Industrial Relations Commission New South Wales

• Medium Neutral Citation: Inspector Mason v Graham Allen Chapman & anor [2013] NSWIRComm 71
• Hearing dates: Tuesday 28 May 2013
• Decision date: 28 August 2013
• Jurisdiction: Industrial Court of NSW
• Before: Walton J, Vice-President

Decision

Matter No IRC 1550 of 2011:

1. The defendant is convicted of the offence as charged;

2. The defendant is fined in the sum of $4,000 with a moiety to the prosecutor;

3. The Court further orders that the defendant shall pay the costs of the prosecutor for these proceedings as agreed or, in default, as assessed.

Matter No IRC 1551 of 2011:

1. The defendant is convicted of the offence as charged;

2. The defendant is fined in the sum of $40,000 with a moiety to the prosecutor;

3. The Court further orders that the defendant shall pay the costs of the prosecutor for these proceedings as agreed, or in default, as assessed.

• Catchwords: OCCUPATIONAL HEALTH AND SAFETY - prosecution of corporation under s 10(1) of the Occupational Health and Safety Act 2000 - prosecution of director of corporation under s 10(1) by virtue of s 26(1) - corporation owner and controller of premises - premises a disused abattoir - work being undertaken to evaluate the suitability of converting the premises into a mushroom farm - work included the detachment of evaporator units suspended above the floor in the abattoir's former cool rooms - risk that persons at work at the premises detaching evaporator units would be struck by an evaporator unit - ad hoc method developed for removal of evaporator units - no persons at premises with appropriate rigging qualifications or experience removing evaporator units - worker departed from ad hoc method - worker unsupervised - worker struck by falling evaporator unit and injured - pleas of guilty - sentencing - objective factors - maximum penalty - risk was foreseeable - inadequate systems in place prior to incident - simple remedial measures available - general deterrence - corporation no longer operative - individual defendant no longer working and unlikely to do so in the future due to ill health - negligible element of specific deterrence - culpability of individual defendant - individual defendant "hands on" - culpability the same as the corporate defendant - offence reasonably serious - subjective factors - remorse and contrition - assistance to injured worker and family - co-operation with the prosecutor - discount for pleas - first offenders - consideration of s 10A of the Crimes (Sentencing Procedure) Act 1999 - section not applied - s 6 of the Fines Act 1996 applied in respect of each defendant - each defendant facing financial difficulty and a reduced capacity to pay any fine - some reduction in penalty - penalties imposed - moiety - costs
• Legislation Cited: Crimes (Sentencing Procedure) Act 1999; Fines Act 1996; Interpretation Act 1987; Occupational Health and Safety Act 1983; Occupational Health and Safety Act 2000; Occupational Health and Safety Regulation 2001
• Cases Cited: Alcatel Australia Limited v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99; Cameron v R (2002) 209 CLR 339; Capral Aluminium v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610; Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of New South Wales (Inspector Wilson) [2000] NSWIRComm 46; (2000) 99 IR 159; Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 33; Department of Mineral Resources of NSW v AM Hoipo & Sons Pty Ltd (2000) 99 IR 137; Environmental Protection Authority v N (1992) 26 NSWLR 352 at 358 - 359 Graincorp Operations Limited v Inspector Mason [2006] NSWIRComm 304; (2006) 157 IR 103; Haynes v C I & D Manufacturing Pty Ltd (No.2) (1995) 60 IR 455; Hookham v The Queen (1994) 181 CLR 450 at 459; Inspector Barry Childs v Kirk Group Holdings Pty Limited & Anor [2005] NSWIRComm 1; Inspector Dall v Ullrich [2012] NSWIRComm 87; Inspector Estreich v Hadfield [2012] NSWIRComm 88; Inspector Green v Big River Timbers Pty Limited; Inspector Green v Big River Timbers (Veneer) Pty Limited [2006] NSWIRComm 279; Inspector Howard v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125; Inspector Kent v Duct Master Pty Ltd [2009] NSWIRComm 143; Inspector Lai v Rexma Pty Ltd and Another [2008] NSWIRComm 78; Inspector Middleton v Cafe C Pty Ltd [2012] NSWIRComm 131; Inspector Nicholson v Gallagher [2012] NSWIRComm 121; Inspector Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138; Inspector Simpson v Tomago Aluminium [2005] NSWIRComm 117; Inspector Stephen Charles v Premier Precast Pty Limited [2009] NSWIRComm 136; Inspector Walker v Roads and Maritime Services [2012] NSWIRComm 105; JT & LC Tippett Pty Limited and RD & LF Tippett Pty Limited v WorkCover Authority of New South Wales [2008] NSWIRComm 177; (2008) 184 IR 1; Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337; Markarian v R (2005) 228 CLR 357; Morrison v Powercoal Pty Ltd & Anor. (No. 3) [2005] NSWIRComm 61; Nash v Austerberry Directional Drilling Services Pty Ltd [2013] NSWIRComm 37; Inspector Simpson v Tomago Aluminium [2005] NSWIRComm 117; Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; Powercoal Pty Ltd and Anor v Industrial Relations Commission of NSW and Anor (2005) 145 IR 327; 156 A Crim R 269; 64 NSWLR 406; R v Thompson; R v Houlton (2000) 49 NSWLR 383; R v Wilhelm [2010] NSWSC 378; Rodney Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364; Workcover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd and Anor [2000] NSWIRComm 1123; (2000) 95 IR 383; WorkCover Authority (NSW) (Inspector Jones) v Challita [2006] NSWIRComm 207; WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Industrial Relations Commission, NSW, Matter No. CT 1280 of 1995, Hill J, 2 April 1997); WorkCover Authority of New South Wales (Inspector Lane) v Australian Winch & Haulage Co Pty Ltd (2000) 102 IR 40; WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21; WorkCover Authority of New South Wales (Inspector Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363; WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd [2001] NSWIRComm 50; (2001) 105 IR 81; WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (2000) 99 IR 163; WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Limited and Another [2000] NSWIRComm 277
• Category: Sentence
• Parties: Inspector Gary Mason (Prosecutor - both matters); Graham Allen Chapman (Defendant IRC 1550 of 2011); G & N Chapman Pty Ltd (Defendant IRC 1551 of 2011)
• Representation: C T Magee of counsel (Defendant - both matters); WorkCover Authority of New South Wales (Prosecutor - both matters); Carroll & O'Dea (Defendant - both matters)
• File Number(s): IRC 1550 of 2011; IRC 1551 of 2011

Judgment

1 These proceedings involve prosecutions instituted by Inspector Gary Mason ('the prosecutor') against Graham Allen Chapman ('Mr Chapman') and G & N Chapman Pty Limited ('the corporation'). Inspector Mason is an inspector of the WorkCover Authority of New South Wales and is authorised by s 106(1)(c) of the Occupational Health and Safety Act 2000 ('the Act') to institute the proceedings.

2 The corporation is the trustee for the G & N Chapman Family Trust ('the trust'). The trust was registered on or about 29 May 2006 and the corporation became the trustee of the trust on the same day. The corporation's business is conducted from 8 Courallie Street, Moree in the State of New South Wales.

3 Mr Chapman is a director and secretary of the corporation. On the date specified in the charges (namely, 28 September 2009), he had the day-to-day management control of the corporation and its activities.

4 Prior to September 2007, the corporation did not conduct any business or undertaking other than its role as trustee for the trust.

5 On or about 11 September 2007, the corporation, as trustee for the trust, purchased the old Moree abattoir at Gwydirville, Newell Highway, Moree ('the premises'). As at 28 September 2009, the corporation owned and controlled the premises.

6 The premises was situated five kilometres south of Moree on the east side of the Newell Highway. The size of the property was approximately 14 acres. It was previously used as an abattoir but that enterprise was abandoned in approximately 1980. As at the date appearing in the charges (namely, 28 September 2009), there were three buildings situated on the western side of the property, consisting of two metal clad sheds and two large, two storey brick buildings which constituted the disused abattoir. There were approximately 20 cool rooms on the site, with each cool room containing two evaporator units. Each evaporator unit was suspended from the ceiling of a cool room, secured by four bolts, two on either side of the unit.

7 The prosecutions against the corporation and Mr Chapman arose following an incident which occurred on 28 September 2009 at the premises.

8 The incident occurred during the course of the removal of an evaporator from a cool room, known as 'Cool Room No 2', situated in the former abattoir building at the premises. The evaporator units were being removed as part of an investigation into the suitability of converting the old abattoir site into a mushroom farming project.

9 Shortly before 28 September 2009, the company engaged Mr Jason Smith, then aged 38, and Mr Stephen Peachey, then aged 45, to provide contract labouring services, on a casual basis, for a short engagement to assist with the removal of fixtures and fittings at the premises. The work designated for Mr Smith and Mr Peachey included the removal of the evaporator units from the cool rooms.

10 On 28 September 2009, Mr Chapman, Mr Smith and Mr Peachey (together with a Mr Strang, who was involved in the mushroom farming project) were working at the premises removing, inter alia, the evaporator units from the cool rooms. The particular circumstances of the incident are described in the Statement of Agreed Facts. Annexed to this judgment marked as 'Annexure A' is the Statement of Agreed Facts relating to the corporation. A short summation will suffice for present purposes.

11 Leading up to the incident on the day in question, one evaporator unit had been lowered from the wall to the ground in a cool room known as 'Cool Room No 3' using two block and tackle units secured to steel carcass rails attached to the roof of the cool room. That task required at least two persons to undertake it. During the course of removing that unit, a decision was taken to give some additional support to the evaporators during the process of detaching them from the walls by the use of 'acrow props'. To this end, Mr Chapman travelled to Moree to hire two acrow props. Upon his return, Mr Peachey unloaded the acrow props from Mr Chapman's ute.

12 Shortly after 3 pm, Mr Smith entered a cool room known as 'Cool Room No 2' and, working alone, commenced removing the evaporator unit. At the same time, Mr Strang and Mr Peachey were removing shelving from another cool room located approximately 50 metres from where Mr Smith was working in Cool Room No 2. It might be noted that, at this time, Mr Chapman was absent from the premises obtaining caster wheels for a trolley manufactured by Mr Strang upon which the evaporator units could be placed for transport and removal after they were lowered from the wall using the block and tackle units.

13 In order to remove the evaporator unit from Cool Room No 2, Mr Smith adopted a system whereby he positioned the two acrow props under, and at each end, of the evaporator unit. This system, together with the fact that Mr Smith was working alone, was not consistent with the procedure which had earlier been used to remove the evaporator in Cool Room No 3, namely, the removal of the evaporator unit using the block and tackle units. That method was not used in Cool Room No 2 by Mr Smith due to his mistaken understanding that there was no position in Cool Room No 2 to which he could attach the block and tackle units. As a result, Mr Smith did not take with him, into Cool Room No 2, the two block and tackle units which had been used in Cool Room No 3. Those units remained in Cool Room No 3.

14 After positioning the acrow pops under each end of the evaporator unit in Cool Room No 2, Mr Smith then stood on a 1.8 metre step ladder and cut two attachment bolts on one side of the evaporator using an oxy-acetylene cutting torch. After repositioning the ladder so it was placed under the other end of the evaporator unit, Mr Smith cut one of the remaining bolts using the same method. The other end of the evaporator unit dropped because the acrow props were not sufficient to prevent its movement. When the evaporator unit dropped, it knocked Mr Smith off the ladder and, pivoting on the remaining bolt, trapped (by one corner) Mr Smith against the wall, piercing his chest on the left side and exiting through his back. The circumstances of Mr Smith working in Cool Room No 2 and his injury may be described as 'the incident' for the purposes of this judgment.

15 As a result of the incident, Mr Smith suffered a penetrating chest injury, a punctured lung, multiple fractured ribs and a brachial plexus injury. At the time of the incident Mr Smith had been unemployed for some time, lived locally with his parents and was a qualified carpenter.

The Charges

Prosecution of the Corporation

16 The corporation was charged, in an amended application for order, with one breach of s 10(1) of the Act (it may be noted that the corporation was originally charged under s 8(1)). That provision is in the following terms:

10 Duties of controllers of work premises, plant or substances

(1) A person who has control of premises used by people as a place of work must, so far as is reasonably practicable, ensure that the premises are safe and without risks to health.

17 That charge was set out in the amended application for order in the following terms:

On 28 September 2009 at the old Moree abattoir site at "Gwydirville", Newell Highway, Moree in the State of New South Wales ("the premises") G&N Chapman Pty Ltd, ACN 119 919 872, a corporation whose registered address is c/- Searle Sessarago, Level 4, 50 Marine Parade, Southport, Queensland ("the defendant"), being a person who on that date had control of the premises in the course of its trade, business or undertaking, those premises being premises that were not a private dwelling and were used by persons who were not employees of the defendant as a place of work

FAILED, by its acts or omissions as particularised below, to

Ensure that the premises were safe and without risks to health to persons at work at the premises, in particular Jason Smith, contrary to section 10(1)of the Occupational Health and Safety Act 2000(NSW).

18 The particulars of the charge were specified as follows:

(a) The risk was the risk that persons at work at the premises detaching evaporator units, in particular Mr Jason Smith, would be struck by an evaporator unit.

(b) The defendant at all material times had control or alternatively limited control over the premises:

(i) The defendant owned the premises as Trustee for the G&N Chapman Family Trust;

(ii) The defendant, by its director Mr Graham Chapman, controlled the premises.

(c) The premises were controlled by the defendant in the course of the defendant's trade, business or undertaking:

(i) The defendant owned the premises as Trustee for the G&N Chapman Family Trust;

(ii) The defendant at that time was considering the possible alternative use of the site as a mushroom farm.

(d) The premises were used by people as a place of work, in particular they were used on 28 September 2009 as a place of work by:

(i) Mr Graham Chapman, a director of the defendant;

(ii) Mr Peter Strang, a consultant or alternatively contractor of the defendant;

(iii) Mr Stephen Peachey; and

(iv) Mr Jason Smith.

(e) The premises were used by persons who were not employees of the defendant, in particular they were used by:

(i) Mr Graham Chapman, a director of the defendant;

(ii) Mr Peter Strang, a consultant or alternatively contractor of the defendant;

(iii) Mr Stephen Peachey; and

(iv) Mr Jason Smith.

(f) The defendant failed to eliminate the risk of harm to the health and safety of persons at work on the premises who were engaged in the work of detaching and removing the evaporator unit, in particular Jason Smith, and in particular;

(I) The defendant failed to ensure that the evaporator unit was securely rigged prior to its attachment points being cut;

(ii) The defendant failed to ensure that work done to detach and remove the evaporator unit only took place under the supervision of a person with adequate skills as a rigger, in particular a person with a Certificate of Competency in Basic Rigging;

(iii) The defendant failed to stop work being done to detach and remove the evaporator unit until such time as there was a system in place that ensured the unit was adequately supported prior to its attachment bolts being cut.

As a result of the defendant's acts and omissions persons at work at the premises and in particular Jason Smith, were placed at risk of injury.

Prosecution of Mr Chapman

19 Mr Chapman, as a director of the corporation, was charged, in an amended application for order, with one breach of s 10(1) by virtue of s 26(1) of the Act (it may be noted that Mr Chapman was also originally charged under s 8(1) by virtue of s 26(1)). The charge against Mr Chapman was set out in the amended application for order as follows:

On 28 September 2009 Graham Allen Chapman, date of birth 18 August 1950, whose address is 8 Courallie Street, Moree, in the State of New South Wales ("the defendant"), a director of a corporation, namely G&N Chapman Pty Ltd, ACN 119 919 872 ("the corporation"), by virtue of section 26(1) of the Act, is deemed to have contravened section 10(1) of the Act, in that the corporation, being a person who had control of premises in the course of its trade, business or undertaking, those premises being premises that were not a private dwelling and were used by persons who were not employees of the corporation as a place of work, on 28 September 2009 at the old Moree abattoir site at "Gwydirville", Newell Highway, Moree in the State of New South Wales ("the premises")

FAILED, by its acts or omissions as particularised below, to

Ensure that the premises were safe and without risks to health to persons at work at the premises,in particularJason Smith,contrary to section 10(1)of the Occupational Health and Safety Act 2000(NSW).

20 The particulars of the charge against Mr Chapman were in the same terms as the particulars of the charge against the corporation (save for formal differences).

The Evidence

21 The prosecutor tendered a sentencing bundle containing the Agreed Statement of Facts, a Factual Inspection Report by Inspector Mason dated 1 October 2009, 14 WorkCover photographs taken by a Colin Wall and a Prior Convictions Report for the corporation and Mr Chapman.

22 Mr C T Magee of counsel, who appeared for the defendants, relied upon the affidavit evidence of the individual defendant, Mr Chapman, sworn on 22 May 2013, and a medical report concerning Mr Chapman's health by Dr Peter Bilton, dated 23 May 2013.

23 Mr Chapman deposed that he was born on 18 August 1950 in Glen Innes. He was educated at Moree High School and left school in the third year at the age of 15. He has no trade or tertiary qualifications.

24 He deposed as to his employment history, describing, in that respect, his apprenticeship as a panel beater/spray painter, his first business, Gwydir Wreckers and Panel Beaters (a business that grew to employ 12 staff) and his engagement in contract farming (having given up the panel beating business after being diagnosed with diabetes and becoming dependant on insulin to treat and manage his condition).

25 In that latter respect, Mr Chapman deposed that, in 1992, he purchased a rural property with his brother, Richard. Having gained experience with the first property, the brothers purchased another property. Both properties grew grain and one ran cattle in addition. There were two to three permanent staff employed at the properties and up to 10 staff worked on the farms at other times.

26 In 2002, Mr Chapman and his brother formed a company, Chapman Brothers Farming Pty Ltd, wherein Mr Chapman was appointed a director on 10 January 2002.

27 About mid 2003, Mr Chapman and his brother purchased the Imperial Hotel in Moree. The hotel employed eight staff. In late July 2003, they formed a new company called Imperial Investments (NSW) Pty Ltd of which Mr Chapman was a director and secretary. The intention of the brothers upon the acquisition of the hotel was that Mr Chapman's brother would continue with farming whilst Mr Chapman managed the hotel. As to the status of those enterprises, Mr Chapman gave the following evidence:

[17] In approximately 2006, due to worsening ill health and the difficulty we had experienced in finding and retaining good staff for the hotel, I decided to retire. My brother was also ill with kidney disease and was in need of a transplant.

[18] The Imperial Hotel was closed and was put up for sale. It has been very difficult to find a buyer for the hotel and it has remained on the market, unsold, for six years. We still owe the bank approximately $140,000.00 on the loan taken out to purchase the hotel. We are also behind in paying the body corporate fees and Council rates.

[19] The farming properties have been sold.

28 Mr Chapman gave evidence as to the formation of the corporation. When it was established in 2006 with his son, the company had no employees. Between 2007 and 2009, the corporation did not undertake any business activities and simply functioned as the registered owner of the premises. Mr Chapman also deposed as to his arrangement with Mr Strang regarding the use of the premises and the advice he received that it would be necessary to remove fixtures, such as evaporators, from the cool rooms at the old abattoir site.

29 Mr Chapman then deposed, as to events preceding the incident, as follows:

[28] On or about 25 September 2009, the company engaged two contract labourers, Mr Jason Smith and Mr Steve Peachey, on a casual basis. They were engaged to assist with the task of removing the fixtures within the coolrooms in the old abattoir building.

[29] Jason Smith lived locally with his parents. He was a qualified carpenter in his late thirties; however, he had been unemployed for some time. At this time the Company was investigating the adaptation of the abattoir premises, so the Company offered Jason a couple of days work to do some casual labouring. It was an opportunity for Jason to earn some money for a few days while helping us to remove the fixtures.

30 After placing reliance upon the factual circumstances stated in the Agreed Statement of Facts, Mr Chapman gave the following evidence:

[31] The Statement of Facts makes clear that all of us involved in the task of detaching the evaporator units within the coolrooms devised a work procedure for the task. The key to the work procedure was that it required at least two men to carry out the task. Jason sustained injury when he attempted to undertake the task on his own, with no assistance.

31 Mr Chapman gave evidence as to the assistance given to Mr Smith following his injury:

[32] After Jason was injured, I went to Moree District Hospital where Jason was admitted until he was airlifted to hospital in Sydney.

[33] While Jason was in hospital, I was in contact with Jason's mother. I was aware that she stayed with Jason while he was in hospital in Sydney. I offered her assistance with accommodation in Sydney but she declined my offer. I resumed contact with Mrs Smith when she returned to Moree.

[34] In consultation with QBE insurance, we arranged to pay wage compensation to Jason which totaled $5,585.16 as at 18 December 2009.

[35] My son, Nicholas, was in contact with Jason when he returned home from hospital. On a few occasions, Nicholas gave Jason a lift to work at the Dragon Phoenix Hotel in Moree when Jason did some bar work at the hotel.

[36] I say hello and enquire about Jason's health whenever I see him in town. My wife, Jacqueline, spoke to Jason in town about a few weeks ago.

32 Mr Chapman also described the events following the incident:

[39] After the incident, all work ceased on the Old Abattoir site.

[40] I was in shock for a few days after the incident, and my blood sugar levels went 'through the roof'.

[41] Subsequently, advice was received by the Company that the Old Abattoir site was not suitable for mushroom farming. As such that project was not continued.

[42] The Company did not thereafter conduct any business or undertaking either at the Old Abattoir site or elsewhere.

[43] Some time later, the buildings comprising the Old Abattoir were demolished by licensed demolition contractors. Materials such as timber and tin were salvaged from the demolition and were donated to the men's shed in Moree.

[44] The site remains disused apart from one shed on the site that is currently rented out to a local tradesperson.

[45] It is my intention to sell the property if a buyer for it can be found.

33 He described his regret as to the injury suffered by Mr Smith, as follows:

[37] I have been in various forms of business for more than 30 years. I have always used the best equipment and machinery available. Under no circumstances would I give a job to any person if I thought that person could be put at risk in any way.

[38] I was shocked when the incident happened and I am very regretful indeed that Jason sustained serious injuries in the incident.

34 Mr Chapman deposed as to his involvement in community activities in Moree and gave a detailed account of the medical condition he had suffered for a number of years, stating that his health condition had adversely affected his mobility and his capacity to work which "had been reduced to virtually zero". In fact, he is presently not working due to his ill health and, in the result, is not generating any income. He did not see any prospect of returning to work in any capacity in the future.

35 Mr Chapman gave the following overview of the state of his health:

[50] For a number of years, I have suffered from insulin-dependent diabetes, high blood pressure, high cholesterol, daytime sleepiness and low back pain. I have also suffered a series of strokes that have adversely affected my speech and general functioning. To people who do not know me, my speech is now largely incoherent.

[51] My health has deteriorated since the incident involving Jason Smith on 28 September 2009.

...

[53] The combination of my health conditions, particularly my diabetes, has reduced my capacity to walk to no more than 100 metres. After struggling to walk that distance, I am very puffed and out of breath.

36 This evidence was supplemented by Mr Magee by the production of a medical report concerning Mr Chapman from Dr Peter Bilton dated 23 May 2013.

37 Mr Chapman gave evidence as to his financial position (including providing individual taxation returns for the financial years ending 30 June 2009, 30 June 2010, 30 June 2011 and 30 June 2012). His evidence in this respect was, as follows:

[55] At present, I am not working due to my health. Accordingly, I am not generating any income. I do not see any prospect of my returning to work in any capacity in the future.

[56] My 2009 Taxation Return shows that my gross taxable income for that financial year was $20,324, made up mainly of income from our superannuation fund ($12,185), my partnership with Jackie ($7,065) and some dividends.

[57] My Taxation Returns show that my income has declined over the past four financial years:

2009 - taxable income of $20,324;

2010 - taxable income of $20,555;

2011 - taxable income of $2,119;

2012 - taxable income of $35.

[58] Annexed to this affidavit and marked "GAC 1" are file copies of my Individual Tax Returns for the financial years ending 30 June 2009, 30 June 2010, 30 June 2011 and 30 June 2012. I believe that these Tax Returns were lodged electronically with the Australian Taxation Office by my accountant, Mr David Eckersley, of the Cambio Group, Southport QLD.

[59] Due to our lack of family income, we have been drawing on our superannuation. To supplement our superannuation drawings, in 2011 my wife, Jacqueline, obtained part-time employment at the local school, working two days a week.

[60] In the middle of the first school term of 2013, my wife requested and obtained full-time work at the school.

38 He also gave evidence as to the status and financial position of the corporation, as follows:

[61] G & N Chapman has no employees. The company is not trading at present and there are no plans for G & N Chapman to trade in the future.

[62] The 2009 Trust Tax Return for G & N Chapman Family Trust (for which G & N Chapman Pty Ltd is the trustee) shows total business income of $693 and total expenses of $16,237, making a net loss of $15,543. The Trust Tax Returns for the 2009 to 2012 financial years each show a net loss, as follows:

2009 - net loss of $15,543;

2010 - net loss of $31,910;

2011 - net loss of $2,942;

2012 - net loss of $13,247.

[63] Annexed to this affidavit and marked "GAC 2" are file copies of the Trust Tax Returns for the 2009 to 2012 financial years, which were prepared by the Trust's accountant, Mr David Eckersley, and lodged electronically with the Australian Taxation Office.

39 He stated that, in February 2012 his home was badly damaged by flood waters and that the flood damage reduced the value of his house.

40 Finally, Mr Chapman stated that he had never been involved in court proceedings of any nature on any prior occasion and had never been charged with an offence under the Act or any other legislation. He sought the exercise of the Court's discretion under s 10 of the Crimes (Sentencing Procedure) Act 1999 ('CSP Act'). It should be noted that, in submissions, counsel for the defendant abandoned any contention for the Court to exercise its discretion under s 10 of the CSP Act, but sought for the Court to make orders in favour of the defendants under s 10A of that Act.

Verdict

41 Having regard to the charges in this matter, the particulars of the offences, the Agreed Statement of Facts and the evidence, which I have described above, together with the submissions of the parties and a consideration of the matters relevant to sentencing, the Court accepts the pleas of guilty entered respectively by the corporation and Mr Chapman, and will enter verdicts accordingly.

Primary Submissions

Submissions for the Prosecution

42 Mr G P Diggins, solicitor, who appeared for the prosecutor, made oral and written submissions which, when taken together, are summarised as follows:

(1) The corporation owned and operated the premises. Those premises were formerly operated as an abattoir. After considering the viability of using the premises as a mushroom farm, it was decided that certain preparatory work would be undertaken incidental to that project. That work consisted of the removal of evaporators. The premises contained 20 cool rooms, each accommodated two evaporators. The evaporators were to be removed from seven of the cool rooms;

(2) "The workers" developed a method for the removal of the evaporator units which consisted of attaching two block and tackle units to steel rails in the ceiling of the cool rooms. The chains of the block and tackle units were to be attached to either side of the evaporator;

(3) It was accepted by the solicitor for the prosecutor, during the course of oral submissions, that, unlike a s 8 charge, the gravamen of a s 10(1) charge does not concern a failure to ensure a safe system of work, but, rather, a failure to ensure a safe premises. So much was reflected in the particulars of the charges brought against each defendant, which focussed on the failure to have in place at the premises an appropriate system of rigging. However, the prosecutor extended that proposition, in written submissions, submitting that as a result of the lack of a proper system of rigging, or anyone qualified to effect such a system, it was foreseeable that Mr Smith would depart from the system which was developed (this point shall be expanded upon below);

(4) The method employed consisted of "rigging" and "high risk work" for the purposes of the Occupational Health and Safety Regulation 2001 ('the Regulation'), see cls 264A and 264B. Clause 264F of the Regulation prohibited the performance of high risk work (and rigging) by persons not qualified or licensed for that work;

(5) The selection and inspection of the block and tackle units and chains, the selection of the carcass rails as the place to which the block and tackle units were to be secured, the setting up of such equipment, the application of slinging techniques, the movement of the evaporators and the dismantling of the block and tackle units were all tasks that fell within the prohibition imposed by cl 264F;

(6) Neither Mr Chapman, Mr Strang, Mr Smith nor Mr Peachey held any trade qualification or certificate of competency to permit them to undertake rigging work. None of them had any experience in detaching and removing evaporator units or performing similar work;

(7) The procedure adopted was devised in the absence of any knowledge of the weight of the evaporator units. There was no evidence of any external advice or assistance being obtained from an appropriately experienced, trained and certified person in relation to the development of the work procedure;

(8) Given that the system devised was "high risk" (by virtue of the Regulation) and required those who performed it to have relevant certificates of competency (which certificates none of the workers at the premises held), the system devised was, therefore, inherently defective;

(9) It was acknowledged that Mr Smith departed from the system of work devised for the removal of the evaporator unit. However, the prosecutor noted:

(i) Mr Smith was working alone;

(ii) The block and tackle units remained attached to the evaporator in Cool Room No 3 and, therefore, were not available to Mr Smith at the time he was removing the evaporator from Cool Room No 2;

(iii) The method originally developed and applied with respect to the removal of the first evaporator was changed or, at least, varied (acrow props had not been used during the removal of the first evaporator); and

(iv) Thus, the system of work was varied and Mr Smith was left to his own devices.

(10) A system had been devised for Cool Room No 3 which was incident free. However, this may be regarded as simply good luck. It was submitted:

The system of work implemented by Mr Smith for the removal of the evaporator in coolroom 2 was patently unsafe. The evaporator was "supported" by two acrow-props alone. The removal of the bolts inevitably resulted in the evaporator becoming unstable.

(11) It was submitted that:

Mr Smith's actions however need to be seen against a background comprised of the following:

(i) Mr Smith had no relevant qualifications or experience in relation to the removal of the evaporators.

(ii) Mr Smith had not undertaken such work, or similar work, previously (excluding the one evaporator he assisted in removing earlier that day).

(iii) The absence of a written safe work method statement.

(iv) The readily available inference that Mr Smith simply had no appreciation of the risk to his safety associated with use of the two acrow-props alone to support the evaporator.

(v) Nobody on site, including Mr Smith, was trained or qualified in the conduct of rigging and/or dogging. The work method of using the block and tackle units involved a contravention of the Regulation.

(vi) The block and tackle units remained attached to the sections of the evaporator unit removed from the ceiling of coolroom 3.

(vii) The fact that the sections of the evaporator removed from coolroom 3 were yet to be placed on the trolley.

(viii) The fact that the method of work involving use of the block and tackle units required at least two people.

(ix) Mr Smith's belief that the task of removing the evaporator unit in coolroom 2 had been left to him.

(x) Mr Smith was working alone.

(xi) Mr Smith was working unsupervised.

(xii) Mr Smith was effectively left to his own devices.

43 When these factors are combined with the expectation that a considerable amount of work remained to be performed at the time of the incident, Mr Smith's actions in departing from the earlier developed method of work, were foreseeable. (Reliance was placed, in this respect, upon Nash v Austerberry Directional Drilling Services Pty Ltd [2013] NSWIRComm 37 at [99] to [100].) The prosecutor referred to WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd [2001] NSWIRComm 50; (2001) 105 IR 81 at [45] to [46] and Inspector Simpson v Tomago Aluminium [2005] NSWIRComm 117 at [28] - both cases involving the operation of the Act in relation to a hasty, careless, inadvertent or inattentive worker.

44 The fact that the performance of particular work practices or the use of particular plant requires certification before it can be lawfully undertaken is significant. Such certification follows training and assessment. It is work regarded as being of sufficient complexity and involving sufficient risk ("high risk" in this instance, according to the Regulation) that persons without such training and skill (designed, as such, after proper assessment) are not permitted to perform it. It is foreseeable that a person not certified to undertake such work would adopt a different work practice.

45 In any event, to focus on the issue of Mr Smith's actions, it was submitted by the prosecutor, was to improperly focus on the manner in which the underlying risk to safety was realised, rather than on the risk to safety itself - a vice consistently warned against by this Court.

46 The particularised risk was the risk that persons at work at the premises detaching evaporator units, in particular Mr Jason Smith, would be struck by an evaporator unit.

47 The particularised risk existed in the absence of Mr Smith adopting the work method he did.

48 The realisation of Mr Chapman's expectation that Mr Peachey would assist Mr Smith in the implementation of that method would not have diminished the risk. Mr Peachey was similarly not authorised to perform such work. A specific practical illustration of the shortcomings in the work method was that it had been developed without knowing the weight of the evaporators.

49 It was submitted that the gravity of the risk to safety in the system of work implemented by Mr Smith was obvious. The injuries sustained by him served as clear evidence of the gravity and consequences of the risk. Those injuries had the real potential to prove fatal.

50 Further, in this regard, s 21A(2)(g) of the CSP Act also provides that substantial injury, emotional harm, loss or damage caused by an offence is an aggravating factor to be taken into account in determining the appropriate sentence for an offence.

51 The particularised measures that the corporation should have taken are all simple, obvious and inexpensive.

52 Having regard to the criteria relevant for determining the objective seriousness of a breach of the Act, the facts and circumstances of this matter properly lead to the characterisation of the corporate defendant's breach as serious.

53 Particular submissions were advanced in relation to Mr Chapman.

54 By operation of s 26(1) of the Act, Mr Chapman is deemed to have been a party to the offence committed by the corporation under s 10(1) because of his complicity in the offence. Section 26(1) does not merely provide for the punishment for an offence which was really committed by the company and is only "deemed" to have been committed by him: Hookham v The Queen (1994) 181 CLR 450 at 459; WorkCover Authority of New South Wales (Inspector Lane) v Australian Winch & Haulage Co Pty Ltd (2000) 102 IR 40 at [50] and Powercoal Pty Ltd and Anor v Industrial Relations Commission of NSW and Anor (2005) 145 IR 327; 156 A Crim R 269; 64 NSWLR 406 at [110] to [111].

55 The purpose of s 26 is to ensure individuals, such as Mr Chapman, who are responsible for the management of a corporation, are similarly responsible and culpable for the acts and omissions of the corporation: WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (2000) 99 IR 163 at [38].

56 Although Mr Chapman's culpability cannot be greater (and may be less) than that of the corporate defendant, the Act, nonetheless, requires that his culpability be assessed in discrete terms having regard to his role in the management of the corporation in the context of the objective nature and gravity of the offence as identified in relation to it: WorkCover Authority (NSW) (Inspector Maddaford) v Coleman (2004) 138 IR 21; and Walco Hoist at [38] to [39].

57 Mr Chapman was the manager of the corporation and was responsible for the work done at the abattoir on the day of the incident. He was present at the site on the day and was directly involved in determining the manner in which the task of removing the evaporators was to be performed.

58 As to the question of deterrence, the prosecutor submitted that both specific and general deterrence should figure in the Court's consideration of penalty.

59 General deterrence should be a significant consideration.

60 As to specific deterrence, it was submitted in relation to both defendants that specific deterrence would be at the low end (relying on Capral Aluminium v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [71] to [77]). Further, it was accepted that the evidence revealed the corporate defendant does not presently trade and has no plans to trade in the future.

61 It was also conceded that it was unlikely Mr Chapman would return to work in any capacity in the future. In the absence of the corporation trading, his likelihood to re-offend as a director is similarly constrained.

62 The prosecutor made reference to maximum penalty. It was submitted that the corporate defendant was not a previous offender for the purposes of the Act or the Occupational Health and Safety Act 1983. The maximum penalty applicable for the corporation was, therefore, $550,000.

63 Mr Chapman is similarly not a previous offender. The maximum penalty applicable is, therefore, $55,000.

64 The prosecutor put submissions as to subjective matters, as follows:

(i) The defendants' pleas of guilty were entered in the present case at an early stage. There are no factors which would disentitle the defendants to an allowance with respect to the utilitarian value of their plea, noting, in that respect, that "the 25% allowance outlined in R v Thomson; R v Houlton (2000) 49 NSWLR 383, whilst not binding, continues to provide guidance with respect to the maximum discount that should be allowed for the utilitarian value of a plea of guilty". The prosecution does not make any particular submission as to the quantum which should be allowed by the Court for the utilitarian value of those pleas.

(ii) As to Mr Chapman's health, the prosecutor acknowledged that there was evidence before the Court as to Mr Chapman's health problems, such as insulin dependent diabetes and hypercholesterolemia (although the diabetes condition is reasonably well controlled). It is submitted that Mr Chapman's health complaints may affect his ability to work. To the extent that his inability to work is relevant to his capacity to pay a fine, his health complaints may be relevant. It is otherwise submitted that Mr Chapman's health complaints are not of a type or magnitude that renders them of any particular relevance to the sentencing process.

(iii) Under s 21A(3)(i) of the CSP Act, provides that "remorse" may be taken into account as a mitigating factor in certain circumstances. For the Court to take remorse into account, there must be evidence before it capable of satisfying the respective limbs of s 21A(3)(i) and that the remorse, so demonstrated, is genuine. It is conceded that there is some evidence of contrition on the part of the defendants by way of their entering pleas of guilty and the assistance afforded to Mr Smith. However, the affidavit of Mr Chapman falls short of an express acknowledgement by himself or on behalf of the corporate defendant of responsibility for its actions and the injury, loss and damage thereby caused.

(iv) The defendants are not otherwise recorded and the prosecutor acknowledges that the Court may extend to the defendants the leniency normally extended to "first offenders".

(v) The defendants co-operated with the WorkCover Authority during the investigation: CSP Act, ss 21A(3)(m), 23.

(vi) Submissions were put in relation to the defendants' capacity to pay. Where a defendant seeks the benefit of section 6 of the Fines Act 1996, the defendant seeks the exercise by the Court of a discretion and, hence, bears an evidentiary onus. It is for the defendant to place sufficient, reliable evidence before the Court to enable the Court to be properly satisfied that the discretion conferred by the section should be exercised. The evidence is insufficient to discharge the evidential onus borne by the defendants.

(vii) It was submitted that:

[73] Dealing first with Mr Chapman, the evidence before the court is that he has minimal taxable income. It is however clear that he receives income by way of superannuation drawings. There is no evidence in relation to the size of Mr Chapman's superannuation fund nor of the amount and regularity of payments to him from that fund. There is no evidence in relation to the other assets owned by Mr Chapman. It appears however that Mr Chapman has an interest in both the corporate defendant and in Imperial Investments (NSW) Pty Ltd. The former still owns the abattoir. The latter owns the Imperial Hotel in Moree. No valuations of these properties are provided. Although there is reference to an outstanding bank loan of $140 000 in respect of the Imperial Hotel, the relationship that figure bears to the value of the hotel itself is not made clear.

[74] Mr Chapman is a primary beneficiary of the trust of which the corporate defendant is trustee. There is no evidence of what role the trust plays in his financial affairs.

[75] In relation to the corporate defendant, there is no evidence of the assets held by it. At the very least, it owns the abattoir. No valuation of that asset is provided.

[76] In the event that the defendant does submit that its financial means are such that it has a limited capacity to pay a fine, the court is respectfully reminded of the comments of Wright P in Ferguson v Nelmac Pty Ltd (1999) 92 IR 188:

"The financial position and more particularly the means of the defendant should be taken into account in relation to the question of penalty... 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."

(viii) There are no "extraordinary and highly exceptional circumstances" which arise in the present case such as would justify the making of any order pursuant to s 10. Mr Chapman was the manager of the corporate defendant responsible for the work being done at the abattoir on the day of the subject incident. He was present at the site on the day and was directly involved in determining the manner in which the task of removing the evaporators was to be performed.

(ix) The prosecutor seeks an order that the defendants pay the prosecutor's costs as agreed or assessed.

(x) The prosecutor also seeks a moiety of any fine imposed upon the defendants.

Submissions for the Defendants

65 Mr Magee made oral and written submissions which, taken together, are summarised as follows:

(1) The amended application for order against the defendants altered the nature of the charge (from a s 8(1) charge to a s 10(1) charge under the Act) and significantly narrowed the particulars of the allegations against the defendants;

(2) The charges the defendants pleaded guilty to were charges under s 10(1) relating to the safety of the premises over which they had control;

(3) By way of introductory remarks, it was contended that the method of work used by Mr Smith, when removing the evaporator in Cool Room No 2 was not the method "that had been discussed earlier between Mr Chapman, Mr Strang, Mr Smith and Mr Peachey and used to successfully remove the evaporator in coolroom 3";

(4) After discussing the judgment of the High Court in Markarian v R (2005) 228 CLR 357, it was submitted that the primary factors in the assessment of penalty were the nature and quality of the offence and subjective factors. Determining a penalty for an offence under the Act required a balancing of those factors;

(5) The defendants made the following written submission as to the objective seriousness of the offence:

[11] By their pleas of guilty, the Defendants accept that there was a risk to a Mr Smith of suffering injuries while performing work at the Premises.

[12] The nature of the particulars of the charges against the Defendants do not relate to an absence of a system or a blatant disregard for safety. On the contrary, the particulars of charge relate to:

(i) a failure to ensure that the evaporator unit was securely rigged prior to its attachment points being cut;

(ii) a failure to ensure that work done to detach and remove the evaporator unit only took place under the supervision of a person with adequate skills as a rigger, in particular a person with a Certificate of Competency in Basic Rigging;

(iii) a failure to stop work being done to detach and remove the evaporator unit until such time as there was a system in place that ensured the unit was adequately supported prior to its attachment bolts being cut.

[13] However, significantly, this is not a case where the Defendants:

(a) ignored a risk; or

(b) being aware of a risk, did not take any measures to address the risk.

[14] The work being undertaken at the Premises was not part of the Corporate Defendant's usual undertaking, which was to act as the corporate trustee for the G&N Chapman Family Trust. It was in its role as Trustee that the Corporate Defendant owned and controlled the Premises.

[15] Prior to the Incident Mr Chapman had taken a number of measures to ensure that the task of removing the evaporator units could be undertaken in a safe manner. These included:

(i) before removing the first of the evaporator units in the coolrooms, Mr Smith, Mr Peachey, Mr Strang and Mr Chapman discussed how they were going to remove the evaporator units;

(ii) the four men considered using a forklift but there was no access for a forklift as the door openings were too small, being approximately 800 mm wide;

(iii) a work procedure was devised for the removal of the evaporator units. This involved:

that two workers were to undertake the task of removing the evaporators;

the use of two block and tackle units to lower the evaporator units from the wall to the ground;

the block and tackle units were to be secured to the steel carcass rails which were attached to the roof of the coolroom (These rails were designed to hold multiple cattle carcasses and were determined to be of sufficient strength to hold the weight of the evaporator units);

the chains of the block and tackle would then be attached to either side of the evaporator unit;

(iv) a trolley was to be manufactured upon which the evaporator units could be placed after they were lowered from the wall using the block and tackle units.

[16] During the morning of 28 September 2009, the four men successfully used the work procedure that had been developed to remove one evaporator unit from the No 3 coolroom.

[17] After using the work method developed to remove the first evaporator, it was agreed to modify the procedure to add an additional safety feature and in particular to use two acrow-props to provide additional support to the evaporator units during the process of detaching them from the wall, to prevent any sudden movement of the evaporators.

[18] Later on 28 September 2009, Mr Chapman hired two acrow-props and brought them to the Premises for use in the process of removal of the evaporators units.

[19] There were sufficient workers available at the Premises on 28 September 2009 to allow for two persons, or more if needed, to undertake the task of removal of the evaporator units from the coolrooms.

[20] Mr Smith did not follow the work procedure that had been devised for the task of removing the evaporator units, when he attempted to remove the evaporator unit in coolroom 2.

[21] The three measures which the Defendant failed to undertake to prevent the risk - (see: particular f(i), (ii) and (iii) in Amended Application for Order in No. 1551 of 2011) - in essence go to the adequacy of the supervision of Mr Smith while he undertook the task in coolroom 2.

[22] In relation to the failure to ensure that Mr Smith followed the work procedure devised for rigging the evaporator units while he cut the bolts that attached them to the wall (see: particulars f(i) & (iii)), the Defendants acknowledge that they did not ensure that Mr Smith had rigged the evaporator unit using the block and tackle units to the steel carcass rails attached to the ceiling in the coolroom.

[23] Shortly before Mr Smith undertook the task, Mr Chapman had briefly left the Premises to obtain parts for the trolley to be used to move the evaporator units once they were removed from the walls.

[24] The Defendants acknowledge that such work should have taken place under the supervision of a person with adequate skills as a rigger. The Defendants acknowledge that none of the persons on site at the Premises on the day of the Incident had a Certificate of Competency in Basic Rigging.

[25] The Defendants admit their failings in this regard and are contrite in relation to the failures.

[26] However, having regard to all of the circumstances, this particular failure should be regarded as being at the low end of the scale of seriousness.

[27] Having regard to all the circumstances, the objective seriousness of the offence ought be assessed in the low range of offences against the OHS Act (bearing in mind that the maximum penalty should be reserved for the worst case of offence - see, for example, Camilleri's Stock Feed Pty Limited v Environmental Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P).

(6) A further factor relevant to a consideration of the objective seriousness of the offence and the level of culpability of the defendants is that Mr Smith appeared to have undertaken the task of removing the evaporator unit from Cool Room No 2 without having been given any direction to do so and undertook it using a method which differed from that which had earlier been developed for the task. Whilst it was accepted Mr Smith should have been supervised by a person with the requisite competency, and that he had no relevant qualifications, it cannot be argued against the defendants that, had Mr Smith adopted the same method which had earlier been used in Cool Room No 3, he would have been exposed to the same risk the subject of the charge. The risk arose, in part, because of the method adopted by Mr Smith;

(7) Further, the charges against the defendants relate to the risk to Mr Smith in regard to the work he undertook in Cool Room No 2; the charges do not relate to the risk or any matters that arose in relation to the system of work used in relation to the removal of the evaporator unit which had occurred earlier on the day of the incident in Cool Room No 3. The adequacy or otherwise of the system used in Cool Room No 3 is not a matter which can be relied upon, as the prosecutor appears to have done in its written submissions, in considering the objective seriousness of the offences;

(8) However, in circumstances where Mr Smith had assisted with the removal of an evaporator earlier on the day of the incident (accepting that, apart from that experience, Mr Smith had not previously undertaken work relating to the removal of evaporators) and was part of the group of workers who had discussed and developed a method of work (which method, leaving aside its adequacy or otherwise, had been implemented in Cool Room No 3 without incident) it was not foreseeable that Mr Smith would undertake work in Cool Room No 2 in the manner he did;

(9) It was accepted there was the absence of a written safe work method statement. However, it was submitted, there is no evidence that Mr Smith would not have, in any event, taken the steps he did;

(10) The maximum penalties which can be imposed for the offence are those referred to by the prosecutor;

(11) As to the question of deterrence, little weight should be given to general deterrence and there was limited, if any, need for specific deterrence. The circumstances of the incident were not such that it would require a substantial penalty to achieve the goals of prevention and deterrence;

(12) As to specific deterrence, the following submissions were made:

[31] The factors that would weigh against the imposition of a component of a fine in relation to specific deterrence are that:

(a) prior to the Incident, Mr Chapman had a strong commitment to occupational health and safety reflected in his over 30 years operating businesses in various industries without any conviction for an offence under OHS legislation;

(b) the task being undertaken that led to the risk was not part of the Corporate Defendant's usual business or undertaking;

(c) prior to the Incident, the Defendants had given consideration to the development of a safe work procedure to undertake the task and had modified the procedure after it was first used to add an additional safety feature;

(d) following the incident, the Defendants immediately ceased the work being undertaken and did not continue with the work of removal of the evaporator units from coolrooms at the Premises;

(e) the Corporate Defendant did not proceed with the use of the Premises as a mushroom farm;

(f) subsequently, licensed demolition contractors demolished most of the building at the Premises;

(g) the Corporate Defendant did not thereafter conduct any business or undertaking either at the Premises or elsewhere;

(h) the Corporate Defendant does not employ persons;

(i) the Premises remain disused apart from one shed on the site that is currently rented out to a local tradesperson;

(j) the intention is to sell the Premises if a buyer for it can be found;

(k) due to his various health conditions, which have adversely affected his mobility, and his capacity to work, Mr Chapman does not presently undertake any work and does not have any present or future intention to undertake paid work or operate a business.

[32] As a result of the above mentioned factors there is little, if any, risk that the Corporate Defendant or Mr Chapman will expose persons to risk or commit a further contravention of health and safety legislation.

[33] The Court would be satisfied that the risk of re-offending is low or non-existent and therefore the Court can disregard the element of specific deterrence.

(13) Further, the defendants submitted that there were no aggravating factors which were relevant in the matter (see s 21A of the CSP Act);

(14) The Court should have regard to the nature of the corporation which was essentially a "one-man company". The company is a corporate trustee and, although "technically" the offence was due to the failure of the corporation "effectively and as a common sense matter the penalty will be met by Mr Chapman and his family". The penalty to be imposed on the corporation should be modified accordingly;

(15) In such circumstances, should the Court determine it appropriate to impose a fine, it should be substantially less than if the corporation was a functioning company with assets of a substantial kind (see Haynes v C I & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 at 457);

(16) It was submitted that a number of significant subjective factors and factors in mitigation should be taken into account in imposing sentence, as follows:

(a) There is no record of any prior safety conviction for either defendant, notwithstanding the corporation was incorporated in 2006 and Mr Chapman had been conducting a business for more than 30 years, including enterprises in the panel beating, farming and hotel industries. Given the variety of industries and activities Mr Chapman had undertaken over a significant period of time, such a record was very much to his credit. That previous good record reflects and endorses Mr Chapman's approach and commitment to safety;

(b) Mr Chapman is a person of good character, being an active participant in the local community in Moree and having contributed directly as an employer and through donations and community involvement;

(c) The defendants have good prospects of rehabilitation and little, if any, prospects of re-offending. The corporation does not conduct any business or undertaking, and Mr Chapman's health, his previous good record, the steps taken after the incident and his contrition indicate that he has good prospects of rehabilitation;

(d) The defendants have shown remorse and provided evidence that they have accepted responsibility for their actions. By entering pleas of guilty, the defendants have acknowledged and accepted responsibility for their actions. The affidavit of Mr Chapman (at [37] to [38]) adequately, for the purposes of the CSP Act, demonstrated his contrition and remorse in relation to the incident. The steps taken to assist Mr Smith after the incident also demonstrated his contrition and remorse;

(e) The defendants have fully cooperated with the WorkCover Authority in relation to the incident;

(f) The defendants entered pleas of guilty as to the amended application for order "at the earliest occasion". The amended charges were substantially different to the charges originally brought against the defendants. A good deal of Court and witness time has been saved by the guilty pleas;

(g) In circumstances where a plea of guilty was entered at the earliest occasion, the defendant is entitled to the full benefit of the discount of the penalty (25 per cent) imposed to reflect the early plea in accordance with the principles in R v Thomson; R v Houlton; Cameron v R (2002) 209 CLR 339;

(h) The Court should make an order under s 10A of the CSP Act. Relying upon the judgment of Howie J in R v Wilhelm [2010] NSWSC 378, the defendants contend that such an order was appropriate given the corporation was primarily the controller of the premises in its capacity as trustee of the trust "and did not undertake any business or other undertaking before the work done in relation to the evaluation of the suitability of the [p]remises as a mushroom farm, and does not currently undertake any business or undertaking";

(i) Section 10A is applicable to Mr Chapman due to his role as a director of the corporation, his prior record, his medical condition and the fact that he no longer works or operates a business, nor does he have any intention of running any other business;

(j) The prosecution process and the conviction would suffice to achieve the goals of punishment, deterrence and rehabilitation in this case;

(k) Further submissions were made by the defendant as to the applicability of s 10A to the corporation which shall be dealt with separately under the heading 'Supplementary Submissions';

(l) An alternative submission was made in the event that the Court did not accept the matter should be dealt with under s 10A of the CSP Act. In such an event, the Court should have regard to the means and financial position of the defendants in imposing any fine pursuant to s 6 of the Fines Act;

(m) The following submissions were made on behalf of the corporation in this respect:

[64] The Corporate Defendant has no employees. The Corporate Defendant is not trading at present and there are no plans for it to trade in the future.

[65] The 2009 Trust Tax Return for G & N Chapman Family Trust (for which G & N Chapman Pty Ltd is the trustee) shows total business income of $693 and total expenses of $16,237, making a net loss of $15,543.

[66] The Trust Tax Returns for the 2009 to 2012 financial years each show a net loss, as follows:

(a) 2009 - net loss of $15,543;

(b) 2010 - net loss of $31,910;

(c) 2011 - net loss of $2,942;

(d) 2012 - net loss of $13,247.

[67] The Trust Tax Returns for the 2009 to 2012 financial years were prepared by the Trust's accountant, Mr David Eckersley, and lodged electronically with the Australian Taxation Office.

(n) In relation to Mr Chapman and the Fines Act, the following submissions were made:

[68] At present, Mr Chapman not working due to his health and, accordingly, is not generating any income. There is little prospect of Mr Chapman returning to work in any capacity in the future.

[69] Mr Chapman's 2009 Taxation Return shows that his gross taxable income for that financial year was $20,324. This was made up mainly of income from his superannuation fund ($12,185), a partnership with his wife Jackie ($7,065) and some dividends.

[70] Mr Chapman's Taxation Returns show that his income has declined over the past four financial years:

2009 - taxable income of $20,324;

2010 - taxable income of $20,555;

2011 - taxable income of $2,119;

2012 - taxable income of $35.

[71] Annexed to Mr Chapman's affidavit and marked "GAC 1" are file copies of his Individual Tax Returns for the financial years ending 30 June 2009, 30 June 2010, 30 June 2011 and 30 June 2012. These Tax Returns were lodged electronically with the Australian Taxation Office by Mr Chapman's accountant, Mr David Eckersley, of the Cambio Group, Southport QLD.

[72] Due to his lack of family income, Mr Chapman was drawing on his superannuation. To supplement his superannuation drawings, in 2011 Mr Chapman's wife, Jacqueline, obtained part-time employment at the local school, working two days a week.

[73] In the middle of the first school term of 2013, his wife requested and obtained full-time work at the school.

[74] Mr Chapman also suffered further financial detriment as a result of the 2012 floods. (see: Affidvat of Mr Chapman at [64] - [65].)

[75] While Mr Chapman is a shareholder with his brother in the corporation which owns The Imperial Hotel, it is apparent that this is not an asset that can be readily accessed to pay for any fines by Mr Chapman.

[76] The Hotel was closed in 2006 and was put up for sale. Mr Chapman still owes the bank approximately $140,000.00 on the loan taken out to purchase the hotel. He is also behind in paying the body corporate fees and Council rates. The fact that it has remained on the market, unsold, for six years, demonstrates that it is not, in a practical sense an asset that should be considered when having regard to his means to pay any fine.

[77] The farming properties that were previously owned by Mr Chapman and his brother have been sold.

[78] It is also important to note that the Old Abattoir site property is not an asset of Mr Chapman or the Corporate Defendant that they can draw upon to pay any fine imposed by the Court. At all material times it has been an asset of a Trust.

[79] In any event it is also apparent that it is not an asset that is readily available to meet any fines imposed in these matters, as it has remained unsold for over 3 years.

(o) It was accepted by counsel for the defendants that, should the Imperial Hotel ultimately be sold, there would likely be some amount of net profit which would be equally divided between Mr Chapman and his brother. The Imperial Hotel is currently on the market for $300,000. However, the Hotel has been on the market for some time and, as such, is not a liquidated asset in terms of Mr Chapman's means to pay any fine;

(p) Whilst it was accepted that, legally, the corporation was the owner of the premises, it was submitted that the corporation holds the property as the corporate trustee for the trust and, thus, the benefit of the value of the land resides in the trust. The corporation holds no relevant assets and makes no relevant income at present. It was accepted that Mr Chapman was a primary beneficiary of the trust who was entitled to the value of the property;

(q) The Court would be satisfied that the material currently before it is sufficient to discharge the onus placed upon the defendants to establish matters in relation to their ability to pay any fines imposed upon them by the Court;

(r) Thus, after assessing the appropriate fines to be imposed having regard to the objective and subjective factors relevant to sentencing, the Court should then reduce the fines to take into account the defendants' limited means to pay any fines.

Supplementary Submissions

66 At the sentencing hearing, the Court requested the parties provide further short submissions on the issue of whether the provisions of s 10A of the CSP Act and s 6 of the Fines Act 1996 were applicable to a corporate defendant.

67 The defendants contended that it was open to the Court to exercise its discretion in favour of the corporation under either provision. The prosecutor concurred with that contention.

68 The submissions made by the defendants, in this respect, were as follows:

[2] Relevantly, section 10A of the CSP Act provides:

10A Conviction with no other penalty

(1) A court that convicts an offender may dispose of the proceedings without imposing any other penalty.

[3] The CSP Act does not define the term 'offender'. However, it is apparent from the scheme of the CSP Act that it applies to offences committed by both natural persons and bodies corporate: (see for example s.16 of the CSP Act).

[4] There is nothing in the CSP Act which would support a conclusion that s.10A is not applicable to a body corporate which is being sentenced for an offence. Based on the ordinary meaning of the term offender a body corporate convicted of an offence under the OHS Act would be an offender.

[5] This approach is consistent with the approach to the interpretation of legislation required by the Interpretation Act 1987 (NSW) and in particular section 11.

[6] While the Interpretation Act does not define the term "offender", it does define "person" as including an individual, a corporation and a body corporate or politic. By necessary implication, an "offender" would also extend to an individual and a corporation.

[7] Consistent with the authorities on the approach to statutory construction, if it had been the intention that section 10A of the CSP Act was to only apply to individuals who were offenders, the section would have expressly stated that limitation.

[8] The authorities in the Supreme Court of NSW and Court of Criminal Appeal where consideration has been given to the application of section 10A of the CSP Act have only dealt with natural persons. There does not appear to have been any consideration of its application to bodies corporate (see: R v Wilhelm [2010] NSWSC 378; Bikhit v R [2007] NSWCCA 202; R v Chan [2009] NSWSC 290).

[9] The authorities in the Land and Environment Court of NSW where consideration has been given to the application of section 10A of the CSP Act have also only dealt with natural persons. There does not appear to have been any consideration of its application to bodies corporate (see: Cessnock City Council v Quintaz Pty Limited; Cessnock City Council v McCudden [2010] NSWLEC 3 (11 January 2010); Zhu v Auburn Council [2009] NSWLEC 97 (30 June 2009); Kirzner, Alex v Manly Council; Kirzner, Natalia v Manly Council [2009] NSWLEC 13 (16 February 2009); Shellharbour City Council v Stewart [2008] NSWLEC 151 (23 April 2008)).

[10] In Inspector Jennifer Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138 (6 June 2007), the President, Boland J considered a submission that the Crown be given the benefit of the provisions of s.10A of the CSP Act. While the application was not acceded to, there was no suggestion by Boland P that such an order was not available at law.

[11] In Inspector James v South Coast Excavators Pty Ltd [2011] NSWIRComm 35 (31 March 2011) Kavanagh J considered at [46] -[52] the circumstances in which a court make an order under the provisions of s.10A of the CSP Act. While the application was not acceded to, there was no suggestion by Kavanagh J that such an order was not available at law to a body corporate.

[12] Similarly in Inspector Richard Mulder v Process Engineering Group Pty Ltd and Anor [2008] NSWIRComm 36 (18 March 2008), Kavanagh J dealt with an application by both a body corporate and an individual for an order pursuant to s.10A of the CSP Act. Her Honour at [41]-[42] refused to grant the application, but did not suggest that such an order was not available at law to a body corporate.

[13] In Inspector Steven Nikolovski v Dennis Sewell [2010] NSWIRComm 26 (2 March 2010), Backman J at [28] granted an application by an individual for an order pursuant to s.10A of the CSP Act. Her Honour was not required to give consideration to whether such an order was not available at law to a body corporate.

[14] In Regan v UGM Engineers Pty Ltd [2011] NSWIRComm 90 (7 July 2011), Marks J dealt with an application by a body corporate for an order pursuant to s.10A of the CSP Act. His Honour at [34] refused to grant the application, but did not suggest that such an order was not available at law to a body corporate.

[15] In Inspector Ochoa v Williams [2010] NSWIRComm 93, Marks J at [43] granted an application by an individual for an order pursuant to s.10A of the CSP Act. His Honour was not required to give consideration to whether such an order was not available at law to a body corporate.

[16] Therefore, there is nothing in the authorities or the language of the section which would preclude its application to a corporation who was an offender.

[17] The Fines Act does not define the term 'accused'. However, it is apparent from the scheme of the Fines Act that it applies to offences committed by both natural persons and bodies corporate: (see, for example, ss.98 & 99 of the Fines Act which deal with enforcement action in relation to fines imposed on bodies corporate under the Act).

[18] There is nothing in the Fines Act which would support a conclusion that s.6 is not applicable to a body corporate which is being sentenced for an offence. Based on the ordinary meaning of the term 'accused', a body corporate charged with an offence under the OHS Act would be an accused.

[19] The Industrial Court has traditionally had regard to the provisions of s.6 of the Fines Act in considering the means of a corporate defendant in relation to the appropriate penalty to be imposed.

[20] In McColl v John Watson Building Services Pty Ltd [2004] NSWIRComm 353, the Full Court adopted the principles distilled from the authorities by Marks J in Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSW IRComm 339 at [24]-[25].

[21] In McColl, the Full Court stated at [23]:

"The application of the provisions of s 6 of that Act and legislation to similar effect were comprehensively reviewed by Marks J in Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSWIRComm 339 at paragraphs [14] and following. That judgment also reviews the application of s 6 of the Fines Act to corporate defendants in prosecutions brought under the occupational health and safety legislation as determined by this Court both at single judge and appellate level as well as the standard of proof which applies, including the onus on a defendant to put forward such material by way of evidence as will assist a court in applying the provisions of s 6."

[22] Consistent with the approach in McColl, the Court can have regard to the means of the Corporate Defendant in this matter to pay any fine imposed upon it:

... a section that has recently been added to the armoury of the sentencing court in such a case where the Court indicates that the charge was deserving of a conviction but one where it is deserving of no other punishment in the circumstances of the particular case (at [36]).

69 The prosecutor also filed supplementary submissions in support.

70 As to s 10A of the CSP Act, the prosecutor submitted as follows:

[3] Boland J (as his Honour then was) in Inspector Jennifer Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138 at [48] stated as follows:

As for s 10A, that was inserted into the Crimes (Sentencing Procedure) Act in 2006. In the second reading speech (Legislative Council, 21 November 2006, p 4326) the purpose of s 10A was explained:

Schedule 1.9 makes a number of amendments to the Crimes (Sentencing Procedure) Act 1999. Item [1] creates a new sentencing option for courts by inserting new section 10A providing that the court may decline to make any further sentencing order other than the recording of a conviction against the person. This option addresses an anomaly in the sentencing regime to overcome situations where inappropriate sentences have been imposed such as fines of 50¢. Imposing very small nominal fines costs the courts, and State Debt Recovery Office, more to administer and recover, than the value of the fine; and where the offender is already serving a sentence of imprisonment, the fine is rarely recovered in any event. This amendment will address such cases.

[4] It is submitted that there is no reason in principle why an order under section 10A of the Crimes (Sentencing Procedure) Act 1999 is not available at law to a corporate defendant. Whether such an order should be made, in particular in the context of breaches of the Occupational Health and Safety Act 2000, is a separate matter not the subject of these submissions.

71 As to s 6 of the Fines Act, the prosecutor submitted:

[5] It is submitted that there is no reason in principle why section 6 of the Fines Act is not available at law to be considered in the sentencing of a corporate defendant. Again, whether the evidential requirements for an application of the section have been met in the present proceedings is a separate matter not the subject of these submissions. The prosecutor relies upon its earlier written submissions ([71] to [76]) in this latter regard.

[6] The defendants' submissions refer to the decision of the Full Bench in McColl v John Watson Building Services Pty Ltd [2004] NSWIRComm 339. In that decision (as noted in the defendants' submissions) the Full Bench agreed with and adopted certain principles distilled from the discussion of the authorities contained within the judgment of Marks J in Inspector Mansell v Eleven Lighting Pty Ltd.

[7] The principles distilled by the Full Bench are set out at [24] in McColl:

24 We agree with and adopt the following principles which may be distilled for present purposes from the discussion of the authorities contained within the judgment in Inspector Mansell v Eleven Lighting Pty Ltd:

1. This court is obliged to take into account the means of a defendant to pay any penalty by virtue of s 6 of the Fines Act.

2. The imposition of a fine on a corporation may have different ramifications to the imposition of a fine on an individual where imprisonment or some other penalty may be available as an alternative sanction. That alternative is not available in the case of a corporation.

3. A defendant who wishes to rely on the provisions of s 6 to temper the amount of any monetary penalty bears the onus of putting such evidence in support as is appropriate before the court and bears the onus on the basis of the balance of probabilities of satisfying the court as to the truth of such evidence and its relevance to the fixing of penalty.

4. Whilst it is for a corporate defendant to fully disclose its financial state, it is for the prosecutor to check that information in order to assist the court in determining the propriety of taking that evidence into account in imposing a monetary penalty. It is inappropriate for the court to exercise an inquisitorial role in this regard.

[8] While McColl does not in direct terms address the question of the applicability of section 6 of the Fines Act to a corporate defendant as opposed to a defendant who is a natural person, it is submitted that it is implicit in the decision that the section is so applicable.

[9] At paragraph 19 of the defendants' submissions it is stated that the Industrial Court has traditionally had regard to the provisions of section 6 of the Fines Act in considering the means of a corporate defendant in relation to the appropriate penalty to be imposed. In this regard the prosecutor refers to the various cases mentioned in [58] to [60] of the decision of Staff J in Inspector Hall v Raydaz Design Pty Ltd [2012] NSWIRComm 81.

Relevant Principles

72 I discussed the relevant general principles for sentencing in this jurisdiction in some detail in Inspector Howard v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92; (2009) 186 IR 125 ('Cross City Tunnel') and more recently in Inspector Dall v Ullrich [2012] NSWIRComm 87 and Inspector Middleton v Cafe C Pty Ltd [2012] NSWIRComm 131. I do not propose to repeat those principles here. Rather, I generally adopt the principles stated in those judgments and the approach to the CSP Act adopted in Cross City Tunnel at [191].

Consideration

Objective Features

73 The corporation was charged, in an amended application for order, under s 10(1) of the Act in its capacity as a controller of premises. It was an agreed fact that, at the relevant time, the corporation, as trustee for the trust, was exercising control over the premises as the owner of the premises. By its ownership of the premises, the corporation had the power to direct and compel corrective action to ensure safety within the operation of s 10(1) of the Act: WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Limited and Another [2000] NSWIRComm 277 at [196] ('McDonald's'). By s 26(1) of the Act, Mr Chapman, as a director of the corporation, was charged with the same offence.

74 The nature and extent of the duty created by s 10(1) was considered by a Full Bench of this Court in Inspector Walker v Roads and Maritime Services [2012] NSWIRComm 105. The Full Bench found, at [23] to [25]:

23 The defendant's contentions invited a narrow approach to the construction of s 10(1), confining the duty imposed by that section to the duty of controllers of premises to ensure that the physical or inherent condition of the premises, when being used as a place of work, is such that the premises are safe and without risk to health. Such a construction necessarily reads out of the section any duty on controllers to ensure that the systems of work used in conjunction with the premises do not result in the premises becoming unsafe. The defendant's approach did not envisage that the safety of premises could be affected by the activities occurring thereon. Rather, the safety of premises was confined solely to the attributes of the premises themselves.

24 In inviting that narrow approach to the construction of s 10(1), the defendant focussed its submissions upon the meaning of the concept of "[a] person who has control of premises" and the definition of the "premises" which that person must ensure are safe and without risks to health. In approaching the construction of the section in that manner, the defendant did not place any great emphasis on the words "used by people as a place of work".

25 Under s 10(1), a person commits an offence where that person has control of premises as defined, the premises are used by people as a place of work and the person fails to ensure that the premises are safe and without risk to health. The eastern shoulder of the F3 Freeway at Warnervale, when not being used as a place of work, was unlikely to be inherently unsafe. However, when that premises was used by people as a place of work, the nature of the premises, in that context, had to be reconsidered by the controller and steps taken to ensure that it was safe for those performing work there. It is our view that the defendant's approach to the construction of s 10(1), confining the duty under that section to a duty to ensure the premises are not inherently unsafe, involves a considerable reading down of the section. However, it is unnecessary, given the conclusions reached, to offer any further view as to the question of construction.

75 Whilst the Full Bench did not make a conclusive finding as to the construction of s 10(1) and the extent of the duty created thereunder, it is suffice to say, for the purposes of this judgment, that the extent of the obligation on controllers of premises under s 10(1) of the Act is limited to those risks that arise in relation to the "premises" (although is not necessarily confined to the physical nature of the premises, per se). In that sense, the obligation under s 10(1) is distinct from that which arises under s 8(1), which is concerned with the work being conducted at a premises. The consideration of the objective seriousness of the offence in these matters shall proceed on that basis.

76 The Court must first, and primarily, consider the objective seriousness of an offence when sentencing under occupational health and safety legislation. I discussed the principles applicable to a consideration of the objective seriousness of an offence in Ullrich at [43] to [45].

77 When constrained by the particulars of the charges, the relevant risk in the present matters was the risk that persons at work at the premises detaching evaporator units, in particular Mr Smith, would be struck by an evaporator unit.

78 This matter concerns a failure to ensure that the premises, being used by people as a place of work, were safe and without risks to health. In particular, the defendants failed to ensure that the activities occurring at, or the systems used in conjunction with, the premises did not result in the premises becoming unsafe. The measures which would have obviated the risk, as described in the particulars, were as follows:

(1) Ensuring the evaporator unit was securely rigged prior to its attachment points being cut;

(2) Ensuring that work done to detach and remove the evaporator unit took place under the supervision of a person with adequate skills and qualifications as a rigger; and

(3) Ensuring that work being done to detach and remove the evaporator unit was halted until such time as there was a system in place that ensured the unit was adequately supported.

79 There are a number of factors which increase the objective seriousness of the offence including the foreseeability of the risk, the seriousness of the injury suffered and the availability of simple remedial measures (see Cross City Tunnel at [191(i)] to [191(iii)]).

80 Work was being undertaken by persons at the premises for the purpose of evaluating the suitability of redeveloping the premises from a former abattoir site into a mushroom farm. The premises housed large, heavy evaporator units within its former cool rooms, which units were suspended above the floor. The incident occurred in the course of work which was being carried out to alter the premises for that purpose by way of the removal of the evaporator units.

81 The nature of the work being undertaken at the premises, which involved the rigging of evaporator units in order to detach them from the walls, was work which was defined, by cl 246B of the Regulation, as "high risk". As such, it was work for which appropriate qualifications were required. The failure by the defendants to ensure that the work occurring at the premises was supervised and/or undertaken by a person with such qualifications was, on any objective consideration, a serious breach of the Regulation. Indeed, there was no person present or working at the premises at any stage on the day of the incident with any relevant or appropriate rigging qualifications (nor was any such person consulted at any time prior to the incident). That is relevant to a consideration of the objective seriousness of the offence in these matters: Graincorp Operations Limited v Inspector Mason [2006] NSWIRComm 304; (2006) 157 IR 103 at [25].

82 The degree of foreseeability of a risk to safety is a significant factor to be taken into account when assessing the level of culpability of a defendant. Hence, the existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a relevant factor in the assessment of the gravity of the offence and will necessarily result in an offence being more serious in nature: Cross City Tunnel at [191](i). In considering the question of foreseeability, the Court must assess whether the risk of harm was conceivably foreseeable to the reasonable person in the position of the defendant, and not whether the defendant subjectively foresaw the risk: Environmental Protection Authority v N (1992) 26 NSWLR 352 at 358 and 359 and Inspector Stephen Charles v Premier Precast Pty Limited [2009] NSWIRComm 136 at [9].

83 The risk as defined in the charges, namely, that persons at work at the premises detaching evaporator units, in particular Mr Smith, would be struck by an evaporator unit, was foreseeable for a number of reasons:

(1) The procedure for the task of detaching evaporator units at the premises was developed spontaneously, or 'on-the-go', at the time the first evaporator was being removed from Cool Room No 3 (and was altered during the process of that removal to add the use of acrow props). There was no written safe work method statement developed for the task prior to it being undertaken;

(2) The procedure adopted involved, as earlier mentioned, the rigging of the evaporator units using block and tackle units attached to steel carcass rails in the cool rooms. Despite rigging being defined by cl 246B of the Regulation as "high risk work" for which qualifications were required, neither Mr Smith nor any person working or present at the premises on the day of the incident had qualifications relevant to the conduct of rigging, nor experience in detaching and removing evaporator units or performing similar work. No external advice or assistance was obtained from an appropriately certified person in relation to the procedure. There was no knowledge on the part of the defendants, nor any person working at the premises, as to the weight of the evaporator units, despite the fact that the procedure adopted by the defendants clearly showed a recognition that each evaporator unit was heavy;

(3) Mr Smith commenced work in Cool Room No 2 without direction (although it was his understanding that the removal of the evaporator unit in Cool Room No 2 had been left to him) and adopted a new procedure which was not consistent with the procedure which had been developed and used in Cool Room No 3. Whilst Mr Smith was clearly aware of the procedure which had been developed and used in Cool Room No 3, having been involved in its creation and implementation, it was nonetheless foreseeable that he may adopt a different procedure in Cool Room No 2 which would place him at risk in the manner contemplated in the charge. It is foreseeable that an untrained employee, holding no qualifications and having had no relevant experience in the work in question, may improvise or modify the ad hoc system developed for Cool Room No 3, particularly when he was unsupervised, there was no written safe work method statement and even the system used in Cool Room No 3 was in a state of refinement vis-à-vis the use of acrow-props. Further to that last consideration, it may be noted that the acrow-props had not yet been used at the premises on the day of the incident (having arrived at the premises after the evaporator unit in Cool Room No 3 had been lowered using the block and tackle units) and Mr Smith had not witnessed or had first hand experience in the use of the acrow-props;

(4) This is not to suggest that the defendants had not developed an informal system which, if adopted, may well have avoided the incident (which factor must also be taken into account (as I do immediately below) in assessing the objective seriousness of the matter), but rather that the work method adopted was such that a departure from the method, of the kind embarked upon by Mr Smith, was foreseeable (although not, of course, foreseen).

84 I accept the submission by counsel for the defendants that some measures had been taken to ensure the task of removing the evaporators could be undertaken in a safe manner. Those measures included: a discussion prior to commencing work as to how best to undertake the work, including the consideration of the use of a forklift; the development of a work procedure involving the use of two workers, two block and tackle units and the manufacture of a trolley; the modification of the procedure to add the additional safety feature of two acrow-props which Mr Chapman left the premises to ascertain; and, the provision of a sufficient number of workers to undertake the work in accordance with the procedure adopted.

85 As the Court noted in McDonald's at [219] (citing Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Ltd (1999) 92 IR 8 at 33 and WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Industrial Relations Commission, NSW, Matter No. CT 1280 of 1995, Hill J, 2 April 1997) at 21) and, more recently, Inspector Nicholson v Gallagher [2012] NSWIRComm 121 at [48], whilst the existence of safety procedures and systems is a factor which is relevant to the assessment of the seriousness of the offence (and which may mitigate the objective seriousness of the offence), those systems must also include searching for and identifying all possible risks and instituting safety measures to guard against those risks.

86 When viewed in the context of the risk to safety occasioned at the premises, it is apparent that the systems in place prior to the incident were inadequate and flawed, as specified in the charges.

87 The balancing of these considerations warrants the conclusion that the defendant is entitled to a reduction in penalty in consideration of the systems which were in place at the premises prior to the incident.

88 A related consideration is the availability of remedial measures that were straightforward or simple. An offence will be a serious one where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and feasible: Cross City Tunnel at [191(i)] citing Powercoal v Morrison at [90].

89 I accept the submission of the prosecutor that measures which could have been taken by the defendants, as particularised in the charge (that is, providing adequate rigging for the evaporator units and ensuring supervision of work by a qualified person), were simple, obvious and inexpensive. The risk in this matter could have been avoided by the taking of the particularised measures which were entirely within the control of the defendant.

90 A final consideration, in this respect, is the relationship between the seriousness of the injuries suffered and the gravity of the offence. Whilst the fact that injury occurred does not automatically dictate the seriousness of the offence, a breach where there was every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences. In such circumstances, the occurrence of serious injury may manifest the degree of seriousness of the relevant risk: Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] and [18]; Capral Aluminium at [94] and [95]; McDonald's and Rodney Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364 at [31] to [33].

91 In the present case, the risk carried the potential for a serious outcome which was ultimately manifested in the serious injury of Mr Smith.

92 It is appropriate to consider two further matters going to the question of objective seriousness. The first is the maximum penalty for the offence (see Cross City Tunnel at [192(i)]). The maximum penalty for the corporation, being a first offender, is $550,000. The maximum penalty for Mr Chapman, also being a first offender, is $55,000.

93 The second consideration is deterrence (see Cross City Tunnel at [192(iii)]). General deterrence is applicable in relation to this offence. It is necessary to ensure that any penalty imposed on the corporation and Mr Chapman properly reflects the need for general deterrence so as to draw attention to those who engage in work involving general labouring and the removal of machinery to the appropriateness of implementing a system of rigging which obviates the risk of serious injury from being struck by falling machinery, and conforms with regulations designed to minimise "high risk" situations (as defined in cl 264B of the Regulation) manifested at the time of the incident.

94 Specific deterrence, in relation to both defendants, is of much less significance. It was accepted by the prosecutor that the corporation had ceased all operations occurring at the premises immediately following the incident. No work has subsequently been carried out at the premises and it remains on the market. It was further accepted by the prosecutor that the evidence revealed the corporation does not presently trade and has no plans to trade in the future. It does not employ any persons. Further, it was unlikely that Mr Chapman would return to work in any capacity in the future due to health problems including insulin dependent diabetes and hypercholesterolemia.

95 It was submitted by counsel for the defendants that specific deterrence would not be a component in any penalty which may be given to either defendant in these matters. In addition to the points acknowledged by the prosecutor, the following factors were relevant: Mr Chapman had a strong commitment to occupational health and safety which was reflected in his having no prior convictions in over 30 years of operating businesses; and, the fact that the task being undertaken at the premises was not part of the corporation's usual business or undertaking.

96 I am satisfied that the risk of the corporation or Mr Chapman re-offending is, in the circumstances, low or non-existent. As a result, there will be only a negligible element for specific deterrence in the penalty for both defendants: Capral Aluminium at [77].

97 It may be noted that although Mr Chapman's culpability cannot be greater (and may be less) than that of the corporation, the Act, nonetheless, requires that his culpability be assessed in discrete terms having regard to his role in the management of the corporation in the context of the objective nature and gravity of the offence as identified in relation to the company: Maddaford v Coleman.

98 By s 26(1) of the Act, as noted, Mr Chapman is taken to be responsible and culpable for the acts and omissions of the corporation. This Court has previously held that, in assessing the culpability of a defendant charged under the Act by virtue of s 26(1), it is not a question of balancing the relative contribution to the offence by the corporation on the one hand and the defendant director (or a person concerned in the management of the corporation) on the other, but, rather, the Court proceeds upon the basis that the purpose of s 26(1) is to make an individual who was 'complicit' in the offence (see, for example, Hookham v The Queen and Powercoal (2005)), or responsible to an extent for the running of the corporation, similarly responsible for its acts or omissions (Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [38]). Accordingly, in assessing the culpability of the defendant, weight will be placed upon the role played by the defendant in decision making in relation to employment and changes to practices, and in otherwise running the corporation (Walco Hoist (No 2) at [39]).

99 Mr Chapman was, at the relevant time, a director of the corporation who was responsible for the work being undertaken at the premises on the day of the incident. He was present at the site on the day and was directly involved in determining the manner in which the task of removing the evaporators was to be performed. Having regard to these facts it must be concluded that Mr Chapman was 'complicit' in the offence by the corporation. He played a significant role in the running of the corporation and was responsible to a similar extent for its acts and ommissions as particularised in the charge. Mr Chapman's culpability for the offence, therefore, must be assessed in essentially the same manner at the corporation's.

100 There is one final matter to which consideration must be given in determining the objective seriousness of the offence. That is, as submitted by the prosecutor, the fact that the offence resulted in the serious injury of Mr Smith may be taken into account as an aggravating factor in sentencing: s 21A(2)(g) of the CSP Act.

101 On balance, the circumstances of the incident, taking into account the nature of the injury to Mr Smith, must result in the conclusion that the offence was reasonably serious.

Subjective Features

102 I now turn to the subjective features of these matters.

103 The assistance rendered to an injured worker and their family, including steps taken by a defendant in relation to their welfare, rehabilitation and continuing employment, provides tangible confirmation of contrition and is a relevant factor in mitigation: Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of New South Wales (Inspector Wilson) [2000] NSWIRComm 46; (2000) 99 IR 159 at [17] and Morrison v Powercoal (No. 3) at [112] and [114]. I am satisfied the defendants provided financial assistance to Mr Smith following the incident, and offered assistance to Mr Smith's mother in respect of accomodation.

104 Demonstrations of remorse and contrition by defendants is a further factor which may be taken into account in mitigation of penalty : Alcatel Australia Limited v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 at (107) and (108); Morrison v Powercoal (No. 3) at [111]; WorkCover Authority (NSW) (Inspector Jones) v Challita [2006] NSWIRComm 207; (2006) 153 IR 409 at [39]; McDonald's at [454] and Inspector Lai v Rexma Pty Ltd and Another [2008] NSWIRComm 78 at [53]. Section 21A(3)(i) of the CSP Act also provides that "remorse" may be taken into account as a mitigating factor in certain circumstances, provided there is evidence before it capable of satisfying the provision and that the remorse, so demonstrated, is genuine.

105 The prosecutor conceded that there was some evidence of remorse and contrition on the part of the defendants demonstrated by their guilty pleas and the assistance afforded to Mr Smith after the incident. It was submitted by the prosecutor, however, that the affidavit evidence of Mr Chapman fell short of an expressed acknowledgment by himself or on behalf of the corporation of responsibility for its actions and the injury, loss and damage suffered by Mr Smith.

106 I am of the view that the affidavit of Mr Chapman adequately, for the purposes of the CSP Act, demonstrated his contrition and remorse in relation to the incident, particularly when combined with the assistance offered to Mr Smith following the incident. The defendants shall each be entitled to the benefit of that demonstration.

107 A related consideration is the co-operation by the defendant with the WorkCover Authority of New South Wales: WorkCover Authority of New South Wales (Inspector Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363 at [30]; Challita at [39] and Rexma at [53]. I accept that the defendant co-operated with WorkCover in its investigation and should, accordingly, be entitled to a discount in that respect.

108 The next consideration is the discount which should be afforded the defendant for the entry of a plea of guilty.

109 I discussed the principles applicable to an assessment of the appropriate discount for the utilitarian value of a guilty plea in Ullrich at [77], as follows:

The determination of where, within the range of 10 - 25 per cent, a discount should fall in a particular case is a matter for the discretion of the sentencing judge, based on a consideration of the utilitarian value of a plea to the efficiency and effectiveness of the criminal justice system : R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [3], [115] and [153]. In Thomson, Spigelman CJ (as he then was) held, at [154], that there are two circumstances which will generally affect the appropriate level of discount in a particular case: the primary consideration is the time at which a plea is entered; the other consideration is the extent of the utilitarian benefit, for example, in the avoidance of a lengthy trial. (I note that the judgment of the Full Bench in Ridge Consolidated Pty Ltd v WorkCover Authority of New South Wales (Inspector Mauger) [2002] NSWIRComm 108; (2002) 115 IR 78 at [37] required that, after the judgment in R v Sharma [2002] NSWCCA 142; (2002) 54 NSWLR 300, the principles in Thomson were to be applied in sentencing offenders under the Act).

110 Also, in Gallagher at [81] and [82] as follows:

81 In Inspector Kent v Duct Master Pty Ltd [2009] NSWIRComm 143, Boland J made reference to the following principle espoused by the Court of Criminal Appeal in R v Dib [2003] NSWCCA 117 at [5] - [6] (which principle was also referred to by the defendant in submissions):

If a plea is entered a long time after a person is first charged, but at a time when a lesser charge is substituted for a greater charge, the advantages to the administration of justice are less, even though the plea may have been made at the earliest opportunity. There is in any event no entitlement to a 25% discount; and the fact that in this situation there are less advantages to the administration of justice can justify a smaller discount.

This approach may mean that in some cases an offender may obtain a lower discount just because the prosecuting authorities initially brought a greater charge than that ultimately pursued, so that the delay in the plea of guilty was not the offender's fault. But this is consistent with the nature of the discount as being at least in part a recognition of practical advantages, and not merely a recognition of mitigation of culpability.

82 However, Boland J went on to note, in Duct Master at [38], the following:

However, simply because a defendant waits until the prosecution amends the charge before entering a plea at the earliest opportunity thereafter, that will not, in my opinion, automatically lead to the sentence being discounted by 25 per cent. Some assessment would need to be made about whether the delay in pleading caused an unnecessary waste of time and resources.

111 It was conceded by the prosecutor that the defendants' pleas of guilty were entered at an early stage and, therefore, there were no factors which would disentitle the defendants to an allowance with respect to the utilitarian value of their plea (although the prosecutor declined to make a particular submission as to the quantum which should be allowed by the Court for the utilitarian value of those pleas).

112 I accept that the defendants' pleas were entered at the earliest opportunity after the filing of the amended applications for order. The charges in the amended applications were significantly different to the original charges (and did not merely have the effect of substituting a lesser charge for a greater charge). In those circumstances, it may be accepted that the pleas, whilst delayed until the filing of the amended applications, were early pleas which did not cause any 'unnecessary' waste of the Court's time and resources: Inspector Kent v Duct Master Pty Ltd [2009] NSWIRComm 143 at [38]. It must be accepted that the pleas, entered when they were, saved the Court time and resources by avoiding a trial and, therefore, had substantial utilitarian value. The defendants shall each receive a discount of 25 per cent for their pleas of guilty.

113 The defendants are both first offenders. This should be taken into account as a significant subjective factor: Corinthian Industries at [17]; Morrison v Powercoal (No. 3) at [107] and JT & LC Tippett Pty Limited and RD & LF Tippett Pty Limited v WorkCover Authority of New South Wales [2008] NSWIRComm 177; (2008) 184 IR 1 at [107].

114 It is clear from the foregoing discussion that there are strong subjective features in relation to each defendant

Section 10A of the CSP Act

115 The application of s 10A of the CSP Act was an issue raised by counsel for the defendants in the proceedings. Section 10A of the CSP Act is in the following terms:

10A Conviction with no other penalty

(1) A court that convicts an offender may dispose of the proceedings without imposing any other penalty.

(2) Any such action is taken, for the purposes of the Crimes (Local Courts Appeal and Review) Act 2001 and the Criminal Appeal Act 1912, to be a sentence passed by the court on the conviction of the offender.

116 As earlier noted, at the sentencing hearing the Court requested, and was provided with, supplementary written submissions by the parties on the issue of whether the provisions of s 10A of the CSP Act were applicable to the corporate defendant. In that respect I accept the submission of the defendant (which, it can be noted, was conceded by the prosecutor), that, in reliance on provisions of the CSP Act, the Interpretation Act 1987 and various authorities, it was open to the Court to exercise its discretion in favour of both the corporation and Mr Chapman under s 10A.

117 It was submitted, on behalf of the defendants, that, in relation to the corporation, such an order was appropriate given the corporation was primarily the controller of the premises only in its capacity as trustee of the trust and did not undertake any business or undertaking before the work done in relation to the evaluation of the suitability of the premises as a mushroom farm. As noted, it does not currently undertake any business or undertaking.

118 With regard to Mr Chapman, it was submitted that a s 10A order was appropriate given his role as director of the corporation, his prior record, his health conditions and the fact that he no longer worked or operated a business nor has any intention of running any other business.

119 Furthermore, it was submitted, the prosecution process and conviction would suffice to achieve the goals of punishment, deterrence and rehabilitation in these matters.

120 Section 10A was inserted into the CSP Act in 2006. In R v Wilhelm, Howie J described the section in the following terms (at [36]):

...

That seems to me to be a section that has recently been added to the armoury of the sentencing court in such a case where the Court indicates that the charge was deserving of a conviction but one where it is deserving of no other punishment in the circumstances of the particular case.

121 It has been observed by Boland J, in Inspector Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138, that the section was inserted into that Act to overcome circumstances where a Court would feel disposed to impose a nominal penalty only. His Honour noted, in that respect, the following (at [48] and [49]):

48 As for s 10A, that was inserted into the Crimes (Sentencing Procedure) Act in 2006. In the second reading speech (Legislative Council, 21 November 2006, p 4326) the purpose of s 10A was explained:

Schedule 1.9 makes a number of amendments to the Crimes (Sentencing Procedure) Act 1999. Item [1] creates a new sentencing option for courts by inserting new section 10A providing that the court may decline to make any further sentencing order other than the recording of a conviction against the person. This option addresses an anomaly in the sentencing regime to overcome situations where inappropriate sentences have been imposed such as fines of 50¢. Imposing very small nominal fines costs the courts, and State Debt Recovery Office, more to administer and recover, than the value of the fine; and where the offender is already serving a sentence of imprisonment, the fine is rarely recovered in any event. This amendment will address such cases.

49 Whatever may have been the legislature's intention regarding s 10A, for the reasons earlier expressed in relation to s 10, disposal of the proceedings under s 10A is not an appropriate course for the Court to take in this matter.

122 The reasons to which Boland J refers at [49] had been set out earlier at [47] of that judgment as follows:

I do not accept that an order under s 10 is appropriate. As it was observed by the Full Bench in WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 at [45], s10 will be available only in rare, limited circumstances in proceedings under the Occupational Health and Safety Act. Where the risk to health and safety was known, where the breach had potentially very serious consequences for the health and safety of employees, where the risk was easily preventable, where the main factor to be considered in determining an appropriate penalty to be imposed is the objective seriousness of the offence, and where the subjective factors do not outweigh the objective considerations, there is no scope, in my opinion, to apply s 10. That is the case here.

123 The judgment of Howie J in Wilhelm illustrates some factors which may be taken into account in the consideration of whether an order may be properly made under s 10A of the CSP Act.

124 His Honour convicted the offender under s 10A of the CSP Act but, according to the provisions of that section, imposed no further penalty. His Honour had regard to a number of factors in reaching that conclusion, including:

1) The nature and seriousness of the offence;

2) The limited criminal record of the offender;

3) The large amount of material placed before the Court indicating the offender was a person of good behaviour and reputation;

4) The extraordinary affect the death of the victim had on the offender both at the time of the offence and over a subsequent long period. His Honour commented (at [19]) "there are before me a number of psychiatric reports which indicate that the offender has, over a long period of time, suffered from severe mental illness as a result of the allegations against him, the publicity of them and ramifications of what he has done. ... Mr Wilhelm has suffered grievously as a result of what occurred on that particular night";

5) At [21] his Honour commented that the Court may take into account "what is called extra-curial punishment, that is, punishment that is inflicted upon an offender otherwise than by a court of law";

6) The stigmatising of the offender and the subsequent reaction of the community towards him. He had suffered public humiliation;

7) At [26], his Honour observed that "any reasonable person in the community would see that this punishment exceeds in any way, shape or form the criminality of the supply to Mrs Brimble in the social context of the drug that he himself was taking"; and

8) The offender was a suitable case for general deterrence but the consequences of the charges for the offender over many years should be sufficient to indicate "the people of like mind in the community that they may bear the overall consequences for their actions in relation to the use and supply of what are sometimes referred to as 'party drugs'" (at [31]).

125 It is clear that, in considering the appropriateness of applying the provisions of s 10A of the CSP Act to these offences, the Court must balance the relevant objective and subjective factors.

126 I should commence the consideration of this issue by reiterating that the corporation was charged under s 10(1) of the Act in its capacity as a controller of premises. By s 26(1) of the Act, Mr Chapman, as a director of the corporation, was charged with the same offence.

127 As mentioned earlier, the corporation owned and controlled the premises in its capacity as trustee for the trust and did not undertake any business or other undertaking before the work done in relation to the premises and does not currently undertake any business or undertaking.

128 Whilst Mr Chapman was a director of the company, he had the day-to-day management control of the corporation and its activities, and, as earlier described in this judgment, was responsible for work being undertaken at the premises on the day of the incident.

129 Even allowing for factors mitigating the seriousness of the offence, as I have earlier found, the offence in these matters was reasonably serious. Whilst not depreciating those earlier findings, it may be noted, for present purposes, that whilst this was not an offence which involved a deliberate disregard of a known risk to safety, the risk as defined in the charge was foreseeable and easily preventable. The breach had, potentially, very serious consequences for the health and safety of those working at the premises, in particular Mr Smith.

130 It is also of relevance to the consideration of the operation of s 10A in the present context that the charges in this matter are suitable, as previously found, for general deterrence.

131 There are other factors which must be weighed in the balance in determining whether an order should be made under s 10A. One of those factors is the subjective considerations which I have referred to under the heading 'Subjective Factors'. I will not repeat those findings here. They must be considered as quite strong subjective factors. Two other factors are relevant to the assessment of whether orders should be made under s 10A of the CSP Act and the ultimate disposition of these proceedings.

132 The first factor is that Mr Chapman's prior record, when considered against the history of his business undertakings, must indicate that he has been, for the purposes of the Act, a good industrial citizen. Based on that observation, his involvement in community activities in Moree and his various business endeavours, it may be concluded that he is a person of good behaviour and good reputation: Morrison v Powercoal Pty Ltd & Anor. (No. 3) [2005] NSWIRComm 61 at [107] and Workcover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd and Anor [2000] NSWIRComm 1123; (2000) 95 IR 383 at 454.

133 This is not to suggest that Mr Chapman experienced the degree of damage to his reputation and humiliation suffered by the offender in Wilhelm, but to indicate these matters should have a bearing upon the disposition of the matter both in the present context and overall in this judgment.

134 The second factor is Mr Chapman's medical history. It is clear that Mr Chapman suffers medical difficulties which severely affect his capacity to work and his mobility. This is a factor also relevant to sentencing, particularly as the incident exacerbated his medical condition (the consideration confirms earlier observations in this judgment as to the remorse and contrition demonstrated by Mr Chapman as discussed above (see Department of Mineral Resources of NSW v AM Hoipo & Sons Pty Ltd (2000) 99 IR 137 at [64]). The factor is relevant to the assessment of financial considerations, which shall be discussed below.

135 The evidence as to Mr Chapman's medical condition does not, however, demonstrate the extent of any deterioration in his condition after the incident and certainly does not support a conclusion that Mr Chapman suffered severe physical or emotional disturbance of the kind referred to in Wilhelm or Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Limited and another [2001] NSWIRComm 130; 2001 105 IR 348 at [201] (noting, of course, that Berrima concerned the making of an order under s 10 of the CSP Act) in consequence of or in response to the incident.

136 On balance, I do not consider that the Court should make an order under s 10A convicting the defendants without imposing a penalty. Utilising the language employed by Howie J in Wilhelm to describe the operation of the provision, I consider the charges are, in the face of the factors I have described in this part of my judgment (and in the earlier components dealing with objective and subjective factors), deserving of punishment in addition to a conviction, per se.

137 The primary consideration, in that respect, is the objective factors and deterrence I have earlier mentioned, but do not repeat. The seriousness of the offences are not such as would, in my view, appropriately lead to no penalty being imposed. Nor is there any warrant, on this basis, for a merely nominal fine.

138 The subjective factors described under this heading are strong and will feature in the penalty imposed, as will factors mitigating the objective seriousness of the offence (and financial considerations). However, they are secondary to the objective factors and are not of such a nature or character as would, in my view, result in no penalty being imposed. Whilst the factors in Wilhelm are a guide to these deliberations, it is clear, in my view, that the circumstances befalling the personal defendant after the incident do not constitute something in the nature of an extra curial punishment which might, in substance, exceed any penalty to be imposed by the Court. Further, whilst the subjective and other factors I have alluded to under this part of my judgment indicate the need for leniency, they do not, in my view, warrant a conclusion that no fine should be imposed, having regard to countervailing objective factors.

139 Two final matters shall be mentioned. First, the fact that Mr Chapman was a director of the corporation does little to advance the personal defendant's case in this respect as he was responsible for the day-to-day management of the corporation and had responsibility for the work and activities carried out at the premises.

140 As to the corporation, it is true that it was the controller of the site only in its capacity as trustee of the trust and did not undertake business, per se. However, it was the legal entity established for the purposes of acquiring the premises and, as particularised in the charges, controlled the premises by its ownership. Its status as a trustee does not relieve its obligations under s 10 of the Act. The establishment of a corporate structure as trustee and the use of the corporation to acquire that premises on behalf of the trust was a business decision which brought with it all of the legal consequences of incorporation: Inspector Green v Big River Timbers Pty Limited and Inspector Green v Big River Timbers (Veneer) Pty Limited [2006] NSWIRComm 279 at [19] to [22].

Capacity to Pay

141 The application of s 6 of the Fines Act and the capacity of the defendant to pay any penalty imposed was an issue raised in proceedings.

142 As mentioned earlier, at the sentencing hearing the Court requested, and was provided with, supplementary written submissions by the parties concerning the issue of whether the provisions of s 6 of the Fines Act were applicable to the corporate defendant. In that respect I accept the submission of the defendant (which, it can be noted, was conceded by the prosecutor), that, in reliance on provisions of the Fines Act and various authorities, it was open to the Court to exercise its discretion in favour of both the corporation and Mr Chapman under s 6.

143 I discussed the relevant general principles for the application of the Fines Act in Inspector Estreich v Hadfield [2012] NSWIRComm 88 at [84] to [88] as follows:

84 Section 6 of the Fines Act provides:

6 Consideration of accused's means to pay

(cf Crimes Act 1900 sec 440AB and Justices Act 1902 sec 80A)

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 to the fixing of that amount.

85 There is a line of authority bearing upon the consideration of financial issues in relation to a defendant's capacity to pay a fine. The authorities set out the principles applicable to the resolution of this issue in the present case.

86 In Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153, a Full Bench of the Commission noted (at [15], citing Rahme v R (1989) 43 A Crim R 81), that "[i]t is well established that a court should first arrive at a penalty and then review it on the basis of any case properly made out by a defendant of a lack of capacity to pay a substantial penalty or any penalty". The Full Bench went on to hold (at [22]) that, whilst the extent of the financial difficulties suffered by the defendant in that case had not been established on the evidence, the Court could accept, applying the 'spirit' of s 6 of the Fines Act, that the defendant had a limited ability to pay (as opposed to a total inability).

87 The principles which apply to the application of s 6 of the Fines Act, in circumstances where consideration is being given to fixing a penalty for a conviction of a criminal offence, were discussed by the Full Bench in McColl v John Watson Building Services at [24] - [25]. It was relevantly held:

24 We agree with and adopