Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Ian Hannah v Gatenby Brothers Pty Limited [2003] NSWIRComm 390 Prosecutor: PARTIES : Inspector Ian Hannah Defendant: Gatenby Brothers Pty Limited FILE NUMBER: 1153 of 2003 CORAM: Staunton J CATCHWORDS : Occupational health and safety - plea of guilty - defendant has no prior convictions - objective seriousness of the offence - foreseeability of risk - extent of remediation - general deterrence - exclusion of specific deterrence as defendant has ceased to trade - financial circumstances of the defendant - plea of guilty entered at earliest available opportunity - penalty imposed LEGISLATION CITED : Occupational Health and Safety Act 1983 Fines Act 1996 WorkCover Authority of New South Wales v Lawrenson Diecasting Pty Limited (1999) 90 IR 464 CASES CITED : Capral Aluminium Limited v WorkCover Authority of New Wales (2000) 1999 IR 29 HEARING DATES: 10/31/2003 EXTEMPORE JUDGMENT DATE : 10/31/2003 Prosecutor: Mr P Strickland of counsel Solicitors: Ms H Cameron Criminal Law Practice Legal Group WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: Defendant: Mr P Maiden of counsel Solicitors: Dignan & Hanrahan JUDGMENT: - 13 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM : Staunton J DATE: 31/10/03 Inspector Ian Hannah v Gatenby Brothers Pty Limited IRC Matter No. 1153/2003 Prosecution pursuant to s15(1) of the Occupational Health and Safety Act 1983 EXTEMPORE JUDGMENT NSWIRComm 390 1 On 6 March 2001 Mr Brian Oliver was employed by the defendant as the foreman of its chaff mill at a property known as Quandong at Ardlethan Road near Coolamon. 2 On that day Mr Oliver was repairing a punctured spare tyre to replace the front wheel tyre of the defendant's tractor. After repairing the tube of the tyre, it was put back inside the tractor tyre and the tyre was put back onto the wheel rim. The tube was then pumped up. 3 Shortly after that was done and as Mr Oliver was standing over the tyre, the tyre blew off the rim. That happened because the bead of the tyre became trapped in the well of the rim of the tyre. 4 When the tyre blew off the rim, it did so very forcefully and struck Mr Oliver in the head. He sustained massive head and facial injuries and died later on his way to Wagga Wagga Base Hospital. 5 As a result of the above accident, the defendant was charged with an offence under s 15(1) of the Occupational Health and Safety Act. 6 A summons was issued on 12 March 2003. The defendant entered a plea of guilty to the offence when the matter was first listed before the Registrar on 19 June last. 7 The offence as expressed says that on 6 March 2001 the defendant failed to ensure the health, safety and welfare at work of all of its employees, in particular, Brian Oliver, contrary to s15(1) of the Act. The particulars of the charge are: (a) At all material times the defendant employed a number of persons, including Brian Oliver. (b) The defendant failed to provide and maintain a safe system of work for employees repairing or changing tyres which was safe and without risk to health. (c) The defendant failed to provide such information as may be necessary to ensure the health and safety at work of its employees whilst the employees were repairing or changing tyres. (d) The defendant failed to provide such instruction as may be necessary to ensure the health and safety at work of its employees whilst the employees were repairing or changing tyres. (e) The defendant failed to provide such training as may be necessary to ensure the health and safety at work of its employees whilst the employees were repairing or changing tyres. (f) The defendant failed to ensure that tyres that were being repaired were secured by an appropriate restraining mechanism or device. (g) The defendant failed to ensure that tyres were not placed face down on the ground whilst being repaired. (h) The defendant failed to ensure that employees check both sides of tyres being repaired to ensure that the bead was properly seated on the rim of the tyre, and (i) The defendant failed to ensure that its employees used a lubricant when putting a tyre on the rim. As a result of the above failures, Brian Oliver was placed at risk of injury. 8 In the proceedings before me the agreed statement of facts states relevantly as follows: [1] At all material times Gatenby Brothers Pty Ltd [ACN: 000 017 809] was a corporation whose registered office was situated at 295 Finns Road, Menangle, in the State of New South Wales ("the Defendant"). [2] At all material times the Defendant operated a chaff mill at a property known as "Quandong", RMB 622, Ardlethan Road, Coolamon in the State of New South Wales ("the property"). [3] At all material times the defendant employed a number of personnel at the property, including: (a) Brian William Oliver, 58 years of age, as foreman of the chaff mill. (b) Mitchell Hancock, 17 years of age, as a farm and process worker for the chaff mill. (c) Cecil Parr, 57 years of age, as a farm manager. [4] At all material times the defendant owned an "Olympic" brand tyre measuring 280mm wide with a diameter of 810mm ("the tyre"). The tyre was a spare for the front wheel of a "Challenge" brand tractor model 358.E ("the tractor"). [5] On 6 March 2001 the front wheel tyre of the tractor was flat and a spare tyre was needed to replace it. The spare tyre had a puncture and required repairing. Cecil Parr instructed Brian Oliver to repair the spare tyre and when Mitchell Hancock arrived at the property he assisted Mr Oliver with the repairs. The repairs were performed in a workshop on the property and the tyre was placed flat on the concrete floor of the workshop with the valve side of the tyre facing up. The tyre rim was an old style rim with a square lip in contrast to the newer rims which have a tapered lip thereby enabling the tyre to seat itself properly on the rim. [6] The tube of the spare tyre was punctured and needed to be patched. Mr Oliver and Mr Hancock used tyre levers to remove one side of the tyre from the rim. They then pulled the tube out, patched it and put the tube back into the tractor tyre. The tyre was put back onto the rim and Mr Oliver then pumped up the tube. Neither of the employees checked the other side of the tyre facing the floor to ensure that the bead of the tyre was seated properly on the rim of the tyre. The bead of the tyre is the rigid, solid edge of the tyre which contains steel wires and always retains its rounded shape. [7] After Mr Oliver had pumped up the tyre he walked over to the tractor and then returned to the tyre and leaned over near the valve side of the tyre. He told Mr Hancock to get a valve cap for the tyre. Mr Oliver appeared to be doing something to the tyre. Mr Hancock walked across the workshop floor to turn the compressor off and obtain a valve cap. Mr Hancock heard a loud bang and turned around and saw Mr Oliver drop to the floor. The tyre had forcefully struck Mr Oliver on the head. It continued upwards hitting the green steel beams on the roof with such force that the tyre had a green paint mark imprinted on it. [8] The tyre blew off the rim as a result of the bead of the tyre being trapped in the well of the rim of the tyre. Mr Roger Skeers, a director of RB and TM Pty Ltd trading as Riverina Tyre Power, examined the tyre. He has been associated with the tyre industry since 1962. He found that the rim of the tyre was adequate and there were no broken wires in the bead of the tyre. [9] Mr Skeer's opinion is that the back or rear side of the bead of the tyre (which was sitting on the floor) had become stuck in the well of the rim of the tyre. The well is the middle of the rim, which holds the bead. The other side of the bead was pushed over the flange or the rim of the tyre, which in turn blew the tyre off the rim of the wheel. [10] Mr Hancock ran out of the workshop and notified Alan Gatenby, director of the Defendant, to call an ambulance. Mr Gatenby called an ambulance and the local doctor and then gave first aid to Mr Oliver. Mr Oliver was then conveyed by ambulance to Wagga District Hospital for treatment, but life was pronounced extinct on arrival. Mr Oliver died of massive head and facial injuries. [11] On 6 March 2001 Inspector Hannah attended the property and carried out a factual inspection. Annexed hereto and marked "A" is a copy of the Factual Report dated 6 March 2001. Inspector Hannah also took photographs on 6 March 2001 which are annexed hereto and marked "B". Photographs taken by Constable Sheryl Munday on 6 March 2001 are annexed and marked "C". [12] The Defendant normally arranged for large tyres to be changed by Beaurepaires. The Defendant's employees generally changed small to large tyres. The usual procedure at the Defendant's workplace was that when tyres were changed or tubes mended or reinflated, the employees did not take the tyres off the vehicles. The employees jacked the vehicle up, broke the bead with a mallet and then took the tube out and repaired it. The employees then reassembled the tube and pumped it up. It was not usual to repair a spare tyre. [13] The Defendant's workshop did not contain any secure restraining mechanism or device to secure the assembly of the tyre tube and rim to the floor. Such a mechanism or device was necessary if the tyres were not being repaired on the vehicle. If the tyre had been secured by a restraining mechanism or device, the explosion of the tyre tube would not have resulted in the tyre striking Mr Oliver on the head. [14] Furthermore, the accident would not have occurred if Mr Oliver and/or Mr Hancock had stood the tyre up on its tread and checked both sides of the tyre to ensure that the bead was seated correctly on the rim. [15] The Defendant did not provide adequate or necessary training to its employees concerning the repair of tyres. In particular, the Defendant did not provide any or adequate information to its employees concerning the dangers of repairing a tyre in the absence of a restraining device or mechanism. Nor did the Defendant provide any or adequate information about the need to check both sides of the tyre to ensure that the bead was seated correctly on the rim. [16] A lubricant was not used to ensure the bead slipped onto the ridge of the rim of the tyre. Mr Craig Corrigan, director of Fosglen Pty Ltd trading as Coolamon Motors, was interviewed by Inspector Hannah. Mr Corrigan has been working in the tyre industry since 1976 and has repaired and changed tyres for the defendant for about 5 years. His opinion was that a lubricant should be used when putting a tyre on the rim in the process of repairing a tube or tyre. [17] Since the accident, the Defendant has made a fixture which is bolted to the floor of the workshop to restrain a tyre whilst it is being inflated if the tyre is not on a vehicle. The Defendant arranges for all tyres over 16 inches to be repaired by Coolamon Motors. 9 There are also a number of photographs included with the factual report provided by Inspector Hannah. Those photos have been of assistance to me in that they depict the defendant's workshop where the accident occurred as well as the juxtaposition of the tyre to the tube and the wheel rim as they presented after the accident. 10 On behalf of the defendant an affidavit with annexures was tendered with some objection, in part, from the prosecution. That affidavit was a statement from Mr Alan Gatenby. Mr Gatenby is a director of Gatenby Bros Pty Limited. He was an employee of the company from 1945 until his retirement in 1992. He has continued as chairman of the defendant company. 11 Mr Gatenby's affidavit goes more to the corporate history of the defendant company, essentially as a family concern from 1926 until the company ceased trading on 28 February 2003. 12 Matters relevant to the accident before me that Mr Gatenby comments upon are to be found in paras [15] to [18] of his affidavit: [15] About three (3) years prior to the accident I had given a direction to Cecil Parr, the farm manager, that any repairs to large tyres were not to be carried out on the farm but that all repairs should be undertaken by Beaurepaires. From that time onwards all large tractor tyre repairs and truck tyre repairs were undertaken by Beaurepaires. I had also indicated that all small tyre repairs should be undertaken by Coolamon Motors and I discouraged staff members from repairing any tyres on the farm. [16] On the morning of the accident I had given instructions that the mill was not be started and that the staff should be employed in distributing fox baits. I was not aware that Brian Oliver had been instructed to repair the spare tyre from the front of the tractor. [17] I am aware that despite my directions in relation to the repair of small tyres, the staff found it inconvenient to take these tyres into town and that repairs were often carried out on farm. [18] Brian Oliver had worked on our farm for most of his working life and was skilled in all aspects of farm work and in the operation of the chaff mill. He had changed countless numbers of tyres in his working life and it is a terrible tragedy that he lost his life in such a way. Gatenby Bros have lost a very loyal employee and I have lost a very dear friend. 13 There was also a letter tendered on behalf of the defendant dated 30 October 2003 addressed to the defendant's solicitors from M J Steenbeeke, the accountants for the defendant company. I will return to that issue in due course. 14 The defendant has no prior convictions for the purposes of the Act and it is agreed that the maximum penalty in this matter is $550,000. 15 In considering offences under the Act for the purpose of penalty, one must start by considering the objective seriousness of the offence. That principle is well settled and was expressed by a Full Bench of this Court in WorkCover Authority of New South Wales (Inspector Ch'ng) v Lawrenson Diecasting Pty Limited (1999) 90 IR 464, more specifically at 476, where the Court had this to say: In the case of an offence under section 15(1) of the Act, there are a number of factors which may tend to establish the existence of an objectively serious offence. It will be a serious offence when there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible. The gravity of the consequences of an accident does not, of itself, dictate the seriousness of the offence. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and the culpability of the defendant. 16 The foreseeability of risk in this matter is particularly relevant. In the facts before me the circumstances of the accident may not of themselves have been manifestly foreseeable but the risk to safety in the task being undertaken was, in the absence of proper instruction and training, readily foreseeable in my view. 17 As the agreed statement of facts discloses, the failure by Mr Oliver to check both sides of the tyre by standing the tyre up on its tread was a simple but important part of the work to be undertaken by Mr Oliver on that day. That is a matter that would have been able to be readily addressed if proper instruction and training in the repair and changing of tyres had occurred. 18 It is also relevant to the objective seriousness of an offence to consider if there were readily and easily available remediation steps which could have been undertaken by the defendant before the accident to prevent the injury occurring. To put it another way, one should have regard to remediation or the extent of remediation that is done post the accident as an indication of the extent to which foreseeability of injury was readily identifiable. In my view, para [19] of the agreed statement of facts is instructive: [19] Since the accident the defendant has made a fixture which is bolted to the floor of the workshop to restrain a tyre whilst it is being inflated if the tyre is not on a vehicle. The defendant arranges for all tyres over 16 inches to be repaired by Coolamon Motors. 19 In all the circumstances, I consider the offence before me to be a serious one and I propose to approach the issue of penalty on that basis. 20 In imposing a penalty in this matter, regard must be had to general and specific deterrence. That much is evident from the decision given by the Full Bench of this Court in Capral Aluminium Limited v WorkCover Authority of New Wales (2000) 1999 IR 29, particularly at paras [74] to [77]. In para [74] the Full Court said in relation to general and specific deterrence: We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industry Pty Limited actively 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. 21 Para [74] goes on to state that: The Judge must indicate with some precision if excluding either of those aspects in his or her considerations. 22 On that point, at para [77] the Court said: In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The Court may form such a view as a result of the rehabilitation of the offender or because the offender will not have the opportunity to commit a similar offence in the future. 23 As Mr Gatenby has stated in his affidavit, the defendant has ceased trading. The background of that decision can be found in paras [8] to [10] of his affidavit as follows: [8] The operation of Gatenby Bros was severely affected by the drought years 1982 to 1984. The Sorghum Board of NSW went into administration owing the Company $856,000. It took seven (7) years to recover this money, without payment of any interest. The deregulation of the domestic grain market made the statutory grain Boards domestic grain traders for the first time and Gatenby Bros and firms like it were left to deal with the less creditworthy clients and as a result the Company went through a difficult financial period. [9] Things at Coolamon were also difficult. 1994 was a 1 in 40 year drought and the Company lost a crop costing $450,000. This was followed by another drought in 1996 and the harvest in 2001 was also very average with insufficient hay produced on the farm to maintain full chaff production in 2002. [10] The decision was made to end chaff milling at Coolamon. All staff were made redundant and the hay and grain that was produced in the 2001-2002 harvest was sold unprocessed off farm. Drought conditions continued in 2002 with a 1 in 100 year drought and the December harvest was a failure. There was insufficient hay produced to provide any basis to recommence chaff production and the Company made a decision to cease trading on the 28th February 2003. 24 The prosecution takes no issue with the fact that the defendant company has now ceased trading. I can, therefore, in my view, exclude specific deterrence as an element in the penalty I propose to impose. 25 I have considered the submissions that have been made by both counsel in this matter. Counsel on behalf of the defendant has raised the financial circumstances of the defendant. Annexed to Mr Gatenby's affidavit are financial statements of the defendant company for the years ending 30 June 2001, 2002 and 2003. As well, there is a letter from the defendant's accountants incorporated with those statements. I note that letter dated 20 September 2003, particularly at para [2] as follows: The company has struggled over the past few years to re-establish itself as a profitable organisation following major changes in its operating environment along with the impact of several severe droughts and two major debtor disasters. 26 The letter goes on and in conclusion states: The company does not have the financial capacity to pay any significant fine which may be imposed by the Court. 27 Mr Gatenby was cross-examined in a limited form about some aspects of the accounts annexed to his affidavit, particularly the financial statements for the year ending 30 June 2003. Looking specifically at the trading account and the balance sheet for the defendant company for that year, the submission made by counsel for the prosecution was that reference to the defendant's balance sheet for the year ending 30 June 2003 shows no amount entered as finished goods at cost. Reference to the trading account for that year shows a figure for closing finished goods as being $143,814. That figure, it was submitted, based on the approach taken in prior years, should have appeared as an asset in the balance sheet of the defendant company for the year ending 30 June 2003. The absence of any such entry gave rise to the inference, it was submitted, of an understatement in the defendant's accounts for that year. Not surprisingly, counsel for the defendant took issue with the inference raised on that point by counsel for the prosecution. 28 In turn, it was submitted on behalf of the defendant that the proposition advanced by counsel for the prosecution represented a misstatement of accounting principles. Counsel for the defendant addressed me on certain aspects of the defendant's financial accounts to that effect. 29 Notwithstanding the diverse propositions advanced by both counsel, the absence of any expert opinion as to the proper interpretation of the defendant's financial statements does not allow me to come to a satisfactory concluded view as to the submissions made by counsel for the prosecution. I accept that the inference as contended by counsel for the prosecution is but one inference that does arise on a consideration of the defendant's accounts but beyond that is mere speculation. 30 Counsel for the prosecution properly conceded that, notwithstanding the submissions made on that point, any general consideration of the defendant's financial accounts did disclose that the defendant company was in financial difficulties. 31 In determining penalty, one of the matters I must take into account is the financial circumstances of the defendant. Section 6 of the Fines Act 1996 makes that abundantly clear. At the same time, it is well settled, in weighing that consideration, the Court must also ensure that the penalty imposed is commensurate with and properly reflects the gravity of the offence. 32 Counsel for the prosecution has properly acknowledged that the defendant's plea of guilty was entered at the earliest available opportunity and that the defendant is entitled to an appropriate discount on that basis. I assess that discount at 25% in relation to the penalty I propose to impose. 33 There are subjective features the defendant is entitled to have taken into account in relation to the determination of penalty. The defendant has no prior convictions. That, in itself, must weigh in its favour. This is a defendant company that has been operating since 1926 in an industry that one could say, quite properly in my view, is not without risks to safety in the type of operations conducted in the rural sector. To have operated from 1926 to the present without any convictions at all with respect to the Occupational Health and Safety Act is a feature that is a positive factor for the defendant. 34 Counsel for the prosecution also acknowledged that the defendant has fully co-operated with investigations in relation to this matter and has done all that it possibly could do to assist those investigations and the remediation work undertaken. 35 I do accept on the affidavit of Mr Gatenby that the tragic circumstances giving rise to the death of Mr Oliver not only robbed the defendant company of a long-standing, valuable and undoubtedly loyal employee, but also robbed him (Mr Gatenby) of a friend. That is a fact that I am prepared to accept as giving rise to circumstances of great regret and remorse on the part of Mr Gatenby on behalf of the defendant company. 36 Taking all those factors into account, I assess a further discount on penalty of 10%. 37 Taking into account all the factors that I have referred to and that I am required to, I determine a notional penalty in this matter of $110,000. In applying the discounts I have assessed, I determine a final penalty of $71,500. 38 Accordingly, I make the following orders: · The defendant is convicted of the offences as charged. · I impose a penalty in this matter of $71,500 and I allocate a moiety to the prosecution on the usual terms. · Costs to the prosecution as agreed between the parties but, failing agreement, that matter may be referred to me for further determination. 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.