Court of Criminal Appeal Supreme Court New South Wales Medium Neutral Citation: Attorney General of New South Wales v Tho Services Limited (in liquidation) (ACN 000 263 678) [2016] NSWCCA 221 Hearing dates: 28 September 2016 Date of orders: 17 October 2016 Decision date: 17 October 2016 Before: Hoeben CJ at CL at [1] Harrison J at [2] Campbell J at [108] Decision: (1) Allow the appeal. (2) Set aside the orders made by Curtis DCJ on 15 February 2016. (3) In lieu thereof, (a) the respondent is convicted; (b) the respondent is fined $240,000. Catchwords: WORK HEALTH AND SAFETY ACT – work experience student suffered flash burns to his eyes when welding without lowering his protective visor – where judge at first instance dismissed charges pursuant to s 10 Crimes (Sentencing Procedure) Act – whether extraordinary or exceptional circumstances shown – whether victim's prior training/experience diminishes respondent's statutory obligations to instruct and advise of risk – extent to which compensation in related civil matter bears upon the formulation of criminal sanctions – whether sentence manifestly inadequate – application of principles of specific and general deterrence – where respondent company in liquidation – importance of general deterrence in matters of industrial safety – application of residual discretion – contrition and remorse – public need for retribution Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Work Health and Safety Act 2011 Cases Cited: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 CMB v The Queen (2015) 89 ALJR 407; [2015] HCA 9 Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54 Inspector Christopher Downie v Menzies Property Services [2004] NSWIR Comm 259 R v McNaughton (2006) NSWLR 566; [2006] NSWCCA 242 Category: Principal judgment Parties: Attorney General of New South Wales (Appellant) Tho Services Limited (in liquidation) (ACN 000 263 678) (Respondent) Representation: Counsel: J Agius SC with M Scott (Appellant) J Cook (Respondent) Solicitors: Department of Finance Services & Innovation (Appellant) McCabes (Respondent) File Number(s): 2016/148143 Publication restriction: Nil Decision under appeal Court or tribunal: District Court of New South Wales at Sydney Jurisdiction: Criminal Date of Decision: 15 February 2016 Before: Curtis DCJ File Number(s): 2014/349487 Judgment 1. HOEBEN CJ at CL: I agree with Harrison J and the orders which he proposes. 2. HARRISON J: On 11 March 2013, Alex Thomas, who was then 15 years old and a student at All Saints College at Maitland, attended the premises of Tho Services Limited for work experience. He was given a visitor's induction by the workshop manager Mr Travis and supervised during the day by a leading hand Mr Gumb. Mr Thomas was assigned to perform welding tasks and was provided with relevant personal safety equipment, including a welding mask. The mask contained an adjustable visor that had to be manually lowered to protect a welder's eyes from the damaging effects of ultra violet light when welding. Despite the provision of this equipment, and the ostensible supervision provided to him, Mr Thomas performed welding work throughout the day without lowering his protective visor. As a result, Mr Thomas sustained significant permanent damage to his eyes. He has been left with a 75 percent bilateral visual incapacity. 3. Tho Services Limited was prosecuted under the provisions of ss 19(1) and 32 of the Work Health and Safety Act 2011. The maximum penalty for a breach of s 32 by a corporation is $1.5M. Tho Services Limited pleaded guilty to these breaches on 26 October 2015 and was sentenced by Curtis DCJ on 15 February 2016. His Honour ordered that the charge be dismissed and ordered the company to pay the prosecution's costs in the sum of $28,000. 4. The appellant appeals from that decision upon a number of grounds contending that in ordering "that the charge be dismissed" his Honour was in error in the following respects: 1. His Honour was in error in "dismissing the charge" against the respondent when he should have convicted the respondent and imposed a fine upon it. The order dismissing the charge without the imposition of a penalty reflected manifest inadequacy. 2. His Honour was in error in finding that there was no need for general deterrence to be reflected in any penalty imposed upon the respondent. 3. His Honour was in error in finding that the agreement by the respondent to pay the prosecutor's costs of $28,000 "is itself a sufficient deterrent". 4. His Honour was in error in finding "that it was an inappropriate use of punishment further to deter any enterprises from providing work experience to students for fear of suffering a substantial fine because of the casual act of negligence of one of their employees" in circumstances where the respondent's culpability extended beyond any alleged "casual act of negligence" of one of its employees and also included a failure in its safety systems concerning the induction, instruction and supervision of students attending the respondent's place of work experience. 5. His Honour was in error in finding that the respondent "took all reasonable institutional measures to ensure compliance with the [Work Health and Safety] Act". Such a finding was against the evidence and ignored the Agreed Statement of Facts and the gaps in the safe work procedures of the respondent as they related to the induction, instruction and supervision of work experience students. 6. His Honour was in error in finding that two particulars of the offence, one relating to a failure to inform Mr Thomas that the visor on his helmet should be flipped down to protect his eyes when welding and the second relating to demonstrating to and instructing Mr Thomas about the wearing of the manual welding helmet with the visor down, were not causally related to the risk. 7. His Honour was in error in finding that the offence was committed in circumstances which were "extenuating" when the evidence did not and could not support such a finding. 8. His Honour failed to have regard to the detailed evidence in the Agreed Statement of Facts concerning the issues raised by grounds 4, 5, 6 and 7 above. 9. His Honour failed to have regard to matters of aggravation, such as those set out in s 21A(2)(g) and (i) of the Crimes (Sentencing Procedure) Act 1999 (to which attention had been drawn by the prosecutor in written submissions). 10. His Honour did not give any or any appropriate weight to the not insignificant prior convictions of the respondent. 11. His Honour was in error in dismissing the respondent's criminal history on the basis of positive findings about the character of the chairman and non-executive director of the respondent. 12. His Honour was in error in finding that "another matter relevant to the exercise of the discretion" was that the young person who was the victim of the offence "has been compensated pursuant to law for his injuries with the full assistance of the [respondent]. His claim settled at the first mediation. In that circumstance I cannot see that Mr Thomas has any further interest in punishing the [respondent]". 13. In the alternative to the grounds listed above, his Honour erred in finding that the offence was committed in circumstances which were "extenuating" when the evidence did not and could not support such a finding. 14. In the alternative to the grounds above, if indeed it was intended to deal with the respondent under the provisions of s 10 of the Crimes Sentencing Procedure) Act 1999, his Honour was in error in dismissing the charge, without specifically finding the offence proved. 1. In my opinion, for the reasons that follow, his Honour's approach to the sentencing exercise was erroneous in several respects. The appeal should be allowed and the respondent should be re-sentenced. Agreed facts 1. His Honour's sentence proceeded upon the basis of agreed facts. These are relevantly reproduced in what follows. 