Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Batty v Intercoast Refrigerated Transport Pty Ltd (No 2) [2012] NSWIRComm 113 Hearing dates: 14 September 2012 Decision date: 17 October 2012 Jurisdiction: Industrial Court of NSW Before: Boland J, President Decision: Matter No IRC 1260 of 2010 (1) The defendant, Anthony Francis Morfea, is convicted of an offence under s 8(1) of the Occupational Health and Safety Act 2000 by virtue of s 26(1) of that Act. (2) The defendant is fined an amount of $8,000. (3) Under s 122(2) of the Fines Act 1996 the defendant shall pay to the prosecutor one-half of any fine imposed by the Court. (4) The defendant shall pay 50 percent of the costs of the prosecutor as agreed or, in the absence of agreement, as assessed. Matter No IRC 1263 of 2010 (1) The defendant, Intercoast Refrigerated Transport Pty Ltd, is convicted of an offence under s 8(1) of the Occupational Health and Safety Act 2000. (2) The defendant is fined an amount of $80,000. (3) Under s 122(2) of the Fines Act 1996 the defendant shall pay to the prosecutor one-half of any fine imposed by the Court. (4)The defendant shall pay 50 percent of the costs of the prosecutor as agreed or, in the absence of agreement, as assessed. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - Corporate defendant - Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 - Roadside repair of truck - Worker suffered fatal injuries after becoming trapped when attempting to engage the brakes of his B-Double Prime Mover to stop it rolling further forward - Defendant found guilty - SENTENCING - Objective and subjective considerations - Penalty imposed Personal defendant - Director - Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 - Roadside repair of truck - Worker suffered fatal injuries after becoming trapped when attempting to engage the brakes of his B-Double Prime Mover to stop it rolling further forward - Defendant found guilty - SENTENCING - Objective and subjective considerations - Penalty imposed Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Fines Act 1996 Occupational Health and Safety Act 2000 Cases Cited: Application by the Attorney General Under s.37 of the Crimes (Sentencing Procedure) Act For A Guideline Judgment Concerning The Offence Of High Range Prescribed Concentration Of Alcohol Under s 9(4) of the Road Transport (Safety & Traffic Management) Act 1999 (No 3 of 2002) (2004) 61 NSWLR 305 Cahill v State of New South Wales (Department of Community Services) (No 3) [2008] NSWIRComm 123 Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 Fletcher Constructions Australia Ltd v WorkCover Authority of New South Wales (Insp Fischer) (1999) 91 IR 66 Inspector Batty v Intercoast Refrigerated Transport Pty Ltd [2012] NSWIRComm 55 Inspector Glass and Foamex Polystream Pty Limited [2004] NSWIRComm 100 Lawrenson Diecasting v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61; (2005) 147 IR 117 O'Sullivan v The Crown in the Right of the State of New South Wales (Department of Education and Training) [2003] NSWIRComm 303 R v Jenkins [1999] NSWCCA 110 R v Mansour [1999] NSWCCA 180 R v Paris [2001] NSWCCA 83 R v Previtera (1997) 94 A Crim R 76 Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31; (2001) 103 IR 143 Rodney Morrison v Powercoal Pty Ltd (2003) 130 IR 364; [2003] NSWIRComm 416 WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd [2004] NSWIRComm 259; (2004) 136 IR 449 WorkCover Authority of New South Wales (Inspector Page) v Walco Hoists Rentals Pty Ltd and anor (No 2) (2000) 99 IR 163; [2000] NSWIRComm 39 WorkCover Authority of NSW (Inspector Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316; [2001] NSWIRComm 263 Category: Principal judgment Parties: Inspector Ian John Batty (Prosecutor) Anthony Francis Morfea (Defendant in IRC 2010/1260) Intercoast Refrigerated Transport Pty Ltd (Defendant in IRC 2010/1263) Representation: Mr S Crawshaw SC (Prosecutor) Mr M Scott of counsel (Defendants) WorkCover Authority of NSW (Prosecutor) Lander and Rogers Lawyers (Defendants) File Number(s): IRC 1260 of 2010 IRC 1263 of 2010 Judgment 1In Inspector Batty v Intercoast Refrigerated Transport Pty Ltd [2012] NSWIRComm 55, Kavanagh J found the corporate defendant, Intercoast Refrigerated Transport Pty Ltd, guilty of an offence under s 8(1) of the Occupational Health and Safety Act 2000 ("the Act") and the director of that corporation, Mr Anthony Morfea, guilty of an offence under s 8(1) by virtue of s 26(1) of the Act. This judgment concerns the sentencing of the two defendants. Factual background 2Kavanagh J described the events leading up to the incident that gave rise to the charges and the incident itself at [10]-[38] of her judgment. The incident involved the death of Gregory Keith Phillips, a driver. 3Briefly, Mr Phillips was employed by the corporate defendant as a longhaul driver. On 12 November 2008 Mr Phillips drove a B-Double (consisting of a Kenworth K104 Model Prime Mover bearing Victorian registration no. VV29GZ and two trailers) from Sydney to Brisbane. The trip took approximately 18 hours of which approximately eleven and a half hours were driving time. Mr Phillips was then instructed to drive to Coffs Harbour to pick up a load to be taken to Melbourne via Sydney. The trip to Coffs Harbour took about six hours 20 minutes of which approximately four hours 40 minutes was driving time. By that time, Mr Phillips had been driving for over 13 hours in the last 24 hours. 4At [22] and [24] of her decision, Kavanagh J recorded the following evidence in relation to Mr Phillips' truck being "grounded" and in need of repair: [22] At about 3:42 am (EST) on 14 November 2008, Mr Phillips was driving the heavy combination vehicle south on the Pacific Highway towards the NSW RTA Inspection Facility near Twelve Mile Creek (the "RTA Inspection Facility") which is close to Hexham near Newcastle. Sensors connected to the NSW RTA Truck Scan computer system identified a vehicle weight discrepancy and an Optical Character Reader ("OCR") discrepancy with respect to his vehicle. He was directed at 3.45pm into the RTA Inspection Facility. He presented his licence and logbook. On inspection, the weights (vehicle and load) were confirmed as in accordance with regulations but three suspension airbags on the right side of the B-Trailer were deflated. A defect notice was issued on the vehicle. ... [24] In accordance with Intercoast's instructions, as contained in the Trucksafe Manual and the oral instruction given by Mr O'Brien, Mr Phillips contacted the corporate defendant's overnight supervisors, based in Melbourne, and informed them that the heavy combination vehicle had been "grounded" and required repairs. Mr Phillips also informed the overnight supervisors that he was "out of hours" and was required by the RTA Inspectors to take a seven hour break. The corporate defendant's officers contacted Autopool at Hexham and arranged for Autopool to send a motor mechanic to the RTA Inspection Facility to inspect and repair the subject heavy combination vehicle. 