Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector James v Paul (No 2) [2011] NSWIRComm 117 Hearing dates: 29 June 2011Written submissions:12 July 2011, 26 July 2011 Decision date: 05 September 2011 Jurisdiction: Industrial Court of NSW Before: Boland J President; Walton J Vice-President; Staff J Decision: 1. The respondent Robert Mark Paul is fined an amount of $15,000 with a moiety thereof to the prosecutor. 2. The respondent is to pay the appellant's costs as agreed, or as assessed, of the appeal. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - s 8(1) and s 26(1) of the Occupational Health and Safety Act 2000 - appeal by prosecutor upheld - re-sentencing - objective seriousness - deterrence - subjective factors - PRINCIPLES "double jeopardy" - penalty imposed - COSTS - Occupational Health and Safety Act 2000 s 8(1), s 26(1); Crimes (Appeal and Review) Act 2001, s 3, s 68A; Criminal Appeal Act 1912, s 5D - Industrial Relations Act 1996 s 196; Crimes (Sentencing Procedure) Act 1999 s 10. Legislation Cited: Criminal Appeal Act 1912 Crimes (Appeal and Review) Act 2001 Crimes (Sentencing Procedure) Act 1999 Industrial Relations Act 1996 Occupational Health and Safety Act 2000 Cases Cited: Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd & Anor [2001] NSWIRComm 130; (2001) 105 IR 348 Inspector Neil Buggy v Weathertex Pty Limited [2003] NSWIRComm 273; (2003) 127 IR 60 Inspector James v Paul [2011] NSWIRComm 82 Inspector James v Dekorform Pty Ltd & Paul [2010] NSWIRComm 150 Morrison v Powercoal Pty Ltd (No 3) [2005] NSWIRComm 61 Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 R v JW [2010] NSWCCA 49 WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd [2000] NSWIRComm 142; (2000) 49 NSWLR 700; (2000) 100 IR 64 Category: Principal judgment Parties: Inspector Wayne James (Appellant) Robert Mark Paul (Respondent) Representation: Counsel Mr M Joseph SC with Mr D Chin (Appellant) Mr P Kite SC with Mr P Coleman (Respondent) Solicitors WorkCover Authority of New South Wales (Appellant) Workplace Law (Respondent) File Number(s): IRC 1418 of 2010 Decision under appeal Citation: Inspector James v Dekorform Pty Ltd & Paul [2010] NSWIRComm 150 Date of Decision: 2010-11-12 00:00:00 Before: Marks J File Number(s): IRC 1012 and 1013 of 2008 Judgment 1On 29 June 2011, judgment was given in Inspector James v Paul [2011] NSWIRComm 82 in which the Full Bench granted leave to appeal and upheld an appeal by Inspector Wayne James against an order by Marks J unconditionally dismissing a charge brought pursuant to s 8(1) of the Occupational Health and Safety Act 2000 ("OHS Act") by reason of s 26(1) of the OHS Act, against Robert Mark Paul ("the respondent") a director of Dekorform Pty Ltd ("Dekorform"): Inspector James v Dekorform Pty Ltd & Paul [2010] NSWIRComm 150. 2The parties were given an opportunity to file written submissions in respect of the re-sentencing of the respondent and advised that unless either party specifically sought to further address the Full Bench, we would undertake re-sentencing of the respondent, having regard to the evidence and material in the appeal, submissions made at first instance and on appeal, and any further written submissions filed. Neither party sought a further hearing. 3It, therefore, follows that this judgment deals with the appropriate sentence to be imposed on the respondent. Approach to sentencing at first instance 4Marks J dealt with the objective seriousness of the offence, and at [33] - [36] of his judgment. His Honour found as follows: [33] Dekorform and, in effect, Mr Paul are each charged with the same breach of s 8(1) of the Act. The starting point for a consideration of the assessment of penalty is a determination of the objective seriousness of the offence. It is clear, as is conceded by all parties, that the multirip circular saw, at the time of the incident, was defective and manifestly unsafe. The internal anti-kickback fingers had been removed, the rollers and sleeves were damaged, employees were not precluded from standing in line with the in-feed of the machine, such steps as were taken to identify any risks involved in the condition of the machine were inadequate, and nobody appears to have been furnished with sufficient or appropriate information, instruction and training concerning the identification of any risk associated with the state of the machine and in some respects its operation, especially prohibiting employees from standing in line. Furthermore, there was a failure to undertake an adequate risk assessment in all the circumstances. [34] This seemingly parlous state of affairs was, however, ameliorated by the fact that Dekorform, through its controlling personnel at Parbury, had had the machine serviced at regular intervals. Indeed, it may be inferred from the evidence, and especially that given by Mr Brydson in his principal affidavit, that the internal anti-kickback fingers had been removed by a person or persons forming part of the Parbury maintenance crew. This throws up for consideration what Dekorform ought properly to have done in circumstances where, on the evidence, the machine was regularly serviced to deal with any problems that arose and undertook