Industrial Relations Commission of New South Wales in Court Session WorkCover Authority of New South Wales (Inspector Ching) v Bros Bins Systems Pty Ltd [2005] NSWIRComm 226 CITATION: This decision has been amended. Please see the end of the judgment for a list of the amendments. PROSECUTOR WorkCover Authority of New South Wales (Inspector Barnabas Ching) PARTIES: RESPONDENT Bros Bins Systems Pty Ltd FILE NUMBER(S): 5012 of 2001 CORAM: Marks J CATCHWORDS: Occupational health and safety prosecution - penalty hearing - evidence given that company had put in place protective measures since accident - evidence that defendant did not forsee the possibility of accident - defendant had no prior convictions - evidence of defendant's financial position and delay of proceedings not sufficient to allow application of s6 of the Fines Act 1996 - objective seriousness of offence - penalty imposed. Fines Act 1996 s 6 LEGISLATION CITED: Occupational Health and Safety Act 1983 s17(1)(b) Inspector Ching v Bros Bins Sytsems Pty Ltd, Inspector Ching v Exo Pty Ltd t/as Tibby Rose Auto [2004] NSWIRComm 197 CASES CITED: Miceli (1997) 94 A Crim R 327 McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353 HEARING DATES: 06/28/2005 DATE OF JUDGMENT: 07/22/2005 PROSECUTOR Mr R Reitano of counsel Solicitor: Ms R Parmegiani WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: DEFENDANT Mr Kintominas of counsel Solicitor: Mr J J Castrissian Castrissian & Co JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Friday 22 June 2005 Matter Number IRC 5012 of 2001 INSPECTOR BARNABAS CHING v BROS BINS SYSTEMS PTY LIMITED Prosecution under s 17(1)(b) of the Occupational Health and Safety Act 1983 JUDGMENT ON PENALTY [2005] NSWIRComm 226 1 In a judgment published on 9 September 2004, the defendant, Bros Bins Systems Pty Ltd, was found guilty of a breach of s 17(1)(b) of the Occupational Health and Safety Act 1983 ("the Act") following a prosecution by Inspector Barnabas Ching of the WorkCover Authority of New South Wales ([2004] NSWIRComm 197). I shall not repeat the factual circumstances which led to the bringing of the prosecution and which were relied upon as relevant to the finding of guilt. 2 I repeat, however, the findings which I made against the defendant, which are contained within paragraph [44] of my judgment: "[44] ... As against the defendant Bros Bins I find that on 22 November 1999: 1. That the truck previously described constituted plant provided for the use or operation of persons at work, not being employees of the defendant, namely that the defendant required that employees of Exo and in particular Matthew Whitehouse carry out work on the vehicle, so providing the vehicle for his use at work. That vehicle was plant for the purpose of s 17(1)(b) of the Act. See Inspector Ching v Bros Bins Systems Pty Ltd (2003) NSWIRComm 3086, a decision of the Full Bench of this Court. 2. That the defendant had control over the truck whilst at the premises of Exo in that its employee retained control over and manipulated the hydraulically raised jib system and the pneumatically controlled hook system. 3. That the defendant failed to provide a safety prop or other mechanism to prevent the tilt-tipping mid-section of the truck from falling whilst work was being carried out underneath it. 4. That the defendant failed to ensure that the lever which operated the pneumatic hook system could not be disengaged or otherwise moved in circumstances where, to do so, would cause the raised jib to fall. 5. That the defendant failed to install a safety lock or some other mechanism to ensure that the lever which operated the pneumatic system could not be moved inadvertently or otherwise accidentally. 6. That the defendant failed to instruct and train its employee David Wood to ensure that any person not an employee of the defendant who entered the cabin of the truck whilst work was being performed on it was warned not to touch or otherwise cause the lever of the pneumatic system to move. 7. That the defendant failed to warn its employee David Wood that he should in turn ensure that the contents of the cabin on the truck were such that they could not cause the lever of the pneumatic system to move so as to disengage the hooks. 8. That the defendant thereby failed to ensure that the truck was safe and without risk to health contrary to s 17(1)(b) of the Act". 3 The Prosecutor led evidence to the effect that the defendant had no prior convictions. The defendant adduced oral evidence from Joshua Turnbull, its sole director. His evidence was to the effect that employees were normally concerned only with the driving and operation of the truck, including the pneumatically driven rear-loading hook lift mechanism. Drivers are not required to, and do not, perform any work under the tipper section of the truck. 