5At [26]-[38] of her Honour's decision a detailed desciption was provided as to what occurred in relation to the carrying out of repairs on the vehicle and the circumstances in which Mr Phillips died: [26] Prior to departing Autopool's workshop Michael Webb, a repair mechanic, loaded an Autopool ute with the tools and equipment he believed he would require for an "airbag repair", including his toolbox, some wheel chocks and some stands. The chocks which Mr Webb loaded were blocks of timber. He could not find any of the purpose-designed rubber chocks designed for the purpose of chocking truck wheels. Mr Webb also loaded a replacement airbag. [27] Mr Webb said the two bits of timber were "the best" he could find in the workshop. The police inspection described the chocks as follows: "two pieces of timber stacked upon one another - oil dirty condition" and "single timber slab - oil, dirty condition". [28] On arrival at the Inspection Facility, Mr Webb observed Mr Phillips in the B double cabin. He knocked on the cabin door. He did not know whether Mr Phillips "was awake or not". Mr Phillips alighted. On examination of the vehicle Mr Webb determined another type of airbag was required. Both he and Mr Phillips then travelled to Hexham and returned. As they chattered, Mr Webb said in evidence that Mr Phillips said he had only a few hours sleep in a couple of days. This comment does not seem to appear in the parts of the WorkCover interview tendered nor in the Police statement. However, the defendant does not seem to press this point. [29] On arrival back at the RTA site, Mr Webb then placed the wooden chocks on the B double wheels, the thinner chock in front driver's side drive tyres on the prime mover and the two wooden blocks joined as one were placed in front of the driver's side steer tyre of the prime mover. [30] The front chock was approximately 90 mm wide, 45 mm high and 500 mm long. The second chock made up of the two wooden blocks had similar dimensions to the first but together were 90 mm high. [31] The repair to the three airbags was then completed by Mr Webb. Mr Webb said he then asked Mr Phillips to climb into the cabin of the prime mover, place his foot on the brake pedal and start the engine. The air built up the pressure in the airbags. Mr Webb then asked Mr Phillips to release the park brake and then the foot brake. Mr Webb stated he waited some two minutes after the park brake was off and the foot brake released to ensure the vehicle was secure. He saw the vehicle move forward hard up on to the chocks. He revealed as the airbags unfurl you expect some movement of the vehicle. [32] Mr Webb then left Mr Phillips sitting in the cabin of the prime mover and went to the B trailer where Mr Webb observed the brakes (lights) were off and he then heard an air leak. He returned underneath the back of the trailer and found a fitting that had not quite locked the air line in. Mr Webb tightened the fitting and fixed the air leak. [33] Once he had stopped the air leaking from the suspension system, Mr Webb moved back underneath the rear axle of the B trailer and watched the rear driver's side airbag unroll. Mr Webb then climbed out from underneath the B trailer before re-positioning himself under the driver's side of the B trailer in front of the first axle to observe the front airbag on the driver's side to make sure it was unrolling properly. [34] Whilst in that position he heard a vehicle leaving the area and he saw that Mr Phillips was out of the prime mover. He saw Mr Phillips was crouched down beside the B trailer with his hand on a valve attached on the side of the chassis rail. Mr Webb asked Mr Phillips what the valve was. Mr Phillips responded it was a docking valve that raised the airbag heights to allow easier access when loading and unloading the vehicle load at certain loading docks. Mr Webb then asked Mr Phillips if he had moved the valve and Mr Phillips said that he had. Mr Webb then asked Mr Phillips to put the valve back to its normal running position. Mr Phillips did this. [35] Mr Webb then looked around and saw that the rear axle airbags on the B trailer were "over-extended" and that the middle axle airbags were starting to overextend. According to Mr Webb, the front airbag then unrolled and a split second later, the trailer "bounced" slightly; a second or two after that the B double went over the chocks and began to roll forward. Mr Webb immediately got out from underneath the B trailer. [36] However, Mr Phillips sustained a fatal injury. It can be inferred that Mr Phillips ran after the vehicle to stop it. Mr Webb observed that Mr Phillips was trapped and jammed between the steel driver's door and the door sill of the prime mover with the door hard up against an adjacent steel light pole on the RTA site. The Autopsy Report dated 20 April 2009 indicates that Mr Phillips died as a consequence of traumatic asphyxia consistent with his entrapment between the driver's side door and the sill of the prime mover. [37] Mr Phillips placed himself between the cabin door of the vehicle and the vehicle in reaching for the brake in his effort to stop the rolling vehicle. The cabin door was forced shut by the movement of the vehicle past the steel pole on the RTA site. [38] Evidence indicates the B-trailer brake lights were observed on immediately after the accident. Further, all efforts to tow the truck backwards from the rear of the B-trailer with a view to releasing Mr Phillips were totally unsuccessful. The trailer brake had been successfully engaged by Mr Phillips. Mr Phillips had managed to stop the rolling vehicle by applying the brake, regrettably at the same instant that he was crushed to death. Charge against corporate defendant 6In relation to the corporate defendant, it was found guilty of a charge that on 14 November 2008 at the NSW RTA Inspection Facility near Twelve Mile Creek, in the State of New South Wales ("the premises"), being an employer, contravened s 8(1) of the Act in that it failed to: ensure the health, safety and welfare at work of all its employees and in particular, Gregory Keith Phillips, contrary to section 8(1) of the Act. 7The charge was particularised and relevantly alleged in relation to the risk that: 1.As a consequence of the acts and omissions of the defendant, as particularised below, on 14 November 2008 Gregory Phillips was exposed to a risk of being struck by the heavy combination vehicle, namely a "B-double" consisting of a Kenworth prime mover bearing registration no VV 29 GZ; an A trailer bearing registration no 215 QHY; and a B trailer bearing registration no VT 85 IP, whilst repairs were being performed on that vehicle at the RTA Inspection Facility. 8The particulars identified the acts or omissions that were alleged to have caused the risk and there were a number of these. Kavanagh J, however, found that the corporate defendant breached the Act under s 8(1) only by its failure to have in place a safe system of work for its employees during roadside repair. In that respect, the particulars identified the measures that the corporate defendant should have taken, but failed to take with respect to the conduct of roadside repairs, namely, it did not properly instruct Mr Phillips not to take part in a roadside repair and that it failed to instruct him to stay clear of his vehicle during such repair. The particulars in these respects were framed as follows: 6.The defendant failed to provide a system of work in relation to the performance of roadside service and/or repair of the defendant's long haul heavy combination vehicles that was safe and without risk to health. 7.The defendant should have instructed its employees, including Gregory Phillips, that long haul drivers were not to participate in the roadside servicing and/or repair of the defendant's long haul heavy combination vehicles. 8. Further, the defendant should have instructed its employees, including Gregory Phillips that long haul drivers were to remain clear of the vehicle and not to approach the vehicle whilst roadside servicing and/or repairs were being conducted. Charge against personal defendant 9Section 26 of the Act provided: 26 Offences by corporations-liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 10Relying on s 26, the prosecutor charged Mr Morfea, the personal defendant, with a breach of s 8(1) of the Act on the basis of the alleged acts or omissions of the corporate defendant. Mr Morfea was at all material times the sole director, managing director and the company secretary of the corporate defendant. He dealt with all facets of a business, including operational staff and employees, customers and creditors, and suppliers of equipment. Failure to provide safe system of work 11Kavanagh J explained her reasons for finding the corporate defendant guilty of failing to provide a safe system of work: [154] The question becomes what obligation was held by Intercoast, his employer, for his action under the Act. Neither Mr Webb nor Mr Phillips would have been in danger had the brakes been applied. Mr Webb may have, had he performed the task he asked Mr Phillips to perform, continued to follow his unsafe system of work and I am satisfied he would have left the brakes off. Had this occurred the breach would have been solely a breach of the Act by Autopool for having in place an unsafe system of work. [155] Unfortunately, Mr Phillips did volunteer to assist. He performed the task as asked: leave the engine on and the brakes off. A prudent and experienced driver, as was Mr Phillips, would, however, have ensured the brakes were engaged again before alighting from the vehicle or there would/could have been a questioning of the procedure he was directed to follow by the repair mechanic by a prudent driver. [156] Mr O'Brien revealed that the only discussion in a single maximum 1½ hour training session he conducted with Mr Phillips was to instruct him in the performance of a repair job that the driver must notify the National Maintenance Manager. That instruction was followed by Mr Phillips. The further instruction Mr Phillips followed was to notify the overnight roster manager of his ordered rest period. [157] The failure of Intercoast to properly instruct Mr Phillips with respect to his conduct during the conduct of repairs by a third party was a failure that contributed to the risk. Mr O'Brien's oral instruction failed to address the issue. The Trucksafe Manual only provides contact numbers for management and states: Any fault that the driver considers may compromise safety or be of serious nature should be reported to the National Maintenance Manager immediately. The driver is then to follow instructions given by the National Maintenance Manager to ensure that prompt repair is organised. The National Maintenance Manager and/or the contract repairer must assess all faults reported. Records must show what action has been taken in relation to each fault reported. [158] The training and system of work is silent on the driver's conduct during a repair. ... [160] Once Mr Phillips had become involved in the repair operation by sitting in the cabin with the engine on and all the brakes off, he acted entirely contrary to what would normally be expected of a prudent truck driver when he left the cabin with the engine on and the brakes off. The action of Mr Phillips in leaving the cabin was clearly inappropriate whether or not there was a request from Mr Webb to stay in the cabin in a position to apply the brakes. [161] Dr Hart said it is unacceptable practice to leave the engine running with the park brakes released whilst a person is underneath a truck without the service brake on. [162] In order to meet the requirements of s 8 of the Act, the corporate defendant's system of work for repairs of vehicles on the road needed to be "coherent and systematic" so that all drivers understood what was required of them during a roadside repair. In order to ensure such a system was safe as required by s 8, it was necessary for the defendants to lay down specific rules and procedures designed to guard against and prevent the type of failure which occurred in the present case... ... [166] In the circumstances where Mr Phillips' instinctive act was to run to the vehicle to engage the brakes which he successfully did and which, I have no doubt was for the public good, it seems illogical to find the defendant should have instructed its drivers to keep clear of a vehicle while roadside repair was being conducted. However, notwithstanding the implications given the set of facts before the Court I am persuaded there was an obligation on Intercoast to give that instruction. Mr Phillips should have been instructed to stay clear of the vehicle when repairs were being conducted. He should have been directly instructed to take no role in any repair of his vehicle when on road. Such an instruction would have minimised the risk to Mr Phillips' safety. [167] The corporate defendant should have instructed Mr Phillips that long haul drivers were to remain clear of the vehicle and not to approach the vehicle whilst roadside servicing and/or repairs were being conducted (Particular 7). [168] I find the corporate defendant failed to instruct Mr Phillips not to participate in the roadside repair and failed to instruct Mr Phillips to remain clear of the vehicle during the repair. These failures are demonstrative of the unsafe system provided by the corporate defendant for roadside repair. 