Industrial Relations Commission of New South Wales in Court Session CITATION : WorkCover v Kevin R Sheather Electrical Services Pty Limited [2001] NSWIRComm 294 PROSECUTOR WorkCover Authority of New South Wales (Inspector Maltby) PARTIES : DEFENDANT Kevin R Sheather Services Pty Limited FILE NUMBER: IRC5579 of 1999 CORAM: Peterson J CATCHWORDS : Occupational Health and Safety - s.16(1) - penalty - electrical explosion - failure to adequately supervise - experienced tradesman - specific deterrence - general deterrence - nature and quality of the offence - no prior criminal record - low to mid-range of seriousness - defendant convicted and penalty imposed - defendant to pay prosecutor's costs LEGISLATION CITED : Occupational Health and Safety Act 1983 Veen v The Queen (No 2) (1988) 164 CLR 465 Lawrenson Diecasting Pty Limited v WorkCover (1999) 90 IR 464 R v Howland (Unreported) [1999] NSWCCA 10 Tyler v Sydney Electricity (1993) 47 IR 1 CASES CITED : Ferguson v Nelmac (1992) 90 IR 188 Inn Leisure Industries Pty Ltd v D F McCloy Pty Limited and Anor (No 2) (1991) 28 FCR 172 R v Thompson, R v Houlton (2000) 49 NSWLR 383 State Rail Authority of New South Wales v WorkCover Authority of New South Wales (Inspector Dubois) (2000) 102 IR 218 HEARING DATES: 06/09/2001 DATE OF JUDGMENT: 11/16/2001 PROSECUTOR Ms P M McDonald of counsel SOLICITOR Price Waterhouse Coopers Legal SYDNEY LEGAL REPRESENTATIVES: DEFENDANT Mr J W Conomos of counsel SOLICITOR McLachlan Chilton JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: PETERSON J DATE: 16 NOVEMBER 2001 Matter No IRC5579 of 1999 WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v KEVIN R SHEATHER ELECTRICAL SERVICES PTY LIMITED Prosecution under s16(1) of the Occupational Health & Safety Act 1983. JUDGMENT RE PENALTY 1 On 10 April 2001 I gave judgment on the issue of liability in respect of two charges brought by the WorkCover Authority of New South Wales through Inspector Maltby against Kevin R Sheather Electrical Services Pty. Limited. One charge, in respect of which the defendant was acquitted, involved an allegation that the defendant had failed to provide a safe system of work for two employees of Bankstown Personnel, a labour hire firm, who were working upon electrical installation work at the Woolworths Town Hall site. The charge in respect of which a conviction was recorded on that occasion involved an allegation of a failure to properly and adequately supervise the two workers. This judgment concerns the issue of penalty, in respect of which the parties have subsequently addressed. 2 On 15 October 1997 an electrical explosion occurred within an essential services switchboard when the two workers concerned were installing pyrotenax cables by one person pushing and one person pulling the stiff copper cable through holes they had drilled in the metal wall of the switchboard. The cable appears to have contacted live copper bus bars in the switchboard causing the explosion and the resultant injuries to the employees. The facts of the matter are set out in detail in my judgment of 10 April 2001, which followed the defendant having pleaded not guilty to both charges. I do not intend to repeat the facts here although it is necessary that I make some brief reference to pertinent aspects of them. 3 The nature of the breach found against the defendant relates to what was its failure to adequately supervise the persons concerned, one of whom was a very experienced electrical tradesman with more than 20 years experience, including heavy industry experience, and another who held himself out as a tradesman but in reality was a trades assistant. It was the latter who was pushing the cabling through the switchboard wall, the tradesman being on the live side of the wall pulling the cable into the vicinity of the live bus bars. These persons knew the bus bars to be live. 4 By my earlier judgment I did not find it established that the defendant had required workers to carry out this work, despite the assertion of the trades assistant that they had been so instructed. The relevant failure lay in not providing supervision of the persons who were known to be enthusiastic to do the work, able to do it by virtue of a temporal opportunity and enabled to do it by the provision of spare parts supplied by the defendant without any understanding or check of the purpose for which they were being supplied. 5 The defendant adduced oral evidence in relation to penalty from Phillip Douglas Paull, one of the three directors of the defendant company. Mr Paull had undertaken an apprenticeship as an electrical fitter between 1956 and 1960 and in 1961 was employed by the defendant company. He progressed to the position of General Manager and in 1996, together with the two other persons who are now directors, acquired the shares in the defendant company. 6 The defendant employs 60 full-time employees. It has work in hand of approximately $4 million value, although margins are now slighter as a result of the post-Olympic slump. 