Industrial Relations Commission of New South Wales in Court Session CITATION: Inspector Julie Townsend v Illawarra Canvas Blinds and anor [2005] NSWIRComm 376 PROSECUTOR: Inspector Julie Townsend PARTIES: DEFENDANTS: Illawarra Canvas Blinds Pty Ltd and Michael Vimpany FILE NUMBER(S): IRC 2214 and 2216 of 2005 CORAM: Haylen J CATCHWORDS: Occupational Health and Safety Act 2000 - s 8(1) and s 26 - company and working director charged - serious injury suffered by employee installing awnings - ladder used on sloping site - absence of safe working methods, training and fall protection equipment - guilty pleas entered at first return of Order - defendants accept breach as "grave" - numerous subjective factors - work methods altered after accident - contrition - co-operation with WorkCover investigation - operation of Fines Act considered - close connection between corporation and director - overall criminality considered - penalty imposed on both defendants Haynes v CI & D Manufacturing Pty Limited (1994) 60 IR 149 CASES CITED: HEARING DATES: 10/20/2005 EXTEMPORE JUDGMENT DATE: 10/20/2005 PROSECUTOR: Ms Patricia Lowson of counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANTS: Mr I Neil of counsel SOLICITORS: Macedone Christie Willis JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Haylen J 20 October 2005 Matter No IRC 2214 of 2005 Inspector Julie Townsend v Illawarra Canvas Blinds Pty Ltd Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 Matter No IRC 2216 of 2005 Inspector Julie Townsend v Michael Vimpany Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 deemed by operation of s 26(1) of the Occupational Health Act 2000 EX TEMPORE JUDGMENT [2005] NSWIRComm 376 1 Illawarra Canvas Blinds Pty Limited and Michael Vimpany have pleaded guilty to offences under the Occupational Health and Safety Act 2000. The company has pleaded guilty to a breach of section 8(1) of the Act and Mr Vimpany, as a director and by operation of section 26(1) of the Act, is deemed to have also been in breach of section 8(1) of the Act. 2 The undertaking of the company, as the name suggests, is the supply of blinds and awnings part of their work involves installation. The prosecutor has tendered an Agreed Statement of Facts in each matter, a number of photographs that help illuminate the circumstances in which the workplace accident occurred and a police sketch. 3 It was clear from a quote supplied by the company that it was contemplated that aspects of this work would take place at a height of between six and 6.5 metres. The photographs of the site show a steep side passage, the use of ladders in attaching the awnings to the building, and those were the surrounding circumstances leading to the severe injury to one of the workers of the company who fell from the ladder. 4 That employee, Mr Richards, had been employed by the defendant since around 1999. On 17 March 2004, with another person from the company, he was involved in installing awnings and, according to the agreed statement of facts, in a way that had been performed by the company over a number of years. Both were involved in applying the normal method of work when installing awnings. 5 I do not detail what is set out in the agreed statement of facts, but it is sufficient to say that in this work Mr Richards used a ladder that might commonly be found in domestic premises, it was not secured to the building, it was in other ways obviously unstable in the situation in which it had to be used. Unfortunately for Mr Richards this was no minor accident. He suffered quite severe injuries and, on the Agreed Statement of Facts, continues under severe disabilities. That evidence, of course, is evidence of the nature of the risk but, as I will come to shortly, it was frankly accepted by the defendants that the risks in this case and circumstances were grave. 6 That very briefly, if somewhat inadequately, sets out the background. As I say, it is set out in much more detail in the both the Agreed Statement of Facts and the affidavit of the Inspector commencing these proceedings. I have had regard to the detail in the agreed statement of facts in dealing with this matter. 7 In considering the objective seriousness of this offence I accept what has been put by the prosecutor in her submissions, namely, these aspects: The defendants failed to carry out an adequate site specific risk assessment in relation to the work to be performed and the place where the work was to be performed; the defendants failed to prepare a written safe work method statement and to ensure the work was done in accordance with such a work method statement; the defendants' failure to provide adequate information, training and instruction in relation to the work; the defendants' failure to ensure that the worker, who was relatively inexperienced, was instructed and supervised so as to perform the work safely; the defendants' failure to control risks associated with a fall from height by providing the worker with an appropriate work platform or by other means; the nature of the offence where the risk of injury demonstrated a degree of seriousness and a potential detriment to health and safety, and in circumstances where there were obvious and foreseeable risks to safety which had not been identified and accordingly against which appropriate measures would have been taken. 8 The brief description I have already given of the circumstances in which this accident took place makes it abundantly clear that not only was this a serious risk and ultimately a serious breach of the Act, but it was one that was foreseeable. 