12In relation to the personal defendant, Kavanagh J found: [201] The corporate defendant has been found to have breached the Act and contributed to the risk by its failure to have a comprehensive system in place for its drivers when there was a necessary road repair on a driver's vehicle. The defendant corporation is guilty under s 8(1) of failing to provide a safe system of work and given its failure to properly instruct Mr Phillips to not take part in a roadside repair and its failure to instruct Mr Phillips not to stand close to his vehicle when under repair. [202] Mr Morfea, as the controlling mind of the corporation, is therefore guilty of failing to provide a safe system of work under s 8(1) of the Act. Evidence 13The evidence in the sentencing proceedings consisted of an affidavit of the personal defendant and an affidavit of Timothy John Wedlock, managing director and a director of Austbrokers AEI Transport Pty Ltd, the insurance broker of the personal defendant. The defendants also tendered a letter from the liquidators of the corporate defendant indicating that they were presently conducting investigations into the affairs of the company, that the corporate defendant was still registered and that the corporate defendant will be deregistered sometime after investigations have been completed. The defendants also tendered an Improvement Notice issued by Inspector Nathan Hamilton on "Gilbert & Roach" and dated 14 November 2008. The Notice indicated that the reasons for issuing it was that: Persons may be placed at risk of injury due to being struck or trapped by moving plant whilst undertaking servicing at locations outside the workshop. 14The Notice further stated in relation to measures to be taken: 1. You must ensure you carry out a review of your systems and procedures for servicing of vehicles outside of the workshop environment, to ensure persons are not placed at risk of injury. 2. You must provide WorkCover with a copy of that review into the incident. 15Mr Morfea was required for cross-examination. In his affidavit the personal defendant deposed to the following matters: (a) a description of the business of the corporate defendant; (b) that as a consequence of adverse financial and economic conditions and the personal defendant's ill-health the corporate defendant was placed in liquidation. The business of the corporate defendant effectively ceased on 5 December 2011 and the corporate defendant is no longer in operation; (c) that the corporate defendant had never been prosecuted for any occupational health and safety breaches; (d) that the personal defendant regretted the tragic events which led to Mr Phillips' death; (e) that the corporate defendant relied completely on the expertise of repairers in relation to the conduct of repairs. There was no expectation for drivers to undertake any form of repair work; (f) that to the personal defendant's knowledge, all other transport and logistics organisations in the industry with which the personal defendant was familiar or had any dealings adopted the same practices that Intercoast did in relation to repair. Larger companies like Intercoast tended to have a National Maintenance Manager who attended to organising repair; (g) that it was not the practice of those companies that the personal defendant was familiar with or, to his knowledge, industry practice generally to issue express instructions that drivers not participate in repair of their vehicles and stand clear of their vehicles during repair. This was not a situation where there was an established industry practice which Intercoast did not follow. Rather, like Intercoast, most companies in the industry tended to rely on the expertise of repairers in relation to the conduct of repairs to their vehicles, without issuing express instructions to stand clear of the vehicle and not participate in repair of the vehicle in any way; (h) that in hindsight, if, rather than relying on the repairer's expertise, instructing Mr Phillips not to participate in any way in the repair work and to "stand clear" of the vehicle when the repair work was being undertaken could have in some way averted the terrible events which occurred, the personal defendant regretted that Intercoast did not issue such instructions expressly; (i) that both the personal defendant and other Intercoast employees cooperated fully with WorkCover inspectors; (j) that after meetings with WorkCover inspectors work was done on amending Intercoast's manuals in accordance with the improvements and updates suggested by the inspector. The improvements and updates reflect a predominant focus on fatigue management issues and trip planning and lack of any reference whatsoever to Intercoast's systems regarding the conduct of repairs; (k) that the personal defendant has in the past been an inaugural board member of the Long Distance Road Transport Association and was involved in the merger of that Association with the National Road Transport Association, which now operates as NATROAD, Australia's largest road transport operators association. He was also, until recently, an inaugural board member of the Australian United Fruit Transport Advisory Council; (l) that with the liquidation of Intercoast, the personal defendant felt that a business that he had spent 22 years of his life building has dissolved in front of his eyes. He is essentially in the position of starting his life again. That was very difficult at his age of 55; (m) that the personal defendant would like to work but given the difficulties he is currently facing finding employment, he fears that it would be virtually impossible if a conviction was recorded against him. It is proving very difficult to find other work. He would like to run his own business again eventually, but he has not even been able to obtain a hire car permit for the purposes of employment; (n) that due to the findings of Kavanagh J, the personal defendant's application to NSW Roads and Maritime Services to obtain a permit as a hire car driver is yet to be determined. In the meantime, the personal defendant has concentrated on getting as much training as possible in order to find some form of employment. He is currently applying for forklift driver jobs just to obtain some sort of employment to tide him over; (o) that the personal defendant stated: I have never previously been convicted of an offence. I am a law abiding citizen who believes in the justice system. I have no criminal record and never envisaged myself having a criminal record. I feel that the events which culminated in Mr Phillips' death were extremely tragic and I sincerely regret not doing more if such actions could in any way have changed the outcome of that unfortunate day. I did, however, do everything in my power to cooperate with WorkCover and make all recommended modifications to Intercoast's systems to improve driver safety. 16It was revealed in the cross-examination of the personal defendant that costs and any penalties that might be imposed were covered by directors' liability insurance. 17Mr Wedlock's evidence was to the following effect: (a) that he had known the personal defendant for about 20 years; (b) that he developed a close professional working relationship with the personal defendant and they spoke fairly regularly about issues affecting the transport industry, Austbrokers AEI's services and the personal defendant's business operations. They also saw each other regularly at annual conferences concerning issues facing the transport sector; (c) Austbrokers AEI formally became Intercoast's insurance broker in about 2007. Since Intercoast ceased trading, Mr Wedlock had continued to interact with the personal defendant on a reasonably regular basis. The personal defendant has recently enquired about insurance broking services for potential new businesses, should he commence such operations; (d) that he holds the personal defendant in extremely high regard. Mr Wedlock's interactions with others in the industry and also Intercoast's operators have confirmed the personal defendant's standing and reputation in the transport industry. The personal defendant has always been a man of strong values; (e) that the personal defendant has always been very passionate about the transport industry and the issues facing the industry, in particular safety and fatigue; (f) that the personal defendant's standing in the industry, amongst his own people and even his competitors, has always been exemplary; (g) Austbrokers AEI never had any problems obtaining insurance quotes for Intercoast - it had an excellent operating history and was always considered a better than average risk due to its Trucksafe accreditation. Intercoast's excellent risk profile was determined by reference to detailed risk surveys carried out by the insurers on Intercoast's operations, which included evaluation of maintenance and fatigue management requirements which were in place. Consideration 18The primary factor to be considered in relation to penalty is the objective seriousness of the offence: Fletcher Constructions Australia Ltd v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 77-81; Lawrenson Diecasting v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474; WorkCover Authority of New South Wales (Inspector Page) v Walco Hoists Rentals Pty Ltd and anor (No 2) (2000) 99 IR 163 at 185 - 187. Subjective factors play a subsidiary role in the determination of penalty: Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61; (2005) 147 IR 117 at [13] and Lawrenson Diecasting at 474. 19The risk found in this case was that of Mr Phillips being struck by the B-double he had been driving whilst repairs were being performed on that vehicle at the RTA Inspection Facility. Exposure to the risk of being struck by a heavy vehicle such as a B-double has potentially fatal consequences and any failure to ensure employees were not exposed to the risk would have to be regarded as serious, absent any mitigating circumstances. 20The corporate defendant's failure to prevent exposure of Mr Phillips to the risk was, according to her Honour, a failure to have in place a safe system of work for its employees during roadside repair. The deficiencies Kavanagh J found in this respect were a failure of the corporate defendant to properly instruct Mr Phillips not to take part in a roadside repair and a failure to instruct him to stay clear of his vehicle during such repair. 21Kavanagh J found the corporate defendant culpable despite also finding that when the vehicle moved out of the chocks Mr Phillips acted instinctively in running to the vehicle to engage the brakes. It would appear there may have been a risk of the vehicle moving on to the highway, hence her Honour's comment at [166] that Mr Phillip's actions were for the "public good". 22Kavanagh J did not explore the causal connection between the risk of being struck by the vehicle and the corporate defendant's acts or omissions to any great extent except that her Honour was persuaded there was an obligation on the corporate defendant to instruct Mr Phillips to stay clear of the vehicle when repairs were being conducted and to take no role in any repair of the vehicle when on the road. Her Honour considered "[s]uch an instruction would have minimised risk to Mr Phillips' safety." 23It would appear, therefore, that Kavanagh J was of the opinion that if the corporate defendant had issued the relevant instructions it may not have eliminated the risk, but it would have "minimised" the risk. Her Honour does not explain how that she arrived at that conclusion. As I understand the evidence, Mr Phillips was not engaged in taking part in the repairs at the time the vehicle moved out of the chocks, but was presumably in a position not far from the vehicle when it began to move. Mr Phillips then acted "instinctively" in running after the vehicle and applying the brakes. How an instruction to stay clear of the vehicle during repairs would have minimised the risk in circumstances where Mr Phillips acted instinctively to stop the vehicle running onto the highway is not readily apparent from her Honour's judgment, but in any event I am bound to adopt her Honour's findings. 