Industrial Relations Commission New South Wales

• Medium Neutral Citation: Inspector Scott Rand v Toffy Pty Ltd t/as ABC Tyrepower and Mechanical [2012] NSWIRComm 39
• Hearing dates: 30 March 2012
• Decision date: 02 April 2012
• Before: Kavanagh J

Decision

ORDERS

1. I find the defendant guilty.

2. The defendant is fined in the sum of $65,000 with a moiety to the WorkCover Authority of New South Wales.

3. The defendant shall pay the prosecutor's costs. As to the quantification of costs, I will hear the parties on this issue in the event no agreement is reached. Leave to relist at short notice.

• Catchwords: OCCUPATIONAL HEALTH AND SAFETY - breach under s 8(1) - amended application for order - guilty plea - corporate defendant - vehicle car tyre business -lift designed to move stock from ground floor to the mezzanine level - errors in design of lift installed - no proper risk assessment undertaken - hoist not approved or certified or registered to carry personnel - personnel using lift when incident occurred - no professional maintenance programme for lift - unsafe system of work in place - foreseeable element to the offence - breach serious - simple remedial steps available - safe system of work now in place - periodic maintenance check and repair of machinery now performed - elements specific of general deterrence in consideration of penalty - risk most serious - early plea - no prior convictions - discount on penalty - compliance with WorkCover Authority - defendant corporation of good character - unlikely to re-offend - corporation of limited means for the purposes of penalty - penalty to reflect objective seriousness of offence - penalty - moiety to prosecutor - costs
• Legislation Cited: Occupational Health and Safety Act 2000; Crimes (Sentencing Procedure) Act 1999
• Cases Cited: ACCC v Safeways Stores Pty Limited (1997) ATPR 41-562; Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610; Corbett v Borg, unreported judgment of Hungerford J dated 15 May 1996; Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464; Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357; Mill v The Queen (1988) 166 CLR 59; Moore v E.W. Co (1990) 37 IR 145; Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364; Pearce v Queen (1998) 72 ALJR 1416; Postiglione v The Queen (1997) 189 CLR 295; R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR 104; Warman v WorkCover (1998) 80 IR 326; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonalds Australia Limited (2000) 95 IR 383; WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Ltd, unreported decision of Schmidt J dated 25 February 1994; WorkCover v Waugh (1995) 52 IR 89
• Category: Principal judgment
• Parties: Inspector Scott Rand (Prosecutor); Toffy Pty Ltd t/as ABC Tyrepower and Mechanical (Defendant)
• Representation: A Searle of counsel (Defendant); WorkCover Authority of New South Wales (Prosecutor); Jordan Djundja Lawyers (Defendant)
• File Number(s): IRC 825 of 2011

Ex tempore Judgment

1 HER HONOUR: This is a prosecution brought by Inspector Rand of the WorkCover Authority of New South Wales against Toffy Pty Ltd t/as ABC Tyrepower and Mechanical ("Toffy") (the defendant) under the provisions of s 8(1) of the Occupational Health and Safety Act 2000 (the Act).

2 It is alleged the defendant breached s 8(1) of the Act in that it:

FAILED BY ITS ACTS AND OMISSIONS as particularised below to ensure the health, safety and welfare at work of all its employees, and in particular Goran Aralica and Paul O'Keefe, contrary to section 8(1) of the Occupational Health and Safety Act 2000 (NSW).

The particulars of the charge are:

1. In or around February 2005 James Corcoran, a sole trader, installed steel frames to support a mezzanine floor at the premises of Toffy Pty Ltd trading as ABC Tyrepower and Mechanical ("ABC Tyrepower").

2. At all material times ABC Tyrepower used the mezzanine floor at the premises for the storage of car tyres.

3. Between 30 April 2005 and 14 May 2005 the defendant designed and/or installed a Hoist at the premises to provide access to the mezzanine floor.

