Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Elizabeth Benbow v Planada Holdings Pty Ltd [2001] NSWIRComm 275 PROSECUTION: PARTIES : Inspector Elizabeth Benbow DEFENDANT: Planada Holdings Pty Ltd FILE NUMBER: IRC4099 of 2000 CORAM: Kavanagh J CATCHWORDS : Prosecution under s 15(1) of the Occupational Health and Safety Act -Immigrant workers, without training or instruction, required to drive forklifts - Injury reflection of an offence the nature and quality of which is serious - No procedures in place for assessment of risk involved in performing forklift truck work nor any system of work in place for safe working while operating a forklift truck - Question as to mitigation of penalty when offence most serious and company impecunious - Question as to whether consideration of specified deterrence relevant in the circumstance where company not trading LEGISLATION CITED : Occupational Health and Safety Act 1983 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 WorkCover Authority of New South Wales (Inspector Lyons) v Warman International Limited (2001) 105 IR 236 Ferguson v Nelmac (1992) 92 IR 188 Tyler v Sydney Electricity (1993) 47 IR 1 CASES CITED : Haynes v James Glass & Aluminium Pty Ltd (unreported, CT91/772-775, 20 May 1994 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, 99 IR 29 Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 Ferguson v Nelmac (1999) 92 IR 188 HEARING DATES: 09/26/2001 DATE OF JUDGMENT: 11/02/2001 PROSECUTOR: Ms P.E. McDonald of counsel SOLICITORS: PricewaterhouseCoopers, Legal LEGAL REPRESENTATIVES: DEFENDANT: Mr P.J. Newall of counsel SOLICITORS: Lin Tang & Co JUDGMENT: - 9 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date : Fri 2 November 2001 IRC4099 of 2000 INSPECTOR ELIZABETH BENBOW v PLANADA HOLDINGS PTY LTD Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2001] NSWIRComm275 1 This is a prosecution brought by the WorkCover Authority of New South Wales through Inspector Benbow under the provisions of s15(1) of the Occupational Health and Safety Act, 1983. It is alleged that on 19 August 1998: the defendant, Planada Holdings Pty Limited (ACN 063 740 027), an incorporated company with its registered office located at Level 1, 233 Beamish Street, Campsie in the State of New South Wales, an employer, breached Section 15(1) of the Occupational Health & Safety Act 1983 at premises located at 61 Fairford Road, Padstow in the State of New South Wales, in that it failed to ensure the health, safety and welfare of its employees at work, in particular Djaka Sudibja. 2 The Prosecution provided the following particulars of the defendant's breach: (a) the Defendant owned and operated a Mitsubishi Heavy Industries forklift truck at the premises; (b) Mr Sudibja was assisting Mr Chen at the premises on 19 August 1998 in emptying a container containing wood chips while Mr Chen operated the forklift truck; (c) shortly after emptying the container, while Mr Chen was operating the forklift truck, it rolled and trapped Mr Sudibja, causing him to suffer serious spinal and internal injuries; (d) the forklift truck was operated by the Defendant's employees including a general hand, Mr Chen; (e) none of the Defendant's employees were qualified to operate the forklift truck; (f) the Defendant failed to provide adequate information and training to employees who operated the forklift truck; (g) the Defendant permitted the forklift trucks' key to be easily accessed by its employees; (h) the Defendant's employees employed as general hands including Mr Sudibja, operated the forklift truck to remove rubbish and unload materials; (i) the Defendant's employees employed as general hands, operated the forklift truck whenever it was needed; (j) the Defendant failed to take adequate steps to prevent unqualified employees from operating the forklift truck. 3 The defendant entered a plea of guilty to the charge. 4 An Agreed Statement of Facts as to the breach relatively reads: 2. At all material times the Defendant, Planada Holdings Pty Limited (ACN 063 740 027): (a) was an incorporated company with its registered office located at Level 1, 233 Beamish Street, Campsie in the State of New South Wales; (b) carried on the business of cabinet making at premises located at 61 Fairford Road, Padstow in the State of New South Wales ("the premises"); (c) employed Djaka Sudibja, 36 years of age, as a general hand at the premises; (d) owned and operated a Mitsubishi Heavy Industries forklift truck 4/73 No. 11341 Model 2FG15 at the premises ("the forklift truck"). 3. Sudibja commenced employment with the defendant on 3 August 1998. 4. On 19 August 1998 Sudibja was performing cleaning duties in the rear yard area of the premises. Sudibja was working with another employee of the defendant by the name of Chen who had recently commenced employment with the defendant as a general hand. Sudibja and Chen were removing wood chips from a factory building on the premises. This process involved placing wood chips in a rubbish container and the container would be pushed to the entrance of the factory. The forklift truck would then lift the container and carry the container to an industrial waste skip where the container was emptied. 5. On 19 August 1998 Chen assisted Sudibja to push the container containing the wood chips to the entrance of the factory. Chen then drove the forklift truck to the container, lifted the container with the forklift truck and conveyed the container to an industrial waste skip and emptied the container. Sudibja assisted Chen in emptying the container. 6. When the container had been emptied Sudibja walked back towards the factory and Chen followed driving the forklift truck. Sudibja heard the forklift truck accelerate and turned around to look at the forklift truck. The forklift truck then rolled over and trapped Sudibja beneath the mast area of the forklift truck. Sudibja suffered multiple injuries including fractures to the spine, nerve damage and injuries to his intestines. When released from under the forklift truck, Sudibja was conveyed by ambulance to Liverpool Hospital and he was later transferred to Royal North Shore Hospital and then to a rehabilitation hospital. 7. Sudibja received surgery including the insertion of spinal rods, fusion of the spinal vertebra and bone grafts. Sudibja suffered temporary and permanent nerve damage resulting in difficulties in passing urine and bowel movements, as well as wasting of his leg muscles. Sudibja has ongoing difficulty in moving his legs and back and had not returned to work approximately 5 1/2 months after his accident. 8. The prosecutor attended the premises on 19 August 1998 and observed as follows: (a) The scene of the accident was the rear yard area of the factory premises. The rear yard area was accessible from Wordie Place, Padstow via a driveway. (b) The main entrance to the factory was through a shop front located at 61 Fairford Road, Padstow. (c) The rear yard area was concrete. (d) The forklift truck was lying on the driver's side in the rear yard area. (e) The forklift truck was an LPG powered Mitsubishi heavy industries 4/73 No. 11341 Model 2FG15 forklift truck that was yellow in colour. (f) The gas cylinder mountings on the forklift truck were empty and a Rheem liquid petroleum gas cylinder was in the yard area nearby. (g) An ignition key was in the forklift and the tines were raised. The tines were approximately 1.8 metres from the base of the mast and approximately 1.09 metres from the top of the mast. (h) A small quantity of saw dust was present on the concrete near the tines. (i) A piece of timber approximately 1.56 metres long by 15mm wide by 14mm deep was observed on the concrete under the front wheels. (j) The timber had been damaged and the breaks and splinters appeared fresh. (k) A black skid mark was observed on the concrete surface. (l) A stockpile of wood partly covered with black plastic was stored in the yard against the rear wall of the factory. (m) An industrial waste bin was against the side fence. A domestic wheelie garbage bin was balanced near the industrial waste bin. 9. The prosecutor's observations and investigations disclosed as follows: (a) On the date of Sudibja's accident the defendant employed approximately 13 employees – 8 full time and 5 casual/part time. (b) At the time of the accident none of the defendant's employees including Sudibja were qualified to operate the forklift truck. (c) The key of the forklift truck was usually kept in the ignition of the forklift truck and it was readily accessible for use by the defendant's employees. (d) The forklift truck was used to remove rubbish but also to unload materials at the premises. (e) The forklift truck was operated by a number of employees employed as general hands at the premises including Sudibja. These employees operated the forklift truck whenever it was needed. (f) Sudibja had received no training or information concerning the operation of the forklift truck. (g) The defendant took no steps to prevent its unqualified employees from operating the forklift truck. 5 Ms P.E. McDonald, of counsel, appeared as Prosecutor for the WorkCover Authority and Mr P.J. Newall, of counsel, appeared for the Defendant. 6 The maximum penalty for the offence at the time of a breach was $550,000. 7 In assessing the objective seriousness of this offence, and in consideration of penalty the words of the Full Bench in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 (at 474) are relevant: . . . in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH & S Act, this proposition has often been expressed by saying that the 'true measure of penalty lies in the nature and quality of the offence'. The Full Bench noted (at 476): . . . the proper approach is to first consider the gravity of the offence viewed objectively. 8 The circumstances of this breach reveal a most blatant disregard for the provision of safe working. A number of particulars to the offence have been admitted. As a regular work practice, at the defendant's premises, untrained workers were required, without the appropriate certification, to drive forklifts to move materials in and around the worksite. The factory was a cabinet-making factory. A description of the operation within the factory reveals the forklift was used to unload materials at the factory; to transport large garbage containers of scrap material to refuse bins at the back of the factory; to generally move materials within the factory. No employees had been trained or given the opportunity to acquire the appropriate certification to drive a forklift. Further, as a practice on the worksite, there was easy access to the forklift for any employee or for any stranger as the keys were usually left in the ignition of the forklift. 9 In assessing the level of culpability of this defendant the words of Walton J, Vice-President in Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at (at 27) are apposite: Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng , Matter No IRC 3064 of 1997, 12 August 1999 at 39), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence: see Camilleri's Stock Feeds (at 700); James Moore v Vibro-Pile (Aust) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at p17) and WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported decision of Hill J, Matter No. CT 1280 of 1995, 2 April 1997, at 16). The circumstances reveal there was a foreseeable risk to safety at this worksite when untrained, unskilled workers were required to operate forklifts. The existence of this foreseeable risk of injury will necessarily result in this offence being perceived as more serious. 10 Mr Newall, for the defendant company, concedes it could be held there was a foreseeable risk of injury in the circumstances but submits the risk had not been actually "foreseen" and therefore the offence was, in relative terms, less serious. The basis for this submission is found in the reasoning of Walton J, Vice President in WorkCover Authority of New South Wales (Inspector Lyons) v Warman International Limited (2001) 105 IR 236 where his Honour stated [at 72]: I accept the contention advanced by the defendant that had the risk to safety been actually foreseen, there would be an increase in the overall seriousness of the offence: Axer Pty Ltd v Environmental Protection Authority (unreported, Court of Criminal Appeal, Matter No. 60763 of 1992, 22 November 1993) at [8]. However, his Honour then examined the facts of the breach being considered before him and commented [at 73]: . . . the submissions made by the defendant as to whether the incident was 'foreseen' also reveals that the defendant had not established a system for the assessment of risk in relation to the work practice in question prior to the incident. Whilst the defendant, on the evidence, had taken elaborate and extensive steps to ensure occupational health and safety at the work place, the adoption of the particular process giving rise to the incident, without the assessment of risk, does indicate at least some flaw in the safety systems adopted by the defendant. His Honour then went on to reiterate the principle that [at 74]: . . . the systems of work adopted by the defendant must include searching for and identifying all possible risks and the institution of safety measures to guard against those risks: WorkCover Authority of New South Wales (Inspector Kelsy) v. University of Sydney (unreported, Hill J, matter number CT1280 of 1995, 2 April 1997 at 21). Employers are required to maintain constant vigilance and take all practical precautions to ensure safety in the work place: Capra Aluminium Ltd v Workcover Authority of NSW (2000) 49 NSWLR 610l at [77]. 11 This court is not considering whether there was an oversight in the conduct of a risk assessment for a particular task that was not a regular practice as was the circumstances before his Honour in Warman. There is no evidence before the court that the defendant company had in place any procedure for the assessment of risk for any task involving the use of a forklift. I reject the corollary submission advanced by the defendant that as the risk to safety was not foreseen the court should make an assessment that the offence is less serious. I do not believe this is a matter where the defendant should obtain a positive consideration in circumstances where the defendant had in place no system for risk assessment; no proper work method for the task, nor provided the proper training for its unskilled workforce who it required to perform a task for which safety guidelines dictated the need for certified skills. I reject this submission of the defendant. 12 A defendant has a positive obligation of informing itself of the circumstances for safe working. There is under the Occupational Health and Safety Act 1983 an absolute duty imposed upon the defendant which gives expression as a matter of public policy to the requirement that management has a positive obligation to so inform itself. There is no evidence before the court that the defendant turned its mind to the appropriate procedures to be adopted in respect of the instruction and training of their employees in the use of forklifts. 13 While the true measure of penalty lies in the nature and quality of the offence and the gravity of the injury actually resulting from the breach does not of itself dictate the penalty, the occurrence of death or serious injury can manifest the degree of seriousness of the relevant detriment to safety. As Wright J, President said in Ferguson v Nelmac (1992) 92 IR 188 (at 204): Where a fatal injury has occurred, that is a factor to be taken into account and is often of itself reflective of an offence the nature and quality of which is serious. His Honour endorsed the well acknowledged words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 (at 5): The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risks flowing from the breach and its foreseeability are clearly relevant. The defendant had not restricted the use and operation of the forklift in any way. The forklift was being driven by an untrained person, Mr Chen, who was emptying a container containing wood chips. After emptying the container, with Mr Chen operating the forklift, it was driven in such a way that it rolled over and trapped Mr Sudibja, the assistant. Mr Sudibja suffered serious spinal and internal injuries. 14 Further, as a general principle, neglect of well known precautions in circumstances where there is a major risk of injury is indicative of the serious nature of the offence and moves such an offence towards the "worst case" category (see Inspector Roy Thomas Milligan v Roads and Traffic Authority (unreported decision, Fisher CJ, 29 August 1996, No CT1127 of 1995 at 14); Haynes v James Glass & Aluminium Pty Ltd (unreported decision, Fisher CJ, 20 May 1994, No. 772-775 of 1991). 15 The seriousness of the offence is also demonstrated by the simple and straightforward steps the defendant was able to implement to meet its obligations under the Act. Evidence revealed it immediately had two of its eight workers certified to drive forklifts. It ensured after the incident the appropriate steps were taken restricting the use of the forklift by uncertified employees. It took steps to ensure no keys were left in a forklift's ignition. 16 There was no risk assessment of the task on this site; there was no evidence of any general safety procedures for the design of work methods on site; there was no training and instruction of workers as to the safe operation of forklifts on site; equipment was left without care; workers were required to perform the task without recommended certification. 17 I find the objective seriousness of this offence most serious and the breach falls into the category of worst case. 18 The court gives consideration to the subjective features placed before it in consideration of penalty. In Lawrenson Diecasting, the Full Bench said (at 474): It has been observed on a number of occasions that subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to consideration of the nature and quality of the offence. The Full Bench cited with approval the passage from the judgment of Fisher CJ in Haynes v James Glass & Aluminium Pty Ltd (unreported, CT91/772-775, 20 May 1994) was cited (at 474) where his Honour said: . . . While previous good industrial citizenship and the absence of prior convictions are proper considerations, their importance lies well behind the two primary aspects of the matter, namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce. 19 The defendant has no prior industrial record for a breach of the Occupational Health and Safety Act, 1983. 20 Mr Newall on behalf of the defendant company reveals the company was incorporated in 1994 and operated with as many as 16 full time employees. There were eight employees on site at the time of the breach. The company performed work making furniture which required wood turning machinery This involved also the use of cutting machines. The defendant operated, Mr Newall submits, in an environment requiring the use of dangerous machinery. It had done so daily for four years without any recorded breach of the Occupational Health and Safety Act, 1983. 21 Mr Newall submits the court should consider positively, in mitigation of penalty, the company's practice of employing persons newly arrived in Australia who had no job skills or limited job skills - a policy he submits which is beneficial and useful to the community. I reject this submission in the circumstance where an employer provided no training or certificate of qualification to its employees nor demonstrated any care or consideration of their environment for safe working. These would be the community's most vulnerable of workers and the community should rightly expect such employees could rely on their employer to educate and train them as workers to the safety standards required at a place of work in New South Wales. 22 The court is assured the company took care of the injured worker. Evidence revealed the company continued to offer Mr Sudibja suitable duties but in the circumstances he declined. He has been provided with a proper rehabilitation programme through the Government Insurance Office. 23 The defendant company expressed, through its counsel, its contrition. The company co-operated with the WorkCover Inspector. At the time of the incident and later, a number of improvement notices and a fine were issued against the company. The court is assured there was compliance with all such notices. 24 Mr Newall revealed a substantial fire occurred in premises occupied by this company in December 1999 which fire destroyed a large part of the premises on which the defendant operated. All the equipment of the defendant company was damaged. The company struggled on for some time after the fire with leased equipment but was not able to sustain its business. Since May 2001 it has not employed any person and sold such equipment as it had. The money received for the equipment has been absorbed by the company's debts. The company has only a few hundred dollars in its bank account. The defendant reveals its financial position is as follows: The defendant suffered a net loss for the financial year 2000-2001 of $23,462.48. The defendant's equity in the business as at June 2001 was negative to the value of minus $89,937.13. 25 Mr Newall submits the question of specific deterrence, to be reflected in the consideration of penalty, is not relevant in the circumstances as there is no purpose in deterring an entity who cannot re-offend. He submits as the defendant company is not trading there is no risk of it re-offending and therefore specific deterrence should be disregarded. However, the company is still in existence. As to the purpose of specified deterrence in penalty, the issue was considered at length by a Full Bench of the Commission in Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; 99 IR 29. The Full Bench adopted the following opinion of Hungerford J in Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388: the fundamental duty of the Court in this important area of public concern ... (is) to ensure a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace. At the same time, the court has a corresponding duty in so far as a defendant is concerned not to impose such a penalty as would be oppressively high. 26 The Full Bench further stated in Capral [at 74]: We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Limited accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Limited (No. 2) [2000] NSWIRComm39 at 40 - 43) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. 27 In my view some element of specific deterrence should feature in the assessment of penalty. The company still exists even if not trading since May 2001. The defendant conceded it had taken no steps to assess the risk to safety of employees engaged in the activities giving rise to the incident. While the company may not be operating at present it is necessary to ensure there will be, if in future it re-operates, a sufficient level of diligence in the defendant's search for, the identification of and the removal of all risks to safety in any future operation (see Warman at [80]). 28 A summary of the defendant's assets reveals no real property assets. This is confirmed by an exhibited Profit and Loss Statement which reveals the defendant's expenditure for the year included more than $21,000 paid in rent. On the basis of these figures the defendant submits, in mitigation, it is impecunious and has minimal assets. 29 Section 6 of the Fines Act 1996 and principles adverted to in Rhame (1989) 43 A Crim R 81 at 86-87 and Sgrio (1989) 40 A Crim R 197 at 201 allow consideration of an offender's financial means and capacity to pay the amount otherwise determined as being appropriate (see Glynn J in WorkCover Authority of New South Wales (Inspector Kitchen) v Tixana Manufacturing Pty Limited [2001] NSWIRComm76 at [74] (published 10 April 2001). Given the primacy of the objective seriousness of the offence in determining the appropriate sentence, the financial position of the defendant needs to be carefully scrutinised. As Wright J, President, in Ferguson v Nelmac (1999) 92 IR 188 stated at (209): ... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. 30 These principles are not without difficulty when applied to this circumstance. This was a serious breach falling into the category of a worst case. The offence would normally attract a significant penalty. Yet a heavy fine would be more than a burden, it would be given in the knowledge the company is debt ridden. The company is still in existence even if in debt. I do not believe the circumstances should attract the mitigation allowed in the special circumstances before Wright J, President in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (No 2) (1999) 87 IR 286 at [27] and [42]. 31 I take into account the company has operated until May 2001 in an industry with the use of dangerous machinery for 7 years. I note the company could be termed a small business operation. The company has no prior convictions. 32 I do not believe the objective seriousness of this offence, in blatant disregard of industrial safety guidelines and occupational health and safety obligations, should be reflected in a minor financial penalty. While the company is in serious financial straits and is, at present, not trading the penalty must reflect the objective seriousness of the offence. 33 The New South Wales Court of Criminal Appeal published a guideline judgment in R v Thompson; R v Houlton (1999-2000) 49 NSWLR 383; (2000) 115 ACrimR 104 as to the consideration a court should give to an early plea of guilty entered by a defendant. In sentencing the court has regard to the utilitarian value of an early plea of guilty. This charge was laid on 6 November 2000. On 26 February 2001 a plea of guilty was entered. In the circumstances, I am persuaded this must be perceived as an early plea of guilty and I allow a discount of 25% for its utilitarian value. 34 I find the defendant guilty. 35 I take into account the objective seriousness of this offence and the subjective features as considered and the discount allowed for the utilitarian value of the plea. I fine the defendant in the sum of $65,000. A moiety is to be paid to WorkCover Authority. The defendant is to pay the prosecutor's costs to be agreed or assessed. 36 I make orders accordingly. 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.