Industrial Relations Commission of New South Wales in Court Session CITATION : P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102 APPELLANT P F Thearle & Co Pty Limited PARTIES : RESPONDENT WorkCover Authority of New South Wales FILE NUMBER: IRC 4369 of 2001 CORAM: Wright J President; Walton J Vice-President; Kavanagh J CATCHWORDS : Appeal - Appeal against severity of penalty imposed - OH&S Prosecution under s15(1) of OH& S Act - Two defendants pleaded guilty for breaches arising from the same incident - Defendants convicted of an offence and fined - Alleged disparity in sentences imposed - Parity principle of fundamental importance - Seriousness of offence - Appellant's offence of significantly greater gravity than other respondent - No system of work to ensure safety in workplace by appellant - Insufficient training provided by appellant and no provision of safety equipment or protective clothing - Appellant's employees not authorised to carry out work required - Aggravated features to be taken into account in assessing objective circumstances of offence - Extreme and self-evident risks to safety and gravity of risk - Foreseeability will result in significant increase to assessment of gravity of offence - Notions of specific and general deterrence - Submission regarding failure to have sufficient regard to financial standing of appellant rejected - Previous conviction for offence of similar nature - Warrant of nearly equal penalties - Appeal dismissed Criminal Appeal Act 1912 s 5AA LEGISLATION CITED : Electricity (Workers Safety) Regulation 1992 Industrial Relations Act 1996 s 196 Occupational Health and Safety Act 1983 s 15 s 16 Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Fletcher Constructions Australia Limited v WorkCover Authority of NSW (Inspector Fisher) (1999) 91 IR 66 House v King (1936) 55 CLR 499 R v Reid [2000] NSWCCA 166 Signato v The Queen (1998) 194 CLR 656 CASES CITED : WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd and anor (No 2) (2000) 99 IR 163 Warman Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority of New South Wales (Inspector Reynolds) v North Power [2001] NSWIRComm 104 WorkCover Authority of New South Wales (Inspector Reynolds) v P F Thearle & Co Pty Limited [2001] NSWIR 105 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (1999) 95 IR 383 WorkCover Authority of New South Wales (Inspector Viesis) v Thiess Contractors Pty Limited (1996) 85 IR 12 HEARING DATES: 03/28/2002 EXTEMPORE JUDGMENT DATE : 03/28/2002 APPELLANT: Mr P O'Connor of counsel SOLICITORS Mr S Pinchin LEGAL REPRESENTATIVES: Trenches Solicitors RESPONDENTS: Mr P Punch Carroll & O'Dea Solicitors JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President KAVANAGH J Friday 28 March 2002 Matter No IRC 4369 of 2001 P F THEARLE & CO PTY LIMITED v WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR REYNOLDS) Appeal by P F Thearle & Co Pty Limited against a decision of Justice Glynn given on 7 June 2001 in Matter Nos IRC 1034 and 1036 of 1999 JUDGMENT OF THE COURT Extempore [2002] NSWIRComm 102 1 P F Thearle Pty Ltd ("the appellant") appeals against the severity of the penalty imposed on it in the decision of Justice Glynn given on 7 June 2001: WorkCover Authority of New South Wales (Inspector Reynolds) v P F Thearle & Co Pty Limited [2001] NSWIRComm 105. The appellant pleaded guilty to one charge under s 15(1) of the Occupational Health and Safety Act 1983 ("the Act") arising out of an incident at the Wardell Sewerage Treatment Works construction site on the North Coast of New South Wales. 2 The appellant is an electrical contractor engaged by Ballina Shire Council to carry out electrical installations works on the Wardell Sewerage Treatment Works then under construction on Kays Road, Wardell. Part of the appellant's work involved the running of mains cables from a kiosk transformer, that was situated on site, to an adjacent electrical switch room and then cutting and lugging those cables to ready them for termination. 3 The actual terminations were to be completed by Northpower, the owner of the transformer. To gain access to the transformer the appellant was required to seek permission from Northpower. The access to the transformer and the conditions required for that access were regulated by the Electricity (Workers Safety) Regulation 1992. 4 Those regulations relevantly provided that access to such a transformer should only be available to appropriately qualified and authorised persons and that, when such access was provided, those persons should be properly supervised. 5 The appellant was provided with access to the transformer by Northpower. The appellant's employees were not adequately trained to perform work in the vicinity of exposed conductors and were not supervised by Northpower's employees when performing the work. 6 The work to be performed involved pulling a group of cables through a conduit which extended from the transformer area to an adjacent switch room. As already mentioned the actual termination of the cables to the transformer was to be completed by Northpower employees. The appellant's employee, having positioned, cut and lugged the cables ready for determination, took it upon himself to connect the earth cables to the low voltage earth bar of the kiosk transformer. He did this to avoid the risk that the lugged cables would inadvertently come into contact with each other whilst they were performing work in the area. 7 The transformer had an inherent manufacturing flaw. Attached to the earth bar was a wrongly colour coded cable. The colour code indicated the cable to be an inert earth termination when in fact it was a live termination. Whilst attempting to connect the first earth cable lug to the earth bar the appellant's employee received an electrical shock and burn injuries. Another of the appellant's employees put himself at risk in attempting to rescue the injured worker due to the failure of the appellant to provide safety equipment. 