4. The Hoist was plant used by employees of ABC Tyrepower.

5. The Hoist consisted of a guided fabricated metal cage ("hoist cage") within a metal perimeter enclosure ("hoist enclosure") powered by an overhead Hitachi electric chain hoist ("electric chain hoist"). The hoist cage lifting point consisted of an eyebolt fillet welded to the "I" beam on top of the hoist cage. The electric chain hoist safety hook ("hook") was connected to the eyebolt fillet welded to the "I" beam on top of the hoist cage.

6. The Hoist was designed and installed to operate within an area which had been left open when James Corcoran installed the steel frames to support the mezzanine floor at the premises in or around February 2005.

7. Since in or around May 2005 there was no other means of access to the mezzanine floor at the premises other than by use of a ladder.

8. The Hoist was designed and installed to be used by persons at work and was designed and installed for lifting both personnel and materials, namely car tyres, to the mezzanine floor at the premises.

9. At all material times Goran Aralica and Paul O'Keefe were employees of ABC Tyrepower.

10. The Hoist was used from on or around 14 May 2005 to 5 October 2010 by employees of ABC Tyrepower.

11. On 5 October 2010 an incident occurred at the premises when the electric chain hoist safety hook detached from the hoist cage causing the hoist cage to fall approximately 3.3 metres to the floor of the premises whilst Goran Aralica and Paul O'Keefe were present in it resulting in injuries to them.

Particulars of the risk:

12. The risk referred to in these particulars and in the charge is the risk to health, safety and welfare of employees, and in particular Goran Aralica and Paul O'Keefe of receiving an injury whilst using and operating the Hoist at the premises.

13. The defendant, as a consequence of failing to take measures particularised below, exposed its employees, and in particular Goran Aralica and Paul O'Keefe, to the risk by allowing the electric chain hoist safety hook to detach from the hoist cage causing the hoist cage to fall to the floor of the premises whilst Goran Aralica and Paul O'Keefe were present in it.

Particulars of the defendant's failure to ensure that the premises and plant were safe and without risks to health:

14. The defendant failed to provide premises that were safe and without risks to health as was necessary to ensure the health, safety and welfare of Goran Aralica and Paul O'Keefe when they were required to use and operate the Hoist.

15. The defendant should have taken one of the following measures to ensure that the premises, in particular the Hoist, was safe and without risks to health:

(a) Having a device to prevent the hoist cage from falling in the event of the eyelet of the hoist cage detaching from the hook of the electric chain hoist, in particular a secondary (or emergency) braking mechanism.

(b) Ensuring the Hitachi electric chain hoist was used in accordance with manufacturers instructions for safe use, maintenance and inspection.

(c)Having a lifting cage designed in accordance with Australian Standard 1418.17 - 1996 (Design and construction of workboxes).

(d) (d)Having a Hoist classified in accordance with the requirements of Australian Standard 1418.1 - 2002 (Crane, hoists and winches - General Requirements) as required by Clause 2.1.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(e) Having a drive mechanism in the Hoist which incorporated an approved brake to safely control the vertical movement of the load and to bring it to rest as required by Clause 2.1.7 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(f) Having a Hoist that was rated in terms of safe working load as required by Section 3 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(g) Having a Hoist, which was raised and lowered by the Hitachi chain hoist, with a device that sustained the Hoist in the event of a broken chain as required by Clause 3.5.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(h) Having a Hoist that provided a means to sustain the Hoist at the top of its lift independent of the Hitachi chain hoist medium, as required by Clause 3.5.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(i) Having a Hoist where the controls were fitted with a device to prevent the chain of the Hitachi chain hoist overrunning as required by Clause 3.5.5 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(j) Having a Hoist where the gates of the hoist cage and the hoist enclosure were mechanically or electrically interlocked and were unable to be opened when the hoist cage was not positioned at the corresponding floor level (Clause 3.5.9.2 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(k) Having a Hoist where a safe means of access was provided to allow inspection or maintenance of the Hoist as required by Clause 3.7.2 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(l) Having a Hoist that had a mechanism to prevent inadvertent detachment of the lifting cage from the hook of the electric chain hoist (Clause 2.7 of Australian Standard 4991 - 2004 (Lifting devices)).