2. The respondent conducted a business or undertaking providing industrial trade services including metal fabrication at various locations including its workshops located at 52 Wallarah Road, Muswellbrook. 3. Mr Thomas was a Year 10 school student at All Saints College, St Peters Campus, which is located in Maitland. He was undertaking work experience at the respondent's Muswellbrook premises. Todd Travis was employed as a workshop manager by the respondent at the Muswellbrook site. Kevin Gumb was employed there as a leading hand. 4. On 11 March 2013, Mr Thomas was undertaking work experience at the respondent's premises. He was welding using a welding helmet and safety glasses but at various times during the day, he did not place the eye protection visor of the helmet over his eyes. As a result he suffered eye damage. 5. He commenced the first day of one week's work experience at approximately 7am and reported to Mr Travis. Mr Travis provided him with a "visitor induction". This took about 15 to 20 minutes. Mr Travis gave him a document headed "Visitor Induction" and another document relating to "Golden Rules to LIVE by". He asked Mr Thomas to read these and then sign them. Neither of the documents referred to work processes for welding, the risk of eye damage associated with welding or the need to eliminate or minimise that risk by using the welding helmet with the visor down over the eyes. Mr Travis gave Mr Thomas a pair of welding gloves and safety glasses. He then introduced Mr Thomas to Mr Gumb. 6. Mr Travis told Mr Gumb that Mr Thomas was doing work experience. He instructed Mr Gumb to supervise Mr Thomas throughout the day, requesting that Mr Thomas assist Mr Gumb in the workshop. Mr Gumb gave Mr Thomas a document headed "Job Safety & Environmental Analysis" for fabricating a metal staircase that Mr Gumb was to work on. The document identified safety hazards and risks and the controls to be applied. Mr Gumb discussed the document with Mr Thomas and asked if he understood it. Mr Thomas said "Yes". Mr Gumb asked him to initial the "action" column of the document as they went through it and also to sign at the end. 7. The document identified "hot work" as a hazard and "flash" as a risk. Risk controls included the wearing of personal protective equipment, namely gloves, safety glasses and face shield. It did not refer to the need to wear the eye protection visor down over the eyes to prevent welding burns. 8. Mr Gumb asked Mr Thomas if he had any experience in welding. Mr Thomas told Mr Gumb that he had some experience welding at school. 9. Mr Gumb set up the MIG welder at the corner of the bench that he was working on. Mr Gumb got a welding helmet and put it on the bench. Mr Thomas put it on. He was wearing welding gloves, eye safety glasses, steel capped boots, long sleeved work clothes and the welding helmet. 10. The welding helmet was a manual helmet. It consisted of a head attachment and mask/visor with a panel of tinted UV filter in front of the eyes. The visor section had to be manually pushed down over the eyes to protect them from flash burn during welding. 11. Mr Thomas had undertaken welding at school but the welding helmet that he used there was an automatic helmet. That is, the visor automatically darkened to adapt to strong light-emitting sources such as welding. Mr Thomas said that he had never seen a welding helmet with a flip down visor prior to his placement at the Muswellbrook site. He had never used such helmets at school. 12. The respondent only provided manual welding helmets for its workforce. If any of the workers wished to use an automatic helmet, they had to purchase it for themselves. Some of the workers did provide their own automatic welding helmets. 13. After providing Mr Thomas with the welding helmet, Mr Gumb cut up some metal and taught him how to use the MIG welding torch. Mr Gumb did a few practice welds on the steel before asking if Mr Thomas was keen and ready to have a go. He said "Yes". Mr Gumb told Mr Thomas that he could spot tack then weld across the metal. He could throw the welded pieces in the bin. 14. When Mr Thomas commenced welding the metal pieces, Mr Gumb observed that he was welding correctly as Mr Gumb had shown him, including with the visor on his helmet down. Mr Thomas continued to weld the metal pieces as Mr Gumb used a grinder on a metal staircase. Mr Gumb was working about five metres away. 15. Mr Gumb did not tell Mr Thomas how to wear the welding helmet or how to flip the visor down. He did not tell him that the visor must be down or that his eyes may be damaged if it was not. Mr Thomas welded with the visor up. Mr Gumb did not notice this while supervising Mr Thomas. Mr Gumb told Mr Thomas not to weld unless Mr Gumb was standing near the bench with him and to stop welding if he left. Mr Thomas said that on numerous occasions throughout the day when Mr Gumb had a break from grinding, he would stop welding as instructed. 16. Mr Gumb said that from time to time on 11 March 2013 he left the workbench to attend to other tasks. A number of times during the day Mr Gumb used the crane lifts. When doing so he could observe Mr Thomas standing at the corner of the workbench and saw that he stopped welding when Mr Gumb was away. During the day Mr Gumb also checked the jobs of the other workers in the workshop. Mr Gumb could not observe Mr Thomas when he went outside to use the forklift, which occurred approximately three to four times for around 10 to 15 minutes. 17. Around lunch time, Mr Gumb left the area to load a truck. After about 15 or 20 minutes when he was not welding, Mr Thomas went to Mr Gumb and asked if he should keep welding. Mr Gumb told him he could. Mr Thomas then continued to weld unsupervised. Mr Gumb left Mr Thomas unsupervised for around one to two hours during the day. Mr Thomas welded on and off throughout the day with his visor up. 18. Between 11am and midday, third-year apprentice Trent Blain got some scrap metal and set the welding machine for Mr Thomas. Mr Blain said that he watched Mr Thomas do one or two welding runs and that from his observation he had his visor lens down. During that hour, third-year apprentice Jake Hannah turned down the welder Mr Thomas was using as it sounded "a bit hot" to him. Mr Hannah also did a weld run for Mr Thomas. Mr Hannah was working on the same bench and talked to Mr Thomas throughout the day. He observed that Mr Thomas was wearing a welding helmet but he did not notice the position of the visor. Mr Thomas made 37 welds during the day. 19. At around 1pm, Mr Thomas said to Mr Gumb that his eyes were going blurry and the lights (welding lights) were "very bright". Mr Gumb then inspected Mr Thomas's welding helmet and the visor. He advised Mr Thomas that they were fine and to continue using them. 20. Prior to finishing his shift at around 2.30pm, Mr Gumb told Mr Thomas to see Mr Travis to see what he was to do after Mr Gumb left. At around 2.20pm, the afternoon shift worker Mark Peel noticed Mr Thomas welding with the visor up. He told Mr Thomas to stop welding. Mr Peel informed the afternoon shift leading hand Peter Cullen and they both approached the bench where Mr Thomas was working. When they asked Mr Thomas why he was welding with the visor up, he told them that he did not know he had to wear the visor down and he had been welding with the visor in the up position the whole day. He also told Mr Peel that the visor was too dark to see through. Mr Peel told him that once he started welding he would be able to see through the visor. 