Industrial Relations Commission
New South Wales

Medium Neutral Citation:

Inspector James v Paul [2011] NSWIRComm 82

Hearing dates:

20/05/2011

Decision date:

29 June 2011

Jurisdiction:

Industrial Court of NSW

Before:

Boland J President; Walton J Vice-President; Staff J

Decision:

1. Leave to appeal is granted.

2. The appeal is upheld.

3. The order of Marks J on 12 November 2010 in Matter No IRC 1013 of 2008 dismissing the charge against the defendant, Robert Mark Paul, is set aside.

4. The appellant shall file and serve any further submissions on sentencing within 14 days of the date of this judgment. The respondent shall file and serve its further written submissions in that respect within 14 days of receipt of the appellant's submissions.

5. Costs are reserved.

Catchwords:

OCCUPATIONAL HEALTH AND SAFETY - APPEAL - leave to appeal - manufacture of mouldings - plea of guilty - inadequacy of sentence - trial judge dismissed charge under s 10 of the Crimes (Sentencing Procedure) Act 1999 - errors by trial judge - error in exercise of discretion under s 10 - failure to adequately consider objective seriousness of offence - failures of respondent - leave to appeal granted - appeal upheld - orders of trial judge set aside - re-sentencing - directions re further submissions on sentence - costs reserved

Legislation Cited:

Crimes Act 1900
Crimes (Appeal and Review) Act 2001
Crimes (Sentencing Procedure) Act 1999
Industrial Relations Act 1996
Occupational Health and Safety Act 2000

Cases Cited:

Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) [2000] NSWIRComm 71; (2000) 49 NSWLR 610; (2000) 99 IR 29
Department of Mineral Resources v Berrima Coal Pty Ltd [2001] NSWIRComm 130; (2001) 105 IR 348
Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321; (2000) 175 ALR 315; (2000) 74 ALJR 1538
House v The King [1936] HCA 40; (1936) 55 CLR 499
Inspector Christopher Downie v Menzies Property Services Pty Ltd [2004] NSWIRComm 259; (2004) 136 IR 449
Inspector James v Dekorform Pty Ltd & Paul [2010] NSWIRComm 150
Inspector James v Ryan (No 3) [2010] NSWIRComm 127; (2010) 199 IR 399
Inspector Neil Buggy v Weathertex Pty Limited [2003] NSWIRComm 273; (2003) 127 IR 60
Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464
Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465
Morrison v Barry John Cahill [2007] NSWIRComm 114
Morrison v Powercoal Pty Ltd (No 3) [2005] NSWIRComm 61; (2005) 147 IR 117
Newcastle Wallsend Coal Company Pty Limited & Ors v Stephen Finlay McMartin [2006] NSWIRComm 339; (2006) 159 IR 121
R v JW [2010] NSWCCA 49; (2010) 199 A Crim R 486
Schultz v Tamworth City Council (1995) 58 IR 221
WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd [2000] NSWIRComm 142; (2000) 100 IR 64
WorkCover Authority v Waugh (1995) 59 IR 89

Category:

Principal judgment

Parties:

Inspector Wayne James (Appellant)
Robert Mark Paul (Respondent)

Representation:

Mr M Joseph SC with Mr D Chin (Appellant)
Mr P Kite SC with Mr P Coleman (Respondent)
WorkCover Authority of New South Wales (Appellant)
Workplace Law (Respondent)

File Number(s):

IRC 1418 of 2010

Decision under appeal

Citation:

Inspector James v Dekorform Pty Ltd & Paul [2010] NSWIRComm 150

Date of Decision:

2010-11-12 00:00:00

Before:

Marks J

File Number(s):

IRC 1012 and 1013 of 2008

Judgment

1This matter concerns an application by Inspector Wayne James ("the appellant") for leave to appeal pursuant to s 196 of the Industrial Relations Act 1996 ("IR Act"), and if granted, to appeal from a sentencing decision of Marks J of 12 November 2010. In proceedings before his Honour, Robert Mark Paul ("the respondent"), a director of Dekorform Pty Ltd ("Dekorform") entered a plea of guilty to a charge brought pursuant to s 8(1) of the Occupational Health and Safety Act 2000 ("OHS Act") by reason of the application of s 26(1) of the OHS Act: Inspector James v Dekorform Pty Ltd & Paul [2010] NSWIRComm 150.

2Dekorform was also charged with a breach of s 8(1) of the OHS Act and also entered a plea of guilty.

3Marks J unconditionally dismissed the charge against the respondent pursuant to s 10 of the Crimes (Sentencing Procedure) Act 1999 ("CSP Act").

4The appellant seeks to appeal the decision on the following grounds:

1 His Honour erred in exercising his discretion to apply s 10 of the Crimes (Sentencing Procedure) Act 1 999 to record no conviction and dismiss the charge against the Respondent.