(m) Having a Hoist that had a safety gear as required by Clause 2.9 of AS1735.2 - 2001 (Lifts, escalators and moving walkways (Part 2: Passenger and Goods Lifts, electric) or Clause 2.9 of AS1418.7 - 1999 (Cranes (including hoists and winches) Part 7: Builder's Hoists and Associated equipment).

(n) Having a Hoist that had a notice exhibited to it prohibiting persons from riding within the Hoist as required by Clause 3.6(f) of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

(o) Having a Hoist that had an isolation switch on or adjacent to the Hoist.

(p) Having a Hoist that was certified, approved and registered to carry personnel.

(q) Having a Hoist that was regularly inspected, tested and maintained.

Particulars of the defendant's failure to undertake an adequate risk assessment:

17. The defendant failed to undertake, or cause to be undertaken, an adequate risk assessment as was necessary to ensure the health, safety and welfare of Goran Aralica and Paul O'Keefe in relation to the use and operation of the Hoist.

18. The defendant should have taken the following measures to conduct an adequate risk assessment in relation to the use and operation of the Hoist at the premises:

(a) Identified the risk associated with using and operating the Hoist without a device to prevent the hoist cage detaching from the hook of the electric chain hoist.

(b) Identified the risk associated with using and operating the Hoist without a secondary (or emergency) braking mechanism or safety gear.

(c) Identified the risk associated with using and operating the Hoist without having its Safe Working Load capacity rated.

(d) Identified the risk associated with using and operating the Hoist without having a device fitted to it to sustain the Hoist in the event of a broken chain.

(e) Identified the risk associated with using and operating the Hoist without having a device to sustain the Hoist at the top of its lift independent of the Hitachi chain hoist medium.

(f) Identified the risk associated with using and operating the Hoist without having a device to prevent the Hitachi chain hoist overrunning.

(g) Identified the risk associated with using and operating the Hoist without having the hoist cage and hoist enclosure mechanically and electrically interlocked to prevent the hoist cage from being opened when the hoist cage was not positioned at the corresponding floor level.

(h) Identified the risk associated with using and operating the Hoist without any safe means of access to allow inspection or maintenance of the hoist.

(i) Identified the risk associated with using and operating the Hoist without an isolation switch on or adjacent to the Hoist.

(j) Identified the risk associated with using and operating the Hoist without having it certified, approved and registered to carry personnel.

(k) Identified the risk associated with using and operating the Hoist without a regular system of inspection, testing and maintenance.

As a result of the defendant's acts and omissions the employees of ABC Tyrepower were placed at risk in that they used the Hoist to access the mezzanine floor at the premises in the course of their employment with ABC Tyrepower. The risk manifested itself in the injuries sustained by Goran Aralica and Paul O'Keefe.

3 The defendant pleaded guilty to the charges.

4 Ms S Gul, solicitor with the WorkCover Authority of NSW appeared for the prosecution and Mr A Searle, of counsel, appeared for the defendant.

5 The prosecution relied upon an Agreed Statement of Facts, a Technical Report of Principal Inspector David Shoobert Engineering Team dated 7 March 2011, Factual Inspection Report of Inspector John Whatman dated 12 October 2010; Factual Inspection Report of Inspector Scott Rand dated 10 December 2010; 22 Colour Photographs taken by Inspectors John Whatman and Alice Cheng dates include 5 October 2010,12 October 2010; 12 November 2010 & 24 November 2010; five colour photographs taken by Inspector Scott Rand dated 22 March 2011; an Invoice from James Corcoran Metal Fabrications to ABC Tyre Power, Invoice No. 2056 dated 14 February 2005; an Invoice from Corcoran's The Metal Fabricators Pty Ltd to ABC Tyre Power Invoice No. 2081 dated 12 May 2005; Instructions For Handling - Hitachi Electric Chain Hoist and Extracts of Relevant Australian Standards.

