Industrial Court of New South Wales CITATION: Inspector Wayne James v Chek Ly & Ors [2007] NSWIRComm 315 This decision has been amended. Please see the end of the judgment for a list of the amendments. PROSECUTOR Inspector Wayne James PARTIES: DEFENDANTS Chek Ming Ly Henry Kei Shing Ngai ABC Tissue Products Pty Ltd FILE NUMBER(S): IRC 606, 607, 610, 611, 612 and 613 of 2006 CORAM: Staff J CATCHWORDS: Occupational health and safety - Prosecutions under s 8(1) and s 26(1) of the Occupational Health & Safety Act 2000 - Manufacturing industry - Inadequate guarding of machine - Inaequate system in place for cleaning rollers of machine - Employee's arm caught in machine causing soft tissue injuries - System of work in operation but defective - Foreseeability - Governing director and general manager also charged - General and specific deterrence - Good industrial citizenship - Considerartion of s 10 for governing director declined - Pleas of guilty - Penalties imposed - Costs Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Factories, Shops and Industries Act 1962 (NSW) Occupational Health & Safety Act 2000 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Crown in Right of the State of New South Wales (Dept of Education and Training) v Keenan (2001) 105 IR 181 Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd (2001) 105 IR 348 Inspector Giles v Foamex Polystyrene Pty Ltd [2004] NSWIRComm 100 Inspector Lavercombe v Alto Automobiles Pty Ltd [2007] NSWIRComm 252 Inspector Stuart Larkin v South Pacific Seeds Pty Ltd [2006] NSWIRComm 247 Morrison v Barry John Cahill [2007] NSWIRComm 114 Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 Pearce v The Queen (1998) 194 CLR 610 CASES CITED: R v Thomson; R v Houlton (2000) 49 NSWLR 383 Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143 Wong v Melinda Group Pty Ltd (1998) 82 IR 11 WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 Workcover Authority of New South Wales (Inspector Ankucic) v Crown in the Right of the State of New South Wales (Department of Education and Training and Training) (2001) 112 IR 1 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another (1999) 95 IR 383 WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81 WorkCover Authority of New South Wales v Denson (2007) 162 IR 199 WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 HEARING DATES: 19 November 2007 and 30 November 2007 DATE OF JUDGMENT: 18 December 2007 PROSECUTOR Mr B Docking of counsel Solicitor: Mr M Addison Dibbs Abbott Stillman LEGAL REPRESENTATIVES: DEFENDANTS Mr H J Dixon SC with Mr D O'Neil of counsel Solicitor: Mr A Douglas Douglas Workplace and Litigation JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: STAFF J 18 December 2007 Matter No IRC 606 of 2006 INSPECTOR WAYNE JAMES v CHEK MING LY Prosecution under s 26(1) of the Occupational Health & Safety Act 2000 Matter No IRC 607 of 2006 INSPECTOR WAYNE JAMES v CHEK MING LY Prosecution under s 26(1) of the Occupational Health & Safety Act 2000 Matter No IRC 610 of 2006 INSPECTOR WAYNE JAMES v HENRY KEI SHING NGAI Prosecution under s 26(1) of the Occupational Health & Safety Act 2000 Matter No IRC 611 of 2006 INSPECTOR WAYNE JAMES v HENRY KEI SHING NGAI Prosecution under s 26(1) of the Occupational Health & Safety Act 2000 Matter No IRC 612 of 2006 INSPECTOR WAYNE JAMES v ABC TISSUE PRODUCTS PTY LTD Prosecution under s 8(1) of the Occupational Health & Safety Act 2000 Matter No IRC 613 of 2006 INSPECTOR WAYNE JAMES v ABC TISSUE PRODUCTS PTY LTD Prosecution under s 8(1) of the Occupational Health & Safety Act 2000 JUDGMENT [2007] NSWIRComm 315 1 On 21 February 2004, Mr Yang was required to clean the embossing roller on the Rewinder No 1 Machine ("the machine") at a factory located at 34-36 Redfern Street, Wetherill Park, where ABC Tissue Products ("the corporate defendant") manufactures toilet paper products. After stopping the machine, Mr Yang pressed the inching, or jogging button, which causes the roller on the machine to operate slowly and at a controlled speed. After pressing the button, the roller and paper in the machine moved, causing Mr Yang's right hand to move as well. The machine gripped Mr Yang's arm in between the embossing roller and the printing roller up to his elbow. 2 Mr Yang suffered a soft tissue and muscle injury to his right arm. He was off work for a period of four days, returning to his pre-injury duties approximately two months after the incident. The corporate defendant had also permitted some panels or guards to be removed from the machine which permitted access to the machine. 3 The corporate defendant has pleaded guilty to two breaches of s 8(1) of the Occupational Health & Safety Act 2000 ("the Act"). 4 The first offence under s 8(1), which I shall refer to as the "general guarding" offence, was that the corporate defendant failed to: Ensure the health, safety and welfare at work of all its employees, in particular Ji Yun Yang ("Mr Yang"), contrary to section 8(1) of the Occupational Health & Safety Act 2000. In particular, on 21 February 2004, at the said site, the Defendant failed: 1. to ensure that any plant provided for use by the Defendant's employees at work was safe and without risks to health when properly used, in particular by failing to ensure the Rewinder No. 1 Machine was adequately guarded; 2. to provide and maintain systems of work that were safe and without risks to health; 3. to provide adequate information, instruction, and training to its employees to enable them to perform their work in a manner that was safe and without risks to health; 4. to provide adequate supervision to its employees and in particular, Mr Yang to enable them to perform their work in a manner that was safe and without risks to health. 5 The second charge brought pursuant to s 8(1) of the Act, which I shall refer to as the "specific nip" point charge was that the corporate defendant failed to: Ensure the health, safety and welfare at work of all its employees, in particular Ji Yun Yang ("Mr Yang"), contrary to section 8(1) of the Occupational Health & Safety Act 2000. In particular, on 21 February 2004, at the said site, the Defendant failed: 1. to ensure that any plant provided for use by the Defendant's employees at work was safe and without risks to health when properly used, in particular that the rollers in the embossing area of the Rewinder No. 1 Machine could only be inched forward to clear any blockage, rather than operated on a manual jog basis, thereby permitting the embossing roller to continually move whilst being cleaned; 2. to provide and maintain systems of work that were safe and without risks to health; 3. to provide adequate information, instruction, and training to its employees to enable them to perform their work in a manner that was safe and without risks to health; 4. to provide adequate supervision to its employees and in particular, Mr Yang to enable them to perform their work in a manner that was safe and without risks to health. 6 It can be seen that particulars 2, 3 and 4 are identical to the particulars in the general guarding charge. 7 The managing director of the corporate defendant, Mr Henry Kei Shing Ngai was deemed under s 26(1) of the Act to have contravened the same provisions as the corporate defendant. Mr Ngai pleaded guilty to each of the charges. 8 Mr Chek Ming Ly, the corporation's general manager, was also deemed under s 26(1) of the Act to have contravened the same provisions as the corporate defendant. Mr Ly also pleaded guilty to each of the charges. 9 The only difference in the particulars concerning Mr Henry Ngai and Mr Chek Ming Ly were that Mr Ngai was referred to as a director of the corporate defendant and Mr Chek Ming Ly was referred to as the assistant general manager. 10 The particulars of the general guarding charge in respect of Mr Ngai and Mr Ly are: 1. The defendant was a director of the corporation; 2. The corporation was an employer and employed a number of persons; 3. Mr Yang was an employee of the corporation at the site; 4. The site was Mr Yang's place of work; 5. The site was the Defendant's place of work; 6. The Defendant failed to ensure that any plant provided for use by the corporation's employees at work was safe and without risks to health when properly used in particular by failing: (a) to ensure the Rewinder No. 1 Machine was adequately guarded; (b) to provide and maintain systems of work that were safe and without risks to health; (c) to provide adequate information, instruction, and training to the corporation's employees to enable them to perform their work in a manner that was safe and without risks to health; (d) to provide adequate supervision to the corporation's employees and in particular, Mr Yang to enable them to perform their work in a manner that was safe and without risks to health. 11 Particulars in respect of the specific nip point charge for Mr Ngai and Mr Ly are identical to the particulars of the guarding. Particular 6 is in these terms: The Defendant failed to ensure that any plant provided for use by the defendant's employees at work was safe and without risks to health when properly used, in particular by failing: (a) to ensure that any plant provided for use by the defendant's employees at work was safe and without risks to health when properly used, in particular that the rollers in the embossing area of the Rewinder No. 1 Machine could only be inched forward to clear any blockage, rather than operated on a manual jog basis, thereby permitting the embossing roller to continually move whilst being cleaned; (b) to provide and maintain systems of work that were safe and without risks to health; (c) to provide adequate information, instructions, and training to its employees to enable to perform their work in a manner that was safe and without risks to health; (d) to provide adequate supervision to its employees and in particular, Mr Yang to enable them to perform their work in a manner that was safe and without risks to health. 12 It can be seen that the charges are identical in that they relate to one day, 21 February 2004 and nominate one identifiable employee, Mr Yang, as being exposed to risk. These are matters which will be relevant to the question of totality, which I will come to later in these reasons, which will also impact on the nature and quality of the offences. The Prosecutor's Evidence 13 Mr B Docking of counsel, who appeared for the prosecutor tendered: 1. Three substantially agreed statements of facts. 2. Three factual inspection reports of Inspector Wayne James dated 24 March 2004; 25 March 2004 and 20 September 2004. 3. A record of interview between Inspector James and Mr Ngai dated 16 August 2005, which was tendered only against the corporate defendant and Mr Henry Ngai, which had attached to it, prohibition and improvement notices served on the corporate defendant. 4. A record of interview between Inspector James and Mr Ly dated 21 March 2005. The record of interview was only tendered against the corporate defendant noting that Mr Ly had objected to answering questions on the basis that may tend to incriminate him. 5. 24 colour photographs showing the south wall of the Machine, the embossing area and rollers, the feed end wall, control switch adjacent to the embossing roller; access to belts and wheels behind the embossing roller, mesh guards in place on the northwest and southwest corners of the machine; access door to feed end wall, padlock and mesh guards, and the new door at southern end. 6. A document entitled "Machine Operator (Rewinders) Safe Operating Instruction for Cleaning Rollers" signed "Management 04-2005". 