District Court New South Wales Medium Neutral Citation: SafeWork NSW v Phong Warehouse & Distributor Pty Ltd [2018] NSWDC 253 Hearing dates: 11 September 2018 Date of orders: 14 September 2018 Decision date: 14 September 2018 Jurisdiction: Criminal Before: Strathdee, DCJ Decision: 1. The offender is convicted. 2. I impose a fine of $30,000.00. 3. I order pursuant to s 122(2) of the Fines Act 1996 that 50% of that fine is to be paid to the prosecutor. 4. I order the offender to pay the prosecutors costs as agreed in the sum of $18,000.00. Catchwords: CRIMINAL LAW – prosecution – work health & safety – duty of persona undertaking business – risk of death and serious injury SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence – appropriate penalty SENTENCING PRINCIPLES – totality – remorse – contrition – appropriate penalty – capacity to pay fines imposed COSTS – prosecution costs Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Fines Act 1996 Work Health and Safety Act 2011 Cases Cited: Baumer v R (1998) 166 CLR 51 BW v R [2011] NSWCCA 176 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Environment Protection Authority v Barnes [2006] NSWCCA 246 Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100 Jahandideh v R [2014] NSWCCA 178 McColl v John Watson Building Services Pty Ltd [2004] NSWIRComm 353; 137 IR 310 Muldrock v The Queen [2011] HCA 39 Nash v Silver City Drilling (NSW) Pty Limited ; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96;93 NSWLR 338 R v Wilkinson (No. 5) [2009] MSWSC 432 Category: Sentence Parties: SafeWork New South Wales (Prosecutor) Phong Warehouse & Distributor Pty Ltd (Offender) Representation: Counsel: Mr T Hammond appeared for the Prosecutor Ms T Epstein appeared for the Offender Solicitors: SafeWork NSW Legal Services (Prosecutor) Clyde and Co (Offender) File Number(s): 2017/386221 Judgment 1. On 16 July 2018 Phong Warehouse and Distributor Pty Ltd ('the offender') pleaded guilty to an offence contrary to s 32 of the Work Health and Safety Act 2011 ('the Act'), that he failed to comply with the health and safety duty imposed upon him by s 19(1) of the Act, namely, to ensure so far as is reasonably practicable the health and safety of workers while the workers are at work in its business or undertaking which exposed Ms Binh Dieu Tuyen Ta ('Ta') to a risk of death or serious injury. 2. This offence, in the case of a body corporate, carries the maximum penalty of $1,500,000. 3. The prosecutor tendered an Agreed Statement of Facts and an Agreed Tender Bundle which forms the basis of the background set out below. BACKGROUND 1. On 19 July 2016 the offender's business or undertaking involve the provision of warehouse labour to pick stock, principally clothing, to fulfil customer orders. Phong Quoc Nguyen ('Nguyen') is the sole director and secretary of the offender. 2. The offender was contracted by Williams Pressing & Packaging Services Pty Limited ('Williams') to pick stock from a warehouse located at 69-73 Gow Street, Padstow in NSW ('the warehouse'). The warehouse was a workplace for the purpose of s 8 of the Act. 3. At all material times Williams employed approximately 90 workers, and the offender employed between approximately 6 and 10 workers. 4. The worker Ta was engaged or caused to be engaged by the offender in that she was an employee of the offender. Ta's activities at work were influenced or directed by the offender in that she was allocated work tasks by the offender and she was subject to the offender's supervision whilst at work. 5. On 19 July 2016, Ta was at work in the offender's business or undertaking in that she was picking stock in the warehouse. She had commenced employment with the offender the previous day. 6. The workers picked stock from boxes located at ground level of the storage racks. When the stock at ground level was depleted, the workers would inform a forklift operator that they needed more stock. The forklift operator would drive into the aisles to retrieve further stock from the upper shelves of the storage racks and lower the stock to the ground level. 7. The risk was the risk of workers, in particular Ta, suffering serious injury or death as a result if being struck by a forklift while undertaking the work of picking stock in the warehouse. THE INCIDENT 1. On 19 July 2016, workers employed by the offender, including Ta and Ms Huynh Thuy Dung Pham ('Pham'), who was a supervisor and Ms Thi Thu Ha Nguyen ('Ms Nguyen'), who was a stock picker, were working aisle C2. Workers employed by Williams were also picking stock in aisle C2. 2. Williams' workers ran out of stock and asked the forklift operator, Benjamin Mald ('Mald') to lower more stock down using the forklift. Williams' workers exited the aisle and stood in a safe zone to the left hand side of the main thoroughfare whilst the forklift was in operation in aisle C2. 3. After Mald had lowered the stock, he reversed the forklift to the end of aisle C2, stopping and giving way and beeping the horn prior to proceeding out to the main thoroughfare. There were no workers in the vicinity of the forklift as it entered the aisle, although some of the offender's workers were at the opposite end of aisle C2. 4. As Mald exited aisle C2, Ta was at the end of the aisle C2 near the main thoroughfare. Ta was unable to move out of the way in time and the right-side wheels of the forklift passed over her feet. Ta shouted out, alerting Mald to her presence, and Mald stopped the forklift and attended to Ta. 5. Ta sustained serious injuries including distal phalanx fractures to both of her big toes and a proximal phalanx fracture of her second left toe. She was taken by ambulance to hospital where she underwent surgery to her toes. She remained in Bankstown hospital for three days before she was discharged. SYSTEMS OF WORK BEFORE THE ACCIDENT 1. The offender and Williams had in place informal undocumented structures aimed at eliminating the risks to workers. Its usual practice was to give workers verbal instructions that whilst the forklift was driving into an aisle, they should evacuate the aisle and stand in a safe area, at least three meters away from the forklift. They could return to work once the forklift exited the aisle. 