6 The defendant relied upon an affidavit of Mr Chris Tofalakis sworn 15 March 2012 and the affidavits of Goran Aralica and Paul O'Keefe both sworn 20 March 2012. A number of relevant documents were attached to the affidavit including documents in relation to the pre-existing safe work method, the investigation of the incident, and the upgrading of the system of work.

7 An agreed statement of facts has been tendered which relevantly reads as follows:

2. At all material times TOFFY PTY LTD (ACN 099655071) t / as ABC TYREPOWER AND MECHANICAL was a corporation whose registered office is situated at "Citywide House", Level 1, Montgomery St Kogarah in the State of New South Wales.

(a) In or around February 2005, Christopher Tofalakis, director of Toffy Pty Ltd, trading as ABC Tyrepower ("the defendant") requested that James Corcoran ("Corcoran"), a sole trader, install steel frames to support a mezzanine floor at the premises of the defendant located at 577 Botany Road, Rosebery, New South Wales (the "premises"). The mezzanine floor was used by the defendant for the storage of car tyres as part of its tyre fitting business.

(b) The defendant then requested that Corcoran install a Hoist to travel between the ground floor and the mezzanine floor at the premises. The Hoist was designed by Mr James Corcoran of Corcoran's The Metal Fabricators Pty Ltd ("Corcoran's") together with Mr Christopher Tofalakis, director of the defendant. Mr Tofalakis drafted a rough sketch of the Hoist which Corcoran then amended and used as a basis for his design. Sometime between 30 April 2005 and 14 May 2005 Corcoran's designed, manufactured and installed the Hoist as requested to provide access to the mezzanine floor at the premises.

(c) The Hoist consisted of a guided fabricated metal cage ("hoist cage") within a metal perimeter enclosure ("hoist enclosure") powered by an overhead Hitachi electric chain hoist ("electric chain hoist"). The hoist cage lifting point consisted of an eyebolt fillet welded to the "eye" beam on top of the hoist cage. The electric chain hoist safety hook ("hook") was connected to the eyebolt fillet welded to the "eye" beam on top of the hoist cage.

(d) The Hoist was designed to operate within a "cut out" area which had been set aside when Corcoran's installed the steel frames to support the mezzanine floor at the premises in or around February 2005. After the installation of the Hoist, it became the only means of access to the mezzanine floor at the premises other than by use of a portable ladder.

(e) The Hoist was raised and lowered by the pendant control unit of the Hitachi electric chain hoist, which was attached to the inside of the Hoist cage. To access the mezzanine the operator would enter the hoist cage via the fabricated gates, then press the "up" button on the pendant control to raise the lifting cage. The operator would then inch the cage to the correct height of the mezzanine level to enable egress from the hoist cage.

(f) The Hoist was used on a daily basis (often multiple times a day) by employees of the defendant to transport both people and materials between the workshop floor of the premises and the mezzanine until 5 October 2010, the date of the incident. It was not uncommon for two employees of the defendant to ride in the hoist cage. Goran Aralica and Paul O Keefe were two of the employees who routinely used the Hoist.

(g) The Hoist was used from or around 14 May 2005 to 5 October 2010 by employees of the defendant.

The Incident

3. At approximately 7:30am on 5 October 2010, Mr O'Keefe commenced his daily duties as Store Manager at the premises. Mr Aralica commenced his daily duties as a Tyre Fitter at approximately 8:00am.

4. Mr Aralica was working, changing tyres on a car. He was attempting to locate the replacement tyres required. He travelled up in the Hoist to the mezzanine storage area by himself. Being unable to find the tyres required, he then travelled down to the workshop floor in the Hoist.