9 The use of ladders in industry is not unusual. The prosecutor makes a point that they are used across a wide range of businesses. Because of that fact there are often found to be risks associated with their use. Here, as I have indicated, it has been readily accepted and properly accepted by the defendant that there was a serious breach of the Act and a serious offence has been committed. 10 I also accept what has been submitted on behalf of the prosecutor in relation to obvious and foreseeable circumstances having regard to these factors: Firstly, the work was being performed at height; the worker was relatively inexperienced in the installation of awnings, including being inexperienced in installation of awnings at heights; there was no or no adequate training, instruction or information provided to the injured worker, notwithstanding that the worker was relatively inexperienced and posed a risk to his safety; there was no adequate supervision of the worker, notwithstanding that the worker was relatively inexperienced and posed a risk to his safety. 11 Having concluded that this is a serious breach, there are a number of issues that also need to be dealt with. Firstly, I consider the application of the principle of general deterrence. I accept the prosecutor's submission as to the need for this penalty to reflect the operation of that principle for reasons I have already briefly touched upon. There is no submission made by the defendant to the contrary. 12 The issue of specific deterrence is to be considered somewhat differently, in my view. I think fairly the prosecutor accepted that, having regard to the steps taken by the defendants following this accident, there is perhaps a reduced role for the operation of specific deterrence. It may be, if I understand the submission correctly, put a little higher by the defendant. I am unable to reach the view that there should be no role for specific deterrence in setting an appropriate penalty. The defendants continue in business and that is a significant consideration in reaching the view that I have reached. 13 That approach must be tempered, however, by the evidence as to the small nature of the company, the effect of this accident, unexpected and terrible in its consequences for Mr Richards, the effects on Mr Vimpany of which he has given evidence and also the steps taken by the company following this incident to address occupational health and safety more generally in relation to its operations. While specific deterrence will play a role in the setting of an appropriate penalty, it will be one tempered by those considerations. 14 I have mentioned in dealing with deterrence the steps taken by the company in addressing occupational health and safety in relation to its entire operations following this accident. The agreed statement of facts accepts these steps: A number of policies and documents have been adopted, including site safety rules; an induction course; a document dealing with occupational health and safety risk management; a document dealing with Illawarra Blinds training officers; and an occupational health and safety consultation statement. 15 It is also agreed that since the time of the incident, the company has changed its work procedures to ensure that any work performed at height is performed from either a cherry picker or scaffolding and the defendants have ensured that its employees have completed the OHS general induction or "green card" course. One of the employees, Mr Harris, has since been re-trained in the use of cherry pickers. Those matters are also to be taken into account in addressing the subjective factors relevant to both defendants. 16 I have had urged upon me by counsel for the defendants a number of other matters. It is significant that in both cases there was an early plea. When these matters were first called before the Court on return of the order issued by the Court there was a plea of guilty entered in each case. I am satisfied that the full discount available, in accordance with guideline judgments, should be granted to the defendants in this case and that will result in a discount of 25 per cent on the final penalty. 17 There are a number of other issues that are urged upon behalf of the defendants. There was co-operation with the WorkCover Authority as well as the measures taken since the accident that I have already referred to. The company has a very long history and this is its first offence and that is to be taken as a good record. Mr Vimpany has no prior convictions. His is a presence in the industry of a much shorter duration but, nevertheless, is I think to be regarded as a good record. 18 The prosecutor, correctly, suggests that there needs to be some caution in dealing with a long record without conviction. That is not to reduce the importance of that factor, but to realise that on occasions that can allow participants in industry to become perhaps too complacent about their usual work methods and fail to be diligent in relation to occupational health and safety. I do not think that that is the case here. There does seem to be a long period of an accepted work practice and that was a work practice that was adopted on this occasion. It was not unknown for this defendant to use the cherry picker, but apparently only in relation to work above two stories. It appears that, prompted by documents undoubtedly sent out by WorkCover to industry in general, Mr Vimpany was in the course of putting together safety documentation for the company, but that was very much in prospect when this unfortunate accident occurred and Mr Richards was, as a consequence, seriously injured. It is in that context that I take into account the good record of both the defendants. 