Industrial Court of New South Wales CITATION: Inspector Simpson v Hyrock Pty Ltd [2008] NSWIRComm 41 PROSECUTOR Inspector Karen Simpson PARTIES: DEFENDANT Hyrock Pty Ltd FILE NUMBER(S): 1141 of 2007 CORAM: Marks J CATCHWORDS: Occupational Health and Safety prosecution - guilty plea - penalty - mitigating factors - defendant committed to occupational health and safety matters - defendant cooperated with prosecutor re investigation - contrition and remorse - no prior conviction under Act - offence regarded as serious - obligations directed to risk of injury - deterrent effect of penalty - value of early guilty plea - penalty imposed LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 s26 Occupational Health and Safety Act 2000 s8(1) HEARING DATES: 22 February 2008 DATE OF JUDGMENT: 7 March 2008 PROSECUTOR Mr R Reitano of counsel Solicitor: Legal Group WorkCover Authority of NSW LEGAL REPRESENTATIVES: Mr W Steenson DEFENDANT Ms W Thompson of counsel Solicitor: Freehills Mr M Bastick JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Friday 7 March 2008 Matter No IRC 1141 of 2007 Inspection Karen Simpson v Hyrock Pty Ltd Prosecution pursuant to s 8(1) of the Occupational Health and Safety Act 2000 JUDGMENT [2008] NSWIRComm 41 1 In these proceedings the prosecutor, Inspector Karen Simpson of the WorkCover Authority of New South Wales, has charged the defendant, Hyrock Pty Ltd, with a breach of s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"). The charge is constituted by an amended application for order which asserts that the defendant, being an employer, on 21 July 2005 at a plant in Charbon in the state of New South Wales failed to comply with s 8(1) of the Act in the manner set out in the particulars. The particulars are as follows: "a) The defendant was, at all material times, an employer; b) The defendant at all material times conducted a lime works at Charbon Road, Charbon; c) The defendant at all material time required its employees at the lime works (in particular Mr Keith) to undertake work that involved the collection and removal of waste from the core chute ("core (waste) removal"); d) The defendant failed to ensure that plant, being a Toyota forklift was properly maintained so as to prevent risks arising from any failure of the forklift's braking system whilst undertaking core (waste) removal from the hydration plant; e) The defendant failed to ensure that an adequate risk assessment was undertake in relation to work performed by employees using forklifts and other equipment in undertaking work associated with core (waste) removal from the hydration plant; f) The defendant failed to ensure that there was a safe system of work for employees (in particular Mr Keith) undertaking work associated with core (waste) removal from the hydration plant; g) The defendant failed to ensure that employees (in particular Mr Keith) working at the plant who were undertaking work associated with core (waste) removal at the said plant were properly trained, instructed and supervised in the work associated with core (waste) removal and the use of forklifts; h) On 21 July 2005, the defendant failed to ensure that employees (in particular Mr Keith) working alone at the plant had an adequate system by which they could communicate with others in the event of an emergency; i) As a result of the defendant's failures, Arron James Keith, was placed at risk and was fatally injured." The defendant pleaded guilty to the charge. This judgment is confined to penalty. 2 An agreed statement of facts was tendered in the proceedings which is in the following terms: "1. At all material times, Inspector Karen Simpson was a person duly authorised to institute proceedings under the Occupational Health and Safety Act 2000. 2. At all material times, the defendant Hyrock Pty Ltd (ACN 000 561 311) ("Hyrock") was an employer. 3. At all material times, Hyrock undertook the business of a lime works (calcing limestone and hydrating quicklime) at Hyrock Lime Works Plant ('Lime Works') Charbon Rd, Charbon in the State of New South Wales. 4. Mr Arron Keith had been employed by Hyrock as a Hydration Plant Operator since 14 October 2002. 5. On 21 July 2005, Mr Keith was fatally injured when he was caught between a forklift and the doors of a seasoning chamber of a hydration unit at the Lime Works. 6. The medical report upon the examination of Mr Keith by Dr J B Hobbs dated22 July 2005 disclosed that the direct cause of death was apparent mechanical compression of the lower abdomen causing elevation of the diaphragm, restriction of respiratory movements and progressive fatal anoxia, which caused left ventricle heart failure. 7. The Lime Works includes a hydration plant, which produces hydrated lime. The process for making hydrated lime involves mixing calcium oxide (quick lime) and water, which causes a chemical reaction to result in hydrated lime in powder form. The powder then passes through a seasoning chamber for drying. The hydrated lime is then transferred and stored in silos. 