5. Mr Aralica then discussed the location of the tyres on the mezzanine with Mr O'Keefe. At approximately 1:20pm, Mr Aralica and Mr O'Keefe entered the hoist cage and shut the fabricated gates. Mr O'Keefe operated the Hoist pendant control to take Mr Aralica and himself from the workshop floor to the mezzanine level.

6. Mr Aralica and Mr O'Keefe were inside the hoist cage, at approximately the mezzanine floor level, when the hoist cage disengaged from the lifting hook of the electric chain hoist. This sent the cage into "free fall", resulting in the hoist cage falling approximately 3.3 metres to the workshop floor below.

Injuries sustained:

7. Mr O'Keefe sustained injuries to his lower left leg, right leg, left hand and back. The injuries included: fractured left ankle; fractured heel (taylus dome left ankle); cartilage damage left ankle; lacerations left ring finger; soft tissue bruising under right foot; and bruising thoracic spinal area.

8. Mr Aralica sustained injuries to both right and left legs. Injuries included fractured left fibia and fibula, fractured right calcaneus. Mr Aralica has had 4 operations on left leg including insertion of metal plates, and has not returned to full duties.

9. On 5 October 2010 Inspector John Whatman of WorkCover attended the premises and conducted an inspection of the Hoist. An investigation followed.

Systems of work prior to the incident:

10. There were no safe systems of work in place for the use of the Hoist.

11. The defendant did not have, nor did it request, any testing for the safe use of the Hoist. Corcoran's provided no written instructions for operating the Hoist to the defendant and the defendant therefore operated the Hoist without them.

12. The defendant did not have, nor did it request, a maintenance manual for the Hoist. There was no documented information in the possession of the defendant regarding inspection and maintenance required to ensure the integrity of the key components of the Hoist.

13. The defendant failed to undertake a risk assessment in relation to the use of the Hoist for transporting either materials and people.

14. Mr Tofalakis would conduct cleaning in the Hoist recess on the floor of the premises underneath the Hoist when it was located on the mezzanine level.

15. The Hoist presented a number of risks to safety. It was inherently dangerous. These risks are outlined as follows:

a. No safety mechanism was installed on the Hoist to prevent the hoist cage detaching from the lifting hook of the Hitachi electric chain hoist and falling to the floor below. In particular, no secondary or emergency braking system was fitted to the Hoist.

b. The Hoist was not designed in accordance with the Australian Standards set out in paragraphs 3(m)(c)(i) - (xiv) in the Application for Order.

c. No written procedure was developed for the safe use of the Hoist.

d. No maintenance of the Hoist (other than the greasing of the rails by Mr Tofalakis) was undertaken after installation in April/May 2005.

e. The Hoist had no mechanisms to interlock the hoist cage in position at each level, i.e. the workshop floor level and the mezzanine level. The gates of the hoist cage and perimeter enclosure were not interlocked.

f. The Hoist was not load rated. There were no signs on the Hoist regarding safe working load or safe use.

g. There was nothing preventing the chain of the Hitachi electric chain hoist from overrunning the attachment point (welded lifting eye) on top of inner cage.

h. The Hoist was not subject to pre-operational test lifts.

Systems of work after the incident:

16. Following the incident on 5 October 2010 and the issuing of a Prohibition Notice No. 171929, the Hoist was removed from operation.

17. In or around March 2011 a stair-ladder was installed to provide access to the mezzanine.

Co-operation with WorkCover

18. The defendant co-operated with Workcover during the investigation.

Prior Convictions

19. The defendant does not have any prior convictions under the Occupational Health and Safety Act 2000.

Relevant Principles

8 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s 8(1) of the Occupational Health and Safety Act 2000 with ss 21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The Court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea).

9 Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]).

10 Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR 104, correctly, given the consideration in Markarian, recognised this "instinctive synthesis" approach to sentencing saying at [57]:

The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole.