7. A record of Prior Convictions showing that the corporate defendant had two prior convictions arising out of an incident in 1998 and an incident in 2002. Neither Mr Ngai or Mr Ly have a prior conviction under the Act. 8. A document on ABC Tissue Products Pty Ltd letterhead titled "OHS Consultation Statement" dated June 2003. This document had attached to it "instructions" if tissue becomes stuck between print rollers" dated 15 March 2000. 9. Document titled "Risk Assessment and Control Plan" for Rewinder No 1 Machine dated August 2005. 10. Minutes of Management Meetings about OHS management system from 11 April 2006 to 1 February 2007. 11. The Memorandum and Articles of Association of ABC Tissue Products Pty Ltd. 12. Transcript of evidence given by Mr Henry Ngai in the summary hearing of matter Nos IRC 608 of 2006, IRC 609 of 2006; IRC 614 of 2006 and IRC 766 of 2006 heard on 7 and 8 February 2007 which is relied upon against the corporate defendant and Mr Ngai. 13. Transcript of evidence given by Mr Ly on 7 February 2007 in summary proceedings in matter Nos IRC 608 of 2006, IRC 609 of 2006; IRC 614 of 2006 and IRC 766 of 2006. 14. Transcript of evidence given by Mr Yang on 6 February 2007 in the abovementioned summary proceedings (pages 54, 55. 15. Transcript of evidence given by Mr Sunny Ngai in the summary proceedings dated 20 February 2007, pages 252 - 255 inclusive and pages 262 - 263 which is relied upon against the corporate defendant. 16. Transcript of evidence given by Mr Daryl de Vries, the production manager of corporate defendant in the summary proceedings dated 7 February 2007. 14 The substantially agreed statement of facts in respect of the corporate defendant provided the following information: 1. The Prosecutor, Inspector Wayne James of the WorkCover Authority of New South Wales, Level 3, 33 Moore Street, Liverpool in the State of New South Wales, is an Inspector duly appointed under Division 1 of part 5 of the Occupational Health and Safety Act 2000 (NSW) ("2000 Act") and empowered under s.106 of the 2000 Act to institute proceedings in this within matter. The Corporate Defendant 2. At all material times, the defendant, ABC Tissue Products Pty Limited (ACN 003 085 112) ("Defendant") was a company duly incorporated with its registered office situated at 34-36 Redfern Street, Wetherill Park in the State of New South Wales. 3. At all material times, the Defendant occupied and conducted the business of manufacturing toilet paper products at 62-68 Redfern Street, Wetherill Park, in the state of New South Wales ("site"). 4. On 21 February 2004 ("actual incident date"), the Defendant employed a number of persons at the site including: (a) Mr Ji Yun Yang ("Mr Yang"), machine operator employed for 6 years. (b) Mr Kuong Srung Tea ("Mr Tea"), leading hand; and (c) Mr Daryl de Vries ("Mr de Vries"). Production manager; and (d) Mr Houy Ly ("Mr Houy Ly"), night shift manager; and (e) Mr Sivagnanasundaram Sivashanmugarajah ("Mr Siva"), safety, purchasing and industrial relation officer; and (f) Mr Chek Ming Ly ("Mr Ly"), assistant general manager. 5. At all material times, the site was Mr Yang's, and the other employees' detailed above, place of work. 6. At all material times, the working directors of the Defendant were as follows: (a) Mr Henry Kei Shing Ngai ("Mr Henry Ngai"), managing director and appointed as a director since 18 April 1986; and (b) Mr Sunny Siu Kei Ngai ("Mr Sunny Ngai"), marketing director and appointed as a director and secretary since 12 November 1991; and (c) Ms Guech Ning Ly ("Ms Ly"), purchasing director and appointed as a director since 8 July 1993. 7. According to Mr Sunny Ngai, the Defendant was a "family business" (Record of Interview, Sunny Ngai Q91). The Machine 8. At all material times, the Defendant was in possession of and operated a machine known as the Rewinder No. 1, machine number ABC-91-005 ("Machine"). The Machine rewinds paper from large rolls to smaller rolls of toilet tissue and kitchen towel. 9. The Machine was approximately 18m long by 5m wide by 3m high. A blue wall covered approximately three quarters of the perimeter of the machine. 10. The Machine consisted of the roll stand, feed rollers, embossing area, perforator area and slitter and sealing units. 11. The northern sidewall of the machine had stored items restricting access to the doors along the length of the side. The middle area had a door fitted, a rack was located on the outside of the door with embossing rollers and other rollers stored on it. The doors could not be opened due to the racking. 12. On the northwest corner of the Machine there were a several cabinets partially enclosing the "drive system". Access to this area was possible as the area was not fenced across from the Machine to the blue wall. This allowed unrestricted access to all moving parts of the Machine. The doors of the blue wall were open. 13. The cabinet doors had a provision for a bar to be placed and padlocks in order to prevent access to the moving parts inside the cabinets. 14. The "feed end wall" consisted of five panels across the Machine. The middle panel consisted of a door that was padlocked on the side of the Machine and the two panels each side of the door were fixed panels. 15. The southern side of the Machine had several panels along its length of which two sections were double doors. 16. The paper flow from the feed rollers went over and then back between the pressure roller (top) and the embossing roller (bottom). 17. The paper was fed between the embossing roller and the inking roller. This was a running nip point. The embossing roller was a roller with an impression pattern on its outer surface and measured approximately 3.32m long x 300mm diameter. The pressure roller had rubber on its outer surface and measured approximately 3.32m long x 400mm diameter. The inking roller measured approximately 3.2m long x 250mm diameter. 18. Adjacent to the embossing/inking roller area was a platform that went across the Machine that measured approximately 300mm high x 700mm wide x 3.84m long. 19. The height of the inking roller from the floor to the centre was approximately 1.2m. 20. There was a gap between the tunning inking roller and the embossing rollers that measured approximately 35 – 38 mm. That gap presented a specific risk of actual potential danger and it materialised into an actual incident as referred to below. 21. Above the inking roller was a lanyard, which was tied off on northern side and a Teleinecanique XY2CK switch, IEC 947-5-1, EN 60947-5-1 on the southern side. 22. Adjacent to the embossing roller were two boxes with a number of switches fitted to it. There were a number of glue control switches and a jog switch. The jog switch when activated allowed approximately 0.5 revolutions per pressing. General Guarding Risks 23. At all material times on the actual incident date, the Machine at various points posed a risk including: (a) A blue perimeter wall partially "guarded" the Machine. However the blue walls around the Machine on the non-operator side had missing panels allowing unrestricted access to all moving parts of the Machine including moving wheels, belts, pulleys, chain and sprockets and the drive system as detailed in paragraph 12 above that were not guarded (photographs 5, 7). The same applied on the operator side as the panelling allowed free access into the Machine as the perimeter wall was not completed (photograph 2). (b) The doors to the cabinet detailed in paragraph 13 above had provision for a bar and padlock to be placed so as to prevent access to the moving parts inside the cabinets but only two of the six doors had the bars fitted correctly. (c) Access to the rear of the cabinets containing the Machine's drive system could be achieved by walking across a small platform at the rear of the embossing roller area. (d) The double doors at the southern end of the Machine, as detailed in paragraph 15, were inadequately guarded in that whilst those doors closest to the feed end were padlocked, the doors adjacent to the embossing roller was not padlocked or electrically interlocked. (e) The exit area adjacent to the perforator was open at the front and the side allowing unrestricted access to all moving parts of the Machine. (f) The north west corner of the Machine was unguarded thereby enabling unrestricted access to all the wheels and belts of the Machine in the north west corner (photographs 8, 9 and 10). Inadequate Guarding of Machine 24. At all material times on the actual incident date, the Machine was inadequately guarded at the various points set out in paragraph 23. 25. The Defendant was well aware of the requirements for guarding due to Improvement Notice 202127 which issued on 28 June 2001 (attached) and previous WorkCover visits for this particular machine. 26. After the actual incident date, the Defendant fitted mesh metal panel between the blue wall and the blue panels of the drive system cabinets on the left side of the Machine. 27. The doors directly in front of the drive system cabinets had the door handles removed and the doors were fixed in place. 28. The cabinet doors had chains fitted through the cabinet door handles. 29. On the right hand side of the Machine two panels were installed and a mesh screen was put in place between the wall and the Machine. 30 Electrical interlocks were fitted and some doors had padlocks fitted on the inside of the doors. System of Work 31. At all material times prior to the actual incident date, the Defendant's system to restrict or stop its employees from accessing the Machine beyond the guarding deficiencies detailed in paragraph 23 above, was to erect a warning sign which stated "do not enter while the machine is running." Mr Siva also told employees not to go inside the Machine while it was running. 32. Prior to the actual incident date, the padlocks referred to in paragraph 23(b) had been removed by person/s unknown. Mr de Vries and Mr Siva knew that the padlocks had been removed prior to the actual incident date. The two missing padlocks had not been replaced prior to the actual incident date. Mr Houy Ly did not know that the padlocks had been removed from the cabinet doors. It was Mr Houy Ly's evidence that "I don't check" those particular cabinet doors (Section 26 Statement Houy Ly Q49). 33. On or about 29 November 2002, the Defendant received a quote from Shiells Sheetmetal Company (ABN 30 533 108 334) to supply, a perimeter wall for the Machine for $28,790.00. The quote was accepted by the Defendant and in or about December 2002 – January 2003, the blue perimeter wall was installed around the Machine. 34. Shortly after the blue perimeter wall was installed, the Defendant modified the Machine, making it longer. Mr de Vries directed the blue perimeter wall be installed around the Machine. Due to the elongation of the Machine, the blue perimeter wall no longer fully enclosed the Machine. 35. According to Mr de Vries the blue perimeter wall was never completed "Because it lost the job impetuous (sic)" (Section 26 Statement, Daryl de Vries Q92). 36. According to Mr Ly he did not, as assistant general manager, inform anyone above him not to operate the Machine in an unguarded state: "Because I actually told Houy to make sure working safely and about the machine to modify it so the operator still happy to work with the machine, We needed the machine running for commercial reasons as well" (Section 26 Statement, Chek Ming Ly Q's 120, 121). Information, Instruction and Training 37. Prior to the actual incident date Mr Yang had received the following training: (a) 3 March 2004 - Forklift Operator training. (b) 3 March 2004 - OHS in the Workplace Induction Course. 38. Mr Yang received on the job training to operate a similar machine known as the Rewinder No. 3. Mr Yang had worked on the rewinder machines for a number of years prior to the accident. 