21. Mr Peel and Mr Cullen notified Mr Travis who told Mr Thomas to sit in the lunchroom. After about 15 minutes Mr Travis asked Mr Thomas how he was. Mr Thomas said his vision was still blurry and he could not see well. Mr Travis said that if he had a welding flash he should report it in the morning. Mr Travis called Mr Thomas's father to take him home. 22. While Mr Thomas was welding, the visor on his helmet was up at various times during the day until approximately 2.20pm. He started welding at about 9am. He welded on and off during the day. He stopped for the day when Mr Peel spoke to him at around 2.20pm. 23. That night Mr Thomas could not see the television clearly. His vision was still blurry the following day when he came back for the second day of his work experience. Mr Travis assigned him to work on a boat with another worker. However Mr Thomas could not read the signs and could not find his way around the workshop. He told Mr Travis. He continued to have problems seeing and went back to Mr Travis a second time to complain about this. Mr Thomas was removed from the workshop. 24. The Health, Safety and Environment Advisor, Matthew Gal came to see Mr Thomas and arranged for him to be sent immediately to an optometrist in Muswellbrook. That same day he was referred to and attended an eye surgeon, Dr Peter Davies, in Newcastle. Dr Davies diagnosed bilateral retinal thermal burns. 25. Mr Thomas was off school for 6 weeks. He initially needed large font for reading. He had to dim the brightness on his mobile phone and hold it close to him. He could not play football or cricket as he could not see the ball. He subsequently returned to school and initially required visual aids to assist him in completing classroom activities. Systems of work prior to the incident – induction, instructions and hand over of work experience students 1. There was a 3 stage process for the introduction and induction of work experience students comprising: 1. "pre-interview" held between the workshop manager, the workshop supervisor and the student; 2. an induction; and 3. following the induction, the workshop manager or the workshop supervisor gave a hand-over of the student to the supervisor. Pre-interview held with Mr Thomas 1. Prior to the placement, on 4 March 2013, Mr Thomas attended the Muswellbrook site and gave Mr Travis a form called "Student Placement Record". He attended an interview with Mr Travis. Mr Travis completed the form and signed it during the interview. It noted the activities/duties to be undertaken by the student as "assisting tradesmen on welding". The supervisor was noted as Adam Dever. During this meeting, Mr Thomas indicated that he had some experience with welding at school. 2. The record was to be forwarded to the respondent's head office once a student had completed their work placement. This document included reference to risks from "welding rays" and controlling risks through "wearing correct PPE for task", among others. Induction 1. The respondent had three different induction processes – the visitor induction and the new starter induction and a longer five day new starter for apprentices. The new starter induction began with a classroom component followed by a written assessment and a workshop orientation. It generally took four hours or longer, depending on the questions raised. It included a Hot Work HSE Awareness Training PowerPoint presentation and a Hot Work Awareness Competency Assessment questionnaire. It also included a Vocam Understanding Eye Safety DVD and completion of Understanding Eye Safety at Work training questions. That referred to the need to protect the eyes from the very bright light created by arc welding. It showed a person welding while wearing a welding helmet with the protective visor over the eyes. It also showed another person who looks at the welding equipment without any welding helmet and hurts his eyes. It did not explicitly refer to the need to wear welding helmets or to flip the visor down to protect the eyes. 2. Mr Travis inducted Mr Thomas according to a visitor induction that required the completion of the "Visitor Induction" form and another document relating to "Golden Rules to LIVE by". It generally took about 10 to 15 minutes to complete. Mr Travis did not show Mr Thomas the Vocam Understanding Eye Safety DVD or have him complete the Vocam Understanding Eye Safety at Work training questions. Mr Travis did not ascertain what experience Mr Thomas possessed in using manual welding helmets. No other person at the Muswellbrook site made an assessment of his experience using manual helmets. 3. Mr Travis did not provide Mr Thomas with any information, instruction or demonstration in how to use the welding helmets which were provided. Nor did he inform him of the risk of damaging his eyes if he failed to use the helmet's visor correctly. No other person at the Muswellbrook site informed Mr Thomas of that risk until Mr Peel approached him at around 2.20pm. 4. The respondent had a document called "Induction Procedure Group HSW Procedure HSS-03-11" which referred to the induction required for "Employees, Subcontractors and visitors working for Thomas & Coffey or for entering a Thomas & Coffey controlled workplace". It provided a definition of "Sub Contractor" as "any person(s) who is not a direct Thomas & Coffey employee, but who is engaged by Thomas & Coffey to deliver outcomes or services on a job. This includes persons gaining work experience with Thomas & Coffey…" 5. The document provided for three types or levels of induction. There was also a document called "Visitor's Induction". "Work experience persons" were to complete levels 1 and 2 Work activity/induction which included job steps to follow to perform a work activity safely, the sequence of job steps for a work task and relevant hazards, risks and controls. The topics and information referred to in the Induction Procedure did not refer to the wearing of welding helmets or the need to keep the visor down. Handover 1. Once the induction was complete, the workshop manager handed the student over to the supervisor. The work experience students were normally placed with a tradesman who supervised them during the work placement. The supervisor nominated on Mr Thomas' Student Placement Record was Adam Dever, who was the workshop supervisor. He was not at work on 11 March 2013. Instead Mr Travis assigned Mr Gumb to supervise Mr Thomas. Mr Dever normally supervised Mr Gumb. 2. Mr Travis did not instruct Mr Gumb as to the tasks that Mr Thomas was to undertake in the workshop, except to say that he would be working with Mr Gumb. Mr Travis did not tell Mr Gumb to inform or demonstrate to Mr Thomas how to wear the welding helmet. Mr Gumb did not inform Mr Thomas that the flip down visor must be pushed down over his eyes when he was welding or that if he did not do so he may damage his eyes. Mr Gumb said that when Mr Thomas commenced the welding he had the visor down. He did not notice that Mr Thomas was not wearing the visor down during the day. Instructions and training to managers and supervisors 1. Mr Travis was not instructed or trained by the respondent on the pre-interview process or what information and material he was required to obtain from the students at the pre-interview. Mr Travis was not given training or instruction in the processes specifically for inducting and supervising work experience students. Prior to the incident, the respondent did not have a process in place to review or audit the pre-interviews undertaken by Mr Travis or others. 