Proper regard is to be had to express legislative provisions and to the relevant statutory regime (Markarian at [27]).

Consideration

11 In a consideration as to penalty, the Court assesses the objective seriousness of the offence or, as has been said, "the nature and quality of the offence". The Full Bench commented in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474):

... in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence"...

And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]:

In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk, In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected...

12 Toffy Pty Limited was a vehicle car tyre business which commenced in August 2002. Christopher Tofalakis is both the director and registered proprietor of the company. He has provided an affidavit and given evidence before this Court. ABC Tyrepower is a co-operative of several independent businesses coming together to achieve lower prices for services and supplies. When he purchased the business, Mr Tofalakis was given a number of documents regarding the operation of the business. He was not provided with any information regarding the appropriate plant, machinery or other equipment or the maintenance of any such equipment.

13 Mr Tofalakis's business was quite successful and in early 2005 he determined he needed more storage space. He decided to use the mezzanine floor of his premises in Rosebery and to do that discussed his intention with a client of his in the tyre business, Mr James Corcoran, who was identified as a metal fabricator.

14 He commissioned Mr Corcoran to design, manufacture and install the machinery needed for his access to the mezzanine level and also for Mr Corcoran to underpin the mezzanine to ensure that it could carry the appropriate weight for the storage of tyres.

15 However, it became a practice in the workshop for staff to use the lift to access the storage on the mezzanine level.

16 Mr Corcoran designed a lift (cage) whose purpose was to move stock from the ground floor to the mezzanine level. There were some fundamental errors in the design of the lift. The cage was to operate with a hoist. A large metal hook connected the cage to the hoist. The hook was soldered to the steel hoist. I accept, as the prosecutor has submitted, there was no proper risk assessment undertaken by either Mr Tofalakis or Mr Corcoran as to the appropriateness of the lift "hoist" being used or being suitable to carry personnel.

17 An Hitachi electrical chain hoist was chosen to lift the lift cage. The instructions for such Hitachi chain hoist revealed, "This hoist is intended for industrial use only and should not be used to lift, support or otherwise transport human cargo." Further, the hoist was never approved nor certified nor registered to carry personnel in accordance with the Australian Standards.

18 Had the hoist been compliant for lifting persons it would have had emergency braking measures, load rating, back-up devices and interlocking access gate. It is contended that Mr Tofalakis, in instructing Mr Corcoran to design the hoist and cage mechanism, was in breach of his occupational health and safety obligation in accepting Mr Corcoran's system of work.

19 At issue between the parties was, further, whether there was a proper maintenance program in place for the operation of the lift. Mr Tofalakis stated, that while there was not a formal and documented program in place, he had been advised by Mr Corcoran to grease the wheels, which he regularly did, and further that Mr Corcoran, when he attended upon the business premises as a client through November 2005, August 2006, September 2006, September 2007, May 2008, May 2009 and June 2009, also inspected the lift and the hoist and was satisfied with how they were working. He contends there was therefore a maintenance system in place.

20 However, when those inspections are viewed in the context that the equipment was not appropriate and that it was being inspected by the "designer", it is difficult to accept that this was a thorough and professional maintenance programme.

21 Further, the defendant has pleaded guilty to a particular asserting he did not have in place a regular system of inspection, testing and maintenance on the equipment. The Court must reiterate that the failure to seek proper professional assistance in the design of the equipment was at the core of this serious breach of the Act. There was an unsafe system of work in place.

22 The defendant conceded in submissions that there is a foreseeable element to the offence. A foreseeable element to the offence makes the breach more serious.

23 The availability of simple and straightforward steps to remedy the defects in the system is also relevant to the consideration of the objective seriousness of the offence (WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Ltd, unreported decision of Schmidt J dated 25 February 1994). There were known steps that could have been taken which either singly or in combination would have eliminated or reduced the risk. These steps have now been implemented by the defendant. Such activity after the incident is indicative of the fact that each amendment to the system of work was readily available and practicable.