7 The defendant has for 12 years produced and updated regularly a substantial document entitled Employees Guide to Safety. It constitutes a safety programme which is implemented through the defendant's foreman. A copy of the Guide is handed to employees upon their commencement. The Guide deals with many aspects of safe working relevant to the industry in which the defendant operates and appears to be a useful general guide for its purpose. 8 In addition, for the past four years (apparently as a development from the accident the subject of these proceedings) the defendant has published in relation to each particular construction job upon which it works, a particularised document dealing with the site. That document is entitled "Employees Guide to Safety at Places of Work in the Electrical Contracting Industry". The example in evidence carried the additional description of "Woolworths Westfields Hornsby" indicating its obvious application to a particular job upon which the employees were to work. Also tendered in evidence was a list of projects upon which the defendant had performed work over recent years. Many projects involved Woolworths' retail stores in most states of Australia. Other projects included retirement villages, bank buildings, the Moore Park Supa Centre and other shopping centres. 9 Oral evidence was also adduced from Kevin John Hickson, who is a project manager employed by the defendant. Mr Hickson's evidence dealt with the development of the site specific safety instruction documents and the role he played in that regard. He detailed the various registers now kept by the defendant, such as that of hazardous substances; another of safety equipment; another concerning safety induction and a skills competency register which informs the defendant of the sort of training its employees and others have had before they commence work on site. 10 Ms McDonald for the prosecutor referred to the purposes of punishment as being the application of both a specific deterrence to the offender and a general deterrence to the community (per the High Court in Veen v The Queen (No 2) (1988) 164 CLR 465 at 476). It was necessary that the Court assess the objective seriousness of the offence charged and that will be indicated by the nature and quality of the offence (Lawrenson Diecasting Pty Limited v WorkCover (1999) 90 IR 464 at 474). 11 It was submitted that the imposition of a substantial penalty is called for in this case having regard to the nature and quality of the offence which involved obvious and foreseeable risks, the need for deterrence and the maximum penalty applicable of $550,000. She referred to the judgment of Spigelman CJ in R v Howland (Unreported [1999] NSWCCA 10): "41. . . . the community has indicated that it wishes to denounce this conduct in the strongest terms . . . by increases in the maximum sentences, the community, acting through the Parliament, has indicated that this is a crime which it wishes to denounce and deter. It is the duty of the Judges to reflect this community concern." 12 As to the nature and quality of the offence, Ms McDonald submitted that the degree of seriousness of the breach was great having regard to the gravity of the injury suffered which is reflective of that seriousness (Tyler v Sydney Electricity per Hill J (1993) 47 IR 1 and Ferguson v Nelmac (1992) 90 IR 188 at 204 per Wright J). 13 It was also submitted that the seriousness of the offence is demonstrated by the simple and straightforward steps the defendant would have been able to implement to meet its obligations under the Act. I note that this submission was directly contested by Mr Conomos. As to costs, it was submitted that the prosecutor, whilst having been unsuccessful in one prosecution concerning a safe system of work, achieved success on the matter the subject of this judgment. Costs should in these circumstances follow the event (see Inn Leisure Industries Pty Ltd v D F McCloy Pty Ltd and Anor (No 2) (1991) 28 FCR 172 at 174. 14 Mr Conomos for the defendant contested certain of the submissions made on behalf of the prosecutor. For example, he submitted that the judgment of the High Court in Veen v The Queen [No. 2] (ibid) was of no utility in the present circumstances given the unique sentencing problems presenting in that case which concerned concepts of penalty and preventative detention. It was submitted that in assessing penalty the maximum penalty available under the Act would obviously call forHigh Co a very reckless disregard for human safety. The need for deterrence is understandable but it was submitted that the court is not dealing with a crime in the normal sense of the word but with an activity. It was submitted that the degree of seriousness of the breach here is at the lower end of the scale, based on the findings earlier made in the matter, and the fact the lack of supervision, which existed for only about one hour or so, involved a licensed electrician of some twenty years experience and another worker who gave the appearance and indicia of experience and indeed held himself out as a licensed of electrician. The defendant has no prior criminal record and at the date of the incident in October 1997 had operated for some 37 years without any criminal conviction. It was submitted for the defendant that each party should be ordered to pay its costs: "The case was fought long and hard, on all issues, nothing was given away. At the end of the day it turned out one-all". 