Industrial Court of New South Wales CITATION: Inspector Jones v JT & LC Tippett Pty Ltd and Anor (No 2) [2007] NSWIRComm 306 PROSECUTOR: Inspector Stephen Jones PARTIES: DEFENDANTS: JT & LC Tippett Pty Ltd RD & LF Tippett Pty Ltd FILE NUMBER(S): IRC 2587 and 2588 of 2005 CORAM: Backman J CATCHWORDS: Occupational Health and Safety - sentences under s 8(1) of the Occupational Health and Safety Act 2000 following defended hearings - objective and subjective factors considered - respective capacities to pay a fine considered - application of principle of totality considered in context of corporate defendants guilty of offences arising from identical facts and in circumstances where the defendants operated as a partnership which employed the injured worker - application of principle of totality rejected - apportionment of costs considered - penalty - orders. Criminal Procedure Act 1986 LEGISLATION CITED: Fines Act 1996 Occupational Health and Safety Act 2000 Department of Mineral Resources of NSW (Chief Inspector Terrey) v A M Hoipo & Sons Pty Ltd (2000) 99 IR 137 Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) and Another v Lane Industries Pty Ltd and Others (1993) 26 IPR 261 Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 Genner Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Guillarte) (2001) 110 IR 57 Haynes v CI & D Manufacturing Pty Limited (No. 2); Callaghan v CI & D Manufacturing Pty Limited (No. 2) (1995) 60 IR 455 Hughes v Western Australian Cricket Association (Inc) and Ors (1986) ATPR 40-676 Inspector Clothier v Malcolm McIntyre trading as Corambie Pastoral Company and another [2007] NSWIRComm 40 Inspector Green v Camilleri Properties Pty Ltd (2006) 152 IR 156 CASES CITED: Inspector Jones v JT & LC Tippett Pty Ltd and Anor [2007] NSWIRComm 26 Morrison v Powercoal Pty Ltd (2003) 130 IR 364 O'Sullivan v Crown in Right of State of New South Wales (Department of Education and Training) (2003) 128 IR 158 T & M Industries Pty Ltd v Inspector James [2007] NSWIRComm 85 Trade Practices Commission v Cue Design Pty Ltd and Cue & Co Pty Ltd (1996) 85 A Crim R 500 WorkCover Authority (NSW) (Inspector Green) v Big River Timbers Pty Ltd (2006) 156 IR 341 WorkCover Authority of New South Wales (Inspector Ankucic) v Lyndhurst Trading Co Pty Limited (2000) 95 IR 462 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Robert Mayell) v DJ Gleeson Pty Ltd [2006] NSWIRComm 363 WorkCover Authority of New South Wales (Inspector Ross Wolf) v South Eastern Sydney and Illawarra Area Health Service (No 2) [2006] NSWIRComm 272 HEARING DATES: 16 July 2007 DATE OF JUDGMENT: 14 December 2007 PROSECUTOR: Mr P Skinner of counsel Bellbridge Hague Solicitors (Mr P Simpson) LEGAL REPRESENTATIVES: DEFENDANTS: Mr K G Bennett of counsel Carroll & O'Dea Lawyers (Mr M Selinger) JUDGMENT: - 25 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: BACKMAN J Friday, 14 December 2007 Matter No IRC 2587 of 2005 INSPECTOR STEPHEN JONES v JT & LC TIPPETT PTY LTD Prosecution under s 8(1) of the Occupational Health & Safety Act 2000 Matter No IRC 2588 of 2005 INSPECTOR STEPHEN JONES v RD & LF TIPPETT PTY LTD Prosecution under s 8(1) of the Occupational Health & Safety Act 2000 JUDGMENT [2007] NSWIRComm 306 1 The defendants JT & LC Tippett Pty Limited and RD & LF Tippett Pty Limited have been found guilty of one offence each under s 8(1) of the Occupational Health and Safety Act 2000 following defended hearings: Inspector Jones v JT & LC Tippett Pty Ltd and Anor [2007] NSWIRComm 26. 2 As set out in the judgment, the charges concerned events that took place at the defendants' property known as "Whroo" at Kyalite in New South Wales. On 19 January 2004, Anthony Desmond Butcher, Timothy John Willie and Daniel James Peterson, all employed by the defendants to harvest potatoes, were using a potato harvester known as a Grimme Windrower, which was pulled by a tractor. A nip point area on the windrower would, from time to time, become blocked with dirt, debris and pieces of potato which had to be cleared away. A prevailing procedure for accomplishing this task involved disengaging the tractor's power take off (PTO), clearing the debris to unblock the area, re-engaging the PTO, and resuming harvesting. 3 The windrower was constructed of spades for lifting out the potatoes and two independent webbing conveyers: a front conveyer (the first web) and a rear conveyer (the second web). The first web was designed to convey potatoes, soil and foliage from ground level up to an elevated position and then to transfer the potatoes onto the second web. A rubber coated friction drive roller drove the first web from the rear. Along the lower rear corner of the first web and friction drive roller was a counter rotating roller (haulm roller). The purpose of this roller was to create an in-running nip point to grip haulm (potato foliage tops) and pass it forward and out on the ground. At the rear, and below the haulm roller, was the second web. After the haulm was removed, the second web conveyed the remaining potatoes to the rear of the windrower: Inspector Jones v JT & LC Tippett Pty Ltd at [4]. At some stage on 19 January, 2004, during the course of the potato harvesting, the machine became blocked. According to Mr Butcher, Mr Willie attempted to unblock the rollers while standing on the windrower. At the same time Mr Peterson sat in the tractor and turned the PTO on and off during the process. Mr Butcher explained that he climbed onto the second web where it was blocked and attempted to assist Mr Willie clear the blockage. He says at that point both he and Mr Willie were asking Mr Peterson to turn the PTO on and off. He was watching the web under his feet and he saw that it had stopped. At that time (presumably because the second web was not moving) he assumed that the PTO was off. He then says he put his foot on the web and that is when his foot was dragged in between the main web and the counter-rotating roller: Inspector Jones v JT & LC Tippet Pty Ltd at [34]. 4 The prosecutor alleged that the defendants failed to provide and maintain a safe system of work for the cleaning of the grimme windrower in that, "a person" could access moving parts of the windrower while cleaning the rollers. The prosecutor had also alleged against both defendants that there was no adequate system of isolating the windrower while the rollers were being cleaned and that the defendants had failed to ensure that the rollers were adequately guarded. The facts and the evidence upon which the allegations were based have been dealt with in detail in my judgment and I do not propose to repeat them here. 5 The defendants come before the Court for sentence following the hearings and the findings of guilt against them in relation to both charges. 6 During the contested proceedings, the prosecutor indicated that the charges apply only to Mr Butcher as an employee. The prosecutor's case against both defendants was that Mr Butcher was at risk of being injured because he could access moving parts of the windrower while cleaning its rollers. The evidence revealed that the windrower contained a number of hazardous components, including the nip point in which Mr Butcher's foot was caught. The risk arose when access was gained to that nip point area while the PTO was engaged and the componentry was operating. 7 The risk to safety, which arose from access to the in-running nip point, was known to the defendants before the accident to Mr Butcher. In the judgment on liability, I reproduced an extract from an interview of John Trevella Tippett, a director of the defendant JT & LC Tippett Pty Ltd. In that interview Mr Tippett nominated various risks or hazards associated with the operation of the windrower, following a question regarding whether a risk assessment had ever been conducted on the machine. He explained that a general risk assessment was undertaken which identified the risks associated with the operation of equipment. The assessment was not documented. According to Mr Tippett, the risks included the PTO shaft, chain and sprockets and moving parts, and the reversing rollers in which Mr Butcher's foot was caught. A simple method of controlling the risk, advanced by Mr Tippett in the interview, was to: "...ensure that the equipment is turned off when people were required to access the rollers. The only other option is to put a guard over the top, however this would have no real value given you would have to take it off to clean the roller and therefore provides no real barrier. All other guards are in place as per the manufacturers specification and were in place at the time of the accident, there are in place at all times when the machinery is being operated." 8 The evidence disclosed a system for cleaning the rollers in place prior to the accident. Mr Tippett, in his interview, outlined the system in the following way: A: If the rollers became blocked you would remove the blockage by hand using a shovel or a crowbar until it was reasonably clear and then you run the machine again. The cleaning must always be done while the machine is turned off. A: If he [Mr Butcher] was doing it by himself he would have to turn the tractor off, clear the machine and then get back in the tractor to turn it on again. The communication would have been given to him verbally. He would have been taken out and shown directly, Anthony has been employed here for at least 4 or 5 years and he was a leading hand not just a casual employee. He would be expected to show some leadership in these matters because the other two workers were actually casuals. As I have seen what these machines can do I would have communicated this to all people working with the machine and I am a hands on person and would have taken any employee to the machine and showed them the task and highlighted the dangers. 9 In his oral evidence, Mr Tippett explained that the system of instruction in relation to the various items of machinery used on the property by employees, including Mr Butcher, was the "buddy system". It was also, he said, not documented, because the workers, "were not extremely well-educated". New employees, he said, usually received instructions from either himself, the foreman or the leading hand. The instructions he said were verbal and included instruction both on the operation of the machines as well as indicating dangerous parts including moving parts and the PTO shafts. Guards on the machines were also identified and the employees told to remove them. These instructions usually took about one hour. In relation to clearing blockages from the windrower Mr Tippett said the employees were told to first stop the machine by disengaging the PTO, then climb onto the windrower and dislodge any debris either by hand or using a crowbar, "or something like that", then return to the tractor and engage the PTO. If the blockage still had not cleared the process was repeated, although Mr Tippett volunteered that one could stand on the tractor axle in order to look into the windrower. 10 In the judgment on liability I made a number of findings (extracted below) as to the content and extent of the prevailing system at the time of the accident for cleaning the rollers. I adopt those finding for the purpose of sentencing in the present proceedings: [30] Mr Tippett's evidence reveals that the system for cleaning the rollers on the Windrower when they became blocked, at least insofar as he understood it, involved a few basic steps namely: (i) disengage the PTO; (ii) climb onto the back of the Windrower and dislodge the debris using hands, a crowbar or some other available implement; (iii) return to tractor and engage PTO; (iv) repeat the procedure if blockage not cleared; (v) at no stage climb onto the Windrower while the PTO is engaged. [31] It is apparent from Mr Tippett's evidence that the system applied equally to one person working alone or several persons working together. In relation to safety aspects and the Windrower, Mr Tippett said the foreman instructed employees on the safe operation of the machinery and that safety matters were, "followed up all the time" through discussion. This discussion took place apparently at the same time as operational matters were discussed. Mr Tippett gave no evidence as to the content or substance of these discussions apart from advice given to employees that they must keep, "a continual watch on safety", and that, "these machines are dangerous". Nor was there any evidence as to the duration of the discussions or the level of attendance or participation in the discussions. In relation to Mr Butcher, Mr Tippett was unable to recall specifically whether he had told Mr Butcher that the rollers on the Windrower were dangerous. The basis upon which he says he "probably recollected" telling Mr Butcher that the rollers were dangerous was that he was aware of injuries being suffered in the potato industry, and he was "very conscious" of the counter-rotating rollers in the machine (presumably because he regarded them as dangerous). [32] It follows from this evidence that there existed a basic, general procedure in relation to cleaning the Windrower at the property which, given the very serious risk to safety posed by the machinery, in my opinion was inherently flawed (an aspect to which I will return shortly). Nor was Mr Tippett able to articulate how the procedure was brought to the attention of farm