24Thus, in considering the objective seriousness of the offence committed by the corporate defendant in this case, one is to have regard to the liability finding that the failure to instruct Mr Phillips to stay clear of the vehicle when repairs were being conducted and to take no role in any repair of the vehicle when on the road, created the risk of being struck by the B-double. Further, that if such instructions had been issued the risk would not have been eliminated, but it would have been minimised. 25It is also relevant to have regard to the view of Kavanagh J that the main cause of the risk to Mr Phillips was the unsafe system of work followed by Autopool's employee, Mr Webb. One may conclude that but for that flawed system of work, the risk to Mr Phillips would not have arisen, but once it did arise, Mr Phillip's exposure to the risk was greater than it otherwise would have been if he had been given the necessary instructions to stay clear. 26It will be a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and feasible: Fletcher Constructions Australia Ltd v WorkCover Authority (Insp Fischer) (1999) 91 IR 66 at 7. In this respect, the prosecutor was correct in pointing out what was said in Cahill v State of New South Wales (Department of Community Services) (No 3) [2008] NSWIRComm 123, namely: [369] In determining whether a defendant should have reasonably foreseen a risk of injury, it is not necessary to show that a reasonable person placed in the defendant's position would have foreseen as a possibility the particular chain of cause and effect involved in the happening of the defendant's accident or, in other words, the precise risk of injury or how it occurred. It is sufficient that the risk is one of a class of risk that in a general way the defendant should have foreseen or it was reasonable to foresee in a general way the kind of thing that occurred. 27In the present case, it is not necessary to find that it was reasonably foreseeable that Mr Phillips might be placed at risk in the precise manner that occurred, that is, that the chocks might be inadequate to hold the vehicle, that Mr Phillips might run after the vehicle to stop it and become trapped and jammed between the driver's side door and the sill of the prime mover if the door struck an object. 28The question is whether it was reasonably foreseeable that Mr Phillips may have been put at risk of being struck by his vehicle if it happened to move whilst under repair unless he was instructed not to take part in the roadside repair of the vehicle and to stay clear of the vehicle during such repair. The answer, I think, must be in the affirmative. 29Another factor to be taken into account in assessing the objective seriousness of the offence is whether death or serious injury occurred. The consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected: Rodney Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364 at [31]-[33]. It was submitted for the defendants that the fatal injury to Mr Phillips was not found by Kavanagh J to be causally related to the corporate defendant's failure to instruct Mr Phillips to stay clear of the vehicle during repair. Rather, her Honour found it was a consequence of Mr Phillip's instinctive reaction to run after the vehicle and apply the brakes. 30This submission does not really address the issue. Even if the corporate defendant is correct in putting that the fatal injury to Mr Phillips was not causally related to the corporate defendant's failure to instruct Mr Phillips to stay clear of the vehicle during repair, that does not, of itself, dictate a conclusion that the offence was not serious for the reason that the defendant's failure did not cause the death of Mr Phillips. As I have observed, the consequence of an accident will not, of itself, dictate the seriousness of the offence. One has to consider the nature of the risk. In this case it was a risk of being struck by a B-double vehicle. On any test that has to be regarded as a serious risk to life or limb. 31What has to be added, however, is that the major contributor to the risk to Mr Phillips was the unsafe system of work followed by Mr Webb. The corporate defendant's failure to instruct Mr Phillips to stay clear of the vehicle whilst it was undergoing repairs increased that risk. In those circumstances, I do not think one is able to conclude that Mr Phillip's death manifested a serious risk created solely or even mainly by the corporate defendant. In other words, unlike many cases to come before the Court, it could not be concluded that the death of Mr Phillips manifested a serious risk to safety for which the corporate defendant was wholly responsible. In noting this feature of the case I am not using it to reduce the culpability of the defendants in any "sharing or proportionate way of an overall penalty, but only as a factor assisting in the determination of the real culpability of the defendant[s] for the offence[s] charged": WorkCover Authority of NSW (Inspector Carmody) v Consolidated Constructions Pty Ltd [2001] NSWIRComm 263; (2001) 109 IR 316 at [46]. 32As to the measures that were available to avoid or mitigate the risk, I accept the prosecutor's submission that clear instructions to drivers of the corporate defendant not to be involved in repair operations and to stay clear of such operations was a simple, effective (to the extent it would have minimised the risk to safety) and available measure which could have been implemented by the defendants. 33Counsel for the defendants, Mr Scott, submitted the personal defendant's level of criminality was less than that of the corporate defendant because the personal defendant: (a) ensured that there were policies and procedures that met the standards expected of the industry in place; (b) put in place a management structure that was capable of overseeing the company's policies and procedures relevant to the operation of drivers. Mr Morfea also took steps to regularly ascertain whether or not the management team were ensuring that the practices and procedures were being met. 34Industry standards do not necessarily equate to the standard required by the Occupational Health and Safety Act and this was a case where they did not. Moreover, the personal defendant as sole Director, Managing Director and Company Secretary of the corporate defendant dealt with all facets of a business, including operational staff and employees, customers and creditors, and suppliers of equipment. The role of the personal defendant was central to the conduct of the business of the corporate defendant. 35I am satisfied the personal defendant's culpability was the same as that of the corporate defendant. 