4 It was the evidence of Mr Turnbull, assisted by a series of photographs, that when this work was carried out, it was possible for some, if not most, of it to be undertaken without the lifting mechanism having been raised. Mr Turnbull also gave evidence that a counterweight device had now been attached to the vehicle to ensure that the hooks would not come undone if the pneumatic air system failed or ceased to operate, that a service prop had been installed to support the lifting mechanism, and that a warning sign had been affixed. All of these measures would or could have avoided the incident which occurred. They were readily available and were able to be implemented without great cost. He said that none of his competitors had utilised the same safety measures that were now a feature of his operation, as previously described. 5 Mr Turnbull said that he had never contemplated that this type of accident might occur. None of his employees would be required to work from underneath the raised section of the truck, nor could he contemplate that maintenance or repair work would need to be done on the truck from underneath the raised section. 6 Mr Turnbull also gave evidence of his work in the construction and earth demolition business for a period in excess of 20 years, in which neither he nor any employee had been involved in any significant accident. 7 It was the evidence of Mr Turnbull that he was devastated by the death of the Tibby Rose employee, whom he had known. In addition, his employed driver did not recover from the consequences of the incident. Furthermore, the company had been exposed to the risk of and actual prosecution proceedings for a period in excess of 5 years, which had had an impact on him, his wife and the operation of the affairs of the defendant company. 8 Copies of balance sheets and profit and loss statements were put into evidence for the financial years ending 30 June 2002, 2003 and 2004. In addition, Mr Turnbull's own individual tax return for the 2004 year became evidence in the proceedings. I shall return to the financial documentation later when considering submissions made on behalf of the defendant. 9 The starting point for the fixing of an appropriate penalty is the objective seriousness of the offence. It is quite clear that, in the circumstances in which the incident occurred as outlined in my previous judgment, there was a real and obvious risk of injury if the raised section of the vehicle collapsed whilst the Tibby Rose employee was working underneath it. The defendant's submission, based on the evidence of Mr Turnbull, was that it was unforeseeable that any person performing repair work on the vehicle would come to be injured, whether fatally or otherwise, in the manner which occurred. That is an assessment that was made by reference to the overall activities of the defendant's organisation, having regard to the fact that the vast bulk of the time in which the vehicle was being utilised was to be taken up by reference to its normal activities. However, in my opinion, this is an inappropriate and impermissible manner in which to approach an assessment of the objective and overall nature of the offence. This must be undertaken by reference to each discrete circumstance in which the operation of the truck might create a risk of injury. Accordingly, the foresight and vigilance expected of this defendant applies to all of the circumstances in which persons may come to work in, on and under the vehicle, including circumstances where it may be maintained or repaired. On this basis, the fact that the truck was used on an isolated occasion for the purpose of effecting repairs does not avoid the responsibility of the defendant imposed under the Act. 10 It is true, as was submitted on behalf of the defendant, that the incident was "freakish" in that it occurred only because the lever which operated the pneumatic system was moved inadvertently or otherwise accidentally. Nevertheless, the defendant is obliged under the Act to take measures to avoid that risk. The question of foreseeability does, however, play some part in the assessment of the overall culpability of the defendant. As was submitted on behalf of the defendant, the incident occurred at third party premises in circumstances where persons with apparent competence were undertaking an investigation into the electrical system of the truck. Although the defendant had, as I have found, some control over what was occurring, the basic work which was being carried out on the truck was being performed by employees of Tibby Rose Auto. 11 I agree with the submissions made on behalf of the defendant that the assessment of culpability is to be viewed in a different light to that which applies to an employer who is required to create and implement a structured, systematic and safe system of work which accommodates circumstances which should reasonably be foreseen to arise in the everyday conduct of the employer's operations and activities. 