2. His Honour erred in giving insufficient weight to the following objective factors in sentencing the Respondent: (1) the extent of the statutory mandate under sections 8(1) and 26(1) of the Act; (2) the Respondent's role in the offence as identified in relation to Dekorform Pty Ltd ('Dekorform') and the nature and gravity of the offence as identified in relation to Dekorform; (3) the availability of simple remedial steps that the Respondent had the power and authority to take, or cause to be taken, to address the risk to safety; (4) the gravity of the potential risk to safety flowing from Dekorform's breach as a measure of the gravity of the breach and the culpability of the Respondent; (5) the maximum penalty for the Respondent's offence; and (6) the requirement for a conviction to have a deterrent effect in relation to a serious offence under the Act.

3. His Honour erred in giving undue weight to subjective factors in sentencing the Respondent.

4. His Honour erred in failing to take into account the following relevant objective factors in sentencing the Respondent: (1) the Respondent's active contribution to Dekorform's offence by the appointment of an untrained and ill-equipped employee in an occupational health and safety role; and (2) the Respondent's failure to take any proactive measures to ensure that those immediately responsible for ensuring the safe operation of the relevant machine were properly trained and competent to do so .

5. His Honour erred in taking into account the following irrelevant considerations in sentencing the Respondent: (1) that the director was a director but not an 'executive employee' of Dekorform; and (2) that the Respondent was predominantly an employee of a company other than Dekorform.

6. His Honour erred in concluding that the Respondent was predominantly an employee of a company other than Dekorform.

7. His Honour erred in placing undue weight on the relative culpability of an employee of Dekorform, Mr Brydson.

8. His Honour erred in placing undue weight on the remoteness of the Respondent from the day-to-day business operations of De korform.

9. His Honour erred in giving insufficient weight to the Respondent's actual power and/or authority to relevantly influence Dekorfom's conduct, and the Respondent's obligations in respect of the management of Dekorform pursuant to the Corporations Act 2001, the constitution of Dekorform, the Act and at common law.

10. His Honour erred in failing to identify any extraordinary or highly exceptional circumstances that might have constituted a proper basis for exercising his discretion under section 10 of the Crimes (Sentencing Procedure) Act 1 999.

11. His Honour erred in failing to provide any, or any cogent, reasons as to the relevance of subjective factors (such as the Respondent's age or 'background') to the exercise of discretion under section 10 of the Crimes (Sentencing Procedure) Act 1999.

12. His Honour erred in that the Respondent's sentence was manifestly inadequate in the circumstances.

5The facts of the matter can be briefly summarised as follows.

6Dekorform was charged with a breach of s 8(1) of the OHS Act arising from a fatal incident on 3 July 2006 in which a medium density fibre ("MDF") board was rapidly ejected from a multi-blade circular ripsaw machine ("the machine") into the stomach region of Mr Wayne Hogden, a long-standing employee and Production Manager of Dekorform. The ejection of the MDF board was the result of a process known as "kickback". Mr Hogden was manually feeding the MDF board into the machine at the time of the incident. Mr Hogden died from blunt force abdominal injuries soon after his admission to hospital.

7The respondent was at all material times a director of Dekorform and a director and the General Manager of Parbury Pty Ltd, of which Dekorform was a subsidiary.

8We note that there was no argument that the machine was unsafe to operate.

9It was an agreed fact that at the time of the incident, the machine was missing its set of internal anti-kickback fingers. Had the anti-kickback fingers been in place within the machine, those fingers would have functioned as an anti-kickback device with respect to the board that struck Mr Hogden. The anti-kickback fingers were found a few days after the incident under another machine within the premises which was located about 20m - 21m from the machine.

10The respondent entered a plea of guilty to the charge under s 8(1) by operation of s 26(1) of the OHS Act, in that being a director of Dekorform, the respondent was deemed to have contravened the OHS Act in that Dekorform failed to maintain and/or ensure the presence and operation of internal anti-kickback fingers within the machine; failed to maintain and/or replace the machine's internal rollers and sleeves to ensure that the length of the rollers had a uniform diameter; failed to ensure that, whilst operating the machine, the employees did not stand in line with the feed of the machine; failed to provide such information, instruction and training as was necessary to ensure the employee's safety in relation to the operation of the machine and to undertake any adequate risk assessment to identify the risk of "kickback" of materials being fed into the machine.

11The issues for determination in this appeal are first, whether Marks J erred in the exercise of his discretion under s 10 of the CSP Act , and secondly, whether in doing so, his Honour imposed a penalty which was manifestly inadequate having regard to the nature and quality of the offence. Each issue should be answered in the affirmative.

