Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Sharpin v Enpro Engineering Pty Ltd [2003] NSWIRComm 357 PROSECUTOR Inspector John Sharpin PARTIES : DEFENDANT Enpro Engineering Pty Limited FILE NUMBER: IRC4902 of 2000 CORAM: Peterson J CATCHWORDS : Occupational health and safety - Issue of penalty - Employee suffering fatal burn injuries - Withdrawal of defendant from the industry - Low risk of reoffending - Issues of deterrence - Level of culpability - Proportionality - Penalty imposed. LEGISLATION CITED : Occupational Health and Safety Act 1983 s16(1) Inspector Sharpin v Enpro Engineering Pty Ltd [2002] NSWIRComm 211, 23 August 2002, unreported. Inspector Sharpin v Bovis McLachlan Pty Ltd [2002] NSWIRComm 210, 23 August 2002, unreported. WorkCover Authority of New South Wales CASES CITED : Capral Aluminium v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Inspector Lancaster v Burnshaw Constructions Pty Ltd [2002] NSWIRComm 319, 29 November 2002, unreported Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 Lawrenson Diecasting Pty Ltd v WorkCover Authority (1999) 90 IR 464 HEARING DATES: 07/11/2003 DATE OF JUDGMENT: 10/24/2003 PROSECUTOR Ms P E McDonald of counsel SOLICITOR LEGAL REPRESENTATIVES: Phillips Fox SYDNEY. DEFENDANT No appearance JUDGMENT: - 5 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: PETERSON J DATE: 24 OCTOBER 2003 Matter No IRC4902 of 2000 INSPECTOR JOHN SHARPIN v ENPRO ENGINEERING PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983. JUDGMENT RE PENALTY 1 These proceedings concern a charge brought under s15(1) of the Occupational Health and Safety Act 1983 ('the OHS Act'). The charge arose out of an alleged failure to ensure the health, safety and welfare of an employee of the defendant company who received fatal burn injuries in the course of cutting through a fuel pipeline which ignited. 2 On 23 August 2002 the court gave judgment in relation to the aspect of liability in relation to the charge [2002] NSWIRComm 211, unreported. That judgment was given as the result of proceedings in which no appearance was made by the defendant. The circumstances relating to that aspect of the matter are dealt with in the primary judgment. 3 As a matter of fairness to the defendant, upon liability having been found, not under s15(1) of the OHS Act but under s16(1), applying the provisions of s15(4) of the OHS Act, the court resolved to afford the defendant a further opportunity to address on the issue of penalty. Accordingly, the matter was listed for hearing on 11 July 2003 and notice was given to the defendant. No appearance was made on the hearing. The court dealt with the matter ex parte. 4 The circumstances giving rise to the charge are set out in the primary judgment. It is unnecessary to repeat them. The conclusion reached on that occasion was that "the prosecution has established beyond reasonable doubt that the defendant failed: (a) to provide or maintain a system of work for the erection of structural steel that was safe and without risks to health. (b) to ensure that a fuel pipeline located at the undercroft site had been removed." 5 The prosecutor in the hearing on penalty has tendered: (i) An affidavit of Sonya Prosperi, a director of the defendant. Ms Prosperi is the daughter of Eric and Eunice Prosperi, who are shareholders in the defendant. Eunice Prosperi is a co-director. Ms Prosperi deposed that the defendant has not traded since the administration of it was completed on 7 May 2001. It has no assets other than $855.00 cash in deposit with the Westpac Bank at Figtree. The defendant has no plan to trade for the reason that Eric Prosperi has retired and is living on the North Coast. He is 71 years old and the defendant has only ever operated when Mr Prosperi has been actively involved in its affairs. (ii) A company extract obtained by the prosecutor on 4 July 2003 indicates that the defendant continues in existence at that date. The defendant has no prior convictions. The maximum fine applicable in relation to the offence is $550,000. 6 In dealing with issues of deterrence, it was submitted that the court ought pay particular regard to general deterrence. Reference was made to the judgment of the Full Court in Capral Aluminium v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 643 where the varying aims of general and specific deterrence were discussed. In the absence of exceptional circumstances, general deterrence should feature in the sentencing of an offender (Inspector Lancaster v Burnshaw Constructions Pty Ltd [2002] NSWIRComm 319, 29 November 2002, unreported). 