2. The offender and Williams had an Induction Workbook which was in English and employees were required to read it and sign it before starting work. For non-English speakers, the information in the workbook was to be verbally explained to them in Vietnamese by Pham. It was a requirement of Williams that the offender use the induction booklet when inducting the offender's workers at the warehouse. 3. Williams also provided training regularly to workers in the warehouse, including the offender's workers, conducted by a work health and safety consultant who covered safety issues and hazards in the workplace. 4. Workers were required to wear high visibility vests whilst working in the warehouse. There were some pedestrian walkways in the warehouse, but these were worn and not clearly visible. 5. A small flashing light and a horn were installed on the forklift. PROCEDURES PUT IN PLACE AFTER THE INCIDENT 1. In the month after the incident Williams implemented a Traffic Management Plan for the warehouse, however, it was only translated into English in August 2018. It was explained to all Phong employees. 2. Nguyen obtained a national licence to perform high risk work from SafeWork. He states in his affidavit that the is more aware of his WHS obligations and provided day to day instructions to workers in respect of safety concerns, including stopping work for informal meetings if he has concerns about the practices that may impact the safety of workers. 3. The offender engaged a WHS consultant to advise as to work, health and safety in the warehouse, and has developed new induction forms. Pham now provides line by line translations of the induction materials in Vietnamese. The new program requires that all workers sign the induction plan after they have read it or it has been interpreted to them. 4. Updated training was provided with regard to the use of, and working around forklifts. Prior History 1. The offender has not previously appeared before the courts on health and safety matters. Considerations 1. I have had regard to the objectives set out in section 3A of the Crimes (Sentencing Procedure) Act 1999 for the purpose of sentencing. Objective Seriousness of the Offence 1. The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending: Muldrock v The Queen [2011] HCA 39 at [27]. 2. The following matters are relevant to the objective seriousness of an offence against occupational health and safety legislation: 1. The maximum penalty available under the relevant provision; 2. The obviousness or foreseeability of the risk; 3. The gravity of the risks to safety flowing from a breach; and 4. The availability and feasibility of measures to eliminate or control that risk. 1. The maximum penalty is $1,500,000.00 in the case of an offence committed by a body corporate. 2. The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R (1998) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the time limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70]. 3. The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] MSWSC 432 at [61]. 4. The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [89]. The question of foreseeability of the risk is to be determined objectively. 5. The Court of Criminal Appeal has recently examined the sentencing process with regard to the Work Health and Safety Act 2011 in the matter of Nash v Silver City Drilling (NSW) Pty Limited ; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96;93 NSWLR 338. His Honour Justice Basten at paragraph 34, under the heading 'Assessment of Risk' said: 'The sentencing judge commenced his consideration with the proposition that 'greater culpability attached to the failure to guard against an event the occurrence of which is extremely unlikely'. However the truth of that proposition depends upon other considerations including: (a) The potential consequences of the risk, which may be mild or catastrophic; (b) The availability of steps to lessen, minimise or remove the risk; and (c) Whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors.' Further at paragraph 42 his Honour continued: 'The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon and overall evaluation of various factors, which may pull in different directions.' 1. My findings about the offender's level of culpability are based on the following: 1. The offender failed to ensure so far as is reasonably practicable, the health and safety of workers, in particular Ta, in that it failed to take one or more of the following reasonably practical measures to eliminate (or alternatively, minimise if not reasonably practical to eliminate) the risks to the health and safety of workers. 2. The offender failed to: 1. Conduct a risk assessment to identify reasonably foreseeably risks associated with workers moving around the warehouse whilst the forklift was also moving around the warehouse; 2. Implement a safe work procedure to identify risks and then implement measures to eliminate, or at least minimise risks to workers in the common areas where a forklift may be moving; 3. Develop and implement a traffic management plan for the warehouse, and train all workers in such plan; 4. Install movable physical barricades to be used at the entrance of any aisle when the forklift was in that aisle; 5. Update or place new marking onto the floor of the warehouse, pedestrian walkways, including in the aisles and mark clear pedestrian exclusion zones; 6. Install mirrors in the warehouse to allow both workers and forklift drivers to have a better view around the warehouse, particularly when going around corners; 7. Ensure that all workers were trained and provided information in a language that they could understand, of the risks identified and how workers could perform their work safely; 8. Ensure proper supervision of all workers when working in the warehouse; and 9. Ensure that Williams also did all of the above measures with regard to all workers in the warehouse. 