Decision of Marks J

12His Honour noted the respondent's plea, set out the charge and the particulars, the agreed statement of facts and summarised the evidence relied upon by the parties. His Honour proceeded to deal with the objective seriousness of the offences, observing:

[33] Dekorform and, in effect, Mr Paul are each charged with the same breach of s 8(1) of the Act. The starting point for a consideration of the assessment of penalty is a determination of the objective seriousness of the offence. It is clear, as is conceded by all parties, that the multirip circular saw, at the time of the incident, was defective and manifestly unsafe. The internal anti-kickback fingers had been removed, the rollers and sleeves were damaged, employees were not precluded from standing in line with the in-feed of the machine, such steps as were taken to identify any risks involved in the condition of the machine were inadequate, and nobody appears to have been furnished with sufficient or appropriate information, instruction and training concerning the identification of any risk associated with the state of the machine and in some respects its operation, especially prohibiting employees from standing in line. Furthermore, there was a failure to undertake an adequate risk assessment in all the circumstances.

[34] This seemingly parlous state of affairs was, however, ameliorated by the fact that Dekorform, through its controlling personnel at Parbury, had had the machine serviced at regular intervals. Indeed, it may be inferred from the evidence, and especially that given by Mr Brydson in his principal affidavit, that the internal anti-kickback fingers had been removed by a person or persons forming part of the Parbury maintenance crew. This throws up for consideration what Dekorform ought properly to have done in circumstances where, on the evidence, the machine was regularly serviced to deal with any problems that arose and undertook a major service during the annual close down.

[35] However, the situation is more complex because some weeks before the incident trouble had been encountered with the machine as is outlined in the agreed statement of facts, and there was a failure to have the machine examined by a person who was fully trained and competent to do so. An examination carried out after lifting the top of the machine would have revealed that a bar which was the housing for the internal anti-kickback fingers was missing. Furthermore, it appears that none of Mr Brydson, Mr Hogden or Mr Owen was trained, equipped or competent to carry out an inspection of the equipment. Accordingly, the no doubt well-intentioned regular inspections and safety audits were insufficient and ineffective to reveal the underlying condition of the machine, one that was manifestly unsafe predominantly because of the absence of the internal anti-kickback fingers.

[36] This discussion of the evidence leads me to conclude that this is a most serious breach of the Act and should be so characterised for the purpose of the assessment of an appropriate penalty.

13His Honour then made the following findings as to penalty:

[51] The effect of the evidence given in the proceedings to which I have previously referred is that Mr Paul had ultimate responsibility for occupational health and safety matters in the Dekorform business. However, he was not involved in the day-to-day management of that business which appears to have been vested in Mr Brydson who was the manager of Dekorform. Assessed objectively, and given the evidence about the obligations, responsibilities and duties both overall and specifically with respect to occupational health and safety matters, I would assess Mr Brydson as being much more culpable than Mr Paul in terms of the matters surrounding the incident that is at the heart of these proceedings. I am unaware whether the prosecutor has instituted proceedings against Mr Brydson under s 26 of the Act, but certainly they are not proceedings with which I have had to deal.

[52] The maximum penalty applicable to the charge against Mr Paul is $55,000. Assuming that his culpability is less than that of Dekorform, on the basis of the matters to which I have just referred, an appropriate monetary penalty would be something less than $5,000.

14In considering the respondent's application that the provisions of s 10 of the CSP Act should apply, his Honour, after considering the applicable principles set out in Morrison v Powercoal Pty Ltd (No 3) [2005] NSWIRComm 61; (2005) 147 IR 117, concluded:

[58] The prosecutor submitted that there did not exist the "extraordinary and highly exceptional circumstances" that would justify the grant of discretion under s 10.

[59] Whilst I recognise that this Court must be concerned to ensure that s 10 is only applied appropriately, there are in my opinion circumstances that would justify the exercise of discretion in favour of Mr Paul. As I have said, his position was remote from that of the actual business operations of Dekorform. Although he was admittedly a director of that company, he was not an executive employee of it. He was predominantly an employee of Parbury with overall management responsibilities for Dekorform. Mr Paul did take active steps designed to satisfy the obligations of Dekorform under the Act and to enhance its commitment to occupational health and safety matters. Persons were appointed by him to facilitate the involvement of Dekorform in occupational health and safety protocols and procedures, audits were undertaken and there were regular reports made to management, including Mr Paul. Of course, as I have observed, the persons who carried out these activities were not adequately or appropriately qualified to do so and were not given the requisite training or instruction. However, these failures should have been more apparent to the immediate management of Dekorform, albeit that they were themselves unequipped to recognise this.

[60] In particular, the failure to ensure that the internal anti-kickback fingers were installed and operational was something that was remote from Mr Paul's day-to-day activities and in particular remote from his involvement in Dekorform. The same comment may be made with respect to the failure to maintain or replace the rollers, the failure to provide information, instruction and training and the failure to undertake an adequate and appropriate risk assessment. All these matters were the responsibility of the more immediate management. There is no explanation for the apparent failure of the prosecutor to institute proceedings against Mr Brydson who is clearly involved in the management of Dekorform and who would have been amenable to prosecution under the provisions of s 26 of the Act.