workers apart from rather vague references to ongoing discussions with the foreman during which workers were told in general terms that the Windrower and its parts were dangerous, and that the machine should not be physically accessed if the PTO was engaged. More importantly the evidence does not reveal whether Mr Butcher was told about or instructed in the procedure. The evidence at its highest is that Mr Tippett "probably recollects" telling Mr Butcher that the rollers were dangerous but this recollection is not based on any actual recollection of instructing Mr Butcher. Rather his recollection is based on his knowledge of injuries suffered by unidentified workers in the potato harvesting industry generally and the potential hazards posed by farm machinery used in the industry such as the Windrower. In relation to Mr Tuck's role in safety matters and ensuring that employees were carrying on their jobs safely Mr Tippett could only say that he presumed and hoped Mr Tuck was making sure employees performed their work safely. Mr Tuck was not called to give evidence. 11 Although there was a system in place for cleaning the rollers, it was deficient in a number of respects. In particular, it did not appear to have been adequately communicated to Mr Butcher. Mr Butcher, at best, received limited instructions on how to safely clean the rollers, and, he had a limited appreciation of the dangers posed by the counter-rotating rollers when the PTO was engaged. These conclusions are borne out by the evidence given by Mr Butcher during the contested proceedings as to the extent of his knowledge and instruction on the procedure for clearing a blockage from the rollers at the time of the accident. The relevant extract of his evidence appears below: Q. What had you been told at that point of time about how to unblock the machine in a similar situation where it had got blocked up? A. Well, just to unblock it, basically. Q. Sorry? A. Just to unblock it and assess the situation and unblock it. Q. Who told you that? A. I don't - I can't remember whether I have actually been told that. Q. You can't remember any specific moment of having discussed that? A. No, or how to unblock it specifically. Q. How long had you been doing that sort of job? A. As soon as I started working for John Tippett, back in 2000. Q. Had you ever been given any written instructions as to how to go about unblocking the machine? A. No, not that I can remember. Q. Had you ever had any sessions where you, with someone from that farm, had been taken through in some formal way, how to unblock the machine? A. I had been given a basic run down of the operation of the machine and how it runs, yes. Q. Who gave you that? A. Tuck Routen. Q. He was the foreman on the farm? A. I think so. Q. When did that happen, as best you can recall? A. When I first started digging potatoes. Q. What did the general run down involve? A. The basic operation of running the potato harvester or Windrower machine Q. Were you told anything specifically about unblocking it when it became blocked? A. Not really. Q. The way you were working that day in relation to the blockage - was that the way you worked always when there was a blockage? A. Well, if - yeah. If there's a blockage you assess the situation and unblock it the best way you can, I suppose. Q. Would that always involve getting up on top of the machine? A. If you have to, yes, to go and unblock that specific web, yes. 12 Despite the deficiencies in the system it cannot be said that the defendants had not taken steps to devise and implement a safe system for the cleaning of the rollers of the windrower. The fact that the defendants had in place, therefore, the system prior to the offence, mitigates to some extent the otherwise objective seriousness of the offences. 13 It should also be acknowledged for the purposes of penalty that, according to Mr Butcher, he had never seen any employees cleaning the rollers on the windrower while the PTO was engaged, nor had he, before the day of the accident, ever attempted to unblock the rollers while they were operating. Mr Butcher was a very experienced farmhand who was also familiar with the operation of the windrower because he had stripped it down and reassembled it as part of a maintenance programme. He realised that all moving parts of the windrower were dangerous and he was aware that the PTO should be off while blockages were cleared from the windrower. Mr Butcher's evidence also demonstrates that the unsafe practice utilised by him and Messrs Willie and Peterson at the time of the accident appears to have been a "one off " occurrence, as opposed to, for example, a pattern of persistent conduct entrenching over time an unsafe work practice which went undetected by the defendants. These circumstances do not reveal conduct which elevates the offences into the most serious category. This is not a case in which an employer has failed to pay any attention to the need to adopt a safe system of work: see Genner Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Guillarte (2001) 110 IR 57 at [72]. 14 The facts giving rise to the offence, indicate, as I observed earlier in these sentencing remarks, that the relevant risk to safety was known to the defendants. The risk also arose in the context of an extremely hazardous piece of machinery with a number of dangerous and accessible moving parts. Mr Butcher's injuries were both serious and extensive. Although the extent of the injuries, which were a consequence of the accident, do not impact on the penalty, they nevertheless are a manifestation of the seriousness of the risk which does impact on the penalty: Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [32]. 15 General deterrence should also feature prominently in the sentencing process. In Inspector Clothier v Malcolm McIntyre trading as Corambie Pastoral Company and another [2007] NSWIRComm 40, a prosecution which also concerned the operation of hazardous machinery on a farm I made the following observations, which I adopt in these sentencing reasons (at [9]): [9] General deterrence has particular significance in the circumstances of these offences. Not infrequently, prosecutions under the occupational health and safety legislation involve farming machinery and equipment used in remote farming locations, by inexperienced, uninstructed and unsupervised workers often with tragic results. I endorse the comments of his Honour Justice Haylen on the necessity for the rural community to meet its safety obligations, in Inspector Chris Chadwick v B H MacLachlan (NSW) Pty Ltd [2004] NSWIRComm 331 at [39]: In this case, there is a proper role for considerations of general and specific deterrence. The evidence demonstrates the slow awakening of the rural community to its obligations under the Act and the need to rethink its everyday work practices. Performing work on the same basis that it has been traditionally done over many years will no longer meet those obligations. The defendant continues to be an employer operating two very large properties. I accept that the defendant had in operation a number of safety practices but they were deficient. It is in those circumstances that specific deterrence has a role to play. 16 Specific deterrence also falls for application. The defendants operate a partnership trading as Tippetts Scrub Hill Pastoral Co. In an affidavit sworn by Mr Tippett following the findings of guilt in relation to both defendants, Mr Tippett explained that farming operations at Whroo have dramatically contracted since the advent of the very serious drought in South Western New South Wales. The partnership currently employs one full-time employee and one apprentice - the usual complement of employees is six permanent and thirteen casuals. The main activity at the farm appears to be potato harvesting and the farm is dependant upon water for irrigation of crops from the Murray River scheme. This information suggests that the farm is an ongoing concern although currently operating at a reduced capacity, at least temporarily. Specific deterrence is therefore relevant and will be accordingly reflected in a component of the penalty. 17 Another factor which heightens the objective seriousness of the offence concerns the simple straightforward measures available to the defendants prior to the offences which would have substantially obviated, if not eliminated, the risk to safety. One such measure which would have substantially obviated the risk would have been to confine the procedure for cleaning the rollers to one employee thereby reducing the possibility of other employees being exposed to the moving parts of the windrower. This aspect was dealt with in my judgment at [39] and [40] and I adopt the observations and findings made in those paragraphs in these sentencing reasons. 18 The Court was informed that the defendants have no prior convictions. The maximum penalty applicable to each offence is therefore $550,000. 19 The absence of prior convictions entitles the defendants to leniency normally extended to offenders not otherwise adversely recorded. 20 Since the accident, the defendants' occupational health and safety systems have been revised with the assistance of a consultant, Mal Giddings. Mr Giddings has developed a plan which formalises the systems already in place at Whroo. He has also devised a number of improvements to the existing safety systems, procedures and processes. As a result of the plan the defendants have, for example, installed "give way" signs on the farm roads. A staffing register has also been established. Most of the changes according to Mr Tippett have involved record keeping more so than substantive changes to the farm's induction and training programme. Mr Giddings is retained by the defendants on an ongoing basis as an occupational health and safety consultant. $4000.00 has been spent by the defendants in consulting fees. Mr Tippett personally reinforces the importance of safety by explaining the circumstances leading up to Mr Butcher's accident as often as possible to staff with a view to increasing their awareness of safety issues. 21 In relation to Mr Butcher, Mr Tippett says that he has offered what support he can to Mr Butcher following his injuries. The defendants' compensation premiums have also increased substantially to lower the costs of Mr Butcher's claim. 22 The safety plan formulated by Mr Giddings was reduced by him to writing and completed on 25 August 2004. The result is a comprehensive document that deals with a broad range of safety policies, procedures and an extensive system of reporting and notification in relation to issues such as maintenance, confined spaces, incident notification, training, licences and certificates of competence, and safe operating procedures. A notation in the plan under the chapter "Safe Operating Procedures. Repairing/Attaching Implements", contains a direction that: "Operator must turn off tractor prior to commencing any maintenance to equipment or implements". 23 These measures, which are impressive, will be taken into account in the defendants' favour on the issue of penalty. 24 Mr Tippett on behalf of the defendants also relies on the impact of the drought on farming operations to support a submission that the defendants have limited capacities to pay fines. A letter written by the defendants' accountant, RSM Bird Cameron, annexed to Mr Tippet's affidavit states that the defendants' turnover for the 2007 financial year has decreased by over 35 per cent which equates to an excess of $1.5 million in lost production. This in turn has resulted in substantial losses for the farm in the 2007 financial year for the first time in many years. The accountant has predicted a continuation of this trend with farms in the region facing greater reductions in water allocations and continued drought conditions. 25 Mr Tippett explains in his affidavit that the farm relies on irrigation for crops, principally potatoes, but that the farm has been currently on stage 4 water restrictions from 1 July 2007. Earlier this year Mr Tippett purchased water at a cost of $200,000. The water however was not delivered and Mr Tippett appealed, unsuccessfully, to the state government for compensation, although he expects to receive about $50,000. This leaves the defendants significantly out of pocket and the future availability of water an uncertainty. The drought and the effect of the drought on finances has in turn resulted in a reduction in the number of employees on the farm to two, with the prospect of further employment dependant upon the water situation. 26 Apart from this material, the defendants have not produced any financial records or other records in support of their submission that they have limited capacities to pay a fine. 27 The capacity of a defendant to pay a fine has been commonly relied upon in this jurisdiction as a subjective feature to be taken into account when imposing a penalty in occupational health and safety matters. The judgments illustrate the importance of placing appropriate and sufficient material before the Court to enable it to properly consider the issue in the exercise of its sentencing discretion. In Inspector Green v Camilleri Properties Pty Ltd (2006) 152 IR 156 the Full Bench made the following observation on the issue, which I adopt in these sentencing reasons: [21] Her Honour also appeared to take into account the respondents' capacities to pay fines, notwithstanding that there was no evidence placed before her to enable any assessment of their respective financial means. Section 6 of the Fines Act 1996 (NSW) requires a court, in the exercise of its discretion to fix the amount of any fine, to give consideration to the defendant's means to pay the fine. In doing so, the section requires the court to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount. Plainly, s 6 provides the court with an obligation to consider the defendant's means in a practical and commonsense way. Nevertheless, the consideration must not be, in proceedings under the Occupational Health and Safety Act , ritualistic or token, so that where a defendant relies on the provisions of s 6 of the Fines Act in such proceedings to temper the amount of any fine to be imposed, the defendant bears the onus of placing appropriate evidence before the court to enable it to give proper consideration to the exercise of its sentencing discretion. [22] The defendant must also satisfy the court, on the balance of probabilities, of the cogency of the evidence and its relevance to the fixing of the fine: WorkCover Authority (NSW) v Chen (2004) 137 IR 33 at [51]; McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310 at 314-315 and WorkCover Authority (NSW) v Wilson (t/as Wilson's Tree Service) (2005) 143 IR 187 at [108]. It follows that the sentencing magistrate, or judge, in occupational health and safety matters, should also explicitly indicate the material upon which she or he has acted. [23] Her Honour, while acknowledging that there was no specific evidence before her as to the respondents' financial means said that she took a "… general approach as to their capacity to pay a fine". Although it is not entirely clear what her Honour meant by that remark, to the extent that her Honour purported to take into account the respondents' respective financial circumstances, we consider that in the absence of any evidence on that issue, her Honour fell into error. (See also T & M Industries Pty Ltd v Inspector James [2007] NSWIRComm 85 at [31]). 28 Here, the paucity of material tendered is not sufficient for the Court to properly consider the defendants' respective capacities to pay a fine. Instead the defendants have asked the Court to consider the issue in the context of the material tendered which discloses that the drought, the lost costs associated with the unsuccessful bid to purchase water, and the reduction in farming operations have placed the defendants in a position of severe financial hardship. Although the Court expresses sympathy for the defendants' plight, it must nevertheless be guided by the provisions of s 6 of the Fines Act 1996, earlier set out, in its consideration of what relevant matters should or may be taken into account. In addition, the judgments of this jurisdiction on the issue emphasise that appropriate financial records must be produced by a defendant to enable the Court to properly consider the issue: see for example Inspector Green v Camilleri Properties at [21]; WorkCover Authority of New South Wales (Inspector Robert Mayell) v DJ Gleeson Pty Ltd [2006] NSWIRComm 363 at [33]. This includes up to date taxation records, and accounting records which set out a defendant's financial position. Such records include profit and loss sheets and the balance sheet. Figures purporting to represent a corporation's annual turnover do not always accurately reflect the true financial position. A simple example of this might be a corporation with an extremely high revenue but a small profit because of large operating costs. The absence in the evidence of any material of this nature precludes the Court from properly considering the issue, in the exercise of its sentencing discretion. 29 The defendants have also advanced a submission that the Court can and should view the offences in a global way, that is, impose a single penalty and then sentence each defendant to 50 per cent of the whole. The factual bases upon which it is said that the Court may do this is that the defendants operated as a partnership which employed Mr Butcher, and, the charges against each defendant are pursuant to the same section of the Act, are in identical terms, and involve the same factual background. 30 The defendants also sought to place reliance on a decision of O'Loughlin J in Trade Practices Commission v Cue Design Pty Ltd and Cue & Co Pty Ltd (1996) 85 A Crim R 500. That decision involved multiple charges against the same defendant, as well as charges against a second defendant. O'Loughlin J found that the gravamen of each count against each defendant was the same, and, the defendants were part of the same corporate group. One defendant was the manufacturer, designer and wholesaler of women's garments. The other defendant retailed the garments. The offences involved attaching price tags to garments displayed in stores bearing higher prices crossed out and lower prices written below, when the garments had not been previously offered for sale at the higher price. O'Loughlin J approached the question of penalty by treating the matters as if there was only one defendant and then dividing the penalty equally between both defendants. His Honour's reasons for so doing appear to have been based on the fact that the strategy was implemented by one business house, and, "...it would be unfair to impose a multiplication of penalties because of the number of outlets or the number of companies in the group". 31 The defendants also sought to rely on my judgment in Inspector Clothier v Malcolm McIntyre & Anor [2007] NSWIRComm 40 at [44] where I said: [44] The Court was also asked in the event fines were imposed on both defendants to apply the principle of totality. The prosecutor suggested that the defendants in partnership operate as one economic unit, even though they are different legal entities. A similar situation arose in Haynes v CI & D Manufacturing Pty Limited & Anor (1995) 60 IR 455 where the Full Bench imposed one penalty on two corporate defendants on the basis that one was wholly owned by the other and, "...the connection between the two companies (was) so intimate that it is permissible to view the offence in a global way," (at 458). I propose to adopt the same course. The defendants presently before the Court are husband and wife and are joint owners of a property which they run together as a partnership. The offences for which each defendant has been charged are identical and involve the same factual background. 32 It should be noted in relation to the judgment in Inspector Clothier v Malcolm McIntyre that both the prosecutor and the defendants made a joint submission to the Court that it should proceed to sentence adopting the approach in Haynes v CI & D Manufacturing Pty Limited & Anor (No. 2) (1995) 60 IR 455 at 458, set out in the extract immediately above, on the basis that the defendants operated as one economic unit even though they were separate entities. 33 In the present proceedings, the prosecutor also conceded that based upon the facts in the matter, it would be "within principle" if, in determining penalty, a discount were allowed of the penalty that would otherwise apply to each defendant, "if it had been the employer solely of Mr Butcher rather than in partnership." 34 The difficulty with this approach, advanced by both the prosecutor and the defendant, is that it was expressly rejected by the Full Bench in WorkCover Authority (NSW) (Inspector Green) v Big River Timbers Pty Ltd (2006) 156 IR 341. In that judgment the Full Bench had before it two corporate defendants, one an employer and the other the owner of plant and controller of business activities. The corporate group, which included both corporate defendants, manufactured plywood and flooring. The Full Bench examined the application of the totality principle in some detail and concluded that the magistrate at first instance misapplied the principle of totality by treating the two corporate defendants as one entity for the purpose of sentencing because they were "interlocked" (that is, closely related corporate entities having a common governance and operations). During the course of deliberations, the Full Bench referred to the judgment of Walton J in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another (2000) 95 IR 383. In that judgment, his Honour considered whether the application of the totality principle to two separate defendants was permissible. In finding against the application of the principle his Honour said (at 459): The principle of totality operates to ensure that the total criminality of a defendant in relation to an incident is properly and justly assessed. It is difficult to envisage how the principle, so expressed, can be used to measure the criminality of more than one defendant no matter how closely related. The principle of totality can be distinguished from the principle of parity which is directly relevant to the assessment of the appropriate penalty for co-offenders. Upon the basis of the authorities I have earlier referred to, the principle of totality would not require the sentencing of the defendants to be undertaken upon the basis that they were effectively treated as a single entity facing two charges. 35 The Full Bench endorsed this approach which precludes the application of the principle of totality to two different defendants. The Full Bench's reasons are set out in the judgment at [18]-[22] and are worth repeating here: [18] We do not consider that on the facts this matter may be distinguished from those applying in McDonald's or A Team Concrete . It was not open on the facts of this case for his Honour to sentence as if he had one defendant before him. [19] However, we consider the error is more profound. We consider that it is inconsistent with the principle of totality to effectively treat two corporate defendants, even when facing similar charges arising out of the same sub-stratum of facts as a common entity, for the purposes of sentencing, no matter how close their corporate relationship (in terms of government, operations or employment). [20] In coming to this view we adopt the opinions expressed by Walton J in McDonald's noting that his Honour then discusses and applies the judgment of McHugh J in Postiglione v The Queen at 307-308. [21] We note that his Honour in McDonald's referred to the judgment of the Full Bench in Haynes v CI & D Manufacturing Pty Ltd (1994) 60 IR 149. In this respect his Honour considered the circumstances of this case as unusual, and proceeded to distinguish it. However, we were invited by the appellant to conclude that the judgment in Haynes v CI & D Manufacturing Pty Ltd was wrong on the issue of totality and we propose to do so in order to ensure that the law in this area is clear. [22] It is not permissible, under the principle of totality, and for the reasons we have discussed, to treat two corporate respondents (distinguished by their separate incorporation) as a single entity for the purpose of sentencing and to the extent that the Full Bench in CI & D Manufacturing adopted a different approach as a matter of law and principle we consider that it is wrong. Plainly, any first instance judgments which have approached the principle of sentencing in like manner would involve error. 36 It will be observed in the passage extracted from WorkCover v Big River Timbers that the Full Bench overruled the approach taken in Haynes v CI & D which treated two corporate defendants as a single entity for the purpose of imposing penalty: see also T & M Industries Pty Ltd v Inspector James. The judgment in WorkCover v Big River Timbers is, of course, binding on the Court and must be followed. 37 The parties sought to distinguish the present circumstances from the judgment in WorkCover v Big River Timbers. The prosecutor sought to do so on the basis that the Full Bench judgment dealt with two corporate co-offenders who were in a business relationship, not a partnership, and where only one was the employer. The defendants here emphasised that they are in partnership, and have been "convicted" of the same offence in the same terms arising out of the same circumstances. 38 These differences, in my view, cannot be sustained in light of the Full Bench findings in WorkCover v Big River Timbers. The principle in that judgment was not based upon fine distinctions between the roles and circumstances of the two or more corporate defendants. Its application has a broader basis which is made clear in the judgment. In the passage extracted above, for example, (at [19]) the Full Bench plainly took the view that the imposition of a single penalty through the application of the principle of totality where there are two separate defendants was an error, "...no matter how close their corporate relationship (in terms of government, operations or employment)...". 39 The defendants, in the alternative, also relied on a principle, again extracted from Haynes v CI & D, which they say would permit the Court to sentence them as if they were individual offenders. The reasons advanced for the application of the principle to the present circumstances were that the defendants are "no more than unincorporated trusts", used as a means of distributing earnings. Presently the operation has only two employees. Any fine will ultimately fall on the Tippett brothers who operate the farm. In these circumstances it is appropriate to, "treat them as individuals". The relevant passage from Haynes v CI & D (at 457), upon which reliance is placed, is extracted below: In a number of cases decided under the OHS Act where the corporate structure of the defendant has been shown to be little more than the means of distribution of earnings arising from personal exertion, or where, as a matter of corporate structure, the burden of any fine levied will fall on one person or one family group ownership, the Court has seen it appropriate to impose a fine substantially less than if the corporation was functioning as a company with assets of a substantial kind. 40 I should state at this point that I do not agree with the defendants that the particular passage extracted immediately above is authority for the proposition that courts may approach the imposition of penalty on a corporate defendant as if it were an individual, facing the lesser statutory maximum. Rather, the approach taken in Haynes v CI&D appears to involve no more than a consideration of the means of a defendant to pay a fine in light of relevant principles. This particular approach was considered by Walton J, Vice-President in Department of Mineral Resources of NSW (Chief Inspector Terrey) v A M Hoipo & Sons Pty Ltd (2000) 99 IR 137 at[47]-[49]: [47] It is convenient to commence the determination of penalty by considering the submissions advanced on behalf of the defendant in relation to its corporate structure and financial circumstances. Mr Hodgkinson did not seek to argue impecuniosity on the part of the defendant, but submitted that the Court should nonetheless have regard to the fact that the defendant's operation is a small enterprise and the fact that the financial burden of any penalty would fall upon Mr Hoipo. [48] Mr Hodgkinson did not submit that the Court was required to treat the defendant as an ''individual'' for the purposes of sentencing so as to detract as a matter of law from the maximum available. Rather, it was submitted that as a matter of discretion the Court should take into account the financial circumstances of the defendant and the fact that its corporate structure was in reality a vehicle for Mr Hoipo's personal activities. In this regard, I note the judgment in Inspector Gordon v MIJO (NSW) Pty Ltd (unreported, Cullen J, CT1002 of 1993,2 December 1993), in which his Honour commented (atp 5): ''The Court does not have a discretion to consider the maximum penalty at some level other than that provided by the Statute. Where a corporation is involved, the appropriate maximum penalty is that applicable to a corporation and not to an individual regardless of how or why the corporation was established. The three judgments of the Chief Judge in Inspector Robins v CT Plumbing Pty Ltd (unreported, Fisher CJ, No 522 of 1991, 16 December 1991), Mauger v Krcmar Engineering Pty Ltd (1993) 47 IR 359 and Inspector Young v Hidane Pty Ltd (unreported, Fisher CJ, CT 1113 of 1993, 30 September 1993), do not support this submission. Individual factors going to capacity to pay are not relevant in the determination of penalty. They may be relevant at a later time in terms of any application the defendant may make as to consideration of payment, but they are not relevant as to the determination of penalty.'' [49] I respectfully agree that the Court has no discretion to apply a maximum penalty other than that prescribed by the legislation: see also WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462. 41 This Court agrees with and adopts the analysis and findings of Walton J in the above judgment. The maximum penalty prescribed under the legislation against each defendant is $550,000 and the Court has no discretion to depart from that legislative prescription. This does not mean that the Court may not treat corporate defendants as "individuals" through the application of the more general principle that a court should consider the financial and other circumstances of a defendant when deciding what fine to impose: WorkCover Authority of New South Wales (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 475. As I earlier found, however, the paucity of material put before the Court as to the defendants' financial circumstances precludes any proper consideration of their respective capacities to pay a fine. The Court has been informed that the corporate operations of the farm are run by the two Tippett brothers and that the defendants are akin to "unincorporated trusts" used as vehicles to distribute income. I conclude from this material that the defendant corporations together constitute a "two-man" enterprise, employing two farm workers. The Court, however, has been unable to determine on the material placed before it, whether the defendants are of "modest means", a finding which might otherwise operate in the defendants' favour to reduce the penalties: cf Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 390 per Hungerford J. 42 The Court has also been requested by the defendants to make an order apportioning the costs between the parties in the defended hearings by one third and two thirds, in favour of the defendants. The prosecutor is opposed to the Court making the order and contends that there is no basis for the Court to depart from making the usual order as to costs made in occupational health and safety prosecutions, which is that costs follow the event. 43 As the defendants point out, the charges against each of them comprised three particulars. The first particular alleged, although not in clear terms, a failure to provide an adequate procedure and adequate instructions to Mr Butcher. The second particular, it emerged in evidence and submissions, also concerned a failure to provide adequate instructions and, in addition, a failure to provide an emergency stop button and/or an interlock device, near the in-running nip point. The third particular alleged that the rollers were inadequately guarded. The defences under s 28 of the Act focused exclusively on the failure to provide an interlock guard, that is, one of three aspects or "sub-particulars" relied upon the prosecutor which emerged from the second particular. The defendants contend that two thirds of the case dealt with the allegations concerning guarding. (I interpolate here that the defendants' reference to guarding is intended to be a reference to the interlock device.) The defendants were successful in defending themselves against the interlock device allegations, relying on an expert, Richard Lea Sulman. The prosecutor was only successful in relation to the allegation concerning inadequate procedures and instruction. This issue occupied approximately one third of court time. In relation to the third particular, the prosecutor failed to establish beyond reasonable doubt a causal nexus between the alleged failure to adequately guard the rollers and the risk to the safety of Mr Butcher while he was cleaning the rollers. Similarly, the Court found in relation to the second particular that an emergency stop button or a trip device would not have removed the risk to Mr Butcher's safety, and therefore, the requisite causal nexus between the failure to provide an adequate system of isolating the windrower and the resultant risk to safety (insofar as the allegation relied upon the emergency stop button or trip device) was not made out by the prosecutor. 44 In O'Sullivan v Crown in Right of State of New South Wales (Department of Education and Training) (2003) 128 IR 158 Walton J, Vice-President made an order for apportionment of costs of an occupational health and safety prosecution. In doing so, his Honour was guided by the relevant principles contained in the judgment of Toohey J in Hughes v Western Australian Cricket Association (Inc) and Ors (1986) ATPR 40-676. These principles were conveniently set out in the judgment of Walton J (at [198]) as follows: [198] In a successful prosecution, costs may be awarded to the prosecutor on the basis that "costs will follow the event": WorkCover Authority (NSW) v Lucon (Aust) Pty Ltd (No 2) (2003) 124 IR 459 at [19]. However, costs may be apportioned in certain circumstances. The relevant general principles in that regard are contained in the judgment of Toohey J in Hughes v WA Cricket Association (Inc) [1986] ATPR 48,134 (40-748), subject to the qualifications in Cretazzo v Lombardi (1975) 13 SASR 4, namely: (a) Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order; (b) Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which it has failed; (c) A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law; and (d) Notwithstanding the above, the interests of justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case. 45 Walton J also relied on Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) and Another v Lane Industries Pty Ltd and Others (1993) 26 IPR 261, where it was said (at 272): Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation. 46 In the present proceedings, although there was a common sub-stratum of facts, the evidence in relation to the issues of the emergency stop button, the interlock device and the guarding were discrete from the evidence in relation to the issues of safe procedures and adequacy of instructions. In relation to the former group of issues the prosecutor was not successful. Those issues occupied at least two thirds of court hearing time. In all but one of those issues (the interlock device) the prosecutor failed to make out the gravamen of the allegations namely the failure to provide an adequate system of isolation by providing an emergency stop button or trip device, and, the failure to ensure the rollers adequately guarded. The remaining issue, that of the interlock device was successfully defended by the defendants under s 28 of the Act. 47 These circumstances in my view warrant a departure from the normal order as to costs and I propose to apportion the costs recoverable by the prosecutor from the defendants. The appropriate order will be that the prosecutor should have 30 per cent of his costs on a party and party basis, payable jointly and severally by the defendants. 48 Finally, the prosecutor contended, in relation to the issue of costs, that ss 257A - 257C, 257E - 257G of the Criminal Procedure Act 1986 (CPA) apply to the present proceedings. The defendants made no contrary submission. I do not, however, agree. I dealt at some length with that particular regime of costs relied upon here by the prosecutor under the Criminal Procedure Act in WorkCover Authority of New South Wales (Inspector Ross Wolf) v South Eastern Sydney and Illawarra Area Health Service (No 2) [2006] NSWIRComm 272. In that matter proceedings were instituted by the prosecutor on 27 April 2005 when applications for order were flied under the Occupational Health and Safety Act 2000. An application for costs under s 257F CPA was made by the defendant following its successful application for an adjournment. The application for costs was refused on the grounds that s 257A to s 257 G inclusive (the amendments) which were introduced into Division 4, Part 5 of Chapter 4 of the CPA by the Courts Legislation Amendment Act No. 23 of 2006, did not apply to proceedings instituted before their commencement date which was 13 July 2006. This was because of Part 11 of Schedule 2 of the CPA which provides: 49 Definition In this Part: amending Act means the Courts Legislation Amendment Act 2006. 50 Amendments (1) An amendment made to this Act by the amending Act does not extend to proceedings instituted before the commencement of that amendment. (2) Such proceedings may be dealt with as if the amendment had not commenced. 49 The effect of this is that s 253 of the CPA continues to apply to the present proceedings. The charges against both defendants were not filed until 19 May 2005. The proceedings were therefore instituted before the commencement date of the amendments to Division 4 of Part 5 of the CPA, which was 13 July 2006. Section 253 relevantly provides: (1) A court may, in and by a conviction or order, order an accused person to pay to the prosecutor such costs as the court specifies or, if the conviction or order directs, as may be determined under subsection (2), if: (a) the court convicts the accused person of an offence, or ..... (2) The costs payable by a prosecutor or accused person in accordance with a direction under this section are to be determined: (a) by agreement between the prosecutor and accused person, and (b) if no such agreement can be reached, in accordance with the rules. Orders 50 In Matter No. IRC 2587 of 2005 the Court makes the following orders: (1) The defendant, JT & LC Tippett Pty Ltd is convicted of the offence. (2) The defendant is fined $60,000 with a moiety to the prosecutor. 51 In Matter No. IRC 2588 of 2005 the Court makes the following orders: (1) The defendant, RB & LF Tippett Pty Ltd is convicted of the offence. (2) The defendant is fined $60,000 with a moiety to the prosecutor. 52 In Matter Nos IRC 2587 and 2588 of 2005 the Court orders that the defendants JT & LC Tippett Pty Ltd and RD & LF Tippett Pty Ltd shall jointly and severally pay to the prosecutor 30 per cent of his costs as agreed, or if no such agreement can be reached, in accordance with the rules. _____________________ 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.