19 I accept the submission as to the defendant's contrition. Mr Vimpany gave evidence of attendances on the injured worker, he has remained in contact with him, holding the job open for Mr Richards. There is substance in the submission put by the defendant that there was certainly no abandonment of the injured worker after the accident. Those matters are all deserving of consideration and serve to mitigate the severity of the ultimate penalty. 20 The matter that has taken some time in the evidence and submissions is the financial position of the defendants and considerations arising under section 6 of the Fines Act. It is said on behalf of the defendant that certainly the company is at the moment operating on a basis that has seen its last annual return record a small loss. The previous year to that indicated a fairly modest profit. It is said that from that material, and I do not again stay to canvas the detail of every aspect referred to, the financial evidence is such that here there is demonstrated a modest capacity to pay. 21 The evidence shows that Mr Vimpany has assets. His family home is mortgaged but there is a substantial equity in the home. There is another property that has a mortgage but, again, there is substantial equity. I did not hear and I did not understand the submission to be made that there was no capacity to pay: it was a submission that those matters needed to be considered so that the Court, in accordance with the provisions of the Fines Act, might properly consider how an appropriate penalty might be imposed upon these defendants having this evidence available as to their financial situation. 22 There was some conjecture arising from Mr Vimpany's evidence that if a significant penalty be imposed, that would require a loan and there would ultimately, probably, be some application for time to pay. Against that it is said there might be some tax benefits if the company took out the loan to pay any penalty; but I think I am not venturing too far by suggesting that common experience is that financial institutions are not in the habit of lending without substantial security being available. On the evidence I have, the company does not appear to have substantial assets. It seems very much to me that the paying of the fine or fines for both defendants will fall to Mr Vimpany. 23 When I am considering these matters, I have to take into account what a number of judgments have highlighted in this area, that while there is a statutory requirement to take these matters into account, there has to be care exercised so as not to ignore or reduce unacceptably the penalty as a reflection of the objective seriousness of the offence. That is a difficult task and in this particular case it is particularly difficult. 24 I have had some discussion with counsel for the defendant and the prosecutor as to an appropriate course. I have canvassed with them an approach adopted by a Full Bench of the previous Industrial Court in Haynes v CI & D Manufacturing Pty Limited (1994) 60 IR 149. This is not the occasion to quote at length or at all from the judgment, but I can perhaps, for present purposes, encapsulate it this way: There are times when the Court is faced with evidence that allows it to reach a conclusion that a corporate defendant is by and large the means by which the directors, who are also defendants, earn a living. In the particular circumstances of CI & D there were in fact two companies - and I would suggest companies of more substance that I have before me in these particular cases. In that case the Full Court said that there might well be circumstances where a global approach should be taken and that the overall culpability or criminality of the offence should be the determining factor. There are a number of ways in which that can be accomplished but in a general sense, that is the approach that I propose to follow, although I would do so by concluding what I regard as an appropriate penalty for the overall criminality of these offences and to then divide them appropriately between the two defendants. 25 Taking that approach, I make the following orders in Matter No IRC 2214 of 2005: 1. The defendant, Illawarra Canvas Blinds Pty Limited is found guilty of the breach of section 8(1) of the Occupational Health and Safety Act 2000 to which it has pleaded guilty. 2. The defendant is fined the sum of $70,000 with half the fine to be paid to the prosecutor as a moiety. 3. The defendant is to pay the costs of the prosecutor in a sum agreed or, in the absence of agreement, as ordered I by the Court. In relation to Matter No IRC 2216 of 2005, I make the following orders: 1. The defendant, Michael Vimpany, is found guilty of a breach of section 8(1) of the Occupational Health and Safety Act 2000 by operation of section 26 (1) of that Act to which he has pleaded guilty. 2. The defendant is fined the sum of $7,000 with half the fine to be paid to the prosecutor as a moiety. 3. The defendant is to pay the costs of the prosecution in a sum as agreed or, in the absence of agreement, as ordered by the Court. 26 During the course of submissions there was some discussion about the power of the Court, in a sentencing exercise, to deal with the issue of allowing time to pay. It is not my desire to make this a test case, but I think I would not intrude upon recent legislative provisions if I recorded my recommendation to the Industrial Registrar that this is a case deserving of close consideration for time to pay. If there is a capacity to have that ultimately considered in this Court, I would be prepared to do so if it is necessary. 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