2. Mr Travis stated that the Business Unit Manager Brad Smith had told Mr Travis to inform him when a work placement student was arriving. Mr Travis did not advise Mr Gal, Mr Smith, any other business unit manager, Human Resources or his manager, Cameron Clarke, that Mr Thomas was to commence work experience on 11 March 2013. Mr Travis said that he verbally advised the workshop supervisor Mr Dever and the Estimating Manager Bob Dial that Mr Thomas was to commence work experience and informed them of the start date. 3. Mr Travis could not recall being informed that he should seek approval from or inform the health safety environment and/or human resources representatives prior to a work experience student commencing his or her work placement. He said that he had inducted work experience students prior to the incident on 11 March 2013 with a visitor induction. 4. Mr Travis stated that providing work experience students with the visitor induction was consistent with the email he received from Mr Gal dated 3 June 2011. In that email, which was copied to Mr Travis, Mr Gal wrote that work experience students should be taken through the visitor induction and the "Take 5" risk assessment, and shown the hand aware and eye safety DVDs. Mr Travis said that he had not been informed that the work experience students were to complete hot work safety training and a written assessment on welding or hot work safety in the workplace. Mr Travis stated that he typically conducted visitor inductions for work experience students, not new starter inductions. 5. Mr Gal stated that the workshop manager and the workshop supervisor were responsible for deciding what work the work experience students would be doing, as well as for providing them with information and instructions about the specific tasks they were to do, the personal protective equipment for the tasks and how to wear it correctly. 6. There was no documented information or instructions provided to workshop managers for the verbal handover of the work experience students to the relevant supervisor. This process was not separately reviewed or audited by the respondent. 7. Mr Gal said that Mr Travis would be aware that work experience students were to be provided with the new starter induction through weekly management meetings which Mr Travis attended and because he was part of the review of the new starter induction process. Mr Travis said that he received the following training from the respondent in relation to his position as workshop manager: 1. Certificate IV in Frontline Management 2010. 2. Approximately 5 or 6 1.5 hour sessions over a 7 month period on "How our brain operates". 3. A 1 day ZIP training course in or around September 2011. 4. A 1.5 hour JSWA session in or around July 2012. 5. A 6 hour course in MS Word Intermediate on or around September 2012. 6. A 6 hour Introduction to Excel course on or around October 2012. 7. An in-house course about 5.5 years prior to August 2013. [Mr Travis wrote that he was "unsure of the content but took about 1 hour"]. 1. Mr Travis also completed a Certificate IV in Assessment and Workplace Training in 2002. 2. Mr Gumb had not received training in relation to supervising employees in the workshop. He said he did not instruct or supervise employees in the workshop but if asked by apprentices he checked their work and advised them on how to do a job. Actions following the incident 1. As a consequence of the incident, at 9.00am on 12 March 2013, the workshop manager informed workers at the Muswellbrook site of the injury and reinforced the appropriate use of eye protection. After being informed, the respondent's HSW Manager, John Hunt, telephoned health, safety and environment personnel in other business units, informing them of the incident and reinforcing the proper use of eye protection. 2. At 6.00am on 13 March 2013, all employees on duty at the Muswellbrook site were required to attend an incident review meeting conducted by the Hunter Mining Health, Safety and Environment Advisor, who reinforced the need to wear correct eye protection for the task being undertaken and who provided an update regarding Mr Thomas. The same process was repeated for those on the afternoon shift at the Muswellbrook site at approximately 2.00pm that day. 3. On 19 March 2013, a safety instruction was issued by the respondent, requiring that all school student work experience placements be engaged through the human resources function. The alert required that "in the case of a work experience student they must receive the same induction as for any operations/trades personnel", that they must have one-on-one supervision at all times and that work should not include medium/high risk activities. Furthermore, at any time that students are provided with personal protective equipment and/or equipment as part of work experience, they must be trained and assessed in its use. 4. On 20 March 2013, the respondent was issued with an Improvement Notice to review the training and induction for workers, particularly for school work experience placements, to ensure that it included training in the use of personal protective equipment. On 26 March 2013, it issued an internal announcement which: 1. expressed extreme disappointment that the incident with Mr Thomas had occurred; 2. stressed the importance of the respondent's personnel working safety and adhering to its policies and procedures regarding work, health and safety; and 3. noted that the respondent was monitoring Mr Thomas's progress and had offered support and assistance to him and his family. 1. The respondent has stated that it conducted a review of its documentation and induction procedure regarding the wearing and usage of personal protective equipment. In response, the respondent updated its induction training material and procedures specifically to address the correct use of personal protective equipment, including welding helmets. The charge 1. The offence with which the respondent was charged was described in the following terms: "On 28 March 2013 at Muswellbrook in New South Wales, Tho Services Limited being a person conducting business or undertaking which had a health and safety duty under s 19(1) of the Work Health and Safety Act 2011 ('Act') to ensure so far as is reasonably practicable the health and safety of workers while the workers were at work in the business or undertaking, did fail to comply with that duty and the failure to comply with that duty exposed Alex Thomas to a risk of death or serious injury contrary to s 32 of the Act." 1. The offence was particularised in the following terms: "Particulars of the defendant's duty under section 19(1) of the Act 1. The defendant being a corporation was a person conducting a business or undertaking within the meaning of the Act. 2. The defendant's business or undertaking involved providing industrial trade services including metal fabrication. 3. The worker was 15 year old Alex Thomas, a Year 10 school student, who was gaining work experience by undertaking a work experience placement with the defendant. Particulars of the risk 4. The risk was the risk of serious welding burns to the eyes ('flash burns') as a consequence of welding without using a UV darkening lens. Particulars of the defendant's failure to comply with the duty under section 19(1) of the Act It was reasonably practicable for the defendant to ensure the health and safety of work experience students by: 5. informing work experience students who were to undertake welding work that manual welding helmets must be worn with the visor in the 'flipped down' position so as to protect the eyes. 6. instructing and demonstrating to work experience students who were to undertake welding work on how to wear a manual welding helmet with the visor down and covering the eyes when welding. 