39. Prior to the actual incident date, Mr Yang had not received any training in relation to operating the Machine. Prior to the actual incident date, the Defendant had commenced a formalised, document based training program for the Machine and others like it at the site. However, prior to the actual incident date, Mr Yang had not been scheduled to attend that training. 40. After the actual incident date, the Defendant trained Mr Yang in the operation and safety requirements of the rewinder machines. Supervision 41. The supervisor in charge of the night shift was Mr Houy Ly. Mr Houy Ly walked around the site during the night shift, approximately every one to one and a half hours. 42. It is Mr Houy Ly's evidence that when he saw employees access the Machine, beyond the blue perimeter wall, he would tell them not to go in and, would close the door once they had exited (Section 26 Statement Houy Ly Q68). 43. It is Mr Houy Ly's evidence that the night shift did not attend to the incomplete guarding of the Machine because the engineers did not work at night, only on the day shift and that "I see Daryl running it, everyone sees it running and no one says not to do it" (Section 26 Statement, Houy Ly Q95). Specific Risk Arising from the Nip Point of Embossing Roller 44. At all material times on the actual incident date, paper was fed between the embossing roller and the inking roller, as detailed in paragraph 17 above. There was a gap between the in-running inking roller and the embossing rollers that measured approximately 35-38mm. This gap constituted a running nip point. 45. On the actual incident date, at approximately 9.00pm at the site, Mr Yang was required to clean a paper build up on the embossing roller of the Machine. He proceeded to stop the Machine by turning the switch situated on the south side wall of the Machine (shown on photograph no.2) from "auto" to "manual". He then walked down to the embosser. Then he started cleaning the paper build up on the embossing roller. As part of the process he could cause the roller to move by pressing a button fixed at the side of the roller (as shown on photograph no.13). This button is commonly described as the inching or jogging button. If depressed and held down it causes the roller to operate slowly and at a controlled speed. Mr Yang used his left hand to press the button. By stretching out his right hand he used that hand to remove the paper. After pressing the button, the roller and the paper moved, causing Mr Yang's right hand to move as well. The Machine gripped Mr Yang's arm in between the embossing roller and the printing roller up to his elbow (photograph 4 at J15 and photograph 14). 46. Prior to the actual incident date, Mr Yang cleaned the rollers of the Machine approximately four to five times per each shift. Paper got stuck on the embossing roller sometimes never and sometimes often depending on the paper and glue. Not agreed 47. Mr Yang was unable to free himself from the Machine. Mr Yang's arm was trapped in the Machine for approximately fifteen minutes. Mr Tea used a spanner to remove the bolt from the Machine so that Mr Yang's right arm could be removed from the Machine. 48. Bodily injury was caused to Mr Yang who suffered a soft tissue and muscle injury to his right arm. 49. Mr Yang was off work for a period of four days. Mr Yang returned to his pre-injury duties approximately two months after the date of the accident. Inadequate Guarding of Nip Point of Embossing Roller 50. The rollers in the embossing area of the Machine could only be inched forward to clear any blockage, rather than operated on a manual jog basis, thereby permitting the embossing area to continually move whilst being cleaned. 51. At all material times on the actual incident date, the Machine's embossing roller and inking roller were inadequately guarded. 52. According to Mr de Vries: "… I did have a guard made up that protected the nip area where he got caught – before the accident. It was the same for both machines and I suggest that the operators have taken it out at some point of time. In photograph No. 4." System of Work for Cleaning the Embossing Roller 53. At all material times prior to the accident, the system of work for cleaning the print rollers had not been formalised or documented. The corporation had provided on-the-job training to its employees, including Mr Yang, as to the system of operating and cleaning the Machine. An operator would: (i) Isolate the Machine's power. (ii) Use the inching pendant (cable type) to rotate the roller. The inching (jog) speed for the Machine and machines similar was approximately 0.5m/sec. The use of a pendant could have assisted Mr Yang in the performance of the task and would have prevented him in having an extended reach to carry out the task. (iii) Rub or scrub the dirty roller with a wet rag and/or a wire brush. 54. On the actual incident date, the Machine's inching pendant was not operational. Therefore, Mr Yang attempted to clear a paper build up on the embossing roller in the unsafe manner described in paragraph 45. Information, Instruction and Training & Supervision for Cleaning the Embossing Roller 55. Mr Yang received on the job training to clean the roller on the Machine and there was no formalised, document based training program in relation to cleaning the rollers of the Machine. 56. After the actual incident date, the corporation put in place an administrative control for the cleaning of the rollers as an interim measure. A notice was put on all of the eleven re-winder machines to inform employees of the corporation's requirements for the cleaning of the embossing roller and the pressure rollers. ... 65. Mr Ly had overall responsibility for safety within the production area of the business. Agreed 66. Mr Ly from time to time had informal meetings with Mr Henry Ngai concerning the management of the company or concerning safety matters. Not Agreed 67. Mr Ly employed others to assist in respect of safety including Mr Siva and Mr De Vries. Not Agreed 68. Mr de Vries had the authority to implement improvements or modifications to the Machine. Not Agreed 69. Mr de Vries and Mr Siva had safety inspection lists for the Machine to enable them to check that guard doors were working, and in particular, that guard switches and emergency stoppers were working. Not Agreed 70. Mr Siva was the safety officer who was responsible for implementing safety audits. Not Agreed 71. Mr Ly was primarily responsible for safety and the day to day operations of the rewinder machines, but Mr de Vries, was also responsible for safety and day to day operations of the machines at the site including the Machine. Agreed 72. Mr Siva was required to report any safety issues to Mr Ly. Agreed 73. Mr Siva had been employed for approximately 6-8 years by the Defendant and Mr Ly relied on him for safety matters. Mr Ly worked on safety matters with Mr Siva on a day to day basis. Not Agreed 74. Mr Ly had an unlimited budget in respect of any safety matters. Agreed The budget in respect of safety was authorised by Mr Henry Ngai. Not Agreed 15 The statements of facts in respect of Mr Ngai and Mr Ly were in similar terms and substantially identical to the statement of facts set out in respect of the corporate defendant. The Defendants' Evidence 16 Mr H J Dixon SC, who appeared for the defendants with Mr D O'Neil of counsel, relied upon the following material: (i) a testimonial from Dr Peter Wong AM dated 14 November 2007; (ii) a testimonial from Mr Nick Lalich, Mayor of Fairfield dated 13 November 2007 and relied upon in respect of Mr Ngai and Mr Ly; (iii) a testimonial from Qiu Shaofang, Consular General of the Peoples Republic of China tendered as a character reference in respect of Mr Ngai; (iv) an affidavit of Mr Henry Ngai sworn 5 November 2007; (v) affidavit of Mr Ly dated 5 November 2007; (v) a letter from the corporate defendant to WorkCover enclosing application for safety awards for 2008; (vi) a diagram of the management structure of the corporate defendant before August 2005. 17 Mr Ngai, in his affidavit, described himself as the governing director of the corporate defendant. He set out his personal background, stating that when he was a baby, his family left China and relocated in Cambodia because life was very difficult in China. Mr Ngai was educated to grade six primary school standard in Cambodia. He left Cambodia in 1970 due to the civil war and travelled to Hong Kong, where he worked until he left for Australia in 1985. 18 Mr Ngai then set out the background of the corporate defendant, which he established in 1986 stating that the company, shortly thereafter, commenced to operate with two machines and six employees, one of whom was his brother in law, Mr Ming Ly. Mr Ngai stated that Mr Ly was in charge of production including the safety aspects of production and said that he left the occupational health and safety responsibilities in his hands. As he had received no occupational health and safety training, he said that he was confident that Mr Ly had the ability to look after safety matters. He said all employees are trained when they commence with the corporation to ensure that they know how to use the machines safely. 19 Mr Ly, as well as Mr Siva, who was in charge of safety between 1999 and 2006, trained employees on a regular basis. Arrangements were also made for the company to bring in persons from outside the company to train its employees. Mr Ngai was not aware of the details of when and how employees were trained, as he was not involved in these arrangements or the training of staff. He stated that Mr Ly was authorised to spend whatever amount he needed to spend on safety. His relationship with Mr Ly was such that he understood that if he thought there were any problems with safety, he would bring it to his attention. They met and spoke regularly about the business. He said that at no time did Mr Ly report to him concerns about safety. 20 Mr Ngai said he was overseas when the accident involving Mr Yang occurred, and that he deeply regretted that Mr Yang was injured in the accident. He stated that it was not unusual for him to be overseas. In 2002 he was overseas for 106 days, in 2003 for 135 days, and in 2004, for 185 days. It was against this background that he relied totally on Mr Ly to keep him informed of occupational health and safety problems if they arose. 21 Mr Ngai stated that he had no reason to believe that safety matters were not being attended to properly in the corporation. He said Mr Ly had an unlimited budget in respect of any safety matters. He was not aware of any accidents at the workplace until Inspector James began investigating the accident involving Mr Yang, nor was he aware of any prohibition notices prior to meeting Inspector James. It was at this time that he became aware that there had been previous accidents in the company, which had resulted in court proceedings and a fine being imposed on the company. He said that he thought that it was appropriate to put Mr Ly in charge of safety. However, he now understands that as a director he must play a role to ensure that systems are being followed. He has informed all directors, except Ms Ly (his wife who resigned as a director), that they must play a role in understanding safety and making sure that all areas of the workplace are safe. 22 Mr Ngai now receives information regarding safety at regular meetings that he attends with the safety committee and if any incident occurs, he is told about it straight away. He said that he has been reminding frontline staff of the importance of occupational health and safety whenever he meets them. He has committed all possible support for the occupational health and safety team to best educate and remind their employees of safety requirements. 23 Mr Ngai stated that the corporate defendant provides assistance and financial support for refugees looking for employment in Australia. About 60 per cent of the corporate defendant's workforce is made up of refugees. His company provides advice as to how refugees can "establish" a life in Australia. In the 2006/2007 financial year, the corporate defendant donated $261,762 to charities. These included donations to Fairfield Hospital, Liverpool Hospital, Cambodia Vision Incorporated, Australian Chinese Charity Foundation and Indo-Chinese Elderly Hostel. A similar amount has been donated to charity since 2001. Since July 1999, total donations to charities amounts to $1,446,312. 24 In June 2006, Mr Ngai was diagnosed as suffering from prostate cancer. He commenced radiotherapy in November 2006. He has hormone injections every three months. He has a stent in his kidney as a result of the cancer and has appointments with his specialist every two months. Mr Ngai has also experienced back problems for over 30 years and is treated by a physiotherapist and a chiropractor two to three times a week. Although he has been advised that his cancer is under control, he says he now feels much weaker. 25 In light of the responsibilities that he has as a director, chiefly in respect of occupational health and safety, he stated that he proposes to remove himself from his current role by the end of 2008, when his son will be appointed managing director. During the next 12 months, it is his intention to ensure that his son is able to perform the financial role that he undertakes at the present time. If it is necessary for him to provide further guidance to the company after 2008, it will be in the role of a consultant. He said that he has already commenced talking to the company's bankers to assist his son in taking over the running of the company. He stated that the present court proceedings have been extremely hard and stressful for himself, his wife and his immediate family, but he now has a greater awareness of the significant steps needed in respect of occupational health and safety. 26 Mr Ngai expressed his deep regret that any worker in the company was ever injured. He said he has done everything in his power to ensure that the company is not prosecuted again. 27 Mr Henry Ngai was required for cross-examination, during which he stated that at no time before the incident did he receive any written budget from Mr Ly in respect of safety matters. Mr Ly was given the power to do whatever he thought was right in respect of safety. Mr Ngai trusted him. He could write cheques and purchase whatever he thought was required. Mr Ngai confirmed that before the accident there were no regular board meetings of directors because the board trusted Mr Ly. 28 Mr Ngai's evidence was that he was not involved in the production area, but confined himself to dealing with the finances and the bank. Mr Ngai stated that during family discussions that occurred before the accident, safety was not raised, as he left occupational health and safety matters to Mr Ly. Mr Ngai's evidence was that when he came to Australia and established his company, he wanted to ensure that nothing would happen to it and he asked his accountant to protect him. He did not understand what the term "governing director" involved, but he understood it was to protect himself. He wanted total control over his company. He agreed that he had described himself as managing director in his interview with Inspector James and that that is what appeared on his business card. 29 Mr Ngai stated that when the company purchased new machines, training was provided to Mr Ly from the company who sold the machines. Mr Ngai could not remember whether Mr Ly received any training in respect of the Rewinder No 1 Machine because it was a very old machine purchased a long time ago. Mr Ngai was not aware who signed cheques to pay for previous fines imposed on the company. His evidence was that if he was at the company at the relevant time, he may have signed the cheque, or Mr Ly may have signed it. His evidence was he could not recall. 30 Mr Chek Ming Ly set out his personal history in his affidavit. He was born in Cambodia in 1956. He was captured by the Khmer Rouge in 1975, separated from his family and forced to work in the rice fields for long periods without rest and food. Following Vietnam's invasion of Cambodia in 1977, he was arrested and sent to a concentration camp where he remained for approximately six months before escaping and fleeing by boat to Indonesia. Mr Ly's sister is married to Mr Ngai and he established contact with Mr Ngai shortly before he left Vietnam and whilst he was in Indonesia. With the assistance of the World Vision Program, Mr Ly migrated to New Zealand in 1980 and commenced work in a plastics company working as a machine operator. He was promoted to the position of supervisor. Whilst there, Mr Ngai contacted Mr Ly and asked him to come to Australia to work in his company. Mr Ngai was responsible for the financial side of the corporation and Mr Ly, the operations side. In 1987 the corporation had three machines and only a few employees, but by 1989 it had 20 to 30 employees with a turnover of $2,000,000 per annum. 31 Mr Ly stated that he is responsible for the safety of employees and from the very beginning of the company's operations, there was no limitation on the safety budget. If something needed to be spent on safety, he had the authority to spend it. Although Mr Ly stated that he had significant personal experience with working with machines, he now accepts that the company's approach to safety was insufficiently detailed and insufficiently systematic. The lack of detail and system occurred because of the extremely rapid growth of the company, despite the company engaging a number of people with experience and expertise to assist in safety matters. He stated that in 1992, Mr Daryl de Vries was employed by the company. Mr de Vries' role included designing, building and maintaining machines to operate safely. In 1997, Mr de Vries was promoted to the position of production manager. He was a qualified mechanical engineer. As production manager, he, together with Mr Ly had responsibility for safety. 32 In or about 1997, the company retained Mr Albert Wells to regularly speak to employees about working safely, the risks of injury and general training on the machines. Although Mr Wells' work was not documented, Mr Ly said he was extremely well qualified in relation to occupational health and safety. 33 Following an incident in 1998 involving Mr Camilleri, which resulted in a prosecution under the Act, the company employed Mr Siva Siva, who had a masters degree in manufacturing engineering and a number of certificates relevant to occupational health and safety and workplace matters. Mr Siva worked under Mr Ly, specifically in relation to safety issues. He put together a manual and assisted Mr Ly in checking that all machines were safe. Mr Siva arranged for the training of employees in occupational health and safety and all employees were re-inducted. A safety committee was established and first met in December 1998. 34 Mr Ly stated that in 2002, risk assessments were performed on all new machines which were purchased from Taiwan or Italy. As the new machines did not comply with the Australian Standards, assessments were undertaken by Mr Ly, Mr Siva and engineers employed by the company. Mr Ly's brother, Mr Houy Ly, who is the assistant general manager in relation to production, on night shift also assisted. Modifications were carried out and safety guards installed to prevent employees going too close to the machines when they were operating. The cost of guarding the machines was approximately $150,000. In 2002, Mr Ly said the company spent almost $200,000 on safety, including approximately $146,000 on staff training. In that same year, Mr Siva commenced working solely on occupational health and safety and reported to Mr Ly. 35 In early 2003, Mr Siva recommended that the company employ Mr Colin Wood to also look after safety and to assist in training employees. In or around June or July 2003, Mr Wood printed the first occupational health and safety employee induction handbook. A copy of this handbook was annexed to Mr Ly's affidavit. In June 2003 Mr Wood also assisted in placing safety signs around the factory, helped with the guarding of the machines and published a document titled "General Working Procedures for All Machines". It was also attached to each rewinder machine. A copy of this document was also annexed to Mr Ly's affidavit. All employees were made aware of the procedure through meetings, where they were shown the content of the procedures. During this time, the company continued to ensure its employees were trained. Mr Yang completed certificate II and certificate III in transport and distribution warehousing in or around this time. 36 As a result of a further accident on 19 November 2002, alterations were made to the Rewinder Machine No 10. Thereafter, a perimeter guard was installed around the machine to prevent access to the hazardous parts of the machine. It was also fitted with a new safety switch according to Australian Standards. The switch does not allow the staff to open the door of the machine unless the machine has completely stopped. Since that accident, staff training has been documented. Warning signs were also put in place advising staff not to clean to rollers whilst the machine is in operation. The signs also contain checklists to remind operators what is required to be done to safely operate the machine. 37 Mr Ly said that since Mr Yang's accident, there has been even more effort put into occupational health and safety. Mr Ly described the circumstances surrounding Mr Yang's accident, observing that he commenced employment with the corporation on 11 November 1998 as a machine operator. He received induction and training on the Rewinder No 3 machine. For the first 10 days of his employment, Mr Yang worked with a trainer on the machine. The trainer then observed him working on the machine for approximately six months. Rewinder No 3 was very similar to Rewinder No 1. There was no written instructions given to new employees of the corporation at that time. The training was all verbal and on the job. Mr Ly said that regular cleaning needs to be performed on the rewinder machines because paper gets stuck in the machines which requires the machines to be stopped and the jam cleared. This may happen a couple of times in one week and then on other occasions, may not occur for many weeks. Mr Yang, along with other employees, was taught how to clear a jam, turn the machine off and use the manual control to inch or jog the machine. 38 Mr Ly stated that all employees, including Mr Yang, had been trained to turn off the machine before proceeding to clear any paper jams. Employees were also warned against touching any moving parts of the machines. Signs had been placed around the factory floor confirming these instructions. In addition, the rewinder machine has a touch sensitive emergency stop cord, which stops it from running in case of an emergency. 39 Subsequent to the incident, Mr Yang was fully trained in relation to the relevant machine. He was also re-inducted and also taken through forklift operator training. This training occurred on 3 March 2004. Copies of the induction and forklift training documentation were annexed to the affidavit. Mr Siva was responsible for implementing safety audits at the time of Mr Yang's accident and was required to report any safety issues to Mr Ly. Mr Houy Ly, the designated night shift manager, would walk around the factory approximately every one and half to two hours during night shift, observing the machines. 