Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Michael Salmon v BB Wool Skins (Australia) Pty Ltd [2003] NSWIRComm 420 Inspector Michael Salmon PARTIES : BB Wool Skins (Australia) Pty Ltd TC Management Services Ltd FILE NUMBER: IRC 403 and IRC 406 of 2002 CORAM: Curtis AJ CATCHWORDS : Occupational health and safety - plea of guilty LEGISLATION CITED : Occupational Health and Safety Act 1983 Inspector Penfold v Camillo Box Co Pty Ltd [1997] NSWIRComm 19 CASES CITED : Haynes v C I & D (1995) 60 IR 455 Mainbrace Constructions Pty Ltd v WorkCover Authority of NSW (Inspector Charles) (2000) 102 IR 84 HEARING DATES: 11/24/2003 EXTEMPORE JUDGMENT DATE : 11/24/2003 PROSECUTOR:Mr D Jordan of counsel SOLICITORS: Carroll and O'Dea LEGAL REPRESENTATIVES: DEFENDANT: Mr M Cahill of counsel SOLICITORS: Turner Freeman JUDGMENT: - 5 - INDUSTRIAL RELATIONS COMMISSIONOF NEW SOUTH WALES IN COURT SESSION CORAM: CURTIS AJ 24 NOVEMBER 2003 IRC 403 of 2002 INSPECTOR MICHAEL SALMON v BB WOOL & SKINS (AUSTRALIA) PTY LIMITED Prosecution under section 16(1) of the Occupational Health and Safety Act 1983. IRC 406 of 2002 INSPECTOR MICHAEL SALMON v TC MANAGEMENT SERVICES LIMITED Prosecution under section 15(1) of the Occupational Health and Safety Act 1983. EX TEMPORE JUDGMENT 1 The defendant pleads guilty to a charge brought pursuant to s 16(1) of the Occupational Health and Safety Act 1983 in that on 6 June 2000 an employee of an associated company, TC Management Services Limited was exposed at the defendant's place of work to a risk of injury occasioned by the use of a de-burring machine. On that day Mr Steven Jenner who only commenced work with the second defendant on 15 May 2000 leant forward as he fed a sheepskin into a de-burring machine and found that his right hand and forearm were dragged into the machine trapping him by the rollers up to his elbow. The blades of the machine struck his left arm causing such serious injuries that the arm was later surgically amputated above the elbow. 2 The machine, called a Sabreuse Type 54 de-burrer, was purchased by the defendant from its manufacturers in France and properly installed. Some time after its installation, maintenance work was carried out upon the machine in which the contractors wrongly wired the machine, reversing the polarity of the current. The cause of the accident was that the machine had been rewired by contractors so that in its default setting the rollers operated so as to introduce a careless hand into the workings of the machine rather than turning safely the other way. The contractors have not been charged. Objective Features 3 The gravity of the offence may be understood as relating to the potential of the risk the subject of the charge to cause harm, and to the culpability of the defendant, taking into consideration the foreseeability of the risk and the burden to which the defendant would be put in obviating that risk. In the present case the potential harm did not extend to possible death but did extend to loss of limb so on that scale it is probably fifty per cent of a most extreme case. So far as obviation of risk is concerned it would have been a trifling matter to reverse the rewiring. However, as against that I accept the evidence of the managing director of the company that he did not foresee that by altering the default mode there was an unusual danger created. A lever was attached to the machine which could reverse the rollers for the purpose of either introducing skins into the machine or returning them in their clean condition to the operator. That said, two similar machines worked correctly and I believe the circumstance was reasonably foreseeable and that bears upon the culpability. 4 Overall I believe the gravity of the offence is in the order of thirty per cent of a most extreme case. The need for general deterrence in relation to dangerous machinery is apparent. The need for specific deterrence is also apparent. Subjective Features 5 It is the subjective features of this matter which most trouble me. The business conducted by the defendant is at Blayney, a remote rural location. It provides employment to six permanent staff and to at least six and sometimes more casual staff depending upon the season. The business was established at Blayney because the local council gave the land to the company for the purpose of attracting industry to the area so as to provide employment to the community. 6 I have before me compelling evidence that because of the effects of the drought and the adverse movement of foreign exchange that the financial situation of the company is parlous. Its debts approximate its assets. It would have a dire consequence upon the economy of a small country town if the imposition of a substantial fine resulted in the insolvency of the company. 7 This is a matter in which, notwithstanding the corporate structure of the defendant and the fact that technically the offence was due to a failure by a corporation, the shareholders of the corporation are Mr Laurence Byron Lowe and his wife. As a matter of common sense the burden of any fine will fall upon Mr Lowe and his family. That is a matter relevant to reduction in penalty (Inspector Penfold v Camillo Box Co Pty Limited [1997] NSWIRComm 19 (Fisher P); Haynes v C I & D (1995) 60 IR 455). 8 Other matters subjectively relevant are that the electrical contractor has not been charged and a substantial fine in that circumstance may give rise to a legitimate sense of grievance and complaint as to inconsistency in the criminal process (Mainbrace Constructions Pty Ltd v WorkCover Authority of NSW (Inspector Charles) (2000) 102 IR 84). 9 I take into account that immediately following the injury the machine was dismantled and kept out of service until it was properly repaired. 10 I also take into account the manifest contrition of Mr Lowe; that the company has no prior convictions and that a plea of guilty is offered. 11 Notwithstanding those subjective matters, I have evidence that Mr Lowe is possessed of an investment property in which he has an equity of $350,000. It would be an affront to the community if the loss by Mr Jenner of his arm was not weighed heavily against the personal circumstance of Mr Lowe. 12 After the reduction consistent with subjective matters, including a twenty-five per cent reduction to which the company is entitled by way of a plea of guilty, the defendant is convicted and fined $75,000. I direct a moiety of the fine be remitted to the WorkCover Authority 13 In relation to matter number IRC406 of 2002, Inspector Michael Salmon v TC Management Services Limited ACN 061 505 397, I refer to my reasons for sentence in the previous matter, number IRC403 of 2002. 14 This defendant, TC Management Services Limited, was a service company incorporated by Mr Lowe upon the advice of his accountants, which company employed the casual labour to work within the business of BB Wool & Skins (Australia) Pty Limited. 15 As a matter of common sense, the offences the subject of this charge were committed by the one agency, which is the family corporate structure of Mr Lowe. The burden of the fine falls upon him. I can identify no circumstance by which TC Management Services contributed to the overall criminality beyond the contribution of BB Wool & Skins (Australia) Pty Limited. In that case it is unreasonable to impose a further penalty. 16 The defendant is convicted and fined notionally $1. 17 I have heard the prosecutor on the question of costs. I think Mr Lowe and his company have been punished enough. I order that the defendant BB Wool & Skins (Australia) Pty Limited pay the costs of the prosecution in matter IRC403 of 2002. In relation to TC Management Services Limited I make no order for costs. 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.