7. constantly supervising work experience students to ensure that while welding they were continuously wearing a welding helmet with the visor down so that it protected the eyes. 8. having a formal procedure for work experience students on placement with the defendant that: i. nominated the persons at the defendant who were to instruct and supervise work experience students ii. mandated that only those nominated persons were to instruct and supervise work experience students iii. instructed and trained those nominated persons on the content of the induction process for work experience students, such induction process to include the work tasks the students were permitted to undertake, the safety risk associated with those work tasks and how to eliminate or minimise the safety risks iv. instructed those nominated persons that they were required to inform students who were to undertake welding work of the matters set out in 5, 6 and 7 above v. instructed that work experience students were to be directly supervised at all times vi prohibited work placement students from performing welding unsupervised at any time vii. provided that staff were to immediately report any instance of work experience students working unsupervised. 9. As a result of the defendant's failures a worker was placed at risk of serious injury. 10. The damage to his eyesight suffered by Alex Thomas on 11 March 2013 was a manifestation of that risk." Judgment 1. It will be sufficient for present purposes to refer to his Honour's judgment in the context of a consideration of the several grounds of appeal upon which the appellant relies. Properly understood, these grounds are effectively particulars of the principal contention that the sentence imposed by the sentencing judge was manifestly inadequate. Consideration Grounds 1 and 14 1. No submissions were made to his Honour concerning the prospect that the charge might be dismissed pursuant to s 10 of the Crimes (Sentencing Procedure) Act 1999. Although his Honour did not in terms express his conclusion as a dismissal of the charge in accordance with that provision, it is clear that that is what he did. His Honour set out the terms of s 10 in his judgment in full. Having regard to the fact that the respondent pleaded guilty to the charge, no other conclusion is available. 2. A summary of the authorities relevant to the application of s 10 to work health and safety prosecutions is set out in Inspector Christopher Downie v Menzies Property Services [2004] NSWIR Comm 259 at [45] to [60]. The section is available in circumstances that can be characterised as extraordinary and exceptional circumstances. Not only did his Honour fail to identify the existence of such circumstances, it is clear upon the facts of the case before him that none existed. 3. The appellant contended that in purporting to sentence the respondent pursuant to s 10, his Honour acted contrary to authority. It is unnecessary for present purposes to assess that contention. I am of the opinion that the order dismissing the charge without the imposition of a penalty reflected manifest inadequacy. The breach was flagrant. It resulted from an egregious and systemic failure to supervise a young and vulnerable person. The fact that Mr Thomas had had some previous experience welding, or with the need to wear a protective visor, is totally beside the point. The magnitude of the risk created by a failure properly to supervise Mr Thomas alone mandated the need to ensure that he wore a properly adjusted welding helmet at all times. It is difficult to understand how he was permitted to weld without this fundamental protection in place. 4. If it is accepted, as appears to be clear, that his Honour intended to deal with the respondent under the provisions of s 10 of the Crimes (Sentencing Procedure) Act, it follows that he was in error in failing specifically to find the offence proved as a condition of doing so. Grounds 2, 3, 4 and 5 1. If ever there were a case in which the need for general deterrence was obvious and critical, this is such a case. His Honour dealt with deterrence at [24]-[25] of his judgment in the following terms: "[24] In the present circumstances I do not find it necessary to denounce the conduct of the offender. I am satisfied from all of the material that the offender took all reasonable institutional measures to ensure compliance with the Act. [25] The site of the offender's operation has been closed down and it no longer accepts work experience students. I see no need for individual deterrence, nor do I see any need for general deterrence. The defendant, at the time, was engaged in a public service providing work experience to students. It would be inappropriate use of punishment to further deter any enterprises from providing work experience to students for fear of suffering a substantial fine because of the casual act of negligence of one of their employees. The defendant at the time employed something like 1,000 employees, and it is impossible to guarantee that no employee would fail to be attentive to his duty." 1. With respect to his Honour, those remarks fundamentally fail to engage either with the concept of general deterrence in the first place or its importance in an industrial setting such as those presently being considered in the second place. 2. There is in my view an irreconcilable tension between his Honour's finding that the respondent took all reasonable institutional measures to ensure compliance with the Act on the one hand and the fact that notwithstanding those measures a work experience student was severely injured on the other hand. With respect to his Honour, he has approached the matter somewhat mechanistically, eliding the respondent's perfunctory performance of its statutory obligations with the absence of responsibility for what occurred. It is clear that at some point during the day in question, Mr Thomas was welding in full view of the respondent's employees without a protective visor in place. A more obvious failure of safety protocols is difficult to imagine. It therefore lies ill in the mouth of the respondent in those circumstances to say that the necessary induction process had been carried out or that the respondent's supervising employees had been properly trained. Such an approach would unacceptably see the elevation of form over substance to the possible detriment of practical safety implementation and would in effect authorise or excuse the less than optimal discharge of the obligation to take reasonable and proper care for the safety of employees and, in the present case, work experience students. 3. I accept that the need for special deterrence is affected by the fact that the respondent no longer trades. The need for general deterrence does not fade in the same way. The fact that the respondent was engaged in the provision of a public service providing work experience to students does not lower the need to be careful for their safety but on the contrary heightens it. His Honour's reasoning appears to trade off the avoidable consequences of an employee's negligence against the fact that the respondent or others like it in the community should not be discouraged from taking and assisting work experience students when possible. Arguably implicit in that approach is the notion that it is acceptable to provide the opportunity for work experience in an unsafe industrial setting if the alternative is no work experience opportunities at all. In my opinion that approach is entirely unacceptable. In my view it would be an entirely appropriate use of punishment to fine an enterprise like the respondent if the result was the potentially greater emphasis upon safety in such circumstances. 