15 What the defendant has been subjected to in these proceedings is the exposure to two charges of a breach of the Act in respect of statutory offences created by the Act and in respect of which money (and other) penalties may be imposed. The offences are criminal in nature. They often involve serious failures of employers and others to observe a statutory duty designed to protect workers, the breach of which can have devastating effects by way of injury or death upon workers or others. They do not necessarily involve criminal intent as will normally be the case in crimes against the person or property. They are, nevertheless, criminal offences and must be tested according to the criminal standard of proof, namely beyond reasonable doubt. So it is, that principles applicable to the determination of criminal proceedings in the ordinary courts will be relevantly applicable in proceedings under this Act. This court has consistently applied general principles applicable in the criminal law to its reasoning and determination of proceedings under this Act. One example is the conformity adopted with the recent decision of the New South Wales Court of Criminal Appeal in R v Thompson; R v Houlton (2000) 49 NSWLR 383 concerning the guideline judgment on discounts applicable in a criminal proceeding where a plea of guilty is entered. (See State Rail Authority of New South Wales v WorkCover Authority of New South Wales (Insp. Dubois), (2000) 102 IR 218 at 236). 16 In this way the judgment of the High Court (Mason CJ, Brennan, Dawson and Toohey J in Veen v The Queen [No. 2] is instructive despite that matter involving the incarceration for life of a person twice convicted for manslaughter but remaining a continuing danger to society by reason of his mental condition. In that judgment their Honours said: However, sentencing is not a purely logical exercise, and the troublesome nature of the sentencing discretion arises in large measure from unavoidable difficulty in giving weight to each of the purposes of punishment. The purposes of criminal punishment are various: protection of society, deterrence of the offender and of others who might be tempted to offend, retribution and reform. The purposes overlap and none of them can be considered in isolation from the others when determining what is an appropriate sentence in a particular case. They are guideposts to the appropriate sentence but sometimes they point in different directions. 17 These indicators are just as applicable, where they arise, in proceedings under this Act. It, of course, remains the fundamental task of the court to assess penalty having regard to the objective and subjective features of the matter and to conform with the usual requirements as to sentencing. In respect of offences under this Act it is now very clear that the objective seriousness of the matter must be determined having regard to the nature and quality of the act. 18 In this matter the essential qualities of the matter are that the defendant failed to supervise the two workers concerned, thereby enabling them to take the steps to obtain equipment necessary to achieve the state of risk which caused the electrical explosion within the switchboard. That absence of supervision was not confined to the period during which the men were actually working on the switchboard but also extended to the opportunity afforded to them to obtain that equipment. On the other hand, regard must be had for the fact that one of the employees was a very experienced tradesman who, while now without any real memory of the incident, must have known that what he was undertaking involved dangerous activity. I have already found it not established beyond reasonable doubt that he was instructed to do this work but, in effect, took it upon himself in concert with the other employee involved, for reasons which remain unexplained. In fixing penalty, I consider I should give weight to the view that it was not readily foreseeable by Mr. Thwaites that these workers would undertake work contrary to the instruction given not to go as far as they did. It was the intervention of the supply of parts, of which he knew nothing, which exposed the defendant in this proceeding. Whereas these factors contributed to finding the offence proved, I consider the failure of the company to be only in the low to mid-range of seriousness. 19 Taking into account that view, and giving due allowance for the defendants absence of prior convictions, I consider an appropriate penalty in this matter would be $110,000. The defendant is convicted and a fine in that sum is imposed with a moiety of penalty to WorkCover. 20 As to costs, I consider the defendant should meet the prosecutor's costs. While it is true that the defendant was not convicted in respect of both charges, the laying of those charges seems to me to have been a course appropriate for WorkCover to adopt. I do not consider that the acquittal in those circumstances would justify the avoidance by the defendant of a costs burden. I order that the defendant pay the prosecutor's costs as agreed or, in the absence of agreement, as fixed by the Court. 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.