40 In respect of the general guarding breach, Mr Ly stated at the time of the incident involving Mr Yang, blue metal doors, which provided full guarding, were not on the machine. The doors had been installed in November 2002. Over a period of time, it became apparent that the doors trapped dust which interfered with the functioning of the machine and caused it to stop. In addition, because of the size of the doors, they did not open and shut properly. Mr Ly was not able to establish when the doors were removed from the machine. Mr Ly noted that a prohibition notice had been issued on 26 February 2004 in respect of the machine. Rectification work was carried out immediately and on 27 February 2004, Inspector James from WorkCover was invited to inspect the machines. 41 Mr Ly detailed the steps taken by the corporation after Mr Yang's accident. He stated that perimeter guards were set up and interlocks installed so that employees could not get near the machine while it was running. The company decided to retain a lawyer with specific expertise in relation to industrial and safety issues and in 2005 retained the services of Andrew Douglas, a specialist in occupational health and safety. Mr Gary Rowe, an occupational health and safety consultant engineer was also retained to provide advice on a range of issues relating to safety, policies and procedures and to develop documentation. In the latter part of 2006, Mr Steve Johnson was appointed as a further occupational health and safety officer with the company. Mr Johnson has an extensive history with occupational health and safety in the construction and manufacturing industries and lectures in occupational health and safety. With the departure of Mr Siva from the company in late 2006, Mr Seng Ly was employed to manage occupational health and safety and assist the company to grow in its understanding of occupational health and safety. There are currently six employees in the occupational health and safety department of the company. 42 Since Mr Yang's accident, the occupational health and safety committee meets with management at least once every second month and sometimes once every month. The directors sit in on meetings. A management meeting is now convened within 24 hours of any incident. 43 The company continually assesses the machinery at the factory to ensure its safety. Examples of this assessment which were completed in August, September and October 2005 were attached to the affidavit. Daily and weekly checks are also undertaken to ensure the machines are safe and that employees are working safely. Examples of such checks which were undertaken in April and August 2007 were also attached to the affidavit. 44 Mr Ly described the policies instructions handbook and other documentation that the company now has implemented. Copies of instruction booklets for Rewinder No 1 and Rewinder No 4 machines were attached to the affidavit. Apart from instruction handbooks and safety documentation in respect of the rewinder machines, there are now policies covering many areas of the workplace including: 1. Communication & Consultation Policy & Procedure 2. Confined Spaces Policy & Procedure 3. Contracts Purchasing & Design Policy & Procedure 4. Drug & Alcohol Policy & Procedure 5. First Aid Policy & Procedure 6. Injury Management Policy & Procedure 7. OHS Policy & Procedure 8. Records Management Policy & Procedure 9. Risk Management Policy & Procedure 10. Substances (Chemicals) Policy & Procedure 11. Surveillance Policy & Procedure 12. Training Policy & Procedure 13. Vehicle Safety Policy & Procedure 45 All of these policies have been improved at managerial and consultation level as at 28 May 2007 and have been implemented. Copies of the OHS Policy & Procedure and the OHS Risk Management Policy & Procedure were annexed to the affidavit. A safety training manual was also prepared by Mr Rowe and the company has created a register for near misses and accidents that occur on the factory floor. Employees regularly attend internal and external training courses to update their skills in relation to occupational health and safety. Mr Ly stated that he believed, as a result of the involvement of Mr Douglas, the company has greatly improved its occupational health and safety. He said the company's progress has been so substantial and so significant that it has been asked by WorkCover to apply for an award which is given to the most improved workplace for safety. The company intends to apply for this award. 46 Mr Ly detailed safety related expenses incurred by the company, stating that in the years 2006 - 2007, the company spent $486,589 on occupational health and safety. This was made up of $389,819 for the salary costs of the OH&S Department employees, training courses for employees and printing and induction books with $100,000 being spent on guarding and fittings. The budget allowance for 2007 - 2008 is $634,098. 47 Mr Ly detailed his personal contribution to the community. He is the chairman of an organisation called "Cambodia Vision". This body provides charitable assistance to Dr Peter Wong, who provides eye care to people in Cambodia and Vietnam. To date, over 100 people have been treated by Dr Wong through funding by Cambodia Vision. In 2006, Mr Ly personally donated 100 tonnes of rice to villages in Cambodia. This was the fourth or fifth occasion he has provided such a donation directly to villages. He also provides financial support to various villages in Cambodia. 48 Mr Ly also set out the company's community work, stating that it is a significant supporter of refugees, with approximately 60 per cent of the company's workforce being refugees from Cambodia or Vietnam. When refugees are employed by the company, great care is taken to make sure the families are introduced into the local Asian community so that they can set up their own social networks. Mr Ly gave an example of a car he donated to a refugee family who had no means of purchasing one. In 2006 - 2007, he stated the company donated $261,762 to charities. Similar amounts have been donated since 2001. The donations since July 1999 to June 2006 total $1,446,312. 49 Mr Ly stated following Mr Yang's accident, the company assisted him in every way that it could. Mr Yang returned to work after four days and was put on light duties so that he did not have to work night shift. All his medical expenses were met by the company. Mr Ly said that he deeply regretted, both personally and on behalf of the company, that Mr Yang was injured. He said the entire court process had been extremely serious for him. At times it had been quite traumatic and stressful. He said that he was confident that the company and all its employees fully comprehend the importance of occupational health and safety and that the company is now well and truly on the road to doing everything possible towards ensuring safety at all times for its workforce. 50 During cross-examination, Mr Ly could not recall who wrote the cheques to pay the fines that had previously been imposed for breaches of the Act. Mr Ly said that he did not regard himself as an expert in respect of the safe operation of the Rewinder No 1 Machine, or in respect of its guarding, although he had knowledge in respect of what was required to guard the machine. He had not spoken to Mr Ngai prior to the accident because he was responsible for the day to day operations of the company, nor had he talked to him about occupational health and safety. He agreed that there was no limit on what could be spent on occupational health and safety. During re-examination Mr Ly said that he spoke to Mr Siva, the safety officer, almost on a daily basis in respect of guarding issues, when provided him with advice in respect of safety. He also spoke to Mr de Vries, the production manager, in respect of guarding issues, including changing the design of the guards on the machines. The Principles 51 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the Act. Their Honours stated: [8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing. [9] In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: [I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide 'further guidance and structure to judicial discretion.' [10] The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474 as follows: [I]t is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ... [11] The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows: The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27: Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence. [12] On the issue of foreseeability, the Full Bench in Capral also stated at 646; 62 - 63: The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209 - 210) in these terms: ... reliance on "hindsight" must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to "ensure ... health, safety and welfare at work" and the decided cases which make plain the nature of the obligation. [13] It is also necessary to consider the damage and injury suffered in the context of the evidence and "in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries which have been suffered, or which may have been suffered, and the gravity of the offence" ( Capral at 650; 66). On that point the Full Bench in Capral stated: We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5, Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 377 at 378, Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456, Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131, WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and Page v Walco Hoist Rentals Pty Ltd (No 2) (at [22]). [14] The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows: [B]oth aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [40]-[43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. [15] In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]: [I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c). Consideration 52 I commence the consideration of penalty by having regard to the principles stated above and examining the nature and quality of the offence. In respect of the general guarding charge, the corporate defendant's system of work to restrict employees from accessing the machine was to erect a warning sign which stated "do not enter while the machine is running". It is an agreed fact that Mr Siva, the safety, purchasing and industrial relations officer also told employees not to go inside the machine while it was running. However, because guarding panels on the non operator side of the machine had been removed, unrestricted access to all moving parts of the machine was available. Access could also be gained to the machine's drive system, the southern end of the machine, the exit area adjacent to the perforator and the northwest corner of the machine. Padlocks on two of the guarding panels had also been removed prior to the incident, enabling access to the moving parts of the machine inside the cabinets. 53 The production manager, Mr de Vries and Mr Siva were aware that the padlocks had been removed. Although a perimeter wall was installed around the machine at a cost of $28,790, in or about December 2002 - January 2003, because of modifications to the machine shortly before the perimeter wall was installed, it no longer fully enclosed the machine. Mr Ming Ly's evidence was that over a period of time it became apparent that metal doors which provided for guarding of the machine were removed because they trapped dust which interfered with the functioning of the machine. His evidence was that the doors also did not open and shut properly. He could not establish when the doors were removed but said that the absence of the doors was a short term deficiency arising from the abovementioned problems. 54 It is the guarding deficiencies that gave rise to the risk to health and safety of employees. Apart from Mr Yang, the employee involved in the incident, there is no evidence of any other employee entering or coming near any moving parts of the machine. Although there was a warning sign that no-one was to enter while the machine was running, there was clearly a risk that employees may so enter. This is the more serious of the two charges as this Court has repeatedly drawn attention to the need for the proper guarding of machine: Workcover Authority of New South Wales (Inspector Ankucic) v Crown in the Right of the State of New South Wales (Department of Education and Training and Training) (2001) 112 IR 1; Inspector Giles v Foamex Polystyrene Pty Ltd [2004] NSWIRComm 100; Inspector Stuart Larkin v South Pacific Seeds Pty Ltd [2006] NSWIRComm 247. 55 The evidence discloses that in accordance with his training, Mr Yang, on 21 February 2004, stopped the machine before entering near the moving parts of the machine. He was required to clean the machine on an average of up to five times per day. There is no evidence that he did so whilst the machine was operating. The risk in respect of this charge was that Mr Yang might enter the area whilst the machine was still operating and could come into contact with moving parts of the machine. 56 On the evidence, which is that Mr Yang stopped the machine before entering near the moving parts, I find that the risk of Mr Yang entering the machine whilst it was working and coming into contact with the moving parts, was relatively low. There was also in place a specific sensor installed at the initiative of Mr Ly, which resulted in the automatic shutdown of the machine if the rollers were approached whilst it was operating. 57 Turning to the specific nip point charge, the particular is that the machine could be caused to move continuously by the operator deliberately activating the movement whilst it was being cleaned. The risk arose from the rollers being able to be inched forward rather than operated on a manual jog basis. This charge does not allege that the risk would have been eliminated by an additional guard or guarding but rather by a change in the method by which the rollers could be moved to facilitate cleaning. During the cleaning process, Mr Yang was able to cause the roller to move by pressing a button fixed at the side of the roller. This button was described as the inching or jogging button. If depressed and held down, it caused the roller to operate slowly at a controlled speed. On the date of the incident, the machine's inching pendant was not operational. 58 The remedial steps taken to eliminate this risk was to reposition the controls so as to prevent either form of activating the rollers during cleaning. The safe operating instruction for cleaning rollers introduced by management in April 2004, directed an employee to only jog switch at the side panel to clean rollers. Employees were directed not to use any other remote control to clean the rollers and to use the jog switch at the side to rotate rollers and stop and clean the rollers. No new guard was required to be introduced through any improvement notice. It follows that this charge was not concerned with a failure to guard but rather the method by which the rollers should be moved to facilitate cleaning. 59 The system of work that warned employees not to enter while the machine was running, equally applied in respect of this charge. Mr Yang heeded this warning and the instruction from Mr Siva not to go inside the machine whilst it was running. The risk that manufactured itself occurred during the cleaning task. 60 Mr Ly's evidence is that when Mr Yang commenced with the corporate defendant, he received induction and training on the Rewinder No 3 Machine, a machine similar to Rewinder No 1. For about the first 10 days, Mr Yang worked with a trainer on the machine and then commenced operating the machine whilst being observed by the trainer. His evidence was that this practice continued for approximately six months. There was no written instructions given to any employees. The training was verbal and on the job. There was no formalised documented based training programme in relation to cleaning the rollers of the machine. 61 After the incident, the corporate defendant put in place an administrative control for the cleaning of the rollers as an interim measure and notices were placed on all 11 rewinder machines to inform employees of the corporate defendant's requirements for cleaning of the rollers. Mr Ly's evidence was that Mr Yang, together with other employees was taught how to clear a paper jam. He stated Mr Yang clearly understood that in order to clean the rollers, the standard procedure was that he had to stop the machine before cleaning it. Employees were warned against touching any moving parts of the machine with signs being placed around the factory confirming these instructions which included turning off the machine before proceeding to clean any paper jams. The rewinder machine had a touch-sensitive emergency stop cord which stopped it from running in the case of an emergency. 62 In respect of supervision, it clearly failed on 21 February 2004 as it did not prevent Mr Yang operating the machine without risk to his health and safety. However, this failure must be assessed in the context of the overall difficulty in ensuring constant supervision of trained employees. The system of work that the corporate defendant had in place in respect of guarding and also in respect of cleaning the rollers was clearly defective in that unrestricted access to the machine was available because of the removal of metal doors. The system in operation for cleaning which enabled, through the use of a button, to slow the rollers as opposed to stopping the rollers and jogging them forward was also deficient. As I observed in Inspector Lavercombe v Alto Automobiles Pty Ltd [2007] NSWIRComm 252, I respectfully agree with the observations of Walton J, Vice-President, in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Another (1999) 95 IR 383 at 449 where his Honour said: Whilst I accept that the existence of settled safety procedures and instructions is a factor which is relevant to the assessment of the seriousness of the offence (see Department of Mineral Resources of NSW (Chief Inspector Bruce Robert McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27, that system must also include searching for and identifying all possible risks and instituting safety measures to guard against those risks: University of Sydney (at 21). In Inspector Hannah v Rice Growers Co-Operative Limited (unreported, Fisher CJ, CT88 of 1990, 20 November 1990), his Honour commented, in relation to an offence under s15 of the Act, that (at 7-8): "It was true that it may be difficult to anticipate the way in which even an obvious and avoidable risk may work itself out. Most serious accidents are not anticipated. This does not excuse any employer from a failure to employ a safe system of work incorporating obvious and desirable safety measures." 63 Mr Dixon submitted that in circumstances where Mr Yang had been trained in the appropriate method of cleaning the rollers, he acted carelessly on the day of the incident and contrary to his training. Mr Dixon relied on the observations of the Full Bench in Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143 at [15] where the Full Bench said: ... Section 15 (the predecessor to s 8(i)) of the Occupational Health and Safety Act (NSW) requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority (NSW) (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 at 257: "Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connections. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. 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." (See also WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at 722). 64 I am prepared to accept that there was a degree of error or carelessness on the part of Mr Yang. However, it is well settled that an employer's obligation is to ensure the health and safety of its employees and contractors. This obligation extends to the hasty, careless, inadvertent, inattentive or unreasonable employee and contractor. This is a facet of the proactive nature of the duty described in such forceful terms by Hill J in WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 where his Honour said: "employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time at the workplace". See also Bauer J in WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 at 257. In WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81 the majority held: [45] The duty to provide a risk-free work environment is a duty owed not only to the careful and observant employee but also to the hasty, careless, inadvertent, inattentive, unreasonable or disobedient employee in respect of conduct that is reasonably foreseeable: Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313 at 320; McLean v Tedman (1984) 155 CLR 306 at 311 – 312 and WorkCover Authority (NSW) (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248. 65 At [46], the Full Bench stated it agreed with the conclusions in Riley at [15], to which I have already referred. And later at [48]: The employer must also guard against acts of inadvertence to the fullest extent practicable: Inspector Ankucic v Naomi Cotton Co-operative Ltd (unreported, 97/2251, 14 July 1998, Hill J). We note in this respect the observations of the Full Bench in Australian Grader Hire (at par 16) as follows: "Similarly, it is important for employers to actively ensure that instructions given are both sufficient for and complied with by employees. We refer to the judgment of Walton J, Vice President in WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Australia) Pty Limited (No 1) (1999) 101 IR 329, as follows: 'In any event, the mere stipulation of procedures and instructions to carry out the work may not be enough to satisfy the requirements of s 15 of the Act. The employer should ensure that procedures and instructions are actively and positively complied with by employees. In Dawson (at 121 and 125) the failure by a foreperson to supervise a qualified and experienced linesperson to the extent of instructing the employee as to the safest available method (where the employer had laid down a procedure for work and various methods of performing the work were available) would constitute a breach of s15 (although in that matter it was found the failure was that of the foreperson and not the employer). I note that in an English High Court case, Pope v Gould (HM Inspector of Health and Safety, 20 June 1996, unreported but cited at p 44 of Redgrave's Health and Safety, 1998, Third Edition) it was held in England, under the equivalent of s 15, that it is not a sufficient defence for an employer to demonstrate that he had instructed the employee to operate machinery in a particular way and the employee had not followed his instructions. There, it was held, that the legislative provision was not concerned solely with the giving of instructions; rather it imposes upon the employer positive duties in relation to ensuring safe systems of work and safe machinery. It was held not to have been sufficient for instructions of a health and safety nature merely to have been given to employees; an employer must also ensure that those instructions are carried out (see also Haynes at 181-182, Kirkby at 53 and McMartin at 8).'" 66 It follows that it is necessary to consider the degree of culpability for the breach of occupational health and safety that can properly be attributed to the acts or omissions of the defendants in order to determine the gravity of the offence to which the defendants have pleaded guilty. The failure here is to have proper guarding on the machine and to ensure employees were not exposed to risk in cleaning the rollers of the machine. 67 It will be a serious offence where there is a foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and foreseeable. The defendants concede that the risk was foreseeable in respect to the general guarding charge. In relation to the nip point charge, the defendants accept that they ought to have seen a risk of harm. However, it is submitted on behalf of the defendants, that the potential for harm must be assessed by reference to the particular rollers and the process being undertaken, namely: (a) the gap between the two rollers was approximately 38 mm; (b) the machine was not in normal production mode; (c) the rollers could only be inched forward by deliberate activation; (d) the actual injuries sustained by Mr Yang, being soft tissue injury to his arm, was consistent with this. 68 The evidence, in my view, discloses, on the balance of probabilities, that it was standard procedure for Mr Yang to clean the rollers in the way that he did on the date of the incident. 69 The seriousness of the risk, particularly in respect to the removal of the guards which allowed unrestricted access to moving parts of the machine, its foreseeability and the ease of removing that risk, together with the corporate defendant's criminal history, renders this a serious offence. 70 The corporate defendant has two prior convictions under the Act. The first occurred in 1998 when the defendant was fined $15,000 in respect of an incident where an employee lost the middle finger on his hand. A second offence occurred in November 2002 where the corporate defendant was fined $12,000 for an offence where again an employee lost the middle finger. However, proceedings in relation to that incident (November 2002) had not been commenced when the incident leading to the matters now before the Court occurred. After the first offence, the corporate defendant submitted that substantial rectification work was carried out and an improvement notice from WorkCover was satisfied. For the purpose of evaluating the corporate defendant's conduct for sentencing, I accept it had one prior conviction at the time of this matter: WorkCover Authority of New South Wales v Denson (2007) 162 IR 199. 71 Mr Dixon acknowledged that the Court is required, in fixing penalty, to consider the need to deter others from committing the same crime and to deter the corporate defendant and the personal defendants from re-offending. In Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [71] - [80] the Full Bench recognised that in the industrial context, it would be rare that a sentencing court need not impose a sentence that includes an element of general deterrence. I consider it is appropriate to once again draw attention to the need for employers operating dangerous machines to be aware of the risks in respect of inadequate guarding and the cleaning of such machines. Employers must be constantly vigilant of the need to ensure that workers are not exposed to risks to their health and safety. Since the introduction of the Factories, Shops and Industries Act 1962 (NSW) industrial tribunals have regularly drawn employers attention to the need to ensure proper guarding of machines so employees are not exposed to risks. It is therefore appropriate that I give weight to the need for general deterrence in determining penalty. 72 In relation to specific deterrence, the attitude of the defendants to questions of workplace safety and any steps taken to improve safety following an incident are relevant, as is the propensity for the defendants to re-offend. The corporate defendant operates a substantial business with a turnover of approximately $230,000,000 in the financial years of 2006 and 2007. It is an employer of at least 300 people. I accept that the defendant dedicated almost $500,000 in expenditure in relation to occupational health and safety in 2006/2007 and has a budget of $634,000 for occupational health and safety in 2007/2008. I also take into account Mr Ly's evidence that the corporate defendant's progress in respect of occupational health and safety has been so substantial and so significant that they have been asked by WorkCover to apply for an award which is apparently given to the workplace with the most improved safety. 73 Although the corporate defendant does not have an unblemished record, it operates a business with approximately 12 large machines. Taking the corporate defendant's significant growth over the past 20 years, its number of employees and turnover, I find that it has a good record. I accept that this is not a case which calls for the imposition of some additional specific punishment aimed at deterring the defendants from further offending against the Act and/or for the purposes of compelling the defendants' attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety. I propose to include an element in the penalty for specific deterrence. Mr Chek Ming Ly 74 Mr Chek Ming Ly was the general manager of the company. His evidence was that he did not have a job description, but had responsibility for everything to do with production and safety. I am not prepared to find in accordance with the submission urged on me by Mr Dixon that from time to time he had informal meetings with Mr Henry Ngai concerning the management of safety matters. Mr Ly accepts that the corporation's approach through him was insufficiently detailed and insufficiently systematic. The lack of detail and systems occurred, he said, because of the extremely rapid growth of the company, despite the company engaging a number of people with experience and expertise in safety matters to assist him. I am prepared to take into account that the company commenced operations in 1985 and the first conviction for a breach of the Act occurred in March 2001, which related to an incident in 1998. I find that it has been proven, beyond reasonable doubt, that Mr Ly was in charge of the day to day operations at the factory. His evidence was that he and Mr de Vries controlled the operation of the machines on a day to day basis and Mr Houy Ly had control during the night shift. 75 Mr Ly's evidence was that he did not talk to the other three directors about making decisions in respect of guarding. Although he said he did speak to Mr Ngai a little bit, the evidence does not establish that it was in respect of the guarding of machines. It was an agreed fact that Mr Ly had an unlimited budget in respect of any safety matters. I also find that Mr Siva reported to Mr Ly. The evidence does not establish that Mr de Vries and Mr Siva had safety inspection lists for machines to enable them to check that guard doors were working prior to the incident. Such lists and/or audit were introduced after the incident. Mr Ly's evidence was that the budget for safety was unlimited and I am prepared to find, on the balance of probabilities, that although there was no written budget, Mr Ngai had authorised Mr Ly to spend whatever he thought was necessary in respect of safety. Mr Henry Ngai 76 The memorandum and articles of association of the corporate defendant, which were tendered by Mr Docking, provide that during his lifetime Mr Ngai shall assume the office of governing director of the company and have power to exercise all powers conferred upon the company by the articles and to appoint an alternate to exercise all or any of his powers. In his record of interview with Inspector James, Mr Ngai described his position with the corporation as managing director. He said that his main duties in respect of the company involved finance and that he did not influence the day to day operation of the company. His evidence was that Mr Ly, Mr Siva and "other expert people" trained employees of the company. He was not aware of the company's procedure for the control and entry of the machines prior to the accident. Mr Ngai's evidence was that he did not involve himself with occupational health and safety because Mr Ly was the general manager. Mr Ly had the ability to do everything he needed to do in respect of occupational health and safety including signing cheques. On this basis Mr Ngai said there was no need for him to come and ask for money. His evidence was that he owned 65 per cent of the company. Mr Ngai made all of the major decisions in the company and determined the particular roles and responsibilities that directors and other persons had. His evidence was that Mr Ly reported to him. 77 Mr Dixon tendered a diagram which demonstrated that each director and Mr Ming Ly reported to him. Mr Ngai was overseas at the time of the incident, although the evidence is clear that the unsafe system was in existence for some period prior to the incident. There were no formal board meetings or meetings in respect of occupational health and safety prior to the incident. However, after the incident, the evidence discloses that management meetings took place in respect of occupational health and safety, which were attended by all of the directors, Mr Ming Ly and other officers employed by the corporation. It appears, and I find on the balance of probabilities, that Mr Ngai had a genuine belief that that he was entitled to delegate responsibility for safety to Mr Ly. It was only after the incident involving Mr Yang that he appreciated that he should have been involved in safety matters. His evidence was that the earlier fines for breaches of the Act and the issuing of improvement notices by WorkCover were not brought to his attention. His evidence was also that he had no knowledge of any deficiencies in the company. In my view, his complicity in the offences arise essentially by reasons of his incorrect understanding of his legal obligations and the structuring of the company. Although ignorance of the provisions of the Act is not a defence, Mr Ngai has accepted responsibility for the corporation's, and thus his breaches of the Act. However, in light of the factors that I have referred to, it seems to me that Mr Ngai should be regarded as the least culpable in respect of the offences. 78 Mr Dixon submitted that in sentencing Mr Ngai it was appropriate to give consideration to the application of s 10(1)(b) of the Crimes (Sentencing Procedure) Act 1999. Section 10(1) provides as follows: 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years, (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. 79 I accept Mr Ngai is a man of good character who has no prior convictions and his affidavit evidence makes clear he has made a significant contribution to the local community and in overseas aid. He and his company support refugees in employment, and provide financial support and assist them in entering the community. Mr Ngai is 61 years of age and has informed the court that he proposes to retire from the company in December 2008. The evidence reveals that he has significant health issues. 80 Section 10(3) of the Crimes (Sentencing Procedure) Act provides as follows: (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. 81 Mr Dixon did not submit that the offences were trivial. However, senior counsel submitted that it was the nature and quality of the offences, as committed by Mr Ngai, to which attention must be given. Mr Dixon submitted that the offences are at the lower end of the scale. I agree. In addition, senior counsel submitted that it is not essential that each of the matters referred to in s 10(3) should necessarily apply before any discretion maybe exercised: Morrison v Barry John Cahill [2007] NSWIRComm 114 at [34]. 82 In respect of the nature and quality of the offence, the following additional matters were drawn to the Court's attention: (i) Mr Ngai was educated to Grade 6; (ii) Mr Ngai arrived in Australia pursuant to a Business Migration Scheme; (iii) Mr Ngai knew very little English and did not, at the time of the incident, have full command of the language; (iv) Mr Ngai built up a business over approximately 18 years which eventually employed over 300 people, many of whom have foreign backgrounds, but maintained a very good safety record within the corporation and personally; (v) Mr Ngai left occupational health and safety in the hands of Mr Ly, who sought to attend to safety matters; (vi) Mr Ngai was aware that his employees received training; (vii) Mr Ngai believed that those employed in occupational health and safety areas of the company were expert in their field; (viii) Mr Ngai made available whatever money was required in respect of safety; (ix) Mr Ngai believed all safety issues were being attended to by Mr Ly; (x) Mr Ngai did not know of any accidents in the company until he spoke with Inspector James after the incident concerning Mr Yang; (xi) Mr Ming Ly raised no safety concerns at all with Mr Ngai in circumstances where the relationship was such that Mr Ngai anticipated that he would be told of any problems. He relied on Mr Ly to keep him informed and believed that Mr Ly would do so; (xii) Mr Ly was overseas at the time of the incident; (xiii) Mr Ngai was overseas in 2002 for 106 days; in 2003 for 135 days and in 2004 for 185 days; (xiv) Mr Ngai has made it clear that he now fully aware of the obligations on him as a director under the Act; (xv) Mr Ngai entered an early plea of guilty. These factors were relied upon as amounting to extenuating circumstances. 83 I am mindful that the discretion under s 10 of the Crimes (Sentencing Procedure) Act is reserved for extraordinary and exceptional circumstances. Inevitably, its use will be finely balanced as it is in this case: WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at [22]; Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 133; Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd (2001) 105 IR 348 at [174] - [175]. 84 Although he clearly had an obligation to ensure safety, as I have observed, the culpability of Mr Ngai is less than that of the corporate defendant and Mr Ly. I have agonised over whether the facts and circumstances in respect of Mr Ngai, particularly that his actual involvement in the company was in respect of its financial matters; that all safety matters were left to Mr Ly who had an unlimited budget in this respect; that he did not observe the deficiencies in the guarding of the machine and that such deficiencies were not reported to him; that the evidence does not disclose for what period the guards or panels had been removed from the machine; that Mr Ngai was overseas at the time of the accident and for almost half of 2004 and one third of 2003, amount to extraordinary and exceptional circumstances under which a discretion may be exercised pursuant to s 10 of the Crimes (Sentencing Procedure) Act. 85 I have reached the conclusion that I should not exercise my discretion pursuant to s 10. It must be remembered that Mr Ngai was the governing director of the corporation. Although the corporation was convicted of an offence in 2001 and was the recipient of improvement notices in respect of guards on machines, no system was put in place to bring such matters to the attention of Mr Ngai. Indeed, his evidence is that he only found out about previous breaches of the Act shortly before the summary proceedings. In the face of this evidence, it cannot be said Mr Ngai has acted diligently as a director, such as to warrant the use of s 10. 86 Taking into account the objects of the act and the purpose of punishment, although finely balanced, in my view, each of these requirements cannot be accommodated by means of placing Mr Ngai on a good behaviour bond for one year, as proposed by Mr Dixon. In reaching this decision, I have also take into account that Mr Ngai will relinquish his role in the corporation at the end of 2008. Subjective Factors in Respect of Corporate Defendant and Personal Defendants 87 The relevant subjective considerations include that each of the defendants pleaded guilty at an early opportunity and so facilitated the administration of justice. The defendants are entitled to a discount of 25 per cent for the utilitarian values of their pleas: R v Thomson; R v Houlton (2000) 49 NSWLR 383. 88 In addition, I take into account that the corporate defendant has been a generous contributor to both the local and international communities. In 2006 donations totalled $261,000 including gifts to Fairfield and Liverpool Hospitals. The corporate defendant also supports refugees. Mr Ly is chairman of Cambodian Vision which assists Dr Wong in providing eye care to people in Cambodia and Vietnam. He deposed that he had personally donated 100 tonnes of rice on four or five occasions to villages in Cambodia and provided financial support to various villages. He has also assisted the corporate defendant's support for refugees and provided one refugee with a car. It is appropriate that I take these matters into account on Mr Ly's behalf. 89 The evidence discloses that following the incident, Mr Ngai assisted Mr Yang in every way he could. Mr Yang returned to work after four days and was put on light duties where he remained until he requested a return to night shift. His medical expenses were met and Mr Ngai deeply regretted Mr Yang was injured. Mr Ly also said he deeply regretted, both personally and on behalf of the company, that Mr Yang was injured. Mr Ngai says it is the awareness of his obligations under the Act that is a factor in his decision to relinquish his position with the company. Furthermore, as the major shareholder in the company, the penalty to be imposed on the company has a major financial consequence on Mr Ngai. His wife is also a shareholder in the company. I take each of these matters into account. 90 I am unable to find an appropriate basis to distinguish between the level of culpability between the corporate defendant and Mr Ly in each of the matters. However, in my view, as I have already determined, the culpability of Mr Ngai is in a different category. The offences arise out of the same incident, involve the same conduct by the defendants and have common elements. It is therefore necessary to apply the principle of totality. 91 The approach to the application of the principles of totality is found in the decision of the Full Bench in Crown in Right of the State of New South Wales (Dept of Education and Training) v Keenan (2001) 105 IR 181, which considered the High Court's ruling in Pearce v The Queen (1998) 194 CLR 610. The Full Bench held that: [23] The effect of Pearce is that, in sentencing a defendant for more than one offence, the Court is required to fix an appropriate sentence for each offence and then consider questions of cumulation, concurrence and totality. It is only after determining an appropriate sentence for each offence that the Court should consider whether the sum of the separate sentences properly reflected the totality of the criminality involved. … [29] In an appropriate case, however, it may still be appropriate to impose a single penalty for multiple offences under the Act, but only as the result of the operation of the principle of totality after separate penalties have been assessed for each offence. However, we consider that the preferable course is that separate penalties should be imposed after the principle of totality is applied. … [51] In view of our conclusion that the two offences contained very substantial common elements, it could not be considered that the deduction made by her Honour was appropriate and sufficient. In a case such as this, the totality principle must be applied to ensure that the defendant is not punished more than once for the common elements of the offences and that the resultant penalty is appropriate to the overall criminality of the offences for which the defendant is being sentenced. 92 The maximum penalty for the corporate defendant in light of its prior conviction is $825,000. The maximum penalty for the personal defendants is $55,000. 93 In determining the penalties to be applied to the corporate defendant, taking into account the total criminality of the offences under s 8(1) of the Act, I consider the appropriate penalty to be: 1. In matter No IRC 612 of 2006 - $90,000. 2. In matter No IRC 613 of 2006 - $60,000. 94 Having regard to the common elements of the two offences, by applying the totality principle and having regard to the overall criminality, I consider the total fine should be reduced to $70,000. 95 Accordingly, the fines to be imposed in relation to each offence in respect of the corporate defendant are: 1. In matter No IRC 612 of 2006 - $42,000. 2. In matter No IRC 613 of 2006 - $28,000. 96 In respect of the defendant, Mr Ly, I consider the appropriate penalties to be: 1. In matter No IRC 606 of 2006 - $13,000. 2. In matter No IRC 607 of 2006 - $9,000. 97 Having regard to the common elements of the two offences, by applying the totality principle and having regard to the overall criminality, I consider the total fine should be reduced to $12,000. 98 Accordingly, the fines to be imposed in relation to the defendant, Mr Ly, are: 1. In matter No IRC 606 of 2006 - $7,200. 2. In matter No IRC 607 of 2006 - $4,800. 99 In determining the penalty to be applied to Mr Ngai, taking into account the total criminality of the offences under s 8(1) of the Act, I consider the appropriate penalty to be: 1. In matter No IRC 610 of 2006 - $3,000. 2. In matter No IRC 611 of 2006 - $2,000. 100 Having regard to the common elements of the two offences, by applying the totality principle and having regard to the overall criminality, I consider the total fine should be reduced to $3,000. 101 Accordingly, the fines to be imposed in relation to each offence in respect of Mr Ngai are: 1. In matter No IRC 610 of 2006 - $2,000. 2. In matter No IRC 611 of 2006 - $1,000. ORDERS 102 The Court makes the following orders: In matter No IRC 612 of 2006 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence. 3. The defendant is fined an amount of $42,000 with a moiety to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. In matter No IRC 613 of 2006 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence. 3. The defendant is fined an amount of $28,000 with a moiety to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. In matter No IRC 606 of 2006 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence. 3. The defendant is fined an amount of $7,200 with a moiety to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. In matter No IRC 607 of 2006 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence. 3. The defendant is fined an amount of $4,800 with a moiety to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. In matter No IRC 610 of 2006 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence. 3. The defendant is fined an amount of $2,000 with a moiety to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. In matter No IRC 611 of 2006 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence. 3. The defendant is fined an amount of $1,000 with a moiety to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. AMENDMENTS HISTORY: 20/12/2007 - Error on cover sheet - Paragraph(s) Catchwords 20/12/2007 - Word misspelt on cover sheet - Paragraph(s) catchwords 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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