Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Estreich v Brennan [2011] NSWIRComm 150 Hearing dates: 7/09/2011 Decision date: 09 November 2011 Before: Backman J Decision: In IRC 992 of 2010, the Court makes the following orders: 1. Anthony James Brennan is convicted of the offence. 2. The defendant is fined $9,000 with a moiety to the prosecutor. 3. The defendant is to pay the reasonable costs of the prosecutor as agreed or assessed. In IRC 993 of 2010, the Court makes the following orders: 1. Bulk Maritime Terminals Pty Limited is convicted of the offence. 2. The defendant is fined $90,000 with a moiety to the prosecutor. 3. The defendant is to pay the reasonable costs of the prosecutor as agreed or assessed. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - Occupational Health and Safety Act 2000 (the Act) - plea of guilty to an offence by the corporate defendant under s 8(1) of the Act and plea of guilty to an offence under s 8(1) by virtue of s 26(1) of the Act by the director - worker receives serious injuries after being crushed by a bulk bag containing 900 kilogrammes of dry bulk powder which fell on him - serious deficiencies in corporate defendant's system of work identified - other objective factors considered - subjective factors considered - significance of small corporate structure to an assessment of factor of remorse - penalties imposed - orders Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Fines Act 1996 Occupational Health and Safety Act 2000 Category: Principal judgment Parties: Inspector Phillip Estreich (Prosecutor) Anthony James Brennan (First Defendant) Bulk Maritime Terminals Pty Limited [ACN 051 914 099] (Second Defendant) Representation: Mr C Magee of counsel (Prosecutor) Mr I Latham of counsel (Defendants) DLA Piper Australia (Prosecutor) Ashlaw Legal Services (Defendants) File Number(s): IRC 992 of 2010 IRC 993 of 2010 Judgment 1Anthony James Brennan (Mr Brennan) pleaded guilty to one offence under s 8(1) by operation of s 26(1) of the Occupational Health and Safety Act 2000 (the Act) in his capacity as the director of Bulk Maritime Terminals Pty Limited (BMT). BMT pleaded guilty to one offence under s 8(1) of the Act. Both charges concern the same facts and circumstances arising from an incident on 17 September 2008 at premises owned by Quality Transport Pty Ltd (the premises). 2BMT operated a business involved in the movement of dry bulk materials. Mr Brennan was the sole director of BMT and was responsible for overseeing the operations of the business and dealing with customers. He exercised the day-to-day control of the business, including the management of the health and safety of BMT's employees and contractors. Mr Brennan also performed "hands-on" duties from time-to-time and attended at the premises on several occasions each week. 3BMT had a commercial arrangement with Quality Transport for the use of space in a large warehouse at the premises which it used for the transportation, storage and unloading of bulk products. To facilitate these operations, BMT used a 15-tonne overhead travelling crane which was operated by a hand control pendant consisting of various buttons for controlling the direction of the crane, as well as "emergency stop" and "auxiliary" buttons. BMT also used steel chains and a chain hook with a D shackle in its operations which were provided by Quality Transport. 4Luke Shepherd was employed by BMT on a casual basis as a general hand. He commenced employment on 10 September 2008 and had prior experience working with a manual Hiab crane. Prior to commencing work for BMT, Mr Shepherd was inducted to the premises by Cameron Roelofs, a contractor engaged by BMT as a general hand/leading hand. During the induction, Mr Shepherd was given instructions on the operation of the overhead crane and chains used to lift bulk bags of dry product, and in the correct use of the crane's remote control, which included the safety procedures to be used in association with the control. He also received instruction on how to lift the bulk bags by linking the chain back onto itself by means of a hook. He was told not to stand directly under the load, to make sure the load was secure before elevating it and to watch for others entering the work space and to signal when the load was in the air. He was also told by Mr Roelofs to be careful when lifting the bags, not to stand next to the bags when lifting them, and not to stand under a bag when it was lifted. 5On the day he first commenced work at the premises, Mr Shepherd performed one five-hour shift during which he assisted Mr Roelofs to lift between 30 to 40 bulk bags. He did not work again at the premises until 17 September 2008. 6The circumstances leading up to the offences are recorded in the Agreed Facts as follows: [12] On 17 September 2008, Mr Shepherd and Mr Roelofs had commenced work at the premises at approximately 4.15pm. The task that they were required to undertake involved the decanting of between 25 and 30 bulk bags of clay powder, into a tanker truck. [13] The clay powder was contained in flexible intermediate bulk containers, referred to as bulk bags. The bulk bags are a standardised container for transporting and storing nonhazardous dry bulk products. The bulk bags were made of woven polyethylene or polypropylene material and measured 1100 mm x 11 mm, with a height of approximately 1000 mm. The bulk bags had material loops stitched into the four top corners of the bulk bag. The bulk bags also had a discharge spout at the bottom of the bag to enable the release of the dry product. The capacity of the bulk bags was approximately 1000 kg. [14] The weight of the clay powder inside the bulk bags was approximately 900 kgs. [15] Mr Brennan with the assistance of Mr Roelofs had earlier devised the system of work used on the day of the incident by Mr Shepherd and Mr Roelofs. [16] The system of work devised used the overhead crane at the premises to lift the bulk bags located on wooden pallets from the floor of the warehouse to a height, where the bags could be decanted into a tanker truck. The method of connecting the bulk bags to the overhead gantry crane involved the use of a length of chain with a grab hook at the end of the chain. The chain was threaded through the four loops of the bulk bag with the grab hook at the end of the chain then hooked into a link of the chain. The chain loop was then drawn together in the middle and slung over a hook attached to the cable of the overhead gantry crane. Once raised to the required height the bag would then be transported by the crane operator to sit vertically over the hatch of the tanker truck to be filled. The discharge spout at the bottom of the bag was then released over the hatch of the truck. [17] The operation required two workers. One worker was required to operate the control pendant for the overhead gantry crane. The crane operator was to slowly lift the bulk bag and elevate the bulk bag to the height of the tanker. Having elevated the bag to the required height the bulk bag was remotely moved horizontally into position for decanting of the product. The second worker during this operation was harnessed to the top of the tanker truck to open the discharge spout of the raised bulk bag and release the dry product into the hatch of a truck. The system required the second worker to put their hand under the bag to release the tag on the discharge spout. [18] Mr Shepherd and Mr Roelofs were performing the task of the decanting the bulk bags of clay powder, using this system of work on 17 September 2008. [19] Mr Shepherd was performing the task of attaching the chain to the bulk bags and raising and transporting them, using the overhead gantry crane. Mr Roelofs was harnessed to the top of the truck and was required to open the discharge spout of the bulk bags to release the dry product into the hatch of the truck. [20] On 17 September 2008, the two workers had used this system of work to decant approximately 3 bulk bags when at approximately 4.25pm Mr Shepherd utilised the same system to lift a fourth bulk bag. He recalled he had placed the chain through the loops of the bulk bag, and then hooked the chain link over the chain hook. The chain was then hooked over the hook attached to the cable of the overhead gantry crane. Mr Shepherd was required stand next to the bulk bag to hook it up and then raise it approximately 500mm to check it was secure and stable. After checking the bag was secure and level Mr Shepherd was to move away from the vicinity of the bulk bag before further elevating the bag by the remote control for its decanting. [21] Mr Shepherd stated what he did on the day as follows: "Once checking the chain was secure I proceeded to lift the bag with the overhead crane device. I then turned away to move towards my next scheduled bag, when the bag fell." As the bulk bag fell to the ground, it came into contact with Mr Shepherd, knocking him to the ground and landing on top of his lower torso and legs. Mr Shepherd stated that he tried to use the gantry crane remote unit to lift the bulk bag, but could not shift the bag. [22] While Mr Shepherd was lifting the fourth bulk bag, Mr Roelofs was standing on the top of the tanker truck awaiting the delivery of the next bulk bag. Mr Roelofs was looking into the inside of the storage tank of the tanker truck, checking on the load and did not see the bulk bag fall. Mr Roelofs heard a bang, and looked up and saw that the bulk bag was on top of Mr Shepherd. He observed that Mr Shepherd was trapped between the bulk bag and the pallet the bag was on before the bag had been lifted. The bag had fallen directly onto the pallet from which it had been