Industrial Court of New South Wales CITATION: Fidoto Pty Limited v Inspector Patton [2010] NSWIRComm 171 PARTIES: Fidoto Pty Limited (Appellant) Inspector John Patton (Respondent) FILE NUMBER(S): IRC 276 of 2010 CORAM: Boland J President; Walton J Vice-President; Haylen J CATCHWORDS: APPEAL - Occupational Health and Safety Act 2000 - s 8(1) - fall injury - two separate corporations culpably involved in workplace injury - appellant pleads guilty to s 8(1) breach - other corporation pleads guilty to s 8(1) and s 8(2) breaches - both faced maximum penalty of $825,000 - both entered early pleas and had subjective factors considered - significant commonality of circumstances, particulars and Agreed Statement of Facts - sentencing Judge finds both defendants equally culpable - finds each charge warrants penalty of $90,000 - principle of totality applied to other corporation - total criminality met by fine of $90,000 equally divided between the two offences - no appeal against application of totality principle - no factual finding of sentencing Judge challenged on appeal - consistency and equal justice does not require appellant's sentence to be adjusted to $45,000 - difference in penalties justified by application of sentencing principles - no justifiable sense of injustice available - appeal dismissed Criminal Appeal Act 1912 s 5AA LEGISLATION CITED: Industrial Relations Act 1996 s 196 Occupational Health and Safety Act 2000 s 8 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Carroll v The Queen [2009] HCA 13 CASES CITED: Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 R v Salcedo [2004] NSW CCA 430 Warman International v WorkCover Authority of New South Wales (1998) 80 IR 326 HEARING DATES: 13 October 2010 DATE OF JUDGMENT: 1 December 2010 Mr S J Stanton of counsel (Appellant) Australian Business Lawyers LEGAL REPRESENTATIVES: Mr M P Cahill of counsel (Respondent) WorkCover Authority of New South Wales JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: BOLAND J, President WALTON J, Vice-President HAYLEN J Wednesday 1 December 2010 Matter No IRC 276 of 2010 FIDOTO PTY LTD v INSPECTOR JOHN PATTON Application by Fidoto Pty Ltd for leave to appeal and appeal against a judgment of Justice Backman given on 26.4.2010 in Matter No IRC 153 of 2008 JUDGMENT OF THE COURT [2010] NSWIRComm 171 1 The appellant, Fidoto Pty Ltd ("Fidoto"), seeks leave to appeal and to appeal the decision of Backman J in imposing upon the company a penalty of $90,000 for a breach of s 8(1) of the Occupational Health and Safety Act 2000. 2 Although a number of issues were raised in the Application for Leave and if granted, on the appeal, when the matter was called for hearing, counsel for the appellant indicated that the only issue to be pursued on appeal was the excessiveness of the penalty, especially in light of the penalty imposed upon another corporation involved in the same workplace incident, namely, Bi-Lo Pty Ltd ("Bi-Lo"). In order to fully appreciate the arguments in support of Fidoto's case, it is necessary to briefly consider the circumstances of the offences alleged against the two corporate defendants and the Statement of Agreed Facts in the sentencing proceedings that were heard consecutively by her Honour but on the same day. 3 Bi-Lo was a trading entity of the holding company Coles Myer Ltd ("Coles Myer"). Bi-Lo operated a supermarket in the seaside suburb of Vincentia located on the South-Coast of New South Wales. The Agreed Statement of Facts described the relationship between various entities and those involved in the workplace accident in the following way: 7. At all relevant times Amcor Packaging (Australia) Pty Ltd ("Amcor") had a national contract with Coles Myer Ltd ("Coles"). The contract is for Amcor to collect waste paper and cardboard from stores and offices and then pay Coles for the product. Coles in turn pay Amcor the relevant charge for the service provided. 8. The defendant (Fidoto) had a contract with Amcor to supply Amcor with reblocked (1 tonne) waste paper cardboard delivered to Amcor's premises at Botany. 9. The defendant did not have a contract with Bi-Lo or Coles. 4 At all material times the appellant employed Mr Terry Bourke as a truck driver. Part of Mr Bourke's duties was to load and unload recyclable material onto his truck at various locations around the Shoalhaven City area. On three days per week, Mr Bourke picked up bales of cardboard and plastic from, amongst other premises, the Bi-Lo supermarket at Vincentia and did so in accordance with the appellant's contract with Amcor. 5 Bi-Lo employed a storeman, Mr William Lynch, to work at the Vincentia supermarket. On 10 February 2006, Mr Bourke was at the Vincentia loading bay at Bi-Lo loading bales of cardboard off a raised hoist on the tray of his truck when he fell between 1.2 and 1.3 metres from the edge of the loading dock hoist onto the floor of the loading dock. At the time of this incident, the storeman, Mr Lynch, was assisting Mr Bourke to load his truck. Arising from this workplace accident Inspector Patton of the WorkCover Authority, commenced proceedings against the appellant for a breach of s 8(1) of the Act and also commenced prosecution proceedings against Bi-Lo for breaches of s 8(1) and s 8(2) of the Act. There was a significant degree of commonality between the particulars alleged in each of the three prosecutions and in each case, the risk identified was the risk of falling from height in the loading dock during the task of loading bales of compressed cardboard for transportation. There was a similar, but differently described risk in the Bi-Lo proceedings, but nothing turns on that for the purposes of these proceedings. 6 In addressing the circumstances of each defendant, her Honour acknowledged that each defendant had a prior conviction or convictions although there was no evidence to suggest that those prior convictions demonstrated a continued attitude of disobedience of the law. In those circumstances, both defendants faced a maximum penalty of $825,000. Both defendants had entered an early plea of guilty and had been allowed a 25 per cent discount in recognition of the utilitarian value of the plea. Both defendants had other subjective factors that were taken into account in mitigating the penalty. 7 In dealing with the penalty to be imposed upon Bi-Lo, her Honour applied the principle of totality to the two charges. In doing so, her Honour stated: [47] The charges, the subject of the incident of 10 February 2006, arose out of the same factual circumstances. I consider that a fine in relation to each charge of $90,000 is appropriate in the circumstances. Taking into account the principle of totality, I consider that a total fine for both charges should be $90,000, that is, $45,000 for each charge. These amounts properly reflect the criminality of Bi-Lo. 8 Although her Honour expressed herself sparingly in this paragraph it is tolerably clear, having regard to the entirety of the judgment, that her Honour had formed the view that the particulars in relation to both the s 8(1) and s 8(2) offences committed by Bi-Lo, arising as they did out of the very same incident and factual circumstances, led to the conclusion that there was a complete overlap in the defendant's conduct in regard to an identical duty, the only difference being that one duty related to employees and the other duty related to non-employees. By invoking the principle of totality, as she was obliged to do in such circumstances, her Honour conducted an analysis required by Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610, namely, to the extent that the two offences charged contained common elements, it would be wrong to punish the offender twice for the commission of the elements that were common. Her Honour then found herself in the position that, although each offence standing alone warranted a penalty of $90,000, the overlap of common elements was so complete that she regarded it as improper to maintain a full $90,000 penalty for each offence. Her Honour concluded that, although there were two offences, the penalty for one offence should be imposed leading to that total penalty of $90,000 then being equally divided between the two offences as representing the overall criminality of Bi-Lo. 9 In relation to the appellant, her Honour noted that the facts agreed between the parties were substantially the same as the facts agreed between the parties in the Bi-Lo matter and she adopted, in the proceedings regarding Fidoto, the sentencing reasons relating to the agreed facts insofar as they were in the same terms as those tendered in the Bi-Lo proceedings. This statement of her Honour was a reflection of the degree of commonality of facts and particulars between Bi-Lo and the Fidoto charge. 10 Her Honour then dealt with submissions as to the respective culpability of Bi-Lo and Fidoto in circumstances where the prosecutor had contended that the penalties to be imposed on the two corporations would be the same, irrespective of where the worker fell from. That submission arose in the context of the difference between the two corporations as to where, precisely, Mr Bourke fell on the day of the accident, a matter referred to in [6]. The appellant, Fidoto, submitted that its conduct did not have the same level of gravity as the conduct of Bi-Lo and that should be reflected in the penalties imposed. Her Honour resolved these propositions in the following manner: [90] Bi-Lo may have owned the premises, including the loading dock hoist and Fidoto may have owned the truck on which Mr Bourke and Mr Lynch were loading the bales, but the relevant risk to which the workers were exposed arose from their respective locations on either the truck or the hoist. These facts without more would facilitate the conclusion that the respective culpabilities of both defendants were equal. Both defendants had equal and attendant responsibilities towards Mr Bourke (as well as Mr Lynch) to ensure his safety while he undertook the work on 10 February 2006. [91] On behalf of Bi-Lo it was contended that Fidoto had the primary responsibility for ensuring that the rear gates on the truck (which had been earlier removed) were secured so that Mr Bourke would have been prevented from falling from the tray of the truck. Again, the submission focuses on the accident not the relevant risk to safety. It does not follow from Bi-Lo's contention therefore that Fidoto's culpability was greater than Bi-Lo's culpability because Fidoto owned the truck. The relevant risk to safety contemplated either a fall from the truck or from the hoist. ... [94] Given these matters, the only reasonable conclusion is one consistent with a finding that the respective culpabilities of both Fidoto and Bi-Lo are the same. CONSIDERATION 11 The essence of the appellant's case for leave and on appeal was that, because Bi-Lo received a penalty of $45,000 for a breach of s 8(2) of the Act in relation to the risks to the safety of Mr Bourke, then Fidoto should have received the same penalty of $45,000 for a breach of s 8(1) in relation to the substantially same particularised breach concerning the risks to the safety of Mr Bourke. This result was mandated, so it was submitted, by applying the principles of parity, equal justice and logic. 12 It was apparent from both the written submissions for the appellant and the oral submissions that it was the extent of the discrepancy or disparity that led to a justified sense of grievance: a $90,000 fine for a breach of s 8(1) by the applicant could not be justified when Bi-Lo was fined $45,000 for a s 8(2) breach arising out of the same incident. 13 There are a number of difficulties standing in the way of these submissions for the appellant. The prosecutor contends, correctly, that technically this is not a case where the principle of parity is applicable because the two corporations were charged with different offences and further, those different offences in the circumstances of Bi-Lo were fundamental to the way in which her Honour ultimately imposed the penalties against Bi-Lo. Nevertheless, in Warman International v WorkCover Authority of New South Wales (1998) 80 IR 326, the Full Bench held that, although the defendants were prosecuted under different sections of the Occupational Health and Safety Act, they should be dealt with consistently (at 341): While the offences with which we are dealing under the O H & S Act do not involve the notion of co-offenders, the fact is that the same circumstances have given rise to prosecutions for offences under ss 15 and 16 of the O H & S Act of the direct employer, Drake Personnel Ltd t/as Drake Industrial which supplied the labour involved, and the defendant here who utilised that labour in relevant circumstances. While those defendants have been found guilty of different offences, nevertheless the factual circumstances giving rise to the charges justify an approach to sentencing that shows consistency and not disparity in punishment in the same way as discussed by Mason J in Lowe . 14 The above conclusion by the Full Bench in Warman follows immediately upon the following discussion, commencing at 340: We also accept that the principle of parity in sentencing as discussed by the High Court in Postiglione -v- R ((1997) 189 CLR 295 has application to sentences imposed under the O H & S Act. In that context it is appropriate to have some regard to the sentences imposed by Hungerford J on Drake Personnel Ltd, the direct employer of two of the injured workers. In Postiglione the High Court was concerned with an appeal against sentence that raised questions of comparison between the sentences imposed on a principal party in a conspiracy compared with that imposed on the appellant, who was subordinate in that conspiracy. Dawson and Gaudron JJ (at 301-2) said: 'The parity principle upon which the argument in this court was mainly based is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them [ Lowe -v- R (1984) 154 CLR 606 at 610-11 per Mason J]. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated. On some occasions, different sentences may indicate that one or other of them is infected with error [ Lowe at 617-18 per Brennan J]. Ordinarily, correction of the error will result in there being a due proportion between the sentences and there will then be equal justice. However, the parity principle, as identified and expounded in Lowe -v- R , recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to `a justifiable sense of grievance' [ Lowe especially at 610 per Gibbs CJ, 613 per Mason J and 623 per Dawson J]. If there is, the sentence in issue should be reduced, notwithstanding that it is otherwise appropriate and within the permissible range of sentencing options. Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality.' That principle was referred to by Mason J in Lowe -v- The Queen ([1984] HCA 46; (1984) 154 CLR 606 at 610) as follows: 'Just as consistency in punishment - a reflection of the notion of equal justice - is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under the law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice. It is for this reason that the avoidance and elimination of unjustifiable discrepancy in sentencing is a matter of abiding importance to the administration of justice and to the community.' 15 To the same effect, we refer to the following passages from the judgment of the Full Bench in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [62]-[66]: [62] It is important to observe the distinction between, and the differing application of, the principles of parity and consistency. Consistency is relevant to the sentencing of different offenders with similar characteristics who have committed similar crimes, and to the sentencing of co-offenders in the same crime. The principle of parity is usually considered applicable only to the sentencing of co-offenders in the same crime and thus is not relevant in this matter. However, as Walton J, Vice-President, observed in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 at 435-436: "Whilst the principle of parity normally operates in relation to co-offenders or across the range of those convicted of the offence in question (see Siganto v The Queen (1998) 194 CLR 656 at 670 and in relation to the same crime Postiglione (at 309)), this Court held in Warman (at 341) that where defendants (not being co-offenders) are prosecuted under different sections of the Act, the Court should nonetheless adopt an approach to sentencing which 'shows consistency and not disparity in punishment in the same way as discussed by Mason J in Lowe ' where there exists common factual circumstances giving rise to the charges. It should also be noted that the Court considered parity in Warman in the context of a labour hire company and the defendant who utilised that labour. Hence, the decision in Warman would require that the defendants, even though prosecuted under different sections of the Act, shall be treated consistently in accordance with the principles in Lowe v The Queen (1984) 154 CLR 606." [63] When sentencing or hearing appeals by different offenders, what must be looked at is whether the sentence is within the range appropriate to the objective gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence (other than that of a co-offender) which merely forms part of that range: see R v Morgan (1993) 70 A Crim R 368 at 371 where Hunt CJ at CL said: "It is quite wrong to compare the sentence under challenge directly with that imposed upon another offender (who is not a co-offender) simply because the two offenders may have similar characteristics and may have committed similar crimes. What must be looked at is whether the challenged sentence is within the range appropriate to the objective gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence (other than that of a co-offender) which merely forms part of that range. As Mason J said in Lowe (1984) 154 CLR 606 at 612. ... 'The reference to an appropriate sentence is apt to be misunderstood. Generally speaking, a sentence within a limited range of years is appropriate to the circumstances in which the offence was committed and to the character, antecedents and conditions of the offender. As the ascertainment and imposition of an appropriate sentence involve the exercise of judicial discretion based on an assessment of various factors it is not possible to say that a sentence of a particular duration is the only correct or appropriate penalty to the exclusion of any other penalty.' " [64] In Channon v The Queen (1978) 33 FLR 433 at 451, Deane J observed: "In every case, there is but one ultimate question involved in the determination of sentence. That question is what is the appropriate punishment for the particular offence in the relevant circumstances." [65] As recently observed by Barr J and McInerney A-J in the Court of Criminal Appeal "each case is different and one case does not demonstrate the limits of a sentencing judge's discretion": R v Stahl [1999] NSWCCA 160 at [10]. [66] The principle of consistency is relevant to this appeal, as it is a reflection of the notion of equal justice, a fundamental element in any rational and fair system of criminal justice: see, for example, R v Henry (1999) 46 NSWLR 346 at 353 where Spigelman CJ said: "[12] As I indicated in R v Jurisic , the purpose of a guideline judgment is to foster consistency in sentencing. The importance of consistency was well expressed by Mason J in Lowe v The Queen (1994) 154 CLR 606 at 610-611: 'Just as consistency in punishment — a reflection of the notion of equal justice — is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under the law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice'"; and see also R v Howland (at 279), per Spigelman CJ. 16 These passages in Warman following longstanding authority are directly relevant to the issues raised by the appellant in these proceedings. While principles of parity and consistency are aspects of equal justice, care has to be taken in identifying that which is appropriate to be compared. As recognised in Postiglione, co-offenders' different sentences may reflect different degrees of culpability or their different circumstances. In the present case, her Honour has made findings as to equality of culpability and those findings have not been sought to be set aside on appeal and indeed, there is no appeal against the sentence imposed on Bi-Lo. In the absence of any challenge to the primary Judge's findings of fact, it would not be open to this Court on appeal to evaluate the adequacy of the sentence by taking into account matters not relied upon by her Honour (see Carroll v The Queen [2009] HCA 13). 17 Importantly, between these two defendants, there are different circumstances. The two breaches by Bi-Lo, arising out of the same workplace accident and surrounding circumstances, on her Honour's finding as to the total level of commonality in the two charges, required her to apply the principle of totality so as to properly reflect the total criminality of Bi-Lo - Bi-Lo was not to be penalised twice for the same conduct (Pearce). As a result of the application of the principle of totality, Bi-Lo has been fined a total of $90,000, the same total amount that the appellant has been fined. The fact that sum of $90,000 has been equally divided between the two offences upon the application of a longstanding sentencing principle, therefore cannot lead to any justifiable sense of injustice. Here, the mere difference in monetary penalties, properly understood, does not lead to a conclusion that there is an unjustified discrepancy. Indeed, in Postiglione, Dawson and Gaudron JJ stated (at 302) "A proper comparison includes a consideration of all components". In this sense, the applicant's submissions rely merely upon a mathematical approach and do not give any recognition to the importantly different circumstances between the two defendants. 18 The foregoing observations are to be considered in the context of her Honour's considered view in relation to Bi-Lo that the fine for each charge should be $90,000 - it was not her Honour's view that each charge should carry a primary penalty of $45,000. The appellant's submissions seems to set to one side that finding of her Honour in order to concentrate on the resultant figure flowing from the application of the totality principle. When her Honour came to deal with the appellant corporation, having found that there was equal culpability, as a matter of consistency, her Honour then had to impose a penalty in the order of $90,000 unless there was some sentencing principle that required that figure to be increased or decreased - none was identified. 19 During the discussion of the appropriate approach to the circumstances that arise in this matter, it has already been observed that a mere difference in a monetary amount does not, of itself, necessarily amount to an unjustifiable disparity or discrepancy in the sentences. This was the approach of the Court of Criminal Appeal in R v Salcedo [2004] NSWCCA 430 at [62]: The parity principle reflects the proposition that consistency of punishment is of fundamental importance in the administration of justice: Lowe v R, above, at 610 per Mason J (as he then was). As it turns upon the perception that discrepancies in sentence may give rise to a "justifiable sense of grievance" or "give the appearance that justice has not been done" (Lowe v R, above, at 610 per Gibbs CJ (with whom Wilson J agreed)), the principle is not attracted on appeal unless it can be demonstrated that there is a manifestly excessive or marked disparity between the sentences imposed on co-offenders. Mere disparity is not sufficient to attract appellate review: Lowe v R, above, at 610 per Gibbs CJ, at 611 per Mason J, at 624 per Dawson J (with whom Wilson J also agreed). Thus it should be accepted, as the Crown submitted, that mere disparity is not sufficient to attract the parity principle. 20 It should be noted that no party squarely called into question her Honour's approach to totality. In these circumstances it is inappropriate for the Court to embark upon a consideration of that question. 21 In light of the authorities referred to above, the submissions for the appellant cannot be accepted. The appeal should be dismissed. (It should be noted that leave to appeal is not required: see s 196 of the Industrial Relations Act 1996 and s 5AA(1) of the Criminal Appeal Act 1912.) In relation to the question of costs, the Court proposes that, in the absence of agreement as to costs, the parties should file written submissions and the Court will then deal with the issue of costs on the papers unless some short time for oral argument is required. The prosecutor will therefore have seven days in which to file and serve its submissions on costs and the appellant is to have a further seven days in which to file and serve its submissions relating to that matter. The Court is to be notified within fourteen days if it is the desire of any party to be heard on the issue of costs. ORDERS 22 For the foregoing reasons, the Court makes the following orders: (a) appeal dismissed; (b) costs reserved. _____________________________________________ 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.