8. The duties of Mr Keith included operating a forklift to move a heavy industrial bin beneath a waste core chute (or grit pipe) located near the seasoning chamber doors and conducting two hourly checks of the seasoning chamber doors. 9. The forklift was a Toyota Model No 02-5FD30 forklift truck serial number 10755 and was owned by Hyrock. 10. On 21 July 2005, Mr Keith was working alone on the midnight to 8.00am shift. CCTV footage showed that at approximately 12.30 am he operated a forklift. He removed one bin and was in the process of repositioning another bin under the core chute. The bin was on the tines of the forklift. Prior to completing the repositioning of the bin, he got out of the forklift and went to the front of the bin on the forklift. Mr Keith was found deceased by a co-worker shortly after 2.00 am, pinned in a 250mm gap between the bin and the doors of the seasoning chamber. 11. On 21 July 2005 there were no supervisors present as it was Hyrock's normal procedure for employees to work on their own at night in the hydration plant. 12. A few days prior to the incident changes had been made to the hydration plant including the installation of the rubbish core chute. The core chute discharged core from the hydration plant as a temporary measure to overcome a production problem with the hydration plant. The core chute was installed because the filters on the overhead chute were not working and had to be replaced. A bin was required to remain constantly under the core chute to collect the waste from the chute. It was put in place and removed by the use of a forklift. As part of the process of removing or replacing the bin under the core chute, the individual operating the forklift was not required to exit and position themselves in front of the forklift. 13. Hyrock did not undertake a risk assessment to ensure that work was conducted safely in the new conditions and did not consult with all employees about these changes to the hydration plant. There were no safe work procedures implemented for the work associated with core waste removal from the hydration plant. 14. Hyrock did not provide a safe system of work for the task of the work associated with core (waste) removal from the hydration plant in the new conditions including checking the seasoning doors after the installation of the core chute and the use of a forklift to move the bin in the vicinity of the chute. 15. On 20 July 2005, another employee, Bradley McManus, discussed with the Maintenance Supervisor, Kevin Turner, and the Operations Manager, David Hewitt, changes to the operation of the bin and core chute. The maintenance staff had been scheduled to make appropriate changes to the core chute on 21 July 2005. 16. The employees, including Mr Keith, were provided with UHF radios and were given verbal training and instruction regarding the use of the radios. Hyrock had a policy requiring employees to carry their radio with them at all times. Mr Keith did not have his radio with him at the time of the incident. The radio was later found in his coat pocket which was found hanging in the hydration plant control room after the incident. There were a number of issues with the UHF radios including UHF radios missing possibly due to theft, batteries being flat at the start of the shift, difficulty in operating the UHF radios in dusty areas or in a noisy environment near plant or in tunnels and at times the UHF radio was not operating properly. Hyrock did not, prior to the incident, take adequate steps to address the issues with the UHF radios or to ensure that employees carried their radio with them at all times. No other system of communication was provided to employees to allow them to communicate with others in case of an emergency. 17. Subsequent to the incident TestSafe provided a report after inspecting the forklift and concluded that the forklift was not maintained to ensure that warning lights and gauges indicating problems with the forklift due to overheating or fire or other system failures were operational and visible. The TestSafe report also found that the braking system on the forklift was inadequate – the park brake did not hold on a flat surface whilst it was in gear. The brake linings were significantly worn, in one case down to the metal base under the lining. The TestSafe report considered that wear of that nature would take a significant amount of time to occur and proper routine maintenance would have detected the wear at an earlier stage. The park brake lever operating force was also found to be outside the specification noted in the Operators Manual and service manual for this type of forklift. However, the Testsafe report did not replicate the circumstances of the incident, including the use of the bin. 18. Prior to the incident, the last service or maintenance work done on the forklift was on 5 May 2005 for a forklift tyre tube. 19. Mr Keith was not qualified to operate a forklift but he had a number of years of experience in driving forklifts prior to the incident and also had a logbook for a forklift. The first entry in his logbook that he was using at the time of the incident was 14 June 2005 and the last entry was 21 July 2005. There were no supervisor or trainer entries in the logbook." 3 In addition the prosecutor tendered into evidence documentation including statements gathered by the Inspector, a Factual Inspection Report, a series of photographs and a report on the forklift vehicle involved in the incident prepared by TestSafe Australia. 4 For the defendant, affidavit evidence was given by William Michael Hines, the group commercial director of the defendant and certain documentary material was annexed to one of his affidavits. Mr Hines also gave oral evidence and was cross-examined on this evidence. 5 As is made clear from the agreed statement of facts, the precise events surrounding the death of Mr Keith are not known. It seems that it was not necessary for him to alight from the forklift in order to carry out the particular operation that he was undertaking. There is no evidence as to whether Mr Keith left the forklift in gear or out of gear or whether he applied or did not apply the park brake. It may be inferred that at the time that the incident occurred, Mr Keith had positioned himself in front of the forklift and that the engine was running. 6 The TestSafe Australia report found that, although there were a number of problems with the forklift, "….the main problem found on this machine was the inadequacy of the braking system. It was evident from the testing carried out at TestSafe that the park brake would not hold the machine while it was in gear and on a flat surface. While it may not be good practice to leave the machine in gear while leaving the machine unattended, it would be expected that the park brake would hold the machine while in gear and on a flat surface. The load applied to the park braking system in this circumstance with the engine idling would not be high. On examination of the braking system components, it was evident that the brake linings were significantly worn, in one case, worn down to the metal base under the lining. Wear of this nature would be expected to have taken a significant amount of time to occur, though it is difficult to ascertain the exact time taken. Routine maintenance of the forklift would be expected to find wear in the brake linings well before this type of excessive wear occurred, and it is expected that the durations between servicing recommended by the manufacturer would take into account the expected wear of components such as these to ensure that they do not wear outside of serviceable limits." The report also found that the park brake lever operating force was outside the specifications for this vehicle. The report concluded "….it is considered likely that the park brake, being adjusted to its maximum adjustment, could not provide enough travel to the mechanism to allow the worn linings to make the necessary contact with the brake drum to provide an effective park brake." 7 There was no documentation evidencing any training that Mr Keith had received on and about the use of the forklift. It was the evidence of Mr Hines that there was a training logbook which had been issued to Mr Keith but that it had not been filled out to indicate that he had received any training in the use of the forklift. It seems that Mr Hines had been told by others in the defendant's organisation that it was believed by managerial personnel that Mr Keith had had experience driving forklifts before he commenced employment with the defendant. Mr Hines said that he had been informed that Mr Keith had undertaken training with the defendant on a buddy system and in any event he had been doing the job for some time. However, as I have said, there is no positive evidence of any training having been given to Mr Keith in the use of a forklift vehicle. 8 Furthermore, it is clear that Mr Keith did not possess the necessary qualification to drive a forklift. The defendant's personnel appear to have been under the impression, prior to the incident, that there was no need for qualifications to be obtained. Since the incident, all employees are now required to be trained and qualified before being allowed to use a forklift. 9 In his evidence, Mr Hines conceded that no maintenance log had been kept concerning the forklift vehicle. He was able to obtain invoices for certain maintenance and other work, which had been carried out on the forklift. Whilst there is evidence that from time to time the forklift was serviced in a general way, and was repaired and maintained with respect to particular problems as and when they arose, there is no evidence that the brakes had been serviced for some considerable time prior to the incident occurring. 10 It was the evidence of Mr Hines that, at the time of the incident, the defendant employed approximately 20 employees and engaged three contractors. It now employs about 26 employees and engages four contractors. It has net tangible assets of $2.45 million dollars and annual after tax operating profit, over the last five years, is about $370,000. 11 I am satisfied, on the basis of the evidence given by Mr Hines, that in a general way the defendant had committed itself to occupational health and safety matters prior to the incident. However, as Mr Hines conceded in evidence, this incident has caused the defendant to focus its attention on occupational health and safety matters to a much greater extent. I am satisfied that it now has in place a comprehensive commitment to occupational health and safety matters of a much higher standard and at a much greater level than existed prior to the incident. Furthermore, on the basis of the evidence of Mr Hines, I am satisfied that the defendant co-operated fully with the prosecutor in and about the investigation of the incident and has expressed contrition and remorse for the death of its employee. Furthermore, the defendant extended tangible assistance to Mr Keith's family. 12 This defendant has no prior conviction for any offence under the Act. Victim impact statement 13 The Court has received a victim impact statement made by Anne Kenworthy who was the foster mother of Mr Keith. Counsel for the defendant raised, as a matter to assist the Court, the fact that a victim impact statement made by a foster mother may not strictly fall within s 26 of the Crimes (Sentencing Procedure) Act 1999. As I do not intend to consider the statement as being appropriate to take into account in the determination of the penalty to be imposed on the defendant, it seems appropriate that the Court acknowledge receipt of the statement without necessarily considering whether, technically, a foster mother is, for the purpose of s 26(c) of that Act, a parent. For this reason, the Court acknowledges receipt of the statement which was made on behalf of other family members, Anne and Peter Kenworthy, Jo-anne Kenworthy, Brett Kenworthy, Matt Kenworthy, Gary Kenworthy, and Josh and Gemma Johnston. Assessment of penalty 14 The starting point for the assessment of penalty is the objective seriousness of the offence. Although, as I have pointed out, there is no explanation as to why Mr Keith alighted from the forklift vehicle and stood in front of it, and although he was able to carry out his work without having to alight from the vehicle, the factual circumstances surrounding this incident require that the offence be regarded as a serious one. It must be remembered that the defendant's obligations under the Act are directed to the risk of injury and must accommodate employees who are inattentive or who might perform their work in ways that bring about a risk to their own safety. This is particularly so in circumstances where the defendant has pleaded guilty to charges that the forklift was not properly maintained, had a defective braking system; it failed to carry out any risk assessment in relation to the work being undertaken; it had failed to properly train, instruct and supervise Mr Keith in carrying out the work and in the circumstances where he was working alone and there was no adequate communication system in place. 15 I also take into account the deterrent effect of the penalty to be imposed both generally within the community and specifically with respect to this defendant. In this latter regard, the deterrent effect may be ameliorated by the enhanced commitment that has been demonstrated towards compliance with its occupational health and safety obligations. 16 The defendant is entitled to a discount for the utilitarian value of an early plea of guilty. The defendant pleaded guilty immediately after the filing of an amended application for order on 5 December 2007. The original order had been issued on 12 July 2007. The prosecutor said that the amendments made to the original order were of a cosmetic kind and without substance. The defendant said that the amendments made it clear that the allegations against the defendant were directed to a breach of the Act with respect to the particular circumstances of Mr Keith. In order to resolve this controversy, it would be necessary to assess objectively the merits of the competing arguments. Although the defendant, through its legal practitioners, may have acted with overabundant caution in having an amended application for order filed so as to enter a plea of guilty, on balance I do not regard what occurred as disentitling the defendant to the full value of the early plea of guilty. I will proceed accordingly. 17 I have already mentioned other matters which are to be taken into account in mitigation of the penalty including co-operation with the prosecutor, an expression of contrition and remorse, a commitment to occupational health and safety matters and the size of the defendant company. 18 The maximum penalty applicable to the defendant is $550,000. Having regard to all of the matters to which I have referred, I fix a penalty in the sum of $95,000. 19 The prosecutor sought orders for the payment of a moiety and for costs, which were not opposed by the defendant. Orders 20 1) The defendant is found guilty of the offence with which it is charged and convicted accordingly. 2) The defendant is fined the sum of $95,000 with a moiety to the prosecutor. 3) The defendant is to pay the costs of the prosecutor, assessed by the Court in default of agreement. 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