lifted. [23] Mr Roelofs was harnessed to the top of the tanker truck. Mr Roelofs climbed down from the tanker truck and ran over to where Mr Shepherd was lying. Mr Roelofs then attempted to move the bulk bag off Mr Shepherd. He was unable to do so because of the weight of the bulk bag. Mr Roelofs the proceeded to locate some employees of Quality Transport and requested that they provide him with assistance. Mr Roelofs and the Quality Transport employees then proceeded to move the bulk bag so that Mr Shepherd was able to pull himself from under it. [24] An ambulance was then called. The NSW Ambulance Service then attended, and Mr Shepherd was transported to Liverpool Hospital. [25] Mr Roelofs was not aware of what had caused the bulk bag to fall as he had not been looking in the direction of Mr Shepherd at the time. Nor did he subsequently observe the position of the chain that had been placed through the four lifting loops of the bulk bag check the status of the crane. 7Mr Shepherd received severe crush injuries which included serious fractures to his vertebra, spinal cord compression, fractures of his left leg, ribs, and a metatarsal bone in his right foot, as well as injuries to his hips and ankles. The charges 8Both Charges allege a risk to Mr Shepherd of being crushed by the bulk bags, in particular, the bulk bag involved in the incident which contained approximately 900 kilogrammes of clay powder. The omissions of BMT alleged in the charges consist of a failure to provide and maintain a safe system of work with respect to the task of lifting, transporting and decanting the dry bulk products in bulk bags; a failure to provide safe plant and equipment (for the task of lifting, transporting and decanting the bulk bags filled with dry bulk products); and, a failure to provide adequate information, instruction, training and supervision to Mr Shepherd in relation to the operations involving the filled bulk bags. Objective factors 9As detailed earlier in these sentencing remarks, BMT had in place an informal system no doubt intended to ensure Mr Shepherd's safety at the premises. That system involved the induction training and instruction given to him, principally by Mr Roelofs. It was acknowledged by both defendants, however, that BMT's "system" for ensuring safety at the premises was inadequate. The deficiencies in the system are identified in the Agreed Facts, which, for convenience, are set out below: Systems of Work prior to the incident [28] BMT did not document the procedure or prepare a safe work method statement (SWMS) for the task of lifting, transporting and decanting of non hazardous dry bulk products in bulk bags at the premises. [29] Mr Brennan, with the assistance of Mr Roelofs, had undertaken an informal risk assessment of the work. The risk assessment did not assess the risk of the grab hook attached to the chain slipping or coming loose from the link of the chain during the lifting process. [30] Mr Brennan was a qualified engineer and held a front end loader operator's ticket and a forklift operator's ticket. Mr Brennan had in the past performed the task that was being undertaken by Mr Shepherd at the time of the incident. Mr Roelofs had no qualifications or experience in relation to developing a system of work for slinging and lifting the bulk bags via an overhead gantry crane. [31] Prior to the incident BMT had sought the advice of a person known as Doug, Mr Brennan understood Doug to be a 'rigger' employed by Quality Transport and had sought his advice in relation to the development of the method of work used for the task of lifting, transporting and decanting of non hazardous dry bulk products in bulk bags. Mr Brennan did not ascertain Doug's qualifications. Mr Brennan had performed the task himself in order to ascertain that the process was safe. He continued to carry out this work from time to time using the system of work he had developed with Mr Roelofs and believed the system was safe. [32] Mr Brennan in developing the system of work failed to seek advice from a properly qualified and competent person as to whether the system he developed was a safe method of slinging the bulk bags. [33] The risk of a bulk bag falling whilst they were being lifted had been identified by BMT. The steps taken by BMT to address the risk were the provision of induction training and supervision by Mr Shepherd by Mr Roelofs. [34] BMT and Mr Brennan failed to ascertain the safe working load limit (WLL) of the chain used for the task of rigging the bulk bags. The chain used did not have a tag stating the WLL. Mr Brennan relied on the opinion of Doug that the chain was adequate for the task. [35] The bulk bags had a tag attached by the manufacturer, which displayed three recommended lifting methods and two which were not recommended. Mr Brennan failed to have regard to the recommended