a major service during the annual close down. [35] However, the situation is more complex because some weeks before the incident trouble had been encountered with the machine as is outlined in the agreed statement of facts, and there was a failure to have the machine examined by a person who was fully trained and competent to do so. An examination carried out after lifting the top of the machine would have revealed that a bar which was the housing for the internal anti-kickback fingers was missing. Furthermore, it appears that none of Mr Brydson, Mr Hogden or Mr Owen was trained, equipped or competent to carry out an inspection of the equipment. Accordingly, the no doubt well-intentioned regular inspections and safety audits were insufficient and ineffective to reveal the underlying condition of the machine, one that was manifestly unsafe predominantly because of the absence of the internal anti-kickback fingers. [36] This discussion of the evidence leads me to conclude that this is a most serious breach of the Act and should be so characterised for the purpose of the assessment of an appropriate penalty. 5We agree with his Honour's finding in respect of the objective seriousness of the offence, but that finding was not reflected in his Honour's other findings regarding Mr Paul's culpability. 6Later in his judgment Marks J noted that the culpability of Mr Paul was linked with that of Dekorform in terms of the serious nature of the offence. His Honour acknowledged he was to have regard to the culpability of Mr Paul in the context of his involvement in the management of Dekorform "and the part played by him in the particular breach of safety with which the Court is concerned in these proceedings." In that respect his Honour referred to Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd & Anor [2001] NSWIRComm 130; (2001) 105 IR 348 and Morrison v Powercoal Pty Ltd (No 3) [2005] NSWIRComm 61, where the decision of Wright J, President in Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [38]-[39] was cited with approval. 7Marks J found as follows: [51] The effect of the evidence given in the proceedings to which I have previously referred is that Mr Paul had ultimate responsibility for occupational health and safety matters in the Dekorform business. However, he was not involved in the day-to-day management of that business which appears to have been vested in Mr Brydson who was the manager of Dekorform. Assessed objectively, and given the evidence about the obligations, responsibilities and duties both overall and specifically with respect to occupational health and safety matters, I would assess Mr Brydson as being much more culpable than Mr Paul in terms of the matters surrounding the incident that is at the heart of these proceedings. I am unaware whether the prosecutor has instituted proceedings against Mr Brydson under s 26 of the Act, but certainly they are not proceedings with which I have had to deal. [52] The maximum penalty applicable to the charge against Mr Paul is $55,000. Assuming that his culpability is less than that of Dekorform, on the basis of the matters to which I have just referred, an appropriate monetary penalty would be something less than $5,000. 8Subsequently, however, Marks J applied the provisions of s 10 of the Crimes (Sentencing Procedure) Act 1999 and directed that the charge against Mr Paul be dismissed. Nature of the offence 9Adopting the approach of Wright J in Walco (No 2) , in assessing the culpability of the respondent it is important to place particular weight upon his role in the management of the corporation and the nature and gravity of the offence as identified in relation to Dekorform and to make an assessment in that context of the situation of Mr Paul. 10As we stated earlier, the primary judge's finding that the breach by Dekorform was a "most serious breach" may be accepted. The risk presented by the circular saw was a serious risk to health and safety, manifested in the death of Mr Hogden. In that context, one must consider Mr Paul's role. At the date of the incident, the respondent had responsibility for implementing and ensuring compliance with occupational health and safety standards and policies within Parbury Pty Ltd ("Parbury"), which included Dekorform. The respondent's failure was to have in place a system that would have enabled managers with the necessary knowledge and training to properly assess the safety of the machine and determine if it was missing its set of internal anti-kickback fingers. 11The failure in this regard lies at the centre of any consideration as to the respondent's culpability: he was directorially responsible for occupational health and safety at Dekorform and for ensuring compliance, but failed to ensure there was an effective system in place capable of enabling an assessment to be made by competent personnel about whether or not the circular saw was safe to operate. The saw was not safe to operate and as a consequence Mr Hogden lost his life. Deterrence 12The importance of the principle of deterrence in the sentencing process cannot be underestimated here. The offence reveals yet another serious incident arising from the failure to undertake an adequate risk assessment to identify the risks associated with operating the machine, including an assessment of the risk of "kickback" of materials being fed into the machine. 