24 The principles of general and specific deterrence are also relevant in consideration. The approach to be taken has been considered in some detail in Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [71] to [77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]:

... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.

25 Mr Tofalakis continues working in his business. The question as to the possibility of re-offending has been addressed by him given the new system of work now in place. The lift has been removed. New plant and equipment have been installed at a further cost to the employer. Now there is a large metal staircase leading to the mezzanine storage level with large handgrips to facilitate human access. Stock is now ferried separately from the ground floor to the mezzanine level by way of a stock belt which carries only stock. The belt lifts up the tyres. When stock is removed, they are placed in a chute that carries the tyres down to the ground level by force of gravity.

26 The Court has been assured that in the system for raising and lowering of the tyres, there has been an inspection by WorkCover. I am satisfied, given the movement of tyres is contained within a chute, there is now a safe system of work in place. Access by persons through the ladder to the storage area also appears proper.

27 While regular toolbox meetings were held before this incident, I am now persuaded they have been properly documented. Further, there is also now a periodic maintenance check and repair of all machinery performed in accordance with professional guidance and in accordance with the documentary requirements of the new systems purchased. However, there must be a small element of specific deterrence in the consideration as to penalty.

28 As to general deterrence, the Court must once more emphasise, notwithstanding the cost, employers in small business ventures must seek professional guidance when choosing and installing equipment to meet their business needs. The need for safe machinery became a statutory requirement through workplace safety laws as early as 1926. The circumstances surrounding this incident reveal once more the Court must draw attention to the necessity to provide safe equipment at every work site. There will therefore be an element of general deterrence in the Court's consideration of penalty.

29 It is submitted, in mitigation, that Mr Tofalakis properly instructed Mr Corcoran and relied upon Mr Corcoran's expertise and therefore there was no general laxness or want of diligence in relation to workplace safety on the part of the defendant Corporation. However, the circumstances reveal there was not a lot of wisdom in the selection of the expert advice sought nor a risk assessment of the task.

30 Although the gravity of the injury actually resulting from the breach does not, of itself, affect the level of penalty, the occurrence of death or serious injury manifested a degree of seriousness of the relevant detriment to safety. In Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]:

In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ...

31 The two employees who were in the lift (to which the hoist was attached) when the hoist snapped away have given evidence before the tribunal through affidavit. They testified there was an existing workplace safety awareness at this work site. They also testified as to the appropriate care and attention provided to them since the incident. However, both suffered serious injury which included broken legs and a broken ankle. Therefore the risk was most serious and the employer and employees are fortunate as to the level of injury.

32 In considering the subjective elements of this offence, the care and attention given to the workers by Mr Tofalakis is taken into account.

33 The defendant, it is agreed, has no prior convictions. The defendant's maximum penalty is, therefore, $550,000. The defendant submitted this was an early plea of guilty and that would attract the appropriate discount (R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 A Crim R 104). The Court accepts the defendant entered a plea of guilty at the earliest possible opportunity. The plea therefore attracts the discount on penalty for its utilitarian benefit in accordance with the principles as outlined in the guideline judgment.

34 It is agreed Mr Tofalakis, on behalf of the defendant corporation, co-operated with WorkCover throughout the investigation. The company has now complied with all WorkCover requirements in relation to the removal of the hoist and the installation of safety compliant means of access to the mezzanine.

35 Section 3A of the Crimes (Sentencing Procedure) Act 1999 contains a comprehensive statement of the purposes of sentencing. It provides:

3A Purposes of sentencing

The purposes for which a court may impose a sentence on an offender are as follows:

(a) to ensure that the offender is adequately punished for the offence,

(b) to prevent crime by deterring the offender and other persons from committing similar offences,

(c) to protect the community from the offender,

(d) to promote the rehabilitation of the offender,

(e) to make the offender accountable for his or her actions,

(f) to denounce the conduct of the offender,

(g) to recognise the harm done to the victim of the crime and the community.