lifting methods provided by the manufacturers of the bulk bags in determining the method of work. The method used was not recommended by the manufacturer. [36] Alternative available techniques for slinging or suspending of the bulk bags recommended by the manufacturer included: (i) the use of a heavy duty centre point lifting frame with fixed or, extendable arms which attach to the four loops of the bulkabag and then attached to the hook of the overhead crane; (ii) the use of a four point lifting chain which attached to the four loops on the bulk bag and to the hook of the overhead crane; and (iii) the use of a forklift with a metal jib which attached to a four point chain attached to the four loops of the bulk bag for the purpose of lifting, slinging or suspending the bulk bags. [37] Another available system was the use of a conveyor system known as Floveyor. [38] The latter system was implemented by BMT after the incident. Information, Instruction Training and Supervision [39] BMT did not retain a competent rigger and dogger to provide training and assistance to Mr Roelofs and Mr Shepherd as to how to safety (sic) perform the task. Instead BMT relied upon the informal training provided by Mr Brennan to Mr Roelofs, who in turn was required to provide instruction to Mr Shepherd. 10In an affidavit, Mr Brennan explained that BMT employed (and still employs) Mr Roelofs to supervise and perform the work at the premises. Mr Brennan said he assessed the activity and risks with Mr Roelofs in relation to each task and they developed a safe work method. He explained that these safe work methods were not documented at the time of the incident because of the close supervision of personnel and limited resources available at the time. He accepts that this system was inadequate and that proper documentation was necessary. 11Taking these matters into consideration, it must be concluded that there were serious deficiencies in the safety procedures employed by BMT at the time of the incident which placed Mr Shepherd at grave risk to his safety. The defendants, while acknowledging the deficiencies in the system, asked the Court to take into account the Agreed Facts which support the inference that some genuine attempts had been made to develop a safe procedure for the task being undertaken by Mr Shepherd at the time of the accident. The relevant facts have been summarised earlier in these sentencing reasons. They include the induction training provided to Mr Shepherd and the specific instructions given to him on how to lift the bulk bags. Those facts will be taken into account by the Court in mitigation of the objective seriousness of the offences. The Agreed Facts underpinning the circumstances of the offences, however, disclose a serious breach of the Act. There were obvious and safe ways of lifting the bags, for example, which were imprinted on the bags. A photograph of one of the bags annexed to the prosecution's tender bundle clearly displayed three available safe handling options for lifting the bags. Any one of those options could have been employed during the lifting process. Mr Shepherd was not instructed by a competent person in a safe method for slinging the bags. Mr Roelofs had no qualifications or experience in relation to developing a system of work for lifting the bags using an overhead gantry crane. Mr Brennan relied on the opinion of a person referred to as "Doug" on the adequacy of the chain used for the task, without ascertaining whether "Doug" possessed any relevant qualifications. BMT did not assess the safe working load limit of the chain which was used to sling the bags. The chains which were used lacked manufacturer's tags which would have indicated the safe working load limit. As a result, BMT was not in a position to know whether the chains could safely lift a 900 kilogramme load. 12In addition to the safe handling options displayed on the bulk bags, a number of readily available steps would have ensured the safety of the lifting process and avoided the risk. These include the new safety procedures developed and utilised by BMT after the accident. BMT has now dispensed with the use of the overhead gantry crane for the task and instead uses a forklift with a new metal jib to which is attached a four-point chain to sling or suspend a bulk bag from its four loops. The method is used in conjunction with a conveyor system known as a "Floveyor". The Floveyor now transfers the contents of the bulk bag directly into the opening on top of the tanker, which eliminates the need to have a second worker on top of the tanker to open the bulk bag spout. 13These matters serve to indicate that the risk was both obvious and reasonably foreseeable. BMT had in fact identified the risk of a bulk bag falling sometime prior to the accident. There was also a likelihood, given the deficiencies in the system employed to lift the bags, that the risk to Mr Shepherd's safety could result in very serious consequences, perhaps even fatal injuries. The contents of the bulk bag being lifted by Mr Shepherd weighed some 900 kilogrammes. The bag fell on Mr Shepherd from a height sufficient to inflict very serious injuries. Deterrence 14In assessing appropriate penalties, I also take into account the deterrent effect, both general and specific. With regard to specific deterrence, the evidence is that BMT, at the time of its offence, had been in operation for some 15 years without incident. It also put in place, following the accident, a number of very impressive measures designed to ensure that the system of work for lifting and slinging the bulk bags is performed without risk to the safety of workers at the premises. These measures, which attest to BMT's commitment to safety, serve to reduce that component of the penalty directed to specific deterrence. Mr Brennan, as BMT's sole director, will also receive the benefit of this reduction. 15BMT nevertheless continues to operate in the same industry which requires the application of specific deterrence to the penalties to be imposed on both defendants, taking into account some reduction for the reasons I have set out. Maximum penalties 16Neither defendant has a prior conviction. BMT therefore faces a maximum penalty of $550,000 and Mr Brennan a maximum penalty of $55,000. 17It was submitted on behalf of BMT that a penalty of $50,000 would be appropriate, and a penalty of $5,000 for Mr Brennan equally appropriate. In my view, the circumstances of the offences are such that penalties imposed at such a low end of the range would not adequately reflect the objective seriousness of each offence. Subjective factors 18After the accident, BMT adopted its system of work utilising a forklift and the Floveyor for lifting the bulk bags. The new system dispenses with the necessities of utilising the overhead gantry crane and the need to have a second worker on the top of the tanker. It makes a significant contribution to ensuring the safety of workers undertaking the task of lifting the bulk bags because it involves the four-point lifting chain method which effectively mirrors one of the safe handling options recommended by the manufacturer of the bags, as displayed on the tag attached to the bulk bag. Other measures implemented by BMT following the accident include documenting risk assessments for each new task carried out by employees. All employees have been trained in the new system of decanting the dry bulk product. These measures which are indicative of the defendants' willingness to implement effective solutions to ensure the safety of workers at the premises serve to mitigate at a subjective level the penalties to be imposed. 19The steps taken by the defendants to improve safety at the premises, in particular the safety of those workers involved in the process of lifting the bulk bags, also demonstrate the defendants' remorse for exposing Mr Shepherd to a risk to his safety and his very serious injuries sustained as a direct result of that exposure. Mr Brennan, in an affidavit, relied both on the post-offence safety measures implemented by BMT and financial assistance which was provided to Mr Shepherd after his accident by BMT as demonstrating BMT's remorse, for the purposes of mitigation of penalty under s 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 (CSPA). 20It is accepted by the prosecution that both defendants entered pleas of guilty to the charges at an early stage. Accordingly, I propose to discount the penalties by 25 per cent as reflecting the utilitarian value in respect of each plea. 21It was submitted on behalf of BMT that the Court should take into account when imposing penalty that it is a small company. The submission, it was emphasised, was not put on the basis of impecuniosity. Rather, it was put on the basis, as I understand it, that BMT's expression of remorse was "significant and genuine", unlike the large corporate defendant where there may be, "disregard for an anonymous worker. These people were always close and have remained close". 22The evidence on this matter is that BMT paid $848 on a monthly basis to Mr Shepherd in order to fill the gap between workers compensation payments and the income he received from his permanent employment at the time of the accident. This factor has already been taken into consideration on the issue of remorse as a subjective matter which has been established and which will be taken into account in mitigation of penalty. Moreover, the submission made on behalf of the defendants which sought to posit a connection between the size of a corporation and its ability to have personal regard for an injured worker (or workers in general) is without substance. There is no logical connection between the size of a corporate defendant and the sincerity, or otherwise, of its expressions of remorse and contrition. 23Mr Brennan, in his affidavit, said: The defendant wishes to stay in business and grow a business that delivers valuable services to its customers and provides safe, reliable and secure work for its' employees, contractors and suppliers. However, a significant financial penalty imposed by WorkCover NSW would have the potential to bring into question the ongoing viability of the business. I turned 57 years old on 18 th May 2011. My retirement funds are limited and I need to continue working for some years before I can provide sufficient funds to enjoy a retirement that does not rely on the Federal Government age pension. The financial impact upon the defendant and me, and the emotional impact upon me and my wife, of the incident and the WorkCover prosecution has already taken a heavy toll. My good record of workplace safety over my work career, and the one workers compensation claim in the entire time that the defendant has been operating i.e. 15 years, being for the incident with Luke Shepherd, gives testament to my and the defendants actions and intentions in these matters over time, and that the one incident was not the result of a pattern of poor behaviour. My company is only very small. It has seven full time employees. The impact of this injury has been very serious both to me and to my wife who is also a shareholder and employee of the company. I was very shocked by the incident. I felt responsible for Luke's injury and I have suffered great guilt over my role. I have maintained contact with Luke. 24Although these matters suggest that both BMT and Mr Brennan might face financial difficulty should a large penalty be imposed upon BMT, it was submitted on their behalf that no application was being made on the basis of "impecuniosity", or financial incapacity, which would have invited consideration of s 6 of the Fines Act 1996. No material in the form of BMT's financial records was placed before the Court in order that an appropriate consideration could be given to the provisions of the Fines Act . The offences as I have found are objectively serious and the penalties to be imposed must reflect this after taking into account the relevant objective and subjective factors in mitigation. 25One feature of the evidence which is relevant to the imposition of appropriate penalties is that Mr Brennan was and is the sole director of BMT. According to the prosecution, Mr Brennan was not only the sole director, but was responsible for BMT's overall operations. Based on these facts, the prosecution submitted, Mr Brennan's culpability was the same as that of BMT. In my view, the prosecution's submissions on this issue must be accepted. No submissions to the contrary were advanced on behalf of the defendants. 26Neither defendant is adversely recorded which entitles them to leniency. BMT's record, together with other evidence, including the relatively lengthy period of time in which it has been operating, demonstrates its good industrial record and its genuine commitment to occupational health and safety matters. Mr Brennan is also a person of good character, not only by reason of the absence of prior convictions, but also because of material contained in testimonials tendered into evidence on his behalf. According to one such testimonial from John Doig, former General Manager of TNT Bulk, a transport logistics company, who worked with Mr Brennan for a number of years, Mr Brennan afforded priority to workplace safety in the operation of the business under his management. In another testimonial, Raymond Chinn, formerly General Manager of Logistics for Penrice Soda Products Pty Ltd, a soda ash manufacturer, who worked with Mr Brennan for some 10 years, said Mr Brennan always displayed a keen awareness of workplace safety and maintained a culture of safety in the workplace. 27The prosecution acknowledged that the defendants co-operated with the WorkCover Authority investigation into the circumstances of the accident. 28The subjective considerations set out above will be taken into account by the Court in mitigation of the penalties to be imposed. Orders 29In IRC 992 of 2010, the Court makes the following orders: 1. Anthony James Brennan is convicted of the offence. 2. The defendant is fined $9,000 with a moiety to the prosecutor. 3. The defendant is to pay the reasonable costs of the prosecutor as agreed or assessed. 30In IRC 993 of 2010, the Court makes the following orders: 1. Bulk Maritime Terminals Pty Limited is convicted of the offence. 2. The defendant is fined $90,000 with a moiety to the prosecutor. 3. The defendant is to pay the reasonable costs of the prosecutor as agreed or assessed. 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: 09 November 2011