[61] Having regard to these matters, Mr Paul's age, background, previous good record and the personal impact that the incident had upon him, I am persuaded that it is appropriate in all the circumstances to apply the provisions of s 10 of the Crimes (Sentencing Procedure) Act and direct that the charge against him be dismissed. Nevertheless, he should be directed to pay the costs of the prosecutor, because having entered a plea of guilty it is appropriate that he be found guilty of the offence.

Appeal principles

15The principles governing an appellate court's approach on appeal against a sentence imposed in criminal proceedings were conveniently set out by the Full Court in WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd [2000] NSWIRComm 142; (2000) 100 IR 64 at [9] - [14]. In summary, intervention by an appellate court is permitted where there is identified "a specified material error" in the sentencing judge's approach or reasoning of the kind discussed in House v The King [1936] HCA 40; (1936) 55 CLR 499 and/or an error on the face of the judgment demonstrated by the sentencing judge's conclusion, such as a manifestly inadequate sentence: Inspector Neil Buggy v Weathertex Pty Limited [2003] NSWIRComm 273; (2003) 127 IR 60 at [52] - [53].

16In Inspector Christopher Downie v Menzies Property Services Pty Ltd [2004] NSWIRComm 259; (2004) 136 IR 449, the Full Bench referred to Weathertex where the Court discussed the High Court decision of Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321; (2000) 175 ALR 315; (2000) 74 ALJR 1538, noting the observations of Gleeson CJ and Hayne J that an appeal may arise either due to the imposition of a penalty which is manifestly inadequate (or manifestly excessive), or due to error on the face of the judgment or decision.

17In Dinsdale v The Queen (at 325), Gleeson CJ and Hayne J discussed the meaning of "manifest inadequacy of sentence" stating as follows:

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. ...

18After referring to the above observations of their Honours, the Full Bench in Weathertex stated (at [52] - [53]):

[52] It is apparent from their Honours' discussion that there is a distinction between specified material error in the sentencing judge's approach or reasoning ( House v The King errors) and error on the face of the judgment demonstrated by the sentencing judge's conclusion, such as a manifestly inadequate or excessive sentence.

[53] The identification of either type of error is sufficient to enable intervention by an appellate court. The appellate court is not required, in our view, to find an additional element of novelty, as suggested by Hungerford and Peterson JJ in Mayo-Ramsay v Allen Taylor. Clearly, however, an appellate court in a Crown appeal has an obligation to act with caution or restraint, given the principle of double jeopardy and the Court's overriding discretion not to intervene: see Kirby J's observations in Dinsdale v The Queen (2000) 202 CLR 321 at 341 - 342 and in Wong v R (2001) 185 ALR 233 at 263; see also R v Allpass at 562 - 563, the joint judgment of Brennan , Deane , Dawson and Gaudron JJ in Everett v The Queen (1994) 181 CLR 295 at 299 and Batty v Graincorp .

19The appellant submitted that the Court should intervene by quashing the decision and proceeding to re-sentence the respondent because:

(a) the sentencing judge fell into material error in respect to the application of sentencing principles;

(b) the sentencing judge failed to take into account and/or to give proper weight to matters relevant to the objective seriousness of the offence;

(c) there was undue or unreasonable weight given to particular subjective considerations;

(d) the sentencing judge erroneously took into account irrelevant considerations;

(e) the sentencing judge failed to provide any cogent reasons for the exercise of discretion under s 10 of the Crimes (Sentencing Procedure) Act 1999;

(f) the sentence on its face was manifestly inadequate thus disclosing error.

20The respondent submitted generally that the decision of Marks J was entirely consistent with established principle, entirely consistent with the evidence properly analysed and a correct application of the statutory provision of s10 of the CSP Act.

21It was contended that none of the grounds of appeal pleaded error which would meet the test set out by the High Court in House v The King. The respondent further contended that the appellant's submissions, to the extent that they attempt to expand on the grounds of appeal, when properly analysed, do not demonstrate any error in the decision appealed.

Appellant's submissions

22The appellant identified eight areas in which, he submitted, his Honour's judgment demonstrated error:

(i) underrating the objective seriousness of the offence;

(ii) failure to comprehend the statutory mandate under s 8(1) of the OHS Act;

(iii) failure to give sufficient weight to the respondent's role in the management of Dekorform and to the nature and gravity of the offence as identified in relation to Dekorform;

(iv) failure to give any weight to the availability of simple remedial steps that the respondent could have caused Dekorform to take;

(v) failure to give any, or sufficient weight to the gravity of the potential risk to safety flowing from Dekorform breaches as a measure of the gravity of the breach and culpability of the respondent;

(vi) failure to give sufficient weight to the maximum penalty and general deterrence;

(vii) excessive weight given to subjective factors and a failure to give adequate reasons for the exercise of discretion under s 10;

(viii) failure to give cogent reasons for the exercise of s 10.