36 Section 21A of the Crimes (Sentencing Procedure) Act sets out the aggravating and mitigating factors that a Court takes into account when determining a sentence. As well as the factors identified in sub-section 2 (aggravating factors) and 3 (mitigating factors), the Court is to take into account any other objective or subjective factors that affect the relative seriousness of the offence.

37 The defendant refers to and relies upon s 23A(3) to submit there can be no case that this breach was a planned criminal enterprise. I accept that submission. I further accept the defendant corporation is of good character and is unlikely to re-offend and there has been rehabilitation. I accept the corporation through Mr Tofalakis has shown remorse and accepted responsibility for the defendant's actions.

38 The question was raised as to the application of the principle of totality as a relevant consideration. McHugh J in Postiglione v The Queen (1997) 189 CLR 295 described the operation of the principle of totality thus:

The application of the totality principle therefore requires an evaluation of the overall criminality involved in all the offences with which the prisoner has been charged. . . . Where necessary the Court must adjust the prima facie length of the sentences downward in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences.

The principle of totality operates to ensure that the total criminality of a defendant in relation to a question is properly assessed (WorkCover Authority of New South Wales (Inspector Ankucic) v McDonalds Australia Limited (2000) 95 IR 383 at [454]). This is usually a principle applied when there are co-defendants. In this case, as best as I can understand the submission, it is that some mitigation should be given to the defendant because of a contribution to the risk by Mr Corcoran who, the defendant believed, held the appropriate expertise to design the equipment. I have a little difficulty with this submission. In an analysis of the system of work, I do not accept the defendant corporation properly ensured that there was the proper professional advice sought in order that there was the correct and safe design of the necessary equipment.

39 The Court has examined the design of the hoist that was used to lift the cage. The hoist hook at the level of the connecting steel point to the shaft clearly gave way under the weight of the two men in the cage. The hoist was never designed for that purpose. The connecting section of steel was clearly never designed to carry such weight. While I accept the defendant, through Mr Tofalakis, clearly thought he was dealing with an expert, he can have no mitigation for hiring somebody who was not an appropriate expert.

40 Therefore I find no contribution to the risk from Mr Corcoran and therefore there shall be no mitigation in penalty for this decision by the corporation.

41 However, in the circumstances the Court also takes into account the financial circumstances of the defendant corporation. Mr Tofalakis properly puts evidence before the Court as to the circumstances of his corporation. He opined by the end of the year 2010 to a turnover of $1.47 million but by the end of June 2011, reflecting perhaps the economic environment across the State, his turnover was down to $884,000. He acknowledges this 2011 figure also reflects a loan deduction which is reflected in a downward estimate of his gross profit in June 2011. In evidence Mr Tofalakis suggested his corporation in 2012 will have a turnover of about $2.2 million. I find Mr Tofalakis a very honest witness before the Court in relation to his business dealings, although I also believe the business turnover has gone up in 2012. Nonetheless, I accept the profit margins have gone down. I find therefore this is a corporation of limited means (given the overheads for running the business) for the purposes of penalty.

42 The Court takes into account all of the above subjective features in mitigation of penalty but notes this offence was serious.

43 I find the defendant guilty.

44 The defendant is fined in the sum of $65,000.

45 There shall be a moiety to WorkCover Authority. The defendant shall pay WorkCover's costs as agreed or assessed.

ORDERS

1. I find the defendant guilty.

2. The defendant is fined in the sum of $65,000 with a moiety to the WorkCover Authority of New South Wales.

3. The defendant shall pay the prosecutor's costs. As to the quantification of costs, I will hear the parties on this issue in the event no agreement is reached. Leave to relist at short notice.

Decision last updated: 10 May 2012