Industrial Court of New South Wales CITATION: Inspector Jelley v Lanza Management Pty Ltd and Guiliano Lanza [2008] NSWIRComm 125 PROSECUTOR Inspector Crispian Jelley PARTIES: DEFENDANTS Lanza Management Pty Limited Guiliano Orfeo Lanza FILE NUMBER(S): IRC 3 and 8 of 2007 CORAM: Boland J President CATCHWORDS: Occupational health and safety - prosecutions of corporate and personal defendants - Supplier of plant - Failure to supply adequately guard dangerous machinery - Death - Whether supply included installation - Guilty plea - Sentencing considerations - Capacity to pay fines - Parity - Convictions recorded - Penalties imposed Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Occupational Health and Safety Act 1983 Occupational Health and Safety Act 2000 Capral Aluminium v WorkCover Authority (2000) 49 NSWLR 610 Department of Mineral Resources v Kembla Coal & Coke (1999) 92 IR 8 Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 Inspector Elizabeth Benbow v Planada Holdings Pty Ltd [2001] NSWIRComm 275 Inspector Jelley v Dupond Industries Pty Ltd & Ors [2007] NSWIRComm 316 Lowe v The Queen (1984) 154 CLR 606 Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 Manpac Industries Pty Ltd (formerly t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435 Markarian v The Queen 228 CLR 357 CASES CITED: Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 Morrison v Powercoal Pty Ltd (2003) 130 IR 364 Postiglione v The Queen (1997) 189 CLR 295 Regina v F.D; Regina v J.D (2006) 160 A Crim R 392 Regina v George Tzanis [2005] NSWCCA 274 The Queen v Olbrich (1999) 199 CLR 270 WorkCover Authority (NSW) v McDonalds Australia Limited and Anor (2000) 95 IR 383 at 428 WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 WorkCover Authority of New South Wales v Maine Lighting Pty Ltd (1995) 100 IR 248 WorkCover Authority of NSW (Inspector Glass) v ACI Operations Pty Limited (unreported, Matter No CT 1025 of 1993, 18 March 1994 HEARING DATES: 22/04/08, 29/05/08 DATE OF JUDGMENT: 27 June 2008 PROSECUTOR Mr R Reitano of counsel Solicitor: Mr W Steenson WorkCover Legal Group LEGAL REPRESENTATIVES: DEFENDANTS Mr S Meehan of counsel Solicitor: Mr G Rigon Mackenzie & Vardanega Solicitors JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: BOLAND J, President Friday 27 June 2008 Matter No IRC 3 of 2007 INSPECTOR CRISPIAN JELLEY v LANZA MANAGEMENT PTY LIMITED Prosecution under s 18(1)(a) of the Occupational Health and Safety Act 1983 Matter No IRC 8 of 2007 INSPECTOR CRISPIAN JELLEY v GUILIANO ORFEO LANZA Prosecution under s 18(1)(a) of the Occupational Health and Safety Act 1983 by virtue of s 50 of the same Act JUDGMENT [2008] NSWIRComm 125 1 Guiliano Orfeo Lanza ('the personal defendant') was a director of Lanza Management Pty Limited ('the corporate defendant'), a company based in Griffith that designed and manufactured industrial and agricultural machinery. 2 In early 2000 Dupond Industries Pty Ltd, a company that carried on the business of storage, repair and distribution of 'Chep' pallets, engaged the corporate defendant to design, manufacture and supply a Pallet Paint Line that included a De-stacker ('the plant'). The plant was supplied in September 2000 and installed at Dupond's premises at Wetherill Park during October and November 2000. 3 On 3 July 2006, Mr Gavin Garland, a 37-year-old employee of Dupond, commenced operating the plant at about 5.30 am. Mr Garland was alone. At about 6.20 am Mr Garland was found in an unconscious state trapped between a stack of 20 pallets, which had moved along the conveyor to enter the de-stacker, and the front entry side guide plate of the de-stacker. Mr Garland died on 6 July 2006 from the injuries he received. 4 The defendants were charged with several offences arising out of the circumstances that led to the death of Mr Garland. However, in the result a number of the offences were discontinued and the defendants were left facing one charge each to which pleas of guilty were entered on 7 February 2008. 5 The offence with which the corporate defendant was charged was a contravention of s 18(1)(a) of the Occupational Health and Safety Act 1983, which provides: 18 Designers, manufacturers and suppliers to ensure health and safety as regards plant and substances for use at work (1) A person who designs, manufactures or supplies any plant or substance for use by persons at work must: (a) ensure that the plant or substance is safe and without risks to health when properly used, and (b) … 6 In Matter No IRC 3 of 2007 it was alleged that: between about June and November 2000 at Dupond Industries Pty Ltd of Dormers Level 1 1049 Victoria Road West Ryde, in the State of New South Wales, the Defendant supplied for use by persons at work plant, being a Pallet Paint Line including the De-stacker ('the plant') which it failed to ensure was safe and without risks to health when properly used, contrary to section 18(1)(a) of the Occupational Health and Safety Act 1983. The particulars of the charge were: a. The defendant was at all material times a supplier of the plant; b. The defendant supplied the plant for Dupond Industries Pty Limited; c. The plant could be operated by employees at work when some of it dangerous parts were not adequately guarded or fenced or have other appropriate controls in place so as to prevent employees coming into contact with those dangerous parts. d. By reason of the defendant's omissions, persons at work were at risk of being injured (including fatally injured) whilst they were using the plant. 7 In Matter No IRC 8 of 2007 it was alleged that the personal defendant, being a director of the corporate defendant, was deemed by virtue of section 50 of the Occupational Health and Safety Act 1983 to have contravened section 18(1)(a) of that Act in that: the corporation did between about June and November 2000 at Dupond Industries Pty Ltd, 7 – 9 Daniel Street Wetherill Park in the State of New South Wales supply for use by persons at work plant, being a Pallet Paint Line and De-stacker ('the plant') which it failed to ensure was safe and without risks to health when properly used, contrary to section 18(1)(a) of the Occupational Health and Safety Act 1983 . The particulars of the charge are: (a) The corporation was at all material times a supplier of the plant; (b) The defendant was at all material times a director of the corporation; (c) The Corporation supplied the plant for Dupond Industries Pty Limited for use by persons at work; (d) The plant was not safe and without risks to health when properly used; (e) The plant could be operated by employees at work when some of its dangerous parts were not adequately guarded or fenced or have other appropriate controls in place so as to prevent employees coming into contact with those dangerous parts; (f) By reason of the defendant's omissions, persons at work were at risk of being injured (including fatally injured) whilst they were using the plant. 8 The defendants pleaded guilty to the charges. 9 Charges under the relevant provisions of the Occupational Health and Safety Act 2000 were laid against Dupond and three of its directors arising from the circumstances that led to Mr Garland's death. Pleas of guilty were entered for each of the defendants. In Inspector Jelley v Dupond Industries Pty Ltd & Ors [2007] NSWIRComm 316, Staff J imposed fines of $200,000 on Dupond and $25,000 on each of the directors. Evidentiary material 10 The prosecutor tendered a bundle of material that included: · prior conviction reports for both defendants. Mr Lanza had no priors, but the corporate defendant had one conviction for an offence under s 8(1) of the Occupational Health and Safety Act 2000 recorded on 2 May 2006 in the Chief Industrial Magistrate's Court. That conviction cannot be regarded as a prior conviction under the 1983 Act, a matter conceded by the prosecution, · statements by the prosecutor, Inspector Jelley, made on 26 September 2006 and Inspector James made on 24 July 2006, · factual inspection reports by Inspector Jelley dated 13 and 18 July, 17 August, 11 and 13 September and 10 November 2006, · sixty-three photographs of the incident site, · WorkCover Technical Report - Electrical Unit re: Pallet de-stacking Machine prepared by James Lawson dated 10 October 2006, · WorkCover Technical Report prepared by Prasad da Silva, November 2006, · extracts from Australian Standard AS 1755 - 1986: 'Conveyors - Safety Requirements', · Victim Impact Statements: Kerry Tutton (sister of deceased); Valerie Garland (mother of deceased), and · judgment of Staff J in Inspector Jelley v Dupond Industries Pty Ltd & Ors [2007] NSWIRComm 316. 11 In addition, the prosecutor tendered two witness statements from Mr G A Dupond and Mr G C Dupond respectively and a statement of facts, most of which was agreed. 12 The evidence of the defendant included two affidavits of Mr G Lyons, accountant; notices under s 62 of the Act served by Inspector Jelley on Mr Glen Mitchell and Mr Mitchell's response; a drawing of the proposed Chep Pallet Painting Line for Dupond Industries; and the aforementioned drawing with markings made by Mr Lanza during the course of giving his evidence (the drawing was also marked in pencil by Mr G A Dupond). The facts 13 The prosecutor tendered a statement of facts that was agreed except for a number of matters that I will address in due course. The agreed facts revealed that the corporate defendant engaged as a designer and draftsman John Moran to design and produce plans for the plant. The personal defendant supervised Mr Moran in the undertaking of these tasks. The corporate defendant also engaged GD & PA Lawson Electrical Pty Ltd to supply wiring, connection and programming of electrical and electronic equipment. 14 The defendant contended that in or about September 2000 the corporate defendant supplied the plant to Dupond's premises at Wetherill Park. The prosecutor, on the other hand, contended that supply extended to installation and that in assessing the objective seriousness of the offences the Court should have regard to what occurred between September and November 2000 when the plant was supplied and installed. It does not seem to me in assessing the objective seriousness of the offences that what might have occurred or not occurred to the state of the plant during its installation is relevant. The defendants are charged with failing to ensure the plant supplied to Dupond was safe and without risks to health. Installation is not part of supply. To supply is to furnish or provide. To install is to place in position for service or use. Further, s 18(3) of the Act makes particular mention of "install" by providing that "In this section, manufacture plant includes assemble, install or erect plant." Section 18(1)(a) makes a distinction between design, manufacture and supply. The defendants are not charged with design or, more pertinently, manufacture, which includes "install". 15 The defendants have pleaded guilty to charges that between June and November 2000 the defendants supplied plant for use by persons at work that was unsafe and a risk to health when properly used. A critical consideration is, then, the state of the plant that was supplied during that time, not the state of the plant that was installed. So that if the defendants failed to supply a particular safety device with the plant, such as a lanyard that acted as an emergency cut-off switch, that may have adverse implications for the defendants in the assessment of the objective seriousness of the offences. But if the lanyard was supplied (but not installed) that may lead to a different assessment regarding the objective seriousness of the offences. 16 The agreed facts indicated that the personal defendant exercised day-to-day control of the operations of the corporate defendant, that the personal defendant engaged as a designer and draftsman John Moran to design and produce plans for the plant, that the personal defendant supervised Mr Moran and that Mr Moran designed the plant. 17 At no time did either of the defendants provide to Dupond an operation manual in respect of the plant, and at no time did either of the defendants provide to Dupond or any of its employees, any training or instruction in the safe use of the plant. 18 The plant was an automated computer controlled process line controlled by a programmable logic controller ("PLC"). The line consisted of a number of sections all connected by a sectional chain conveyor system. The plant was reliant in part upon a series of sensors for input. A section of the plant included the de-stacker. The PLC controlled the process for the feeder and de-stacker. The agreed facts further indicated in relation to the operation of the plant that: Stacks of twenty pallets (" stack ") travel along a feed conveyor towards the de-stacking machine. The stack moves into the de-stacking machine. The next stack of pallets stops at a sensor and waits for a signal that the de-stacker has been emptied of the stack. When the stack is in the 'de-stacker', one pallet from the stack is "de-stacked" at a time and removed in order from bottom to top. This is achieved by a table located in the center (sic) of the de-stacker raising to a height so as the arms, otherwise known as tines, can enter the second pallet from the bottom of the stack. The table then lowers down to the moving conveyor with the bottom pallet on it. This process continues until the de-stacker is empty. Once lowered the pallet leaves the de-stacker and travels along the conveyor to the spray area were it is spray painted. From there the pallet moves along the conveyor through a drying tunnel to a stencil area where the word "Chep" is sprayed onto the pallet. The pallet then moves to a grading area where it is graded in accordance to its appearance and condition. Pallets are brought to and removed from the area adjacent to the plant by forklift. The dimensions of the pallets are approximately 1165mm square and 140mm high. The pallets are comprised of a series of boards and bearers of varying lengths and widths weighing approximately 43 kilograms each. The plant was supplied so that forklifts could transfer the stacks of pallets onto the feed conveyor. At the time of its supply by the first defendant, the design of the plant included a safety lanyard switch operated by a relay running down the length of the feed conveyor to the de-stacker. The design included a sensor installed at conveyor No. 1 to sense forklift presence and automatically turn the conveyor off to allow loading of pallets onto the conveyor. On the post situated at the entry side of the de-stacker were two buttons - which can be seen in photograph 20, taken on 3 July 2006 by Inspector Jelley, appearing as they did at the time of the incident referred to below. The top switch stopped and started the de-stacker and the bottom switch reversed the de-stacker conveyor. At the exit of the de-stacker on the guide plate was a pneumatic lever style switch - which can be seen in photograph 21, taken on 3 July 2006 by Inspector Jelley, appearing as it did at the time of the incident. The lever allowed the pneumatic table located within the de-stacker to be raised and lowered. The pneumatic table could only be activated once the de-stacker had been stopped using the stop/start button - which can be seen in photograph 20, taken on 3 July 2006 by Inspector Jelley. Located on the front conveyor leg near the exit side was a red mushroom style, emergency stop switch, which can be seen in photograph 21, taken on 3 July 2006 by Inspector Jelley, appearing as it did at the time of the incident. This button, when pressed, stopped and isolated the conveyor part of the de-stacker. On both the entry and exit side of the de-stacker were steel upright posts where yellow warning stickers were placed. The stickers contained the warnings "Do not enter" and "Pinch Point". 19 The fact statement described the incident itself, or as much as was known of the incident, as no one witnessed it, and the investigations following the death of Mr Garland. It was stated in that latter respect there was found to be a lack of adequate guarding on the plant to prevent operators from accessing the internals of the de-stacker and associated hazards within the de-stacker or control measures to guard the nip points created by moving items on the conveyor, the pallets and the stationary points, being the side of the de-stacker. 20 The fact statement provided that: The feed conveyor motor isolation switches were located next to the motors on the non working side of the line and could be accessed by walking over the walkway and around the back of the line. There was no feed conveyor motor isolation switches located on the working side of the plant. 21 The prosecutor's position regarding that statement was that it reflected the position at all material times, that is, from the time of supply in 2000 up to and including the date of the incident in which Mr Garland died. The defendants' position was that what the statement described was the position that existed at the time of the incident. In other words, the prosecutor was contending that the state of the plant remained unchanged from the time of supply up to and including the date of the incident except for some additional guards installed by Dupond. The defendants' position was that Dupond made changes to the plant after supply. 22 A similar difference between the parties existed in relation to the statement that: There was no master isolation switch on the outside of the control cabinet of the plant or ability to lock out. There was a master isolation switch on the inside of the control cabinet. 23 The fact statement continued in uncontroversial fashion: Upon receipt of the plant Dupond conducted an informal risk assessment, which led to Dupond supplying and fitting guarding on the machine at the tine arms and on the ends of the conveyor lines around the sprockets. On the de-stacker machine, attached to the horizontal posts at feed and exit sides, were a number of signs/stickers to warn of the existence of nip points and stated "do not enter" and "Pinch Point". There was no guarding to prevent access to some moving parts of the destacker including an area around the horizontal posts, underneath the raising table and on either the entry or exit side. There was signage on the plant approximately 500mm from the point where Mr Garland was trapped, on a support post on the same structure of the plant. Dupond did not have in place an adequate documented set of instructions for the operation of the plant. The first and second defendant did not provide Dupond with any written instructions about the plant. There was no documented system in place to advise employees to safely deal with jams or other mechanical difficulties experienced with the plant. The first and second defendant did not provide Dupond with any such document. Employees of Dupond were instructed that they were not to do anything to the machine unless it was turned off prior to rectifying any problems. Dupond did have in place a verbal system of work and instructions for the safe operation of the plant. There was a verbal system of work in place in which the employees had been trained. The operators were instructed that they were permitted to rectify minor operational problems with the plant. If in the event they were unable to rectify the problem (as it was not minor or they were unable to rectify it) operators were to notify either their supervisor or Dupond's manager. It was accepted practice, when pallets got caught up and would not exit the plant, for operators to give the caught up pallet a hit with a hammer to release it. Dupond's requirement was that the machine be switched off before attempting to take steps to free the caught pallets. Training took place in the form of verbal instruction and on the job experience under supervision. New or inexperienced operators were teamed to work with experienced operators. The exact cause of why the stack that moved forward and trapped Mr Garland entered the de-stacker whilst it still contained pallets is unclear. On one previous occasion the sensors on the de-stacker appeared to fail which caused the stack on the feed conveyor to be forced into the de-stacker whilst it still contained pallets. Dupond was aware of this problem with the plant but was of the opinion that there was nothing that could be done to rectify it. At the time of the incident Dupond: a) failed to ensure that all of the dangerous parts of plant at the premises comprising the Pallet Paint Line including the De-stacker which was used by its employees was adequately guarded or fenced or had other appropriate controls in place so as to prevent employees coming into contact with those dangerous parts; b) failed to ensure that there was an appropriate procedure in place for the cleaning of blockages or 'jams' on the plant that did not require employees to place themselves in the dangerous parts of the said plant; c) failed to ensure that employees working on the plant were properly trained, instructed and supervised . 24 Following the incident, improvement notices were issued on the defendants and the fact statement described the actions taken by the defendants to upgrade and improve the safety of the plant. Matters in dispute 25 I have already determined that 'supply' does not include 'install'. There is then the question of whether the plant as supplied was in the same state as when the incident occurred except for some additional guarding installed by Dupond. This question in turn raises three issues: (i) whether a lanyard that acted as an emergency cut-off switch was supplied because it was not in place at the time of the incident; (ii) whether vice grips shown holding an electronic sensor to a metal mounting were supplied by the defendant; (iii) whether there were any changes to the plant that may have impacted on the positioning of a light beam sensor. 26 There were certainly changes made by Dupond to the plant after it was supplied and installed by the contractors for the defendants. The changes included an additional conveyor and changes made to the light beam sensor that stopped the No. 1 feed conveyor when approached by a forklift loading pallets onto the conveyor. However, the light beam sensor, both before and after the changes that were made to it, was not in such a position that it stopped the conveyor if a person moved into the gap between the conveyor and the de-stacker. In so far as the vice grips were concerned, I am of the opinion, given the evidence, that the vice grips were not supplied by the defendants. It was Mr Lanza's evidence that they were not part of the supply and the two directors from Dupond who gave evidence could not say categorically that the vice grips were part of supply. The evidence that the defendants supplied the grips did not rise above assumptions. 27 In so far as the lanyard is concerned, it was clear from the evidence that a lanyard was supplied for the paint pallet line but what was not immediately clear was whether a lanyard was supplied for the in-feed conveyor and which extended to cover the gap between that conveyor and the de-stacker. The dispute was whether a lanyard was supplied for the whole length of the pallet line and, importantly, whether it extended past the gap. Mr Lanza said in his evidence a lanyard was supplied for the whole length of the pallet line. Under cross-examination of Mr GA Dupond the following exchange occurred: Q. I am putting to you what you have said about there being no lanyard being supplied by Lanza is simply not true? A. In that area it was never installed. Q. Never installed, I asked you about supply? A. The lanyard was supplied, yes. Q. It was supplied, wasn't it, for that particular area of the plant? A. But it was never installed. Q. Step at a time. It was supplied though, wasn't it? A. A lanyard was supplied. Q. You agree with that? A. Yes. Q. And it was supplied specifically for the in-feed conveyoring? A. I can't answer that. Q. Well, why not? You have accepted there was a lanyard everywhere else on the plant but for the in-feed conveyor? A. As I said before, it was not installed. Q. We will come to that. It was supplied for that particular area of the plant, that is the truth? A. Okay. HIS HONOUR? Q. I didn't hear that answer? A. Okay. MEEHAN Q. I take it by that you agree? A. Yes. 28 In re-examination the following exchange occurred: Q. Mr Dupond you were asked some questions about the lanyard or you were asked some questions about a lanyard being supplied and I think you answered something like it was supplied but not installed or words like that and then you were asked another question and you might remember this because his Honour asked you he didn't hear what you said, and you said okay. What is it that leads you to the conclusion that the lanyard was supplied or why did you tell his Honour that the lanyard was supplied? A. The lanyard was supplied because it was installed on every other part of the machine, that's why I said that. Q. Do you know one way or the other whether a lanyard was supplied to be installed on this particular part of the machine? A. I'd have to say yes because it's on the original drawing. Q. Is there any other reason why you say it was supplied for this particular part of the machine? A. No, there's not. 29 As to Mr GC Dupond's evidence about supply of the lanyard, it was left somewhat unclear. In cross-examination the following exchange occurred: Q. Returning to the lanyards for a moment; I want to suggest to you squarely what you said about the lanyards in that you assert it was never there at the time of supply is not true? A. Sorry. Q. I am suggesting to you that what you say about the lanyards namely there was not a lanyard at the in-feed conveyor at the time it was supplied, is not true? A. I can tell you without a doubt there is no and never was a lanyard along that in-feed conveyor. Q. Mr Graham Dupond has given evidence that a lanyard was supplied, do you say that is not true? OBJECTION MEEHAN: Withdrawn. 30 The matter was ultimately not pressed with Mr GC Dupond by the defendants and so his evidence rose no higher than "there is no and never was a lanyard along that in-feed conveyor", which is not determinative of whether the lanyard was supplied. As the prosecutor has sought, in sentencing, to have the Court take into account what he contended was the fact that the defendants did not supply a lanyard that extended the full length of the paint line, including the in-feed conveyor, the onus falls on the prosecutor to prove that beyond reasonable doubt: The Queen v Olbrich (1999) 199 CLR 270 at 281. The prosecutor has not discharged that onus in this case. Whilst Mr Lanza was a less that impressive witness - belligerent and evasive - his evidence, nevertheless, was that on an inspection of the site after installation of the plant he saw the lanyard in place along the in-feed conveyor. Mr GA Dupond agreed with the defendants that the lanyard was supplied for the in-feed conveyor. Mr GC Dupond was not able to say categorically that the lanyard was not supplied. 31 The consequence of this finding is that in sentencing the defendants, and in considering the objective seriousness of the offences, I do so on the basis that a lanyard safety device was supplied with the plant. Consideration 32 The principles that I am required to apply in these sentencing proceedings were summarised by the Full Bench in Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 at [8]-[15]. There is no utility in repeating those principles. 33 The defendants have pleaded guilty to a charge that they supplied for use by persons at work plant which they failed to ensure was safe and without risks to health when properly used, contrary to section 18(1)(a) of the Occupational Health and Safety Act 1983. In particular, it was charged that the plant could be operated by employees at work when some of it dangerous parts were not adequately guarded or fenced or had other appropriate controls in place so as to prevent employees coming into contact with those dangerous parts. The defendants' failure to ensure safety was reflected in their failure to meet the safety requirements set out in Australian Standard AS 1755 - 1986: 'Conveyors - Safety Requirements' in relation to the provision of guarding to prevent injury to persons. 34 In this respect, the facts statement indicated that there was a lack of adequate guarding on the plant to prevent operators from accessing the internals of the de-stacker and associated hazards within the de-stacker or control measures to guard the nip points created by moving items on the conveyor, the pallets and the stationary points, being the side of the de-stacker. Further, that the feed conveyor motor isolation switches were located next to the motors on the non working side of the line and could be accessed by walking over the walkway and around the back of the line. However, there was no feed conveyor motor isolation switches located on the working side of the plant. It was also stated that: there was no master isolation switch on the outside of the control cabinet of the plant or ability to lock out; there was no guarding to prevent access to some moving parts of the de-stacker including an area around the horizontal posts, underneath the raising table and on either the entry or exit side; the defendants did not provide Dupond with any written instructions about the plant; there was no documented system in place to advise employees to safely deal with jams or other mechanical difficulties experienced with the plant; and the defendants did not provide Dupond with any such document. 35 If it is accepted, as I have, that a safety lanyard was supplied that would have extended along the length of the conveyor and across the gap between the de-stacker and the conveyor feeding the de-stacker, then the objective seriousness of the offence must be regarded as less grave than it otherwise would have been because the risk of the conveyor trapping someone would be, in my opinion, significantly reduced. The lanyard would have stretched across the gap between the conveyor and de-stacker and, it may be inferred, provided a mechanism for someone leaning into the de-stacking machine to bring the conveyor to an emergency stop. Whether the lanyard, of itself, would have prevented the risk to safety is problematic, but the defendants should be given the benefit of a finding that the supply of the safety lanyard reduced the risk. As it was, no lanyard was installed on the day of the incident but that failure cannot be sheeted home to the defendants because they were not charged with a failure to install. 36 Nevertheless, the failure to adequately guard or fence or have other appropriate controls in place so as to prevent employees coming into contact with dangerous parts of the plant supplied by the defendants is, on any objective consideration, a serious breach. Although the damage or injury caused by the breach does not, of itself, dictate the seriousness of the offence or the penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences. In such a case, the occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk: See Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]. See also Capral Aluminium v WorkCover Authority (2000) 49 NSWLR 610 at [94] and [95]; WorkCover Authority (NSW) v McDonalds Australia Limited and Anor (2000) 95 IR 383 at 428; and Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [32]. 37 In the present case, in the absence of adequate guarding or fencing, there was the prospect of death or serious injury if a person came into contact with dangerous parts of the plant. This is not to suggest that the defendants had no regard for safety considerations in supplying the plant; clearly they did as evidenced by other safety features of the plant, including the supply of safety lanyard switches. 38 A further consideration in assessing the objective seriousness of the offences is the extent to which the risk was foreseeable. The risk was the risk of an employee of Dupond coming into contact with dangerous parts of the plant supplied by the defendants and suffering serious injury or death. The question in this case is whether in supplying the plant it was reasonably foreseeable that the supplied plant, once installed, would constitute a risk to health and safety to employees of Dupond. 39 It is not necessary that the defendant should have foreseen the precise nature of the risk. That is to say, it was not necessary for the defendants to have been able to foresee the precise circumstance that an employee of Dupond could become trapped between the conveyor and de-stacker, but only whether it was foreseeable that there was the risk of an employee coming into contact with dangerous parts of the plant if those parts were not adequately guarded. Such a risk was reasonably foreseeable. 40 Mr Meehan of counsel for the defendants contended there was evidence of an inherently unsafe work practice whereby when a pallet was caught in the de-stacker an employee, having shut off the machine, would lean into the de-stacker and hammer the pallets to try and adjust them. Mr Meehan contended that the supplier could not have reasonably foreseen such a practice. However, as Bauer J said in WorkCover v Maine Lighting Pty Ltd (1995) 100 IR 248 at 257, the Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry. Further, even if Mr Garland was engaging in such a practice when the tragedy occurred it was not necessary for the defendants to have foreseen the precise circumstances in which the risk arose in order to ensure the plant was adequately guarded. 41 The existence of simple and straightforward remedial steps which could have been taken by the defendant to avoid the risk to safety are relevant to assessing the seriousness of the offence: See Department of Mineral Resources v Kembla Coal & Coke (1999) 92 IR 8 at 27; WorkCover Authority of NSW (Inspector Glass) v ACI Operations Pty Limited (unreported, Matter No CT 1025 of 1993, 18 March 1994); and, Inspector Elizabeth Benbow v Planada Holdings Pty Ltd [2001] NSWIRComm 275. Following the incident on 3 July 2006, Dupond took a number of steps to improve the safety of the plant including: (i) the installation of perimeter fencing around the plant to prevent employees accessing the dangerous parts of the line, including the installation of interlocked gates where access is required; (ii) upgrading the electric and operation system of the plant through the installation of: (a) control panels that provide operators with more functionality to operate the stackers and de-stacker; (b) a fortress style, captive key, system at the control panels; Emergency stop (e-stop) switches at the control panels; (c) two additional sensors in the de-stacker for the detection of pallets; (d) E-stop lanyards along the feed conveyor, on the operator's side of the conveyor; and (e) a lockable main isolation switch at the main control panel to isolate the whole line. 42 Noting that lanyards had been supplied, none of the other machinery or equipment used by Dupond to improve safety of the plant would have been difficult for the defendants to supply in the first place. 43 General and specific deterrence are further considerations to be taken into account: Capral Aluminium at [71] to [80]. With respect to general deterrence, a significant number of breaches of the Occupational Health and Safety Act arise from the failure to guard or adequately guard machinery. It is appropriate for the Court to fix a penalty that has regard for the obvious and important need for general deterrence. 44 In relation to specific deterrence, the evidence was that the corporate defendant of which the personal defendant was a director and had exercised day-to-day control over its operations, was no longer an operational company and had not been since the incident on 3 July 2006. I accept this evidence and I do not propose to make provision for specific deterrence. I will, however, provide for a small element of specific deterrence in the penalty to be applied to the personal defendant because there was no evidence that he would not re-engage in some form of enterprise involving the supply of plant. 45 The Court is required to give careful attention to maximum penalties because, firstly, the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick: See Markarian v The Queen (2005) 228 CLR 357 at [31]. The defendants have no previous convictions under the relevant legislation. Accordingly, the maximum penalty in the case of the corporate defendant is $550,000 and for the personal defendant it is $55,000: Section 12 of the Occupational Health and Safety Act; s 17 of the Crimes (Sentencing Procedure) Act. 46 The defendants have pleaded guilty to the respective charges although the pleas were entered quite late because of negotiations over a number of other charges that had been laid against the defendants but were later withdrawn. Further, I note that each of the pleas of guilty were in relation to an unamended charge against each of the defendants. Nevertheless, the pleas have a utilitarian value because time and expense have been saved and inconvenience avoided by matters not having to proceed to trial. I propose to allow a discount of 15 per cent on the penalties. 47 Mr Meehan submitted that the Court would give consideration to applying s 10 of the Crimes (Sentencing Procedure) Act 1999 in respect of the personal defendant, Mr Lanza. It was submitted that Mr Lanza, as a director of the corporate defendant was, in effect, at arms length from the events that occurred giving rise to the charges and that the prosecutor did not bring evidence as to Mr Lanza's personal culpability. 48 On the contrary, Mr Lanza exercised day-to-day control of the corporate defendant. He supervised Mr Moran in designing the plant that was supplied to Dupond. He inspected the plant after it was supplied thereby giving him the opportunity of detecting any deficiencies in the safety requirements for the plant once it had been installed. Mr Lanza also failed to supply to Dupond an operation manual in respect of the plant. 49 As it was observed by the Full Bench in WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 at [45], s 10 will be available only in rare, limited circumstances in proceedings under the Occupational Health and Safety Act. Where a defendant deemed by virtue of s 50 of the Act to have contravened a general duties provision of the Act is personally culpable, where the risk to health and safety was reasonably foreseeable, where the breach had potentially very serious consequences for the health and safety of employees, where the risk was easily preventable or steps were available but not taken to mitigate the risk and where the subjective factors do not outweigh the objective considerations, there is no scope, in my opinion, to apply s 10. That is the case here. 50 Mr Meehan submitted that the corporate defendant was impecunious and Mr Lanza, who was 63 years old, earned only a very modest income from part time employment, the amount being $400.00 per week. Reference was made to the affidavits of Mr Lyons, which contained reports on the financial position of both defendants. It was Mr Lyons' evidence that the corporate defendant was not in a financial position to pay any amount of fine without placing the company into an insolvent financial position. Mr Lyons stated that the corporate defendant had no assets. 51 In relation to the personal defendant it was Mr Lyons' evidence that Mr Lanza was not in a position to pay any fine without seeking financial assistance by borrowing funds from his bank under a mortgage the bank holds. Any repayment of borrowings, Mr Lyons said, would put significant financial pressure on Mr Lanza's day-to-day living standard. 52 The treatment of the financial situation of a defendant was addressed in Manpac Industries Pty Ltd (formerly t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435 at [82]-[84]: [82] …It emerges from par [51] of the judgment at first instance that her Honour was given inappropriately limited assistance by the appellant as to the financial evidence it relied on at the trial. In the result, and even though her Honour indicated that the appellant had "significant financial liabilities", the finding it was "proper in the circumstances to order a significant fine for this offence" must be tempered. As Mr Archer submitted, "the imposition of a fine of $160,000 on a company with net assets of $31,000 is demonstrably oppressive". Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at p 339); WorkCover Authority of New South Wales (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at p 333; and Profab Industries (49 NSWLR at p 714, 100 IR at p 76). [83] However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at pp 209-210, Wright J, President observed: ... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty.... ... When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ... [84] We are of the opinion, in light of the evidence as to the financial situation of the appellant, that the quantum of the fine imposed by Kavanagh J was indeed manifestly excessive and, therefore, the ground of appeal in that respect has been made out. 53 Mr Reitano of counsel for the prosecutor submitted that the objective seriousness of the offences was on par with that of the corporate and personal defendants in Inspector Jelley v Dupond Industries Pty Ltd & Ors. It is evident that Staff J in that case regarded the offences as very serious and that is reflected in the penalties. I do not consider the offences in the present case are at the same level of objective seriousness as found by his Honour in Dupond Industries. In those proceedings the defendants were charged with multiple failures as the employer having direct control and supervision over the plant and Mr Garland, including that: The defendant failed to ensure that there was an appropriate procedure in place for the cleaning of blockages or 'jams' on the said plant that did not require employees to place themselves in the dangerous parts of the said plant; The defendant failed to ensure that employees working on the said plant were properly trained, instructed and supervised. 54 Further, in his consideration of the matters Staff J found that the corporate defendant was aware of the problem that the sensors on the de-stacker appeared to fail, which caused the stack on the feed conveyor to be forced into the de-stacker whilst it still contained pallets. His Honour also found that: [51] At the time of the incident, it would appear that the machine was running and Mr Garland was leaning into the de-stacking machine. Assuming this to be the case, it is firstly Mr Garland's proximity to the machine and secondly, his leaning into the machine, either to clear a blockage or remove a steel bar that gave rise to the risk to health and safety. In such circumstances, the defendants failed to have in place appropriate procedures for the clearing of blockages so that employees were not required to place themselves at risk by being in the close proximity of dangerous parts of the plant. … [54] Although the corporate defendant had verbal systems of work in place, there was no documented system in place to advise employees to safely deal with jams or other mechanical difficulties experienced with the plant. Employees were instructed that they were not to do anything to the machine unless it was turned off. However, it was accepted practice that if and when pallets got caught and would not exit, the plant operators would give the caught up pallet a hit with a hammer to release it. The corporate defendant's requirement was that the machine be switched off before attempting to take such steps. [59]…. It was readily foreseeable, as the corporate defendant was aware, that access could be gained to the machines. 55 The principles governing parity and consistency in sentencing do not require equal sentences where there exists differences between offenders that warrant a different approach. Where there are relevant differences between the defendants' culpability or circumstances, due allowance should be made for them: Lowe v The Queen (1984) 154 CLR 606 at 610-611 per Mason J and at 617-618 per Brennan J; Postiglione v The Queen (1997) 189 CLR 295 at 301-302 per Dawson and Gaudron JJ, 309 per McHugh J, 325 per Gummow J, 338-340 per Kirby J. In my view the culpability of the defendants is less than the defendants in Dupond Industries. 56 In addition to making due allowance for the differences in the defendants' culpability, as I have noted the Fines Act makes it necessary for the Court, in exercising a discretion to fix the amount of any fine, to consider the means of the defendants. Whilst the corporate defendant claimed impecuniosity and the personal defendant claimed a small recurring income and small assets, I note that the personal defendant has a life insurance policy about which there were no details and a property in Griffith, again about which there were no details except the opinion of Mr Lyons that it was a "modest family residence". 57 I would characterise the defendants as being of modest means and some care needs to be taken to ensure any fines imposed are not oppressive. That consideration has to be weighed in the light of the principle stated by Wright J in Nelmac at 210, namely: ... whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty ... the penalty should reflect the objective seriousness of the offence. 58 The Court was provided with victim impact statements from Mrs Valerie Garland, the mother of the deceased and Mrs Kerry Tutton, Mr Garland's sister. No submissions were made by either party as to how the Court should deal with the statements and the statements were not read aloud. However, I note that the statements were in the same terms as those considered by Staff J in Dupond Industries and they reveal the grief, loss, pain and feeling of devastation suffered by Mr Garland's family members at the injuries he received and his subsequent death. 59 The use to which victim impact statements may be put is not without controversy: see Regina v F.D; Regina v J.D (2006) 160 A Crim R 392; Regina v George Tzanis [2005] NSWCCA 274. The controversy appears to arise from s 21A(2)(g) of the Crimes (Sentencing Procedure) Act which provides that the Court may take into account that "the injury, emotional harm, loss or damage caused by the offence was substantial". It will be noted that this aggravating factor is not limited to the injury, etc to the victim. The controversy does not appear to have been resolved and neither party addressed the controversy. 60 Section 27(2A) of the Crimes (Sentencing Procedure) Act allows this Court to have regard to victim impact statements. However, the section provides: (2A) In relation to an offence being dealt with by the Industrial Relations Commission, this Division applies only if: (a) the offence is an offence against Division 1 of Part 2 of the Occupational Health and Safety Act 2000, and (b) the offence results in the death of, or actual physical bodily harm to, any person. 61 The offences in this case are under the 1983 Act and no submissions were made as to whether the provisions of the Crimes (Sentencing Procedure) Act relating to victim impact statements apply in relation to the offences before this Court. In the circumstances, I do not propose to have regard to the victim impact statements. 62 It remains to determine the amount of penalty. In the case of the corporate defendant I consider an appropriate penalty, having regard to the objective and subjective considerations and to the provisions of the Fines Act, is $90,000. In respect of the personal defendant the appropriate penalty is $9,000. Orders 63 The Court makes the following orders: Matter No IRC 3 of 2007 (1) A verdict of guilty is entered and the defendant is convicted of the offence. (2) The defendant is fined an amount of $90,000 with a moiety thereof to the prosecutor. (3) The defendant shall pay the costs of the prosecutor as agreed or assessed. Failing agreement, the matter may be referred to the Registrar for assessment. Matter No IRC 8 of 2007 (1) A verdict of guilty is entered and the defendant is convicted of the offence. (2) The defendant is fined an amount of $9,000 with a moiety thereof to the prosecutor. (3) The defendant shall pay the costs of the prosecutor as agreed or assessed. Failing agreement, the matter may be referred to the Registrar for assessment. __________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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