36I turn to the issues of deterrence. Deterrence is a fundamental consideration in the sentencing process. As it was observed in Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 in the context of general deterrence: The fundamental duty of the Court in this important area of public concern ... [is] to ensure a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the work place. 37It may be accepted that whilst general deterrence is an important factor in the sentencing decision that factor is not to override, to an impermissible degree, a defendant's favourable subjective circumstances, and particularly the finding that the defendant was unlikely to re-offend: R v Jenkins [1999] NSWCCA 110 at [38] per Simpson J. The prosecutor properly conceded that the corporate defendant is in liquidation and no longer employs persons. The personal defendant is currently unemployed. Counsel for the personal defendant submitted his client has no real prospect of ever operating a road transport company again and hence has no prospect of re-offending. 38In respect of the corporate defendant, I have been careful in fixing the penalty to set a proper balance between the need for general deterrence, and the fact that the corporate defendant will not re-offend. I have not included any element in the penalty for the corporate defendant for specific deterrence. 39In respect of the personal defendant I have taken the same approach to general deterrence as I did with the corporate defendant. I am not entirely satisfied the personal defendant has no prospect of ever operating a road transport company again. Accordingly, I propose to include a small element in the penalty for specific deterrence. 40A further fundamental consideration in the sentencing process is the maximum penalty for the offences: Powercoal at [16]-[18]. The defendants have no prior convictions. The maximum penalty available for each of the offences is, therefore, $550,000 for the corporate defendant and $55,000 for Mr Morfea. 41I turn to the subjective considerations. It may be accepted the defendants are of good character: s 21A(3)(f) of the Crimes (Sentencing Procedure) Act 1999. Further, the defendants offered cooperation and assistance to the investigating authority following the incident on 14 November 2008: s 21A(3)(m) of the Crimes (Sentencing Procedure) Act. 42I also accept those matters pleaded by the defendants as subjective factors in their favour, namely: (a) The evidence of Mr Morfea as to the involvement of Intercoast with Inspector Jelly with regard to the review and modification of Intercoast's safety policies and procedures. (b) The involvement of Mr Morfea as a Board member in industry bodies. (c) The policies and procedures of Intercoast relevant to driving prior to 4 November 2008 were Trucksafe accredited and were audited regularly by not only Trucksafe but also Intercoast's largest customers such as Woolworths. (d) In the preparation of policies and procedures Intercoast had brought in external consultants (Mr Paul) to help develop and determine that policies and procedures were in accordance with required standards. 43Section 21A(3)(i) of the Crimes (Sentencing Procedure) Act provides in relation to remorse as a mitigating factor as follows: (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both). 44The prosecutor submitted that while Mr Morfea had expressed some conditional remorse for the offences, neither he nor Intercoast had provided evidence that they have accepted responsibility for the corporate defendants' actions as required for the satisfaction of s 21A(3)(i) of the Crimes (Sentencing Procedure) Act. 45In his affidavit, the personal defendant stated: After Mr Phillips' death, both I and other Intercoast employees cooperated fully with WorkCover inspectors. I was so shocked by what happened to Mr Phillips that I determined to do everything in my power to work with WorkCover and take any measures necessary to avert the risk of a similar incident ever occurring again and stamp out any potentially unsafe practices adopted by Intercoast. I saw cooperation with WorkCover as the best way to give effect to my determination. In late December 2008 and throughout the course of 2009, I and other Intercoast employees worked in tandem with WorkCover's inspectors to improve Intercoast's systems and add greater detail to Intercoast's safety policies and procedures. I did everything within my power to ensure Intercoast complied with WorkCover's requests, notices and recommendations. 46I consider that by the actions taken by the defendants to ensure the incident never recurred, they demonstrate a sense of responsibility for what occurred and taken together with the personal defendant's regret and shock, one may conclude the requirements of s 21A(3)(i) have been met. 47The personal defendant submitted that an order made pursuant to s 10(1) of the Crimes (Sentencing Procedure) Act would be appropriate in this matter. Sections 10(1) and 10(3) provide respectively: (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. ... (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. 48The personal defendant accepted the offence was not trivial, but submitted that whilst the Court was required to have regard to each of the matters set out in s 10(3), the matters were disjunctive: see R v Paris [2001] NSWCCA 83 (14 March 2001) at [42] and Application by the Attorney General Under s.37 of the Crimes (Sentencing Procedure) Act For A Guideline Judgment Concerning The Offence Of High Range Prescribed Concentration Of Alcohol Under s 9(4) of the Road Transport (Safety & Traffic Management) Act 1999 (No 3 of 2002) (2004) 61 NSWLR 305 at [130]-[132]. 49As to the matters set out in s 10(3) the personal defendant submitted: (a) there was evidence of no prior convictions and evidence of his age (55) and his poor health; (b) there was evidence of a lack of prior requirements for an instruction of the kind found by Kavanagh J as needing to be given to long haul drivers; (c) he has suffered the loss of his business, his income and is unemployed. 