7 While continuance of an offender as an employer may still maintain risk to the safety of its employees and contractors and may justify particular attention to elements of specific deterrence, where the defendant no longer continues to operate in industry and its risk of re-offending is low or non-existent, the prosecutor submitted the court may disregard the element of specific deterrence. 8 The nature and quality of the offence were dealt with in the context of the decisions in Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 and Lawrenson Diecasting Pty Ltd v WorkCover Authority (1999) 90 IR 464. A serious breach of the OHS Act may be found to exist where the matter demonstrates an obvious or foreseeable risk against which appropriate measures were not taken even though available and feasible. 9 Here it was submitted there were obvious risks involved. Mr Prosperi was told of the presence of the service pipelines in the undercroft area prior to the work being undertaken and informed the representative of Christie Civil Contracting that all services should be removed to enable his workers to erect scaffolding. However, he did not enquire what services were covered by his instruction nor did he check that the services including the fuel pipeline had been removed. The risks associated with the work were not considered adequately by the defendant. The occurrence of death or serious injury manifests a degree of seriousness with a relevant detriment to safety (see Tyler v Sydney Electricity (1993) 47 IR 1 and Ferguson v Nelmac (2002) 90 IR 188 at 204). 10 It is necessary to refer to two judgments of the Commission in Court Session already given in relation to the accident involved in this case. Bovis McLachlan, the site manager, and Christie Civil Contracting Pty Limited, the principal contractor to which the defendant here was contracted, were each dealt with pursuant to prosecutions brought under s16(1) of the OHS Act. In the case of Bovis McLachlan [2002] NSWIRComm 210, 23 August 2002, unreported, a penalty was assessed at $65,000 and a fine, after a reduction in penalty of 30% reflecting in part the plea of guilty, of $45,500 was imposed. 11 In the matter of Christie Civil Contracting [2002] NSWIRComm 209, 23 August 2002, an identical approach was taken. This result was dictated by the principle of parity and circumstances in which the court could not distinguish between the culpability of Bovis McLachlan and Christie Civil Contracting. 12 The prosecutor's submissions in that respect gave proper credit to the defendant here which, while having failed in its particular duties, could be seen to be at a lower level of culpability than the other two defendants earlier dealt with for the reason that Mr Prosperi sought to have Christie Civil remove the services prior to the work being undertaken. He, presumably, anticipated that his request in that regard would be carried out. Conclusions 13 I accept the submission of the prosecutor that the level of culpability of the defendant here is below that of Christie Civil Contracting and Bovis McLachlan. I also consider it appropriate that in assessing penalty the court should not give any weight to the element of specific deterrence. It is apparent from the affidavit of Ms Prosperi that there is no reasonable likelihood of the defendant resuming in the scaffolding industry. 14 In fixing penalty in this matter I take into account the need for penalty to reflect elements of general deterrence. I take into account the inactive condition of the defendant and its absence of assets and funds. Nevertheless, I consider a not insubstantial penalty ought be imposed proportionate to the penalty imposed on Christie Civil Contracting and Bovis McLachlan, but taking into account the relative impecuniosity of the defendant and the absence of a plea of guilty. I consider, in the circumstances, a penalty of $20,000 would be appropriate. 15 I convict the defendant of the offence of a breach of s16(1) of the OHS Act, as identified in the primary judgment. I impose a penalty of $20,000 with a moiety of penalty to the WorkCover Authority of New South Wales. 16 The prosecutor seeks an order that the defendant pay its costs in the sum of $31,000. Taking into account the history of the matter where the prosecutor was put to the expense of preparing for a trial which was ultimately reduced dramatically in size by the absence of the defendant, I consider the prosecutor is entitled to its costs. However, I do not consider the prosecutor should be indemnified against its full costs. In the ordinary course, the costs would be as agreed or assessed by the court. I would assess costs at $25,000. I order the defendant to pay the prosecutor's costs in that sum. 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.