4. Moreover, the issue does not appear to me to revolve around the respondent's ability "to guarantee that no employee would fail to be attentive to his duty". The question is directed at a failure to comply with a statutory obligation to take reasonable care, not a failure to guarantee safety. The fact that Mr Thomas was apparently exposed to the relevant risk throughout a large portion of the day suggests a fairly significant failure to comply with that obligation. It would not seem to me to be unreasonable or unusual for the respondent to have been sentenced in a way that informed the wider industrial community of the need to take an ever-vigilant and practical approach to safety in similar circumstances. That is particularly so when one has regard to the terms of s 3 of the Work Health and Safety Act which provide as follows: "3 Object (1) The main object of this Act is to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces by: (a) protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work or from specified types of substances or plant, and (b) providing for fair and effective workplace representation, consultation, co-operation and issue resolution in relation to work health and safety, and (c) encouraging unions and employer organisations to take a constructive role in promoting improvements in work health and safety practices, and assisting persons conducting businesses or undertakings and workers to achieve a healthier and safer working environment, and (d) promoting the provision of advice, information, education and training in relation to work health and safety, and (e) securing compliance with this Act through effective and appropriate compliance and enforcement measures, and (f) ensuring appropriate scrutiny and review of actions taken by persons exercising powers and performing functions under this Act, and (g) providing a framework for continuous improvement and progressively higher standards of work health and safety, and (h) maintaining and strengthening the national harmonisation of laws relating to work health and safety and to facilitate a consistent national approach to work health and safety in this jurisdiction. (2) In furthering subsection (1) (a), regard must be had to the principle that workers and other persons should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work or from specified types of substances or plant as is reasonably practicable." Ground 6 1. Commencing at [4] of his judgment, his Honour nominated "the first question" to be addressed as "whether the first two failures were causative of the risk". Those failures were alleged by the prosecution to be a failure to inform Mr Thomas that his manual welding helmet should be worn with the visor in the flipped down position to protect his eyes and a failure to demonstrate and instruct him how the welding work was to be carried out by wearing the manual welding helmet with the visor down covering his eyes. At [14] his Honour recorded his view that the respondent's "causal failure was a discrete failure of supervision". 2. His Honour observed at [12]-[13] as follows: "[12] It is for the prosecution to prove that the omissions pleaded as giving rise to the risk were causal of the risk. On the material placed before me I am not satisfied that there was any causal relation between any failure to inform Mr Thomas and the risk. That is, it was not necessary for him to be informed because he knew of the risk. [13] I record that it is an agreed fact that during the course of his training at school Mr Thomas wore a welding mask which automatically darkened in the course of welding and it was not necessary to flip that mask down. It seems to me that this fact is not sufficient to satisfy me that, in all of the circumstances to which I have adverted, he was ignorant of the risk." 1. Once again with great respect to his Honour, the extent of Mr Thomas' knowledge or appreciation of the risk is entirely beside the point in the course of assessing the respondent's liability for an allegedly criminal act or omission. It may on one very narrow view be relevant to the question of contributory negligence in civil proceedings. That has nothing to do with this case. 2. As far as I can determine, the failures contended for were not only causally related to the risk but were effectively the fundamental facts and circumstances that created it. What his Honour's reasoning appears to overlook is the fact that the obligation to advise or inform Mr Thomas that his manual welding helmet should be worn with the visor in the flipped down position to protect his eyes was a continuing obligation. It was not an obligation that could either be discharged by a single compliance at an induction or avoided entirely because he was understood otherwise to know what to do when welding. 3. More fundamentally for present purposes, however, is the fact that his Honour purported to make his finding concerning causation despite the respondent having entered an unqualified plea of guilty to the offence as charged and never challenged. As already noted, his Honour's finding proceeded upon a conclusion that as Mr Thomas had been informed during prior training undertaken at his school that exposure to ultraviolet light could cause damage to his sight, he did not need to be instructed again. However, there was in fact little evidence of the detail of any training received by Mr Thomas at his school. In any event, the visor attached to the helmet provided to him at school automatically adjusted to radiated light when welding commenced, whereas the visor provided by the respondent required manual adjustment. Moreover, there was no evidence that the respondent had ever questioned Mr Thomas about his experience in the use of manual visors before commencing to weld. Mr Thomas had said that he had never used a manually adjusted visor before coming to the respondent's premises. 4. His Honour therefore mistook the facts before him. 5. The issue of causation was dealt with by the Court of Appeal in Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [127]-[129] as follows: "[127] For the purpose of s 8 of the Act, the relevant question on causation is whether the act or omission of the employer was a significant or substantial cause of the employee being exposed to the risk of injury. [128] Thus, in the present case, it was necessary to establish whether the failure to appoint an SAC was causally related to the risk of the employee's safety which occurred on the evening in question. That question is to be determined by the application of common sense to the facts in question, appreciating that the purpose of the inquiry is to attribute legal responsibility in a criminal matter: Royall v The Queen [1991] HCA 27; 172 CLR 378 at [17] … [129] Further, in considering the issue, regard must be had to the purpose to which the question is directed, which involves considering it in light of the scope and objects of the Act: Allianz Australia Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568 at [41]-[42], [95]-[101]; see also Simpson Design and Associates Pty Ltd v Industrial Court of NSW [2011] NSWCA 316 … at [79]-[102] and the cases there cited." 1. The appellant contended that "the application of common sense" would have led to the inevitable conclusion that if a young work experience student were not told how properly to wear or adjust personal protective equipment, which is specifically designed for the purpose of avoiding the identified risk, the student who fails to wear or adjust the equipment will be exposed to the risk of injury in question. The appellant submitted that the failure to instruct Mr Thomas about how to wear the helmet or to supervise him in doing so were each a cause of him being exposed to the relevant risk of injury. I agree. 2. To the extent that it is significant in the disposition of this appeal, I consider that his Honour was in error in making the finding on causation to which this ground is directed. Grounds 7 and 13 1. At [28] of his judgment his Honour observed that "[28] The extenuating circumstances in which the offence was committed seem to me to include the great weight of the evidence of the manner in which the defendant had gone about discharging its duties pursuant to the Act…" 1. The appellant complains that there was no evidence that did or could support such a finding. The difficulty for present purposes is that his Honour did not refer in detail, or indeed at all, to the evidence that he suggested had this effect. At best it seems that his Honour was adverting to circumstances that would have made his dismissal of the charge pursuant to s 10 of the Crimes (Sentencing Procedure) Act an appropriate course. That has already been considered in the context of Ground 1. Ground 8 1. Having regard to my conclusions with respect to grounds 4, 5, 6 and 7, it is unnecessary to consider this ground of appeal. Grounds 9 and 12 1. Section 21A (2) of the Crimes (Sentencing Procedure) Act lists among other matters as aggravating factors that "(g) the injury, emotional harm, loss or damage caused by the offence was substantial, … (i) the offence was committed without regard for public safety…" 1. The appellant complains that these matters were neither specifically referred to nor apparently considered by his Honour, despite submissions made by the prosecutor at the sentencing proceedings dealing with them. 2. His Honour's failure to refer in terms to a particular aggravating feature does not necessarily indicate that his Honour failed to have regard to it. Indeed, it would seem to be extremely unlikely that a judge of his Honour's extensive experience would not have been completely alive to the significance of the consequences of the respondent's admitted failings. Moreover, in a slightly different context, his Honour acknowledged that Mr Thomas had been appropriately compensated for his injuries, thereby tacitly recognising the full extent of the injuries sustained. 3. At [29] and [30] of his judgment, his Honour said this: "[29] Another matter relevant to the exercise of the discretion is that Mr Thomas has been compensated pursuant to the law for his injuries with the full assistance of the defendant. His claim settled at the first mediation. In that circumstance I cannot see that Mr Thomas has any further interest in punishing the defendant. I see no need to protect the community from the offender. [30] The defendant company is in voluntary liquidation and in the circumstance I see no point in requiring a good behaviour bond. Notwithstanding the submissions of the prosecutor I believe that the agreement by the defendant to pay prosecution costs in the sum of $28,000 is itself a sufficient deterrent." 1. However, I am satisfied that his Honour relevantly failed to take account of these matters or that he took them into account erroneously. The extent to which a person injured by a criminal act may have been compensated or may have received some form of reparation ought logically to bear upon the formulation of an appropriate criminal sanction. The appellant's complaint is really not that his Honour did so at all but that he permitted this factor disproportionately to influence his sentencing discretion. The appellant's concern is that the recovery of damages by a victim of an offence should not have been permitted to swamp factors arguably aggravating that offence. 2. In my opinion, his Honour erroneously permitted the payment of compensation to Mr Thomas to influence the exercise of his sentencing discretion. It may be accepted in general terms that Mr Thomas' damages will have been calculated so as to put him in the position he would have been but for the injury to the extent that money can do so. However, his Honour's approach, suggesting that Mr Thomas will therefore have had no "further interest in punishing the [respondent]" fails to take account of the significant public interest in the imposition of proper penalties for offences such as this. It also appears to be based upon assumptions about Mr Thomas' attitude to what happened to him that is not actually supported by evidence. Grounds 10 and 11 1. The respondent is currently in voluntary liquidation. Its indifferent record of convictions for breaches of industrial safety provisions in those circumstances raises considerations that are analogous to the significantly attenuated need for special deterrence. It is unnecessary to consider these grounds further. General 1. The burden of the appellant's contentions is that the sentence imposed upon the respondent was manifestly inadequate. Somewhat curiously, with the exception of a passing reference in Ground 1, no written submission or ground of appeal specifically articulates that proposition. The grounds of appeal are directed to the alleged errors already discussed, but the only allegedly significant consequence of establishing any of these errors in a Crown appeal is mentioned only once. Paragraph 55 of the appellant's submission, directed to the residual discretion of the Court not to intervene, is in these terms: "55. A further reason for not exercising the discretion in this matter and determining instead to sentence the respondent is the large number of errors revealed in this case. The manner in which the judge dealt with the respondent led to a result where no penalty was imposed and the costs agreed were taken to be a sufficient penalty. The result was one which was manifestly inadequate." 1. Notwithstanding that fact, it is clear that the appellant's significant challenge to his Honour's sentence rests fundamentally upon the basis that it is manifestly inadequate and that the respondent should be re-sentenced. 2. Demonstration of manifest inadequacy is not dependent upon the identification of specific error. So much is clear from the remarks of Gleeson CJ and Hayne J in Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54 at [6]. These oft cited remarks bear repeating here: "[6] Manifest inadequacy of sentence, like manifest excess, is a conclusion. A sentence is, or is not, unreasonable or plainly unjust; inadequacy or excess is, or is not, plainly apparent. It is a conclusion which does not depend upon attribution of identified specific error in the reasoning of the sentencing judge and which frequently does not admit of amplification except by stating the respect in which the sentence is inadequate or excessive. It may be inadequate or excessive because the wrong type of sentence has been imposed (for example, custodial rather than non‑custodial) or because the sentence imposed is manifestly too long or too short. But to identify the type of error amounts to no more than a statement of the conclusion that has been reached. It is not a statement of reasons for arriving at the conclusion. A Court of Criminal Appeal is not obliged to employ any particular verbal formula so long as the substance of its conclusions and its reasons is made plain. The degree of elaboration that is appropriate or possible will vary from case to case." 1. The collocation of complaints promoted as alleged errors by the appellant suffices in my view to demonstrate that the sentence imposed by his Honour was indeed manifestly inadequate. His Honour's whole approach to this particular sentencing exercise demonstrably proceeds upon a series of particularly benign assumptions and findings about the respondent that often alone but certainly in combination operate to downgrade and minimise the serious nature of the respondent's offending. 2. The inescapable conclusion from the agreed facts is that the respondent failed in an egregious fashion to monitor the activities of Mr Thomas while he was directly exposed to the avoidable and preventable risk of serious injury. The vast range of induction and supervising protocols adopted by the respondent or in force at its premises serves not to relieve the respondent of its responsibility for safety but on the contrary powerfully reinforces the extent to which the respondent failed to put them into practical effect. 3. I do not accept that his Honour's decision not to record a conviction and to dismiss the charge was appropriate in the circumstances of this case. Strictly speaking, the sentence was not manifestly inadequate so much as it was non-existent. The respondent was ultimately not sentenced or penalised in any way for its admitted breach of the Act. The costs order made by his Honour does not alter that conclusion. 4. The appellant contended that his Honour failed properly to have regard to the objective seriousness of the offence. The risk was significant and notorious and the steps available to obviate the risk were simple, cheap and uncomplicated. His Honour failed to consider where in the range of like offences the subject offence is to be found. His Honour's judgment does not address the objective seriousness of the offence at all. 5. In my opinion the appellant's complaint of manifest inadequacy is made out. Residual discretion 1. The Crown bears the onus of establishing why this Court should not exercise its residual discretion not to intervene in the circumstances: see CMB v The Queen (2015) 89 ALJR 407; [2015] HCA 9. 2. The present case comes to this Court close on the heels of its decision in Bulga. In that case, this Court said the following at [202]: "[202] One matter put forward by the Attorney leads to the conclusion that the residual discretion should not be exercised, namely, that this is amongst the first of appeals to this Court from the exercise of the jurisdiction under the Act by the District Court. One of the errors identified by the Attorney was the failure of the trial judge to deal properly with the matter of general deterrence notwithstanding strong authority against his Honour's approach from the Full Bench of the Industrial Commission. In those circumstances it is important that this Court express its approval of those decisions of the Industrial Commission to make the point that in matters of this nature general deterrence (and specific deterrence for that matter) will be significant considerations for a court in all but the most exceptional cases. That is so, notwithstanding that the legislation has changed since the time of the offending. The changes are not relevant to the issue of general deterrence and its importance when sentencing for these types of offences." 1. The appellant submitted that the present case, coincidentally decided by the same trial judge as Bulga, but before his Honour had the benefit of this Court's decision in that case, remained a proper and convenient vehicle with which to emphasise the importance of general deterrence in matters of industrial safety. The appellant has contended that his Honour was in error in the approach he took to the issue of general deterrence and that his judgment, if left uncorrected, may lead to the inadvertent or unintended validation of his Honour's approach. In a similar vein, his Honour's approach, on one view if left uncorrected, has the significant potential to degrade the perception that work experience students are entitled to the most stringent industrial protections and safeguards. 2. In my view these concerns reliably inform the conclusion that this Court should not exercise its residual discretion not to intervene but that it should instead proceed to re-sentence the respondent. A proper sentence 1. The respondent is to be re-sentenced having regard to the agreed facts. Objective seriousness 1. I consider that the offence falls above the mid-range of objective seriousness for matters of its kind. The victim was young and otherwise vulnerable. The injuries sustained by him were permanent and presumably devastating. The respondent wholly disregarded his safety over an extended period. In that context, the injuries sustained were the direct result of a continuing failure by the respondent's employees to appreciate what was occurring and were not the result of an occasional act of negligence or momentary inattention. The breaches represent a systemic failure of all protocols and induction procedures that were formulated to prevent injury. Plea of guilty 1. The respondent pleaded guilty to the charge at the earliest opportunity. It is entitled to a discount of 25 percent representing the value of that plea. It patently obviated the need for an expensive and presumably extensive hearing and avoided the need to subject Mr Thomas to either the fact or the anticipation of potentially distressing criminal proceedings. Contrition and remorse 1. The respondent has demonstrated significant remorse for what occurred. Robert Kerry Critchley swore an affidavit on 10 February 2016. He was then the chairman and a non-executive director of the respondent. Among other things Mr Critchley said this: "7. At the outset I wish to make very clear that the [respondent], its other directors and I are all deeply remorseful for the incident … on 11 March 2013, in which Mr Alex Thomas, a work experience student, suffered retinal thermal burns to both of his eyes whilst welding… 8. The [respondent] unreservedly accepts that … it … allowed Mr Thomas to be exposed to a risk of serious injury under s 32 of the WHS Act. … 10. The [respondent] offers an unqualified apology for its breach … and for exposing Mr Thomas to a risk of serious injury. This is particularly so in circumstances where Mr Thomas had attended the premises for work experience and should have been properly supervised to ensure his safety. 11. Further, the [respondent], its other directors and I have treated, and will continue to treat, the incident, the consequences of the incident, this prosecution and the … breach of the WHS Act as serious matters. The [respondent] in no way resiles from its unreserved acceptances above." 1. I have no reason to treat these expressions of remorse as anything other than entirely genuine. Deterrence 1. There is no need for specific deterrence having regard to the fact that the respondent is in voluntary liquidation and appears likely never to trade again. 2. The issue of general deterrence is quite different. At the time of the events in question, the respondent was an apparently active and viable industrial enterprise with a large workforce. It appears to have occupied a prominent commercial position within its industrial setting. The notoriety of the injury to Mr Thomas and its potential educative value make this offence a particularly appropriate vehicle for general deterrence. The demise of the respondent does not mean that the risks associated with welding are any the less likely if similar breaches of safety precautions are permitted to occur. The prospect of stern criminal sanctions for similar conduct should be appropriately reinforced. Previous convictions 1. The respondent accepted before his Honour that it was not entitled to the leniency it would otherwise have been able to claim had it not been previously convicted of a criminal offence: R v McNaughton (2006) NSWLR 566; [2006] NSWCCA 242. The subject incident involving Mr Thomas is the second significant safety incident in the respondent's 90 year history and the fifth incident overall. Discernment 1. The maximum penalty for the current offence is a fine of $1.5M. The sentence in this matter should punish the respondent in a way that satisfies the public need for retribution and that demonstrates the community's disapprobation of the criminal conduct concerned. 2. In my opinion, the following orders should be made: 1. Allow the appeal. 2. Set aside the orders made by Curtis DCJ on 15 February 2016. 3. In lieu thereof, 1. the respondent is convicted; 2. the respondent is fined $240,000. 1. CAMPBELL J: I agree with Harrison J. ********** 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 2016