13The dangers presented to workers in operating machines that are not the subject of regular safety audits are obvious. Management at all levels have a responsibility to ensure that systems are in place whereby regular and effective assessments of the safety of machinery are undertaken. We include in the penalty a component for general deterrence. 14As to the question of specific deterrence, after the incident, the respondent took active steps to arrange for a complete review of the occupational health and safety procedures and protocols of Dekorform and changed the structure of the businesses. He resigned from the parent company and decided to "move away from manufacturing and back into sales and marketing". He is now "extremely critical of the company's focus on OHS". Dekorform also carried out improvements to the machine including the following: (a) reinstalled the anti-kickback fingers in the machine; (b) enabled the electronic interlock device by fitting an air operated locking device to the splinter catchers to prevent the lever being moved (thereby lifting the splinter catchers) whilst the machine was being operated; (c) installed an interlock on the rear cover of the saw (non-operator side); (d) installed a laser beam safety cut-out device that prevents persons from accessing the feeder table (scissor lift) while the machine is operating; (e) installed new neoprene sleeves on the top rollers; (f) installed a fence and interlock gate on the exit end on the non-operator side of the machine; (g) installed a fence on the rear and side (non-operator) of the in-feed scissor lift with a sliding gate that is bolted and a safety switch mechanism to prevent unintentional access; (h) installed "c-section" guarding on the operator side of the in-feed roller table with a lanyard interlock and bar; (i) installed two sets of kickback (finger) flaps on the in-feed roller table and one continuous flap on the in-feed end of the scissor lift table; (j) repositioned the stop/start switch and installed three emergency stops; (k) installed an interlock switch on the lid of the machine; and (l) engaged two external consultants to perform a risk assessment of the machine. 15The respondent is no longer associated with Dekorform, but it is evident before his departure he took appropriate steps to remedy the flaws in the company's approach to health and safety and he undoubtedly has a new perspective on the fundamental importance of appropriate policies and procedures to ensure health and safety in the workplace. It was not entirely clear what was meant by the respondent's move back into "sales and marketing". However, it was not submitted that this move meant that the respondent no longer had any responsibility for occupational health and safety. We consider there should be a small element included in the penalty for specific deterrence. Subjective factors Respondent's reliance on mitigating factors 16The respondent summarised the evidence and submissions made at first instance and on appeal in respect of the culpability of the respondent, together with the various subjective factors in mitigation relevant to penalty, this way: (a) The respondent was a director for only approximately 1 year before the incident. (b) He had a broad portfolio of responsibilities with the business of Dekorform operating at a discrete location and forming approximately 5% of the total. (c) The Dekorform business and the machine involved in the incident itself were of long standing, under stable long serving local management and with no history of OH&S issues. It appeared to the respondent as a well run, well managed operation. In those circumstances the respondent relied, not unreasonably, upon that local management. (d) He paid careful attention to his OH&S responsibilities. It was the subject of regular reporting and the subject of regular management meetings. This included reports that the machine was regularly inspected and serviced. (e) An employee was appointed to the Dekorform business with specific OH&S responsibilities. This was a new role created at Dekorform by the respondent and demonstrates a commitment to, and significant allocation of resources to, OH&S, upon taking up the directorship and prior to the incident. Processes were in place, albeit that they were not effective in preventing what happened in this case. (f) The absence of the anti-kickback mechanism was only apparent when the top lid of the machine was opened and the person looking down into the machine knew what to look for. The mechanism was apparently removed, some 18 months earlier, by external contracted maintenance workers. As submitted by the appellant, a director cannot be expected to have detailed awareness of day to day activities ( ASIC v Healey [2011] FCA 717 at [17]). This mitigates the failure set out at paragraph 2 (b) of the appellant's supplementary submission. The respondent did not know that the system of checks in place was faulty and it was by no means obvious to anyone, including to the long standing local management and operators that it was lacking. (g) After the incident, the respondent devoted unlimited corporate resources to OH&S to the point that nothing more could have been done. (h) The respondent, and under his control, other managers conducted relations with Mr Hogdens family with compassion and provided substantial support. (i) The incident has had an adverse impact upon the respondent at a personal level and has also impacted upon his career. (j) The evidence strongly suggests that the local manager of the Dekorform business could have been prosecuted pursuant to section 26 but was not. No explanation was proffered for that. 17We accept that the factors identified by the respondent should be taken into account in mitigation and given appropriate weight. However, that the respondent relied on local management and that he could not be expected to have detailed awareness of day to day activities of Dekorform, for example, are by no means exculpatory given the respondent's responsibility for occupational health and safety. That included a responsibility to ensure Dekorform carried out risk assessments on machinery by persons with the necessary training and instruction. That responsibility was not met. Other subjective factors 18We take into account the plea of guilty. The appellant submitted that the plea was not entered at the earliest opportunity. The respondent contended that it was inappropriate for him to give consideration to entering a plea of guilty until he was aware of the course that Dekorform was likely to take to the charge under s 8(1) of the OHS Act. 19Marks J determined that Dekorform had not entered a plea at its earliest opportunity and applied a discount of 5 per cent. His Honour applied a discount of 10 per cent for the plea entered by the respondent. 20We propose a discount for the utilitarian value of the plea of 20 per cent. It was not unreasonable, in our opinion, for the respondent to wait, before entering a plea, for Dekorform to decide its response to the charge against the company. 21We also take into account the respondent's co-operation in the investigation of the incident, its contrition expressed by reason of the plea of guilty, the steps taken immediately after the incident to improve the machine's safety and the absence of a prior conviction. 22We consider that Dekorform and the respondent were equally culpable in relation to the conduct giving rise to the offence. Principles of double jeopardy 23We turn to consider the relevance of the principle of "double jeopardy". Section 68A(1) and s 68A(2) of the Crimes (Appeal and Review) Act 2001 ("CAR Act") provides: 68A Double jeopardy not to be taken into account in prosecution appeals against sentence (1) An appeal court must not: (a) dismiss a prosecution appeal against sentence, or (b) impose a less severe sentence on any such appeal than the court would otherwise consider appropriate, because of any element of double jeopardy involved in the respondent being sentenced again. (2) This section extends to an appeal under the Criminal Appeal Act 1912 and accordingly a reference in this section to an appeal court includes a reference to the Court of Criminal Appeal. 24Section 68A of the CAR Act applies to an "appeal court" which is defined in s 3 to mean the court to which an appeal or application for leave to appeal may be made under Pt 3, Pt 4 and Pt 5 of the Act. These parts deal with appeals from the Local Courts to the District Court, the Land and Environment Court and to the Supreme Court respectively. 25The respondent submitted that the present matter is an appeal from a single judge of a superior court of record and not from a Pt 3, Pt 4 or Pt 5 appeal court and therefore s 68A does not apply. We disagree. 26By operation of s 196 of the Industrial Relations Act 1996 ("IR Act"), the present appeal constitutes an appeal under s 5D of the Criminal Appeal Act 1912 and is subject to the provisions of that Act in both substantive and procedural respects, although modified, as expressly provided by s 196 of the IR Act : Inspector Neil Buggy v Weathertex Pty Limited [2003] NSWIRComm 273; (2003) 127 IR 60 at [45]. 27Section 68A removes from consideration on the part of this Full Bench, the element of distress and anxiety to which all respondents to a Crown appeal are presumed to be subject: WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd [2000] NSWIRComm 142; (2000) 49 NSWLR 700 (2000) 100 IR 64 at [41]. 28It follows, therefore, that this Full Bench is precluded from, firstly, reducing the sentence which it would otherwise determine to be appropriate on the basis of such distress and anxiety, and secondly, from having regard to the "frequency or rarity" of Crown appeals as a sentencing principle applicable to an individual case by taking into account the factors of distress and anxiety: R v JW [2010] NSWCCA 49 at [141] per Spigelman CJ. Orders 29We make the following orders: 1. The respondent, Robert Mark Paul, is fined an amount of $15,000 with a moiety thereof to the prosecutor. 2. The respondent is to pay the appellant's costs as agreed, or as assessed, of the appeal. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 September 2011