23We shall consider the appellant's submissions in respect of each area of alleged error in turn.

24First, the appellant submitted that it was well established that the primary factor to consider in relation to penalty was the objective seriousness of the offence. The offence before the sentencing judge concerned a foreseeable incident leading to a most serious injury and thus could not be characterised as trivial for the purpose of s 10. Authorities of this Court have consistently affirmed and applied the approach that s 10 (and its predecessor s 556A of the Crimes Act 1900) will be available only in rare, extraordinary and/or highly exceptional circumstances in proceedings under the OHS Act and would rarely be available in significant or objectively serious offences against the OHS Act: Schultz v Tamworth City Council (1995) 58 IR 221 at 229; WorkCover Authority v Waugh (1995) 59 IR 89 at 101.

25The correct approach consistent with the established authority of the Court is that s 10 will rarely apply to directors who have the power or authority to influence the conduct of a corporation in relation to an objectively serious contravention of the OHS Act. The sentencing judge considered the offence by the corporation to be a serious matter. His Honour referred to the proven particulars as giving rise to a "seemingly parlous state of affairs".

26Mr Brydson, the Sales Manger of Dekorform, had no more than a basic understanding of the various machines used and operated by Dekorform. He had a qualification in accounting but no formal qualification associated with the operation of machinery. His Honour found that Mr Brydson, Mr Hogden (the deceased) and Mr Owen (whom the respondent transferred to Dekorform to support and develop OHS awareness) were not trained, equipped or competent to carry out an inspection of the equipment. His Honour underestimated the failure and culpability of the respondent who had the responsibility for occupational health and safety matters concerning Dekorform.

27Secondly, it was contended that the sentencing judge's emphasis on the respondent's so-called "remoteness" from the day-to-day management of Dekorform illustrated that his Honour failed to comprehend the extent of the statutory mandate under s 8(1) of the OHS Act. The application of s 10 in these circumstances was inconsistent with the proactive nature of the duty cast by s 8(1) and the duties of directors. Although the respondent was not engaged in day-to-day management, the evidence established that he had untrammelled power and authority to influence the conduct of Dekorform in respect of meeting its occupational health and safety obligations and, moreover, that the respondent actively contributed to Dekorform's failures. It was an agreed fact that the respondent was responsible for implementing and ensuring Dekorform's compliance with occupational health and safety standards.

28The appellant submitted that his Honour failed to take into account firstly, that the respondent's active contribution to Dekorform's failures by the appointment of the untrained and ill-equipped Mr Owen, and secondly, the respondent's failure to take any proactive measures to ensure that those who were immediately responsible for inspecting the machines were properly trained and competent to do so.

29Thirdly, the appellant submitted that his Honour failed to give sufficient weight to the respondent's role in the management of Dekorform and to the nature and gravity of the offence as identified, in relation to Dekorform.

30The appellant submitted that Dekorform's offence, and thus the offence which the respondent was deemed to have committed was objectively very serious as the risk of injury from "kickback" was readily foreseeable; the risk was explicitly identified in the manufacturer's manual; the breach did have serious consequences for the safety of the employees, in particular, Mr Hogden who was fatally injured; and the risk was easily preventable, such as by the installation of a critical safety mechanism within the machine. It was submitted that the sentencing judge applied the wrong principle in considering the relative level of contribution as between the corporate and individual defendant for the particular breach. The reasoning of the trial judge miscarried insofar as he found that the unsafe machine should have been "more apparent" to persons within the immediate management of Dekorform because those persons were themselves totally unequipped to appreciate the machine's deficiencies. The machine's deficiencies could not have been expected to be at all "apparent" to personnel who were not trained, equipped or competent to detect those deficiencies.

31Fourthly, it was contended that his Honour failed to give any weight to simple remedial steps that the respondent could have caused Dekorform to take, such as to ensure that its employees were informed, instructed and trained in the contents of the manufacturer's manual to make them aware that the machine should have had internal anti-kickback fingers and that the machine was not to be operated without them. Furthermore, that employees should never stand in line with the in-feed when operating the machine and that there should have been a system in place for conducting regular and documented assessments or inspections of the capacity of the machine to address the risk of "kickback".

32The respondent caused to be implemented and approved a series of remedial measures after the incident, including new occupational health and safety training for the employees of Dekorform.

33Fifthly, it was submitted that his Honour failed to give any, or sufficient weight to the gravity of the potential risk to safety flowing from Dekorform's breaches as a measure of the gravity of the breach and culpability of the respondent.