12 My discussion of these issues leads me to conclude that, whilst the offence is an obviously serious one, I should take into account the matters to which I have referred by reference to the defendant's submissions. I hesitate to compare the culpability of this defendant with that of Exo Pty Ltd trading as Tibby Rose Auto because the proceedings with respect to penalty to be applied to that defendant have not yet concluded. 13 In assessing the penalty I shall also take into account the general deterrent effect of the imposition of a penalty, as well as the deterrent effect on this defendant. 14 By way of subjective features, I note it was conceded that the defendant cooperated with the WorkCover Authority in connection with its investigation of the incident, and that the defendant, through Mr Turnbull, has expressed contrition for what occurred. 15 It was submitted on behalf of the defendant that the Court should take into account the delay which had occurred between the time of the incident and the date of conviction which has thus-far extended over a period in excess of 5 and a half years. In making such a submission, Mr Kintominas of counsel, who appeared for the defendant, relied upon the judgment of the Victorian Court of Appeal in Miceli (1997) 94 A Crim R 327. In that case, Tadgell JA referred to the need to take into account overall delay between the commission of an offence and the imposition of a sentence by reference to the prospect of rehabilitation, and the need for a personal defendant to structure his or her affairs and reorganise his or her life by reference to a sentence of imprisonment. Winneke P and Charles JA agreed with his Honour's judgment. Charles JA also delivered some additional comments which referred to the exercise of mercy which is reflective in some extension of leniency in imposing a sentence. The circumstances of the delay in these proceedings need not be traversed in any detail. It is sufficient to state that finalisation of the proceedings was delayed as a result of a successful appeal by the Prosecutor. Whilst the observations of the Victorian Court of Appeal in Miceli do have some application to the circumstances of a personal defendant facing a penalty of imprisonment, I do not apprehend that there are any circumstances which attach to these proceedings which would justify any reduction in penalty by reference to the delay which has occurred. On one view of it, the defendant has had the use of such monies as it will now be compelled to pay by reference to the monetary penalty to be imposed on it. 16 It was also submitted by Mr Kintominas that the Court should have regard to the financial circumstances of the defendant, as revealed in its financial accounts and by reference to the taxation return of Mr Turnbull, and Mr Turnbull's oral evidence. 17 Mr Kintominas based his submissions initially on the common law, without reference to s 6 of the Fines Act, but ultimately, as I understand it, based his submissions on the provision of s 6 of the Fines Act 1996. This requires a court, when exercising a discretion to fix the amount of any fine, to consider "such information regarding the means of the accused as is reasonably and practicably available to the court for consideration" and "such other matters as, in the opinion of the court, are relevant to the fixing of that amount". 18 The application of s 6 of the Fines Act has been considered on a number of occasions by Full Benches of this Court. I refer in particular to McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353. It is appropriate to reproduce paragraphs [24] and [25] of that judgment: "[24] We agree with and adopt the following matters of principle which may be distilled from the discussion of the authorities contained within the judgment in Inspector Mansell v Eleven Lighting Pty Ltd : 1. This court is obliged to take into account the means of a defendant to pay any penalty by virtue of s 6 of the Fines Act . 2. The imposition of a fine on a corporation may have different ramifications than the imposition of a fine on an individual where, imprisonment or some other penalty may be available as an alternative sanction. That alternative is not available in the case of a corporation. 3. A defendant who wishes to rely on the provisions of s 6 to temper the amount of any monetary penalty bears the onus of putting such evidence in support as is appropriate before the court and bears the onus on the basis of the balance of probabilities of satisfying the court as to the truth of such evidence and its relevance to the fixing of penalty. 