8 Inspector Adrian Reynolds of the WorkCover Authority of New South Wales ("the prosecutor") brought proceedings under s 16 of the Act against Northpower and proceedings giving rise to this appeal under s 15 of the Act against the current appellant. The matter proceeded before Justice Glynn by way of pleas of guilty having been entered by both defendants. Judgment was delivered in both sets of proceedings on 7 June 2001. Northpower was convicted of an offence and fined $60,000. The appellant was convicted and fined $58,500. 9 The questions raised by the appeal are as follows: 1. Whether the penalty imposed was too severe. 2. Whether the discount allowed to the appellant was sufficient. 3. Whether proper allowance was made in fixing penalty for the status of the appellant as a small corporation of modest means. 4. Whether account should be taken of the level of penalty upon the financial status of the defendant. 5. Whether there was disparity in the punishment of the appellant in relation to the punishment imposed upon North Power in WorkCover Authority of New South Wales (Inspector Reynolds) v North Power [2001] NSWIRComm 104. 10 The grounds of the appeal are in the following terms: 6. Her Honour erred in imposing a penalty of $58,500 upon the appellant. 7. Her Honour erred in failing to properly take into account the appellant's status as a modest financial performer in imposing a fine. 8. Her Honour erred in imposing a penalty that was disparate to the penalty imposed upon North Power. 11 The appeal is brought pursuant to s 196 of the Industrial Relations Act 1996 and s 5AA of the Criminal Appeal Act 1912. The form of s 5AA of the Criminal Appeal Act relevant to the appeal is as follows: (1) A person: (a) convicted of an offence; or (b) against whom an order to pay any costs is made, by the Supreme Court in its summary jurisdiction may appeal under this Act to the Court of Criminal Appeal against the conviction (including any sentence imposed) or order. … (4) The Court of Criminal Appeal, in proceedings before it on an appeal under this section, may confirm the determination made by the Supreme Court in its summary jurisdiction or may order that the determination made by the Supreme Court in its summary jurisdiction be vacated and make any determination that the Supreme Court in its summary jurisdiction could have made on the evidence heard on appeal. 12 As a result of the amendment to the section by the legislature effective from September 2000, the principles on appeal are accordingly not those set out in cases such as Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326, Fletcher Constructions Australia Limited v WorkCover Authority of NSW (Inspector Fisher) (1999) 91 IR 66 and Capral Aluminium v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 99 IR 29 which depend upon an earlier form of s 5AA. 13 The approach to be adopted in this matter, which is an appeal against sentence is, therefore, the more traditional approach exemplified by the authorities such as House v King (1936) 55 CLR 499 and WorkCover Authority of New South Wales (Inspector Viesis) v Thiess Contractors Pty Limited (1996) 85 IR 12 at 31; see for example the discussion in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163. 14 An important ground of appeal relates to the alleged disparity in the sentences imposed by her Honour on Northpower and the appellant. That disparity is said to arise from the impact that that penalty will have on the respective defendants. The imposition of a $60,000 penalty on Northpower, a company with some $1.1 billion in assets, will be of little impact whereas a $58,500 fine on the appellant being a 'moderate financial performer' will be most significant. The significant difference in the defendant companies is said to give rise to a justifiable sense of grievance and the penalty in the case of the appellant, it is submitted, is close to oppressive. Thus, it was submitted, the appellate bench ought to intervene. 15 The parity principle has been described as of fundamental importance in the administration of justice: Signato v The Queen (1998) 194 CLR 656 at 670. The principle has been considered applicable to prosecutions brought pursuant to the Act. In Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 at 340 - 341 it was stated: We also accept that the principle of parity in sentencing as discussed by the High Court in Postiglione v The Queen (1997) 189 CLR 295 has application to sentences imposed under the O H & S Act. In that context it is appropriate to have some regard to the sentences imposed by Hungerford J on Drake Personnel Ltd, the direct employer of two of the injured workers. In Postiglione the High Court was concerned with an appeal against sentence which raised questions of comparison between the sentence imposed on a principal party in a conspiracy compared with that imposed on the appellant, who was subordinate in that conspiracy. Dawson and Gaudron JJ (at 411-412) said: The parity principle upon which the argument in this court was mainly based is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them [ Lowe -v- R (1984) 154 CLR 606 at 610-11 per Mason J]. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated. On some occasions, different sentences may indicate that one or other of them is infected with error [ Lowe at 617-18 per Brennan J]. Ordinarily, correction of the error will result in there being a due proportion between the sentences and there will then be equal justice. However, the parity principle, as identified and expounded in Lowe -v- R , recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to `a justifiable sense of grievance' [ Lowe especially at 610 per Gibbs CJ, 613 per Mason J and 623 per Dawson J]. If there is, the sentence in issue should be reduced, notwithstanding that it is otherwise appropriate and within the permissible range of sentencing options. Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality.' That principle was referred to by Mason J in Lowe -v- The Queen ((1984) 154 CLR 606 at 610) as follows: Just as consistency in punishment - a reflection of the notion of equal justice - is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under the law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice. It is for this reason that the avoidance and elimination of unjustifiable discrepancy in sentencing is a matter of abiding importance to the administration of justice and to the community. While the offences with which we are dealing under the O H & S Act do not involve the notion of co-offenders, the fact is that the same circumstances have given rise to prosecutions for offences under ss15 and 16 of the O H & S Act of the direct employer, Drake Personnel Ltd t/as Drake Industrial which supplied the labour involved, and the defendant here who utilised that labour in relevant circumstances. While those defendants have been found guilty of different offences, nevertheless the factual circumstances giving rise to the charges justify an approach to sentencing which shows consistency and not disparity in punishment in the same way as discussed by Mason J in Lowe . 16 The principle was most recently considered by the Full Bench of this Court in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [62] - [65], as follows: It is important to observe the distinction between, and the differing application of, the principles of parity and consistency. Consistency is relevant to the sentencing of different offenders with similar characteristics who have committed similar crimes, and to the sentencing of co-offenders in the same crime. The principle of parity is usually considered applicable only to the sentencing of co-offenders in the same crime and thus is not relevant in this matter. However, as Walton J, Vice-President, observed in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (1999) 95 IR 383: Whilst the principle of parity normally operates in relation to co-offenders or across the range of those convicted of the offence in question (see Signato v R (1998) 194 CLR 656 at 670 and in relation to the same crime Postiglione at 309), this Court held in Warman (at 341) that where defendants (not being co-offenders) are prosecuted under different sections of the Act, the Court should nonetheless adopt an approach to sentencing which "shows consistency and not disparity in punishment in the same way as discussed by Mason J in Lowe v The Queen " where there exists common factual circumstances giving rise to the charges. It should also be noted that the Court considered parity in Warman in the context of a labour hire company and the defendant who utilised that labour. Hence, the decision in Warman would require that the defendants, even though prosecuted under different sections of the Act, shall be treated consistently in accordance with the principles in Lowe v The Queen (1984) 154 CLR 606 ... When sentencing or hearing appeals by different offenders, what must be looked at is whether the sentence is within the range appropriate to the objective gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence (other than that of a co-offender) which merely forms part of that range: see R v Morgan (1993) 70 A Crim R 368 where Hunt CJ at CL said, at 371: It is quite wrong to compare the sentence under challenge directly with that imposed upon another offender (who is not a co-offender) simply because the two offenders may have similar characteristics and may have committed similar crimes. What must be looked at is whether the challenged sentence is within the range appropriate to the objective gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence (other than that of a co-offender) which merely forms part of that range. As Mason J said in Lowe v The Queen (1984) 154 CLR 606 at 612: "The reference to an appropriate sentence is apt to be misunderstood. Generally speaking, a sentence within a limited range of years is appropriate to the circumstances in which the offence was committed and to the character, antecedents and conditions of the offender. As the ascertainment and imposition of an appropriate sentence involve the exercise of judicial discretion based on an assessment of various factors it is not possible to say that a sentence of a particular duration is the only correct or appropriate penalty to the exclusion of any other penalty." In Channon v The Queen (1978) 20 ALR 1 at 18, Deane J observed: In every case, there is but one ultimate question involved in the determination of sentence. That question is what is the appropriate punishment for the particular offence in the relevant circumstances. As recently observed by Barr J and McInerney AJ in the Court of Criminal Appeal "each case is different, and one case does not demonstrate the limits of a sentencing Judge's discretion": R v Stahl [1999] NSWCCA 160 at 10. 17 As noted in the authorities above, the principle of parity is relevant only to comparisons of like with like. In the present proceedings, it was contended that the capability of the appellant ought to be assessed as being equivalent or less than that of Northpower. As such the manifestly different nature of the corporate defendants and their financial means ought to result in a markedly different penalty being imposed. 