34Although his Honour appeared to accept that the respondent was entitled to be satisfied that Dekorform was a "well run business", it was submitted there was no objective basis to justify what was effectively little to no involvement in the occupational health and safety of the business. A review of the nature and extent of the failures, it was submitted, indicated a systemic failure, starting at the top, to manage occupational health and safety at Dekorform.

35Sixthly, the appellant submitted that his Honour failed to give sufficient weight to the maximum penalty for the respondent's offence and the need for the penalty imposed upon the respondent to have a general deterrent effect.

36Seventhly, the appellant contended that his Honour gave excessive weight to subjective factors concerning the respondent's "age, background, previous good record and the personal impact the incident had on him". It was submitted that the sentencing judge failed to disclose the reason why the respondent's age and "background" were relevant subjective factors that would mitigate the sentence to be imposed upon him. It was contended that the only subjective factors that his Honour examined in any detail concern the defendant's cooperation with the WorkCover Authority, his contrition and remorse and the proposition that the defendant had entered an early plea.

37Eighthly, it was contended that his Honour failed to give cogent reasons for the exercise of discretion under s 10. It was submitted, in contrast to the circumstances in cases such as Powercoal (No 3) and Morrison v Barry John Cahill [2007] NSWIRComm 114, there was no suggestion that the respondent lacked sufficient opportunity to become familiar with the Dekorform factory; or that the respondent was absent from his position during the offence; or that the respondent took an especially proactive interest in ensuring that the safe condition of the plant at the Dekorform factory was assessed.

38Furthermore, it was submitted that it could not be said that the culpability of the respondent was "markedly less" than that of Dekorform such that would justify the application of s 10.

Respondent's submissions

39It was the respondent's submission that the Full Bench should dismiss the appeal because none of the grounds of appeal pleaded error which would meet the test set out by the High Court in House v The King . Similarly it was contended that, when properly analysed, the appellant's submissions did not demonstrate any error in the judgment the subject of the appeal.

40The respondent contended that the relevant principles in respect of the application of s 10 were set out by the Full Bench in Powercoal (No 3) and that his Honour had carefully identified, considered and correctly applied those principles. The respondent acknowledged that an assessment of culpability was always an important consideration in sentencing generally. However, it contended, consistent with the principle in Powercoal (No 3), that if a defence was made out pursuant to s 26(1)(a), it would lead to a dismissal of the charge. If it could constitute a complete defence then the same consideration must impact upon the level of culpability short of the defence being pursued and established.

41It was submitted that his Honour did identify and rely upon extenuating circumstances. In particular, the consideration with respect to the respondent's role in, and remoteness from the defendant company. It was submitted that a relatively low level of culpability was considered as part of the "extenuating circumstances" factor. It was submitted that the missing anti-kickback mechanism was not apparent to those on site. The machine had to be opened for the missing mechanism to be observed, assuming that the observer was aware that the mechanism should be there.

42It was contended that the machine was opened several weeks prior to the accident and the rollers inspected and the shims adjusted. It was submitted that the reliance by the respondent upon the General Manager of Dekorform and others on site was reasonable in the circumstances and that systems were in place. The respondent had appointed Mr Owen to Dekorform with specific occupational health and safety duties, which included regular safety inspections of the machine. The fact that those on site did not have the required knowledge to identify the problem could not have been apparent to the respondent and was never drawn to his attention.

43These were matters which formed part of his Honour's consideration of culpability and extenuating circumstances pursuant to s 10.

44It was contended that consideration of the role and relative culpability of Mr Brydson was not an irrelevant consideration as he was the General Manager and the most senior executive of Dekorform.

45It was also submitted that the Full Bench in Newcastle Wallsend Coal Company Pty Limited & Ors v Stephen Finlay McMartin [2006] NSWIRComm 339; (2006) 159 IR 121, found no error in the sentencing judge in that matter giving weight to the fact that a third party, not charged, may well be culpable when assessing the culpability of a defendant.

46The respondent submitted that his Honour acknowledged the need for cogent reasons and recognised the test as required by Full Bench judgments in exercising his discretion under s 10 of the CSP Act.

47It was submitted that the facts and circumstances of this case were not dissimilar from those in Powercoal (No 3) ; Department of Mineral Resources v Berrima Coal Pty Ltd [2001] NSWIRComm 130; (2001) 105 IR 348 and Wallsend Coal where s 10 was applied to a personal defendant in circumstances where the personal defendant was found to have a much lower level of culpability than the corporate defendant.

48Counsel contended that as in Berrima Coal and Powercoal (No 3) , the respondent was in no way the "alter ego" of the defendant company. The respondent was not a shareholder. He was the employed General Manager of the parent company and had been in that position for only 15 months at the time of the accident. In the circumstances where the Dekorform business was geographically remote and constituted only five per cent of his responsibilities he quite reasonably relied upon others, with a long history of successfully managing the Dekorform business.