4. Whilst it is for a corporate defendant to fully disclose its financial state, it is for the prosecutor to check that information in order to assist the court in determining the propriety of taking that evidence into account in imposing a monetary penalty. It is inappropriate for the court to exercise an inquisitorial role in this regard. [25] In addition, we note the following principles which have been settled for the consideration of the financial situation of the defendant: 1. In the context of determining penalty prosecutions for a breach of occupational health and safety legislation by a corporation, it may be appropriate, in some limited circumstances, for the Court to have regard to whether the defendant's corporate structure is little more than a means of distributing earnings arising from personal exertion or where the burden imposed by a fine will fall on one person or family, compared with a corporation which is functioning as "a company with assets of a substantial kind": see Haynes v CI&D Manufacturing (1995) 60 IR 455 at 457. However, it is now clear that the fact that a corporation may represent the alter ego of a person or family and that any penalty imposed on the corporation will consequently have a financial impact on that person or family does not, of itself, warrant a reduction in penalty: WorkCover Authority of New South Wales (Inspector Mansell) v Jian Chen and Obing Pty Ltd trading as Old But New [2004] NSWIRComm 247 ; Inspector Gregory Maddaford v Graham Gerard Coleman & Anor [2004] NSWIRComm 317 . 2. The financial position and the means of a defendant should be taken into account when determining penalty. It is well established that, notwithstanding such considerations, the penalty must ultimately reflect the objective seriousness of the offence: Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209; WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 at 308-309; Manpac Industries Pty Ltd v WorkCover Authority of New South Wales (2001) 106 IR 435". 19 I should first observe that the relevant time at which to consider the financial circumstances of the defendant is at the date of sentencing. There was no evidence tendered as to the financial circumstances of the defendant as at the date of hearing on penalty. The latest information available was contained within the defendant's financial statements for the year ended 30 June 2004. That showed gross income of about $1 million and expenses of about $972,000. A total of $40,000 was shown under "Director's Fees," but only $20,000 of this amount appears to have been paid to Mr Turnbull. 20 The balance sheet showed tangible assets after depreciation of about $240,000; and current liabilities of about $237,000; leaving net assets of just over $16,000. Included in the current liabilities are trade creditors of $133,000 and a loan which appears to be to a related entity of $40,000. One of the assets is a loan to directors of $26,000. Other assets are shown, after depreciation, as being plant and equipment valued at $127,000; and motor vehicles valued at $226,000. 21 Although this balance sheet does not demonstrate, as at the 30th of June 2004, substantial net assets over liabilities, there are nevertheless some assets available for the payment of penalty, albeit at the cost of unsecured creditors. 22 There is a further discrepancy within the accounts. Mr Turnbull gave evidence that the only assets of the company were vehicles subject to lease. This is not reflected in the financial accounts as at 30 June 2004. 23 Overall I am not persuaded that such financial evidence as has been made available to the Court would justify the application of s 6 of the Fines Act, particularly by reference to the "in principle approach" to sentencing required to be adopted when determining penalty so as to reflect the objective seriousness of the offence as referred to in paragraph [25] of McColl extracted above. 24 However, I do take into account the evidence given by Mr Turnbull with respect to his approach to safety, as typified by the previous good record of entities with which he has been associated. 25 The maximum penalty is $550,000. I note that, as I have previously pointed out, the defendant has no prior convictions. 26 Having regard to the matters to which I have referred, I fix a penalty in the sum of $90,000. The Prosecutor sought a moiety of the fine, and costs. I make the following orders: 1. The defendant is found guilty of the offence charged and convicted accordingly. 2. The defendant is fined the sum of $90,000 with a moiety to the Prosecutor. 3. The defendant is to pay the costs of the Prosecutor assessed by the Court in default of agreement. AMENDMENTS HISTORY: 06/02/2006 - typographical error - Paragraph(s) 0 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.