18 We consider that her Honour did not err in the application of the principle of parity. Her Honour attached primary significance to the objective seriousness of the respective offences charged. When determining an appropriate penalty in circumstances where more than one individual or legal entity can be said to have contributed to the relevant risk it is important to view the seriousness of the defendant's offence by reference to the contribution of the defendant to the relevant risk: see WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (1999) 95 IR 383. 19 The defendant in the Northpower proceedings had an elaborate system in place to provide a safe work place. In this regard, we agree with the contentions of the respondent, that the following features distinguish the two offences: (a) Northpower did have in place an extensive safety system. It was a failure to adequately adhere to that system that contributed to the accident. (b) The failure of Northpower did not result from a lack of concern for safety per se, but due to a lack of follow up auditing the system established. (c) The appellant carries on the business of a specialist electrical contractor and presents itself as having been in operation for some 40 years. It would, therefore, not be unreasonable for Northpower to assume the appellant's employees were appropriately trained. This does not, of course, absolve Northpower from its responsibility for safety under the Act. (d) The appellant had not given any prior recognition in its system of work or training of employees as to the risks which its employees were exposed, or it's duty to obviate those risks. (e) Regardless of the failure to supervise by Northpower, the work method adopted by the appellant's employee was apparently unsafe. 20 We note in this respect that, in paragraph (c) as enunciated by us in this summary, there is a reference to Northpower's responsibilities which was not referred to in the respondent's submissions. It is our reference, in that respect, to those responsibilities. 21 In our view, her Honour was correct in finding that the appellant's offence was of significantly greater gravity than that committed by Northpower. 22 The appellant had not provided any system of work designed to ensure safety in the work place; had not provided any training in either hazard identification or safe work methods; had not provided any training in terms of emergency measures and had not provided any form of safety equipment or protective clothing. Further, the risks to safety were such that work on the relevant type of transformer was subject to strict regulation (see Electricity (Worker's Safety) Regulation 1992). We would concur with the submissions of the respondent that the terms of these regulations were effectively ignored. The appellant has conceded as much. The appellant's employees were not trained or authorised to carry out the work which was required and ought not to have been required to do so. 23 We agree with the observations of Glynn J at paragraph [79] of her judgment at first instance: In the case of the defendant, PF Thearle & Co there does not appear to have been any prior recognition by it that either in regards to its systems of work, or its training of employees in installing electrical cables, its employees were exposed to risk in carrying out such work and that there reposed on it a duty to ensure, in terms of s 15(1) of the Occupational Health & Safety Act , the health, safety and welfare at work of all its employees. 24 We consider that the failure to ensure that even the most basic safe working methods were adopted, as occurred in the present case, constitutes an aggravating feature that should be taken into the account in assessing the objective circumstances of the offence. 25 Further, the risk to safety and the gravity of the risk involved working on an energised sub-station near exposed conductors was both extreme and self-evident. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will result in a significant increase to the assessment of the gravity of the offence: Capral Aluminium at [82]. 26 As to notions of deterrence, the court has recently restated its fundamental duty to ensure penalties imposed under the Act are sufficient to compel attention to occupational health and safety issues so that persons are not exposed to risks to health and safety at their work place: Capral Aluminium at [73]. Notions of both specific and general deterrence ought feature significantly in the determination of penalty in this matter, having regard to the risks to safety inherent in carrying out electrical work of the kind undertaken in this case. 27 We reject the appellant's submission that her Honour failed to have sufficient regard to the financial standing of the appellant. When considered in the light of the objective seriousness of the offence, we consider that her Honour gave a substantial reduction in this respect and did so without error in applying the relevant principles. 28 Whilst it must be noted that Northpower had a previous conviction for an offence of a similar nature and was subject to a higher maximum penalty than the appellant, in our view the failures on the part of the appellant to observe its obligations under the Act resulted in the seriousness of the offence by the appellant being significantly higher than that of Northpower, thereby warranting the nearly equal penalties for the appellant and Northpower. 29 It is not necessary in this judgment to consider whether the penalty imposed in the Northpower proceedings for the serious offence committed by that defendant was adequate, although, in some appeals raising the issue of parity, that consideration may be relevant: see R v Reid [2000] NSWCCA 166 at [16]. 30 In the circumstances, the appeal should be dismissed. ________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.