1. Whilst Williams owned the forklifts and was responsible for the lay out of the warehouse, the offender's obligations to the workers cannot be delegated to Williams. The offender and Williams had joint control of the warehouse and the workers. 2. The risk of serious injury was clearly foreseeable, particularly in circumstances where people and forklifts are working in common areas. Whilst the actual injury to Ta was serious, the risk of a more serious injury or death was real. DETERRENCE 1. Nguyen swore an affidavit on 3 September 2018 which was tendered in these proceedings. Based on matters deposed to in his affidavit, I accept that Nguyen, on behalf of the offender, has shown contrition and remorse. 2. Nguyen has undergone further training and now has a better understanding of his Occupational Health & Safety ('OH&S'). He has updated his training and induction programs with the assistance of a specialist consultant in OH&S. He has appreciated that there may be language difficulties for some workers and has attempted to address them. 3. The offender continues to operate the business, and he states that he is in the warehouse on a day-to-day basis, and has more regard for the manner in which the workers are performing their duties, and call them up if he observes any dangerous behaviour. 4. The offender pleaded guilty at the first available opportunity and ought therefore be entitled to a 25% discount based on the utility of the plea. 5. However, the fact that the incident occurred on the second day that Ta was working at the factory is an aggravating feature. It can only cause a suspicion that she had been provided with either no training or no effective training for the incident to occur so early in her employment. 6. At the time of the incident, the offender employed 6-10 employees, and in the last two years, the business has expanded and now employs 15 workers. This means that theoretically more people are at risk thus an element of specific deterrence is warranted. 7. In imposing a penalty in relation to this offence, general deterrence must also be provided for. The requirement to comply with the expectation of the community that both large and small employers will comply with safety requirements means that employers must take the obligations imposed by the Act very seriously. I accept that general deterrence is a matter that I must consider in the sentencing process however it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all factors. I am satisfied that the changes in management practices based on the evidence before me will likely be effective. It is conceded by the Prosecution that I can take this into account on sentencing. CAPACITY TO PAY 1. Section 6 of the Fines Act 1996 provides as follows: '6 CONSIDERATION OF ACCUSED'S MEANS TO PAY In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) Such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) Such other matters as, in the opinion of the court, are relevant tp the fixing of that amount.' 1. The onus is on the offender to satisfy the court on the balance of probabilities as to the truth of such evidence and its relevance to the fixing of penalty: McColl v John Watson Building Services Pty Ltd [2004] NSWIRComm 353; 137 IR 310 at 224. The offender's capacity to pay in relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16]. 2. In Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100 Staff J said at [57]-[58]: 'The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 are as follows: '[83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50): 'It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as (2002) 112 IR 284 at 309 far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.' [84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82): '... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76).' However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed: '... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. ...... When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ...' I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476: 'Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86.' 1. The offender has provided evidence of his current financial circumstances, and that of his business, including tax returns and financial statements. Nguyen submits that if the offender is given a fine that it is unable to pay, the company would become insolvent, and would be forced to cease trading. This would result in 15 workers losing their employment. 2. I also accept that I can take into account the fact that the offender concedes that it must pay the prosecutor's costs, and that I can take that into account when imposing a penalty. See Environment Protection Authority v Barnes [2006] NSWCCA 246. 3. But for the mitigating factors, the financial position of the offender and the costs for which it has agreed it is liable to pay, a higher penalty than that which I propose would be appropriate. In all the circumstances, taking into account the discount for the early plea of guilt, the appropriate penalty in this matter is as follows: 1. $40,000 to be discounted by 25% for the early plea. COSTS 1. The offender is to pay the prosecution's costs and disbursements agreed in the sum of $18,000.00. PENALTY 1. My orders are: 1. The offender is convicted. 2. The appropriate fine is $40,000.00 but that will be reduced by 25% to reflect a plea of guilty. 3. I impose a fine of $30,000.00. 4. I order pursuant to s 122(2) of the Fines Act 1996 that 50% of that fine is to be paid to the prosecutor. 5. I order the offender to pay the prosecutors costs as agreed in the sum of $18,000.00. ********** 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: 14 September 2018