Industrial Court of New South Wales CITATION: Inspector Davidson v Williams [2009] NSWIRComm 64 PROSECUTOR WorkCover Authority of New South Wales PARTIES: DEFENDANT Russell Alan Williams FILE NUMBER(S): IRC 259 of 2008 CORAM: Marks J CATCHWORDS: OHS prosecution - ex parte hearing - defendant director of corporation - corporation contravened the Act - corporation failed to ensure health, safety and welfare at work of all its employees - failure to provide and maintain safe system of work - failure to provide information, instruction and training - failure to provide supervision - objective seriousness of the offence - actions of victim were not contemplated - victim acted in foolhardy manner - breach restricted to failure to ensure employee acting in irrational manner would not do so - deterrent effect - penalty imposed. LEGISLATION CITED: Occupational Health and Safety Act 2000 s8, s26 HEARING DATES: 11 August, 11 November 2008, 23 March and 4 May 2009. DATE OF JUDGMENT: 12 May 2009 PROSECUTOR Mr M Cahill of counsel Solicitor WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: Legal Group Ms B Benson DEFENDANT No appearance JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Tuesday 12 May 2009 Matter No IRC 259 of 2008 Inspector Maree Davidson v Russell Alan Williams Prosecution under s 26(1) and s 8(1) of the Occupational Health and Safety Act 2000 JUDGMENT [2009] NSWIRComm 64 1 In these proceedings, the defendant, Russell Alan Williams, is charged with a breach of s 26(1) of the Occupational Health and Safety Act 2000 ("the Act") by the prosecutor, Inspector Maree Davidson of the WorkCover Authority of New South Wales. The charge arises out of an alleged breach by a corporation, St Mary's Tyre Service (NSW) Pty Ltd ("St Mary's Tyres") of s 8(1) of the Act, by reason of the defendant being a director of that corporation. 2 Relevantly, ss 8(1) and 26 of the Act are in the following terms: 8 Duties of employers (1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. 26 Offences by corporations—liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 3 The offence with which the defendant is charged is that he was a director of St Mary's Tyres on 1 March 2006 and that on that date that corporation contravened s 8(1) of the Act in that, being an employer at 2 Plasser Crescent St Marys, the corporation "failed to ensure the health, safety and welfare at work of all of its employees, and in particular Kevin Butler, contrary to s 8(1) of the (Act)." 4 The particulars of the charge as set out in the application for order are as follows: "a) At all material times the defendant was a director of the corporation; b) At all material times the corporation was an employer; c) the corporation failed to provide and/or maintain a safe system of work with respect to the removal of split rim wheel and tyre assemblies from vehicles, including but not limited to split rim wheel and tyre assemblies on trucks, forklift trucks, earthmoving equipment and mobile cranes; d) the corporation failed to provide such information, instruction and training as was necessary to ensure the health and safety at work of its employees, including Mr Butler, in that the defendant failed to provide adequate information, training and instruction to its employees with respect to safe methods for removing split rim wheel and tyre assemblies from vehicles, including but not limited to split rim tyre assemblies on trucks, forklift trucks, earthmoving equipment, mobile cranes and other heavy industrial vehicles; e) the corporation failed to provide Mr Butler with adequate supervision. f) As a result of the abovementioned failures, Kevin Butler was placed at risk of injury and was fatally injured." 5 The prosecutor was unable to effect service of the proceedings on the defendant. Haylen J, in this Court, made an order for substituted service. The prosecutor, having complied with his Honour's order, and the defendant not having appeared, the matter has proceeded ex parte. Prior to fixing a date for hearing, I made orders requiring that service of affidavit material upon which the prosecutor would seek to rely for the purpose of the hearing be effected on the defendant at two nominated addresses. During the course of the proceedings, the prosecutor adduced evidence of having served the affidavit material at the two addresses specified. 6 The prosecutor gave evidence and, in addition, a number of affidavits were tendered into evidence as well as certain other documentary material, which I shall briefly describe. 7 I should state initially that I am satisfied on the basis of evidence adduced by the prosecutor that she was duly appointed under the provisions of the Act and is empowered by it to institute these proceedings. Her instrument of appointment was tendered during the course of the proceedings. 8 Searches conducted on behalf of the prosecutor of records kept by the Australian Securities and Investments Commission reveal that, at all relevant times and in particular on the date of the alleged incident, namely 1 March 2006, St Mary's Tyres was incorporated and that the defendant Mr Williams was a director of that corporation. 9 There was tendered into evidence a number of affidavits which, essentially, annexed records of interview given by the deponents to the prosecutor and attested as to their veracity. These affidavits were predominantly from persons who were employed by St Mary's Tyres but also from Wladyslaw John Burdzy, who was employed by Plasser Australia Pty Ltd ("Plasser") on whose premises the incident which gave rise to these proceedings occurred. An affidavit of Dr Neil Langlois, who carried out a post-mortem examination on the body of Kevin Butler, whose death is at the heart of these proceedings, also became evidence. 10 The prosecutor had taken a number of photographs and had obtained from St Mary's Tyres a number of documents, which became evidence in the proceedings. 11 From the totality of the evidentiary material filed in the proceedings, I am able to conclude that the prosecutor has established, to the requisite standard, the following facts: 1) On 1 March 2006, Terry Murray was working at St Mary's Tyres as a tyre management consultant. He had been engaged by that corporation for two years. He had over 15 years experience in the industry, although not as a tyre fitter. He worked part-time. On 1 March 2006, he received a phone call from a person working for Plasser, which operated mobile cranes, seeking a replacement for one of the rear tyres on a mobile crane. Mr Murray completed a "field service request form" which showed the location of a job at Plasser in St Marys and contained the following service details: "Inspect. Ring back if tyre and wheel is still on unit." Mr Murray assigned that job to Kevin Butler, who was an employee. Mr Butler was asked by Mr Murray to inspect the tyre and wheel and report back. He was not asked to do anything more. Mr Butler went to the Plasser site after performing some other work. He did not have a replacement tyre with him or other equipment essential to change the tyre. It was always Mr Murray's intention that the wheel and tyre would be removed by two persons, having regard to its size and weight and taken back to St Mary's Tyres to enable the new tyre to be fitted. 12 On 1 March 2006, Mr Burdzy noticed a tyre truck enter the premises of Plasser and stop near the mobile crane. He saw a person, whom the evidence has established was Mr Butler, get some equipment from the truck, start the compressor on the back of the truck and then commence undoing some nuts on the rear right hand wheel and tyre assembly of the mobile crane using a pneumatic ratchet gun. Mr Burdzy approached Mr Butler and asked him whether everything was "OK" and whether he knew what he was doing. Mr Butler replied: "I know what I'm doing." 13 The wheel and tyre assembly on the mobile crane consisted of a split rim. That is, there were two parts to the rim secured together by threaded studs fitted with nuts. The split rims and tyre assembly were in turn fixed to the rear hub of the mobile crane by an inner rim of eight threaded studs fitted with nuts. There were ten threaded studs fitted with nuts which held the two parts of the split rim together, which formed an outer circle of nuts. The outer rim of bolts did not contain any distinctive colouring nor was there any warning plaque of any kind on the wheel and tyre assembly. This is to be contrasted with the other back tyre of the mobile crane where the outer circle of nuts were painted red and to which was affixed a plaque that read "WARNING, DO NOT LOOSEN BOLTS PAINTED RED UNTIL TYRE IS FULLY DEFLATED." 14 The tyre was filled with both air and water. The water supplies ballast to stabilise the mobile crane whilst it is being operated. 15 It was industry practice that no effort should be made to deal with the tyre in any way without letting the air out first. If the air is not removed, the tyre remains under pressure. 16 After having the initial discussion with Mr Butler, Mr Burdzy walked away because the ratchet gun that Mr Butler was using was very noisy. A short time later, Mr Burdzy walked back towards the area where Mr Butler was working and saw the rim moving slightly. He said he felt that something was not right and then heard an explosion and saw Mr Butler thrown into the air by the force of the air and water escaping from the wheel and tyre assembly. Mr Burdzy estimated that Mr Butler was thrown approximately six to seven metres before he slumped into a 44-gallon drum. 17 Mr Butler was, in effect, in loosening the outer ring of nuts, breaking the seal on the tyre assembly that kept the pressurised air and water within the housing. By releasing those nuts and breaking the seal, he allowed the air and water, which was under pressure, to escape in what Mr Burdzy described as an "explosion". 18 Mr Butler was taken by ambulance to hospital but later died. 19 Following the incident, the prosecutor issued a number of improvement notices to the corporation and a prohibition notice. 20 Following the incident, and in response to notices issued by the prosecutor, the corporation developed a risk assessment template in order to allow risk assessments to be undertaken of its work, including the changing of a split rim tyre, has provided training to all employees on proper and safe work procedures for working with split rim tyres, has provided training to all persons carrying out supervisory duties about risk management, has reviewed its work practices for working with split rim tyres and developed a safety manual, has developed a formalised system to conduct proper reference checks on all potential employees and has developed and implemented an induction package for new employees. 21 The particulars of the charge against the corporation, which are, of course, relevant to the breach by the defendant, go to the failure to provide and maintain a safe system of work with respect to the removal of split rim wheel and tyre assemblies, the failure to provide information, instruction and training particularly to Mr Butler and the failure to provide him with adequate supervision. 22 The affidavit evidence given in the proceedings was that of five employees. Not all of these employees had daily or, indeed, frequent contact with Mr Butler and not all of them were involved in his supervision or worked closely with him in an operational sense. Therefore, there was no evidence about any specific training or instruction given to Mr Butler. However, the totality of the evidence is to the effect that at the time of the incident St Mary's Tyres did not have in place any formal documented occupational health and safety systems, there were no formal induction or training processes and no documentation with respect to training. Furthermore, there was no documented material that referred to the prior experience and expertise of any employee. None of the persons who gave evidence, including those who carried out significant operational work, had been given any systematic training nor advised of any safe work methods which were utilised by St Mary's Tyres. As the prosecutor submitted, and as I accept, the company's safe work methods were "ad hoc" and the company: "relied, principally, upon safe work practices learnt by staff through training that had been provided to them in previous jobs with other employers operating in the tyre industry." 23 Whilst there was wide spread recognition that in general terms all tyres which were inflated should be deflated before any repair work was performed, there were no formalised means of reinforcing this with employees, particularly in circumstances where an employee might, through carelessness, foolishness or in an inattentive manner, attempt to carry out work on a tyre before ensuring that it was deflated, as occurred, tragically, to Mr Butler. 24 Of course, no-one in the company could reasonably have foreseen that Mr Butler might have attempted single-handedly to remove the tyre from the mobile crane in circumstances where it was clearly not a one person job, he had not deflated the tyre first and, more particularly, in circumstances where he had not been asked to perform any work on the tyre, but had merely been directed to inspect it and report back about it. Whilst on the one hand, no-one could have anticipated that Mr Butler was going to act in such a foolhardy manner, nevertheless appropriate training and instruction would have fully discharged the corporation's obligations under s 8(1) of the Act which extends to employees who act foolishly or inattentively. 25 I infer from the evidence called in the proceedings by the prosecutor that there has been established, to the requisite criminal standard, the evidence which enables me to find that each of the particulars of the charge which I have earlier set out has been established by the prosecutor. Although, as I have said, there was no direct evidence about any information, training, instruction or supervision given personally by or on behalf of the corporation to Mr Butler, there is sufficient evidence concerning the practices, procedures, and the lack of attention to training, instruction and supervision that demonstrates a failure on the part of the corporation to have complied with particulars c), d), e) and f) of the charge. Of course, there is direct evidence that establishes the particulars contained in a) and b). I find that the prosecution has established the charge brought against this defendant. 26 It was submitted on behalf of the prosecutor that because Mr Murray was not fully aware of Mr Butler's experience and expertise, then he should have provided a greater level of supervision. The prosecutor submitted that it was incumbent upon St Mary's Tyres to have informed Plasser that Mr Butler would only be inspecting the tyre and would be on its premises for no other purpose. This would allow the third party owner of the premises to be aware of the nature and extent of what work was to be undertaken by its employee on the premises. Furthermore, there should have been some indication, it was submitted, that there was some limit to Mr Butler's expertise. 27 In my opinion, this latter submission may arguably elevate what the WorkCover Authority of New South Wales requires of employers whose employees carry out work on third party premises in order to discharge their obligations under the Act beyond a commercial reality. To expect the owners of third party premises to be advised on each occasion of the precise work to be carried out and of the limits of expertise and experience of those performing the work would create an additional layer of compliance in general terms which might only be justified in limited circumstances. Penalty 28 The maximum penalty is $55,000. The offence created by this defendant is to be measured against the objective seriousness of the offence of the corporation. Whilst the breach is serious, it needs to be considered in the context of all of the factual matrix. Mr Butler was sent to inspect the tyre only, it was not contemplated that he would perform any work on it, he was not equipped to transport the tyre back to the St Mary's Tyres' workplace and the manner in which he went about working on the tyre was foolhardy and in breach of all recognised safe and sensible work processes. The breach is restricted, therefore, to the failure to ensure that an employee acting in an irrational and erroneous manner would not do so. 29 In fixing penalty, I will also take into account the general deterrent effect that the penalty will have in and about the operation of the work of others in this industry and in and about the role of directors of corporations who employ persons in the industry. There is also a need to take into account the specific deterrent effect on this defendant. 30 The prosecution submitted that the evidence was to the effect that the defendant was an active director of the corporation and had been so since its incorporation. 31 The prosecution sought a moiety and costs. 32 In all the circumstances, I intend imposing a penalty in the sum of $20,000. Orders 33 I make the following orders: 1) The defendant is found guilty of the offence with which he is charged and convicted accordingly. 2) I impose a monetary penalty of $20,000 with a moiety to the prosecutor. 3) The defendant is to pay the costs of the prosecutor in an amount assessed by the Court in default of agreement. 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.