50An offence that is objectively serious will rarely attract the exercise of a sentencing discretion under s 10 in favour of a defendant: WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd [2004] NSWIRComm 259; (2004) 136 IR 449 at [55]. The exercise of such a discretion is saved for extraordinary and highly exceptional circumstances: Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31; (2001) 103 IR 143 at [13]. The offence was objectively serious; whilst the corporate defendant's omissions were not the principal cause of the risk to Mr Philips' safety, according to the liability findings if Mr Phillips had been given the instruction to stay clear of the vehicle whilst repairs were being undertaken the risk to safety would have been minimised. That instruction was not given and a person died. That death was not solely attributable to the corporate defendant's omissions, but it must follow from the liability findings that the failure to give the instructions contributed to the risk arising and the subsequent fatality. 51 The personal defendant, as I previously observed, was the sole director, managing director and the company secretary of the corporate defendant. He dealt with all facets of a business, including operational staff and employees, customers and creditors, and suppliers of equipment. He was clearly in a position to recognise the risk as pleaded and to issue instructions for drivers to stay clear of vehicles whilst repairs were being undertaken. The fact that it was not industry practice to issue express instructions that drivers not participate in repair of their vehicles and stand clear of their vehicles during repair is not a basis upon which the personal defendant may be excused given the nature of the liability under the Act. 52Having regard to these matters, on balance I do not consider the matters referred to by the personal defendant were such as to take him into the realm of "extraordinary and highly exceptional circumstances". Accordingly, I do not propose to apply s 10 to the personal defendant. 53The Court accepts the defendant's guilty pleas and the defendants are convicted of the offences charged. Victim impact statement 54Mr Phillips' mother, Mrs Liela Margaret Phillips-Richards, read out a Victim Impact Statement to the Court. Mrs Phillips-Richards said she was coping with her son's death only with the greatest difficulty. She described the immense toll of her son's death on her health, finances and marriage. Mrs Phillips-Richards described her "agonising, gut-wrenching sorrow & pain" her "anger, distress, bitterness and bewilderment" and her sleepless nights. The Court has extended its deepest sympathy for the loss Mrs Phillips-Richards has suffered. 55The Court of Criminal Appeal in R v Mansour [1999] NSWCCA 180 and R v Previtera (1997) 94 ACrimR 76 said that on sentence the Court may bear in mind the Victim Impact Statement and have regard to the particular affects of the death of the deceased on members of the family. However, the Court should not give these considerations weight in determining the sentence to be imposed. In Inspector Glass and Foamex Polystream Pty Limited [2004] NSWIRComm 100 I referred to the value of Victim Impact Statements and said at [43]: [T]he fact the court is required in the case of a death to receive a Victim Impact Statement given by a family victim and acknowledge its receipt and that the court may make any comment on it that the court considers appropriate, may help in releasing some of the family's grief and importantly it assists this court in driving home to those responsible for workplace safety the devastating consequences that may flow from failing to ensure that they provide and maintain a safe workplace. Conclusion 56Having considered all of the objective and subjective factors relevant to the two offences, I have come to the view that whilst the offences may be regarded as serious, penalties towards the lower end of the range are appropriate. the Court determines that a penalty of $80,000 should be imposed on the corporate defendant and $8,000 on the personal defendant. Costs 57The prosecutor has sought the following orders: (a)Under s 122(2) of the Fines Act 1996 that the defendants pay to the prosecutor one-half of any fine imposed by the Court. (b)The defendants are to pay 50% of the costs of the prosecutor as agreed, or in the absence of agreement as assessed. 58The prosecutor did not seek all of his costs because two of the charges were dismissed. Rather the prosecutor sought half of his costs. It was submitted this is consistent with the approach taken by Walton J, Vice President in O'Sullivan v The Crown in the Right of the State of New South Wales (Department of Education and Training) [2003] NSWIRComm 303 at [196]-[202] in which the prosecutor was only successful in relation to three out of the five charges. 59The defendants submitted that the appropriate costs order would be each party pay their own costs. This submission was made on the following basis: (a)the prosecution failed in respect of charges against the defendants under s 8(2) of the Act; (b) the prosecutor was successful in relation to the s 8(1) charges in respect of only one particular where there were multiple particulars and where the majority of the time, which included extensive expert evidence, was spent on those particulars relating to fatigue and drugs, such particulars having been dismissed by Kavanagh J. 60It would not be an appropriate outcome for the parties to pay their own costs in circumstances where the prosecutor was successful in achieving convictions for serious offences under s 8(1) of the Act. The prosecutor was not wholly successful, however, and a good deal of time and resources was taken up in the prosecutor attempting to prove the particulars relating to fatigue and drugs, an attempt that was ultimately unsuccessful. 61The appropriate costs order is that proposed by the prosecutor. Orders 62The Court makes the following orders: Matter No IRC 1260 of 2010 (1)The defendant, Anthony Francis Morfea, is convicted of an offence under s 8(1) of the Occupational Health and Safety Act 2000 by virtue of s 26(1) of that Act. (2)The defendant is fined an amount of $8,000. (3)Under s 122(2) of the Fines Act 1996 the defendant shall pay to the prosecutor one-half of any fine imposed by the Court. (4)The defendant shall pay 50 percent of the costs of the prosecutor as agreed or, in the absence of agreement, as assessed. Matter No IRC 1263 of 2010 (1)The defendant, Intercoast Refrigerated Transport Pty Ltd, is convicted of an offence under s 8(1) of the Occupational Health and Safety Act 2000. (2)The defendant is fined an amount of $80,000. (3)Under s 122(2) of the Fines Act 1996 the defendant shall pay to the prosecutor one-half of any fine imposed by the Court. (4)The defendant shall pay 50 percent of the costs of the prosecutor as agreed or, in the absence of agreement, as 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: 17 October 2012