49It was further contended that the evidence made it clear that the respondent, whilst a director with some overarching responsibility personally, in fact was not the controlling mind of Dekorform. He was in no way its alter ego: see Inspector James v Ryan (No 3) [2010] NSWIRComm 127; (2010) 199 IR 399 at [43].

50The respondent also submitted that Marks J gave some weight to the personal impact that the incident had upon the respondent. This was clearly a relevant consideration: see Powercoal (No 3) at [142]. There was also substantial evidence before his Honour in this regard. It translated immediately into an increased focus on occupational health and safety after the accident at Dekorform. Under the management of the respondent there was a heightened emphasis on safety and a considerable allocation of resources thereto to the extent that nothing more could have been done.

51Finally, it was submitted that the exercise of discretion to dismiss the charge under s 10 was not inconsistent with the objects of the OHS Act and the respondent's conviction itself would not have furthered those objects.

Appellant's reply

52The appellant submitted that the respondent's assertion that the grounds of appeal and the appellant's submissions did not identify the kind of error that would enable the decision of Marks J to be disturbed on appeal was misconceived for the following reasons:

(a) firstly, the notice of appeal identifies the ground of manifest inadequacy of sentence. This conclusion is distinct from House v The King errors and does not depend upon attribution of identified specific error in the reasoning or approach of the sentencing judge. It alone is sufficient to enable intervention by an appellate court. Although it is not strictly necessary to identify particular errors which result in the conclusion that the sentence is manifestly inadequate, the appellant clearly identifies the sentencing judge's placement of excessive or inadequate weight on various factors that leads to such a conclusion. The principles associated with a Crown appeal has recently been reviewed by the High Court in Lacey v Attorney-General of Queensland [2011] HCA 10;

(b) Secondly, the appellant clearly identifies House v The King errors in respect of the trial judge's reasoning, such as:

i. failing to take into account material objective considerations, such as the respondent's active contribution to the offence by his appointment of the untrained and ill-equipped Mr Owen;

ii. being guided or affected by extraneous or irrelevant matters, such as the sentencing judge's observation that the respondent was not an 'executive employee' of the company;

iii. applying wrong principle in misconstruing the relative culpability between the respondent and the immediate management of the company; and

iv. mistaking the facts, such as the finding that the respondent was 'predominantly an employee of Parbury'.

53It was further submitted that this was not a case of a director placing reasonable reliance upon relevant competent and qualified experts or specialists. This submission cannot be sustained in circumstances where the respondent accepted that he appointed Mr Owen to perform safety inspections of the machine. However, for the purposes of justifying the trial judge's application of s 10, the respondent also sought to rely upon his own ignorance of Mr Owen's lack of expertise to adequately perform that task. The respondent cannot derive any comfort from his ignorance of Mr Owen's unsuitability for the position (on the basis that it was "never drawn to his attention") in circumstances where the respondent himself was directly responsible for Mr Owen's appointment to a position that manifestly required some familiarity with the safe operation of the machine. A similar submission was made in respect of Mr Brydson's position.

54Finally, it was submitted, any substantial diminution of the respondent's culpability due to his so-called "remoteness" from the corporate defendant would effectively sanction an approach to occupational health and safety in which directors could apportion their time and attention according to the value of revenue generated by a company, rather than on an assessment of risk to health and safety. Such an approach would be plainly contrary to the proactive obligation imposed by s 26(1).

Consideration

55As earlier stated, the questions that arise for determination in this appeal are firstly, whether Marks J erred in the exercise of his discretion under s 10 of the CSP Act, and secondly, whether the making of an order under that section represented a manifestly inadequate penalty in all the circumstances. The questions will be addressed together and must be answered in the affirmative.

56The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 (at [8] - [15]) succinctly summarised the principles to be applied in determining sentence for an offence under the OHS Act. Their Honours observed (at [10]) that the starting point for consideration as to penalty is the objective seriousness of the offence: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464 at 474: see also Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at 646; (2000) 99 IR 29 at 53.

57The Full Bench in Lawrenson Diecasting stated (at 475):

As we have observed, the primary factor to look at in relation to the penalty to be imposed is the objective seriousness of the offence. Particularly in cases involving a serious breach of the OH&S Act. Subjective factors, such as a plea of guilty, co-operation with the investigation and subsequent measures taken to improve safety, must play a subsidiary role in the determination of penalty to the gravity of the offence itself. While the court must keep in mind not only facts which establish the seriousness of the offence, but also those which tend to mitigate that seriousness or exculpate the offender (see Camilleri's Stock Feeds Pty Limited v Environmental Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P), the presence of the subjective factors referred to should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence.

58In light of his Honour's finding in respect of the objective seriousness of the offence, with which we agree, and without specification of error, even with the strongest subjective factors, in our view, it was not appropriate to make an order pursuant to s 10 of the CSP Act in this case.

59Having regard to the appeal principles set out earlier in these reasons, and bearing in mind the decision in Dinsdale v The Queen to which we have earlier referred, we consider that the sentence in this matter was manifestly inadequate. In our view, when the totality of the matter is considered and the objective and subjective elements of the offence are weighed, the dismissal of the charge under s 10 of the CSP Act represents a manifestly inadequate penalty. There was, in our view, an absence of reasoning to demonstrate why such an objectively serious matter presented exceptional circumstances that warranted the making of a s 10 order.

60The factual circumstances in Powercoal (No 3) and Wallsend Coal were different to those that apply in these proceedings. In Powercoal (No 3) , where a mine manager was the subject of a s 10 order, the Full Bench observed that the mine manager had conscientiously and diligently attended to all his safety responsibilities in the 3 months that he had been employed prior to the incident. The Court found that the opportunity for the mine manager to become completely familiar with the mine and its operations was limited. A number of elements of the charge that referred to periods and/or events prior to the mine manager commencing employment, could not, therefore, apply to him.

61Furthermore, the mine manager had carried out underground inspections, but had noticed nothing untoward in respect of the state of the roof of the mine which subsequently collapsed. In addition, the Court accepted that there was nothing in the reporting system in place before the accident that alerted the mine manager to the risk arising from the instability of the roof. Finally, the Court took into account that the mine manager was not involved in the critical planning stages where decisions were made about assessment procedure in relation to mining conditions and the process of recording a notification of conditions in the mine.

62In Wallsend Coal , the Full Bench identified a number of considerations weighing in favour of applying s 10 of the CSP Act to an individual who was also concerned in the management of a mine. These factors included the extent to which the personal defendant was involved in the actual commission of the offence and that his involvement was significantly limited. He had left the role of mine manager prior to the incident; he had an unblemished record, with a relatively longstanding role in mine management positions and was found to be a person of good character, conscientious and committed to issues relating to workplace safety by the trial judge, who found that there was no need for specific deterrence in his case. None of the extraordinary features in either of the above cases are present in this matter.

63In light of the basis upon which we have determined that the s 10 order should be quashed, it is not incumbent upon us to find error. However, we do propose to make the following observations.

64In our view, it was wrong to say, as Marks J did, that the respondent was remote from the day-to-day operations of Dekorform and that this was a factor that should be given weight. What his Honour was required to do was to relate these circumstances to the role of the respondent as a director of Dekorform, that being the basis upon which he was charged under the OHS Act.

65A director will often, in our view, be remote from the day-to-day operations of a business. However, the relevant question that must be determined is what was the culpability of the director, absent any defence for the contraventions in respect of his role as a director? The approach, as developed by Marks J was erroneous, particularly when the charges related to a failure to put in place systems that would have discovered the unsafe state of the machine, with such failure being attributable to the respondent.

66Furthermore, the reliance upon acts of management were never developed to a point where the respondent was able to demonstrate that he had placed reliance on employees who had a proven record of knowledge and training in respect of the operation of the machine.

67It was, as the appellant submitted, an agreed fact that the respondent was responsible for implementing and ensuring Dekorform's compliance with occupational health and safety standards. Yet his Honour failed to take into account the respondent's active contribution to Dekorform's failures by the appointment of Mr Owen who was not equipped for the task of ensuring compliance, nor did his Honour take into account the respondent's failure to take any proactive measures to ensure that those who were responsible for inspecting the machinery were properly trained and competent to do so.

68As we have already observed, the deficiency was a systemic failure, part of which occurred because of the reliance on managers of Dekorform who did not have the necessary knowledge or training to make the necessary assessments of the safety of the machine.

69The appellant pointed to additional errors made by his Honour to which we have referred in our summary of their submissions. However, because of the approach that we have adopted in this appeal, it is unnecessary for us to embark upon an analysis of them.

70We, therefore, propose to uphold the appeal. It is appropriate that we give the parties an opportunity to make submissions in respect of the re-sentencing of the respondent. Given the approach on appeal, we propose to have regard to the evidence and material in the appeal, submissions made at first instance and on appeal, and any further submissions we receive by way of written submissions. Unless either party specifically seeks to further address the Full Bench, we would propose to undertake re-sentencing of the respondent on the papers.

71Although we note that the appellant has contended in its written submissions that since the enactment of s 68A of the Crimes (Appeal and Review) Act 2001, the issue of double jeopardy is no longer a relevant consideration in the exercise of the appellate Court's discretion in Crown appeals: see R v JW [2010] NSWCCA 49; (2010) 199 A Crim R 486, we would invite both parties to address this issue.

72The appellant should file and serve any further submissions on sentencing within 14 days of the date of this judgment. The respondent should file and serve its further written submissions in that respect within 14 days of receipt of the appellant's submissions.

73We shall reserve costs. That issue shall be dealt with in the context of our further judgment on sentencing.

Orders

74We make the following orders: