Industrial Relations Commission of New South Wales in Court Session CITATION: Inspector Bestre v T & Y Pty Ltd [2005] NSWIRComm 392 APPELLANT Inspector Sara Bestre PARTIES: RESPONDENT T & Y Pty Ltd FILE NUMBER(S): IRC 3533 of 2005 CORAM: Wright J President; Walton J Vice-President; Boland J CATCHWORDS: Appeal - Occupational Health & Safety - Prosecution appeal from decision of Chief Industrial Magistrate - leave to appeal - guilty pleas - sentences manifestly inadequate by reference to scale of penalties - based on identifiable errors - misapplied principle of parity - misapplied principle of totality - failed to take into account specific deterrence - importance of general deterrence for s 94 offence - leave to appeal granted - appeal upheld - fresh penalties imposed - no order as to costs. Industrial Relations Act s 197 LEGISLATION CITED: Occupational Health and Safety Act 2000 ss 8(2) 26(1) 94 Beacham v Interface Manufacturing Pty Ltd and Another (2005) 141 IR 416 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Department of Mineral Resources (NSW) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Glass v Flexible Packaging (Australia) Pty Limited (2005) 144 IR 385 CASES CITED: House v The King (1936) 55 CLR 499 Inspector Stephen Campbell v James Gordon Hitchcock [2005] NSWIRComm 34 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Nesmat Pty Ltd v WorkCover Authority (NSW) (1998) 87 IR 312 WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Limited (2003) 127 IR 60 WorkCover Authority of NSW (Inspector Victor Page) v Walco Hoist Rentals Pty Limited (No 2) (2000) 99 IR 163 HEARING DATES: 11/09/2005 EXTEMPORE JUDGMENT DATE: 11/09/2005 APPELLANT Mr M Cahill of Counsel Moray & Agnew, Solicitors LEGAL REPRESENTATIVES: (Mr P Thompson) RESPONDENT Ms Y Pan (Director) JUDGMENT: - 6 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President BOLAND J Wednesday 9 November 2005 Matter No IRC 3533 of 2005 Inspector Sara Bestre v T & Y Pty Ltd Application by WorkCover Authority of New South Wales for leave to appeal and appeal against a decision of Chief Industrial Magistrate Hart given on 16 June 2005 in Matter Nos 20025117/05/2 and 20025109/05/2. JUDGMENT OF THE COURT [2005] NSWIRComm 392 (Ex tempore) 1 This is a prosecution appeal pursuant to s 197 of the Industrial Relations Act 1996 against a sentence imposed by Chief Industrial Magistrate Hart. 2 The prosecution for breaches of the Occupational Health and Safety Act 2000 at first instance arose from an accident at a licensed bar and restaurant in Sydney on 28 February 2004. On that evening, a patron fell out of a large second floor sash window and landed on a metal awning approximately six metres below the window sill. The patron was in a coma for two weeks and sustained serious injuries. 3 The respondent, which operated the licensed bar and restaurant, was a company with two directors and two equal shareholders: Ms Pan (who had a day-to-day involvement in the management of the business) and her companion, Mr So. The respondent and Ms Pan were charged under ss 8(2) and 26(1) respectively of the Occupational Health and Safety Act 2000. 4 Following the accident, the respondent was issued with a prohibition notice under the Occupational Health and Safety Act on 26 March 2004 to "immediately cease opening windows until they could be fixed with an opening which would not allow a person to fall out". On 10 April 2004 Inspector Bestre noticed that, in breach of the prohibition notice, the windows were open. The respondent and Ms Pan were then charged pursuant to ss 94 and 26(1) respectively with failing to comply with the prohibition notice. 5 Following early pleas of guilty to both offences by both defendants, the Chief Industrial Magistrate applied discounts of 35 per cent (which included 10 per cent for subjective factors other than the pleas) and imposed the following penalties upon the respondent: (a) $5,000 in relation to the s 8(2) offence; and (b) $5,000 in relation to the s 94 offence. with the following penalties imposed upon Ms Pan: (a) $7,000 in relation to the s 8(2) offence; and (b) $7,000 in relation to the s 94 offence. 6 It is apparent that, without the application of a discount of 35 per cent, the respondent's penalties would be in the order of $7,700 for each offence. The prosecution has appealed in relation to the penalties imposed upon the respondent only, but the penalties imposed upon Ms Pan are relevant to submissions concerning parity. 7 We agree with the appellant that this case raises issues of such importance to the proper exercise of the sentencing discretion in occupational health and safety prosecutions that leave to appeal should be granted. The Full Bench has observed in two recent appeals from Industrial Magistrates upon the need to ensure that penalties reflect the important social purposes of the Occupational Health and Safety Act 2000: see, for example, Beacham v Interface Manufacturing Pty Ltd and Another [2005] NSWIRComm 123 at [27] and Glass v Flexible Packaging (Australia) Pty Limited [2005] NSWIRComm 93 at [2]. Lip service to these authorities is not enough: they need to be applied in practice at the time of sentencing. 8 No written submissions were filed by the respondent in accordance with the directions made on 18 July. However, at the hearing of the matter today, Ms Pan, a director of the respondent, appeared on its behalf. She did not wish to have the matter adjourned and did not offer any submissions in reply except to clarify a factual matter, to indicate her regrets about the injury to the patron, and to advise that the business was closed (it was intended the respondent would be deregistered). Ms Pan also indicated she had decided against further engaging in business and had returned to nursing. 9 We consider that the Chief Industrial Magistrate erred in exercising his discretion in the manner described in House v The King (1936) 55 CLR 499 at 505. The sentences were manifestly inadequate and were also based on identifiable material errors. It is on these bases that we allow the appeal. The sentences did not adequately reflect the objective seriousness of the offences, particularly by reference to the available scale of penalties; they misapplied the sentencing principles relating to parity and totality. 10 The maximum penalty for the s 8(2) offence is $550,000 although the jurisdictional limit of the fine available to be imposed by the Magistrate was $55,000. It is well established that a sentencing court must assess the relative seriousness of an offence in relation to a worst case for which the maximum penalty is provided and then impose a penalty which approximately correlates upon the scale of penalty set by the legislature from zero to the maximum: per Kirby P (as he then was) in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698-699. See also Nesmat Pty Ltd v WorkCover Authority (NSW) (1998) 87 IR 312 at 321 and WorkCover Authority of NSW (Inspector Victor Page) v Walco Hoist Rentals Pty Limited (No 2) (2000) 99 IR 163 at 186. 11 The objective seriousness of the s 8(2) offence is apparent from his Honour's unequivocal findings of the existence of "an obvious and foreseeable risk" of "serious injury" that was "capable of being eliminated by the taking of simple, straightforward and inexpensive steps": see Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [82]; Inspector Stephen Campbell v James Gordon Hitchcock [2005] NSWIRComm 34 at [25]; Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at [476] and Department of Mineral Resources (NSW) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27. His honour also stressed the importance of general deterrence in relation to the offence. 12 These findings, which together emphasise the gravity of the offence, cannot be reconciled with a fine (before making any discount for subjective factors) in the order of $7,700 in light of the maximum penalty of $550,000. Nor is a fine in the order of $7,700 (absent subjective factors) commensurate with the substantial criminality of the s 94 offence (the maximum penalty for which is $110,000, subject to the same jurisdictional limit earlier referred to), which must include general deterrence as a most significant factor. It is critical that the public appreciates the significance of prompt and full compliance with prohibition orders. This offence, which itself stems from the commission of an earlier offence and exhibits blatant disregard for the important social purposes of the Occupational Health and Safety Act, must be viewed in a most serious light. 13 There can be no doubt that the Chief Industrial Magistrate erred in his application of the principles of parity and totality. The respondent and Ms Pan should have been treated alike, there being no relevant difference in their levels of culpability, and yet, by reference to the different scales of penalties, the respondent was fined in the order of one-tenth the amount Ms Pan was fined. There is no justification for his Honour's finding that Ms Pan's culpability was of a higher order to the culpability of the respondent simply on the basis that she was an active director and 50 per cent shareholder. 14 The principle of totality is relevant when a court is sentencing a defendant for more than one offence which contain common elements. In relation to totality, his Honour made the following observation which clearly demonstrates an error of law: In relation to both s 8(2) offences, I find that in each case the nature and quality of the offence indicates that penalties in the medium range are warranted subject to appropriate consideration for the subjective mitigating factors and after taking into account relevant sentencing principles including the principle of parity and the principle of totality. The two s 8(2) offences referred to by his Honour were committed by two different defendants; this necessarily precludes the principle of totality. Even if his Honour had purported to apply the principle to the two offences committed by the respondent (that is, under ss 8(2) and 94) the ingredient of commonality was lacking. 15 Given the manifest inadequacy of the penalties on the respondent imposed at first instance and the errors upon which they were based, we have determined to set them aside and assess appropriate sentences to be imposed, taking into account their objective seriousness in the context of the available scale of penalties and the subjective factors (as discounted by his Honour). This assessment shall be conservative, having regard to the principle of double jeopardy: see Beacham v Interface Manufacturing Pty Ltd and Another [26]; Glass v Flexible Packaging (Australia) Pty Limited at [10] and WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Limited (2003) 127 IR 60 at [54] - [55]. 16 We have decided to impose a penalty of $20,000 in respect of the offence under s 94 in order to emphasise the seriousness of the offence and to reflect general deterrence. The fine in respect of the other offence shall be $15,000. 17 We make the following orders: 1. Leave to appeal is granted. 2. The appeal is upheld. 3. The penalties at first instance are set aside. 4. The respondent is fined the sum of: (a) $15,000 in relation to the s 8(2) offence with a moiety of the penalty to be paid to the appellant; and (b) $20,000 in relation to the s 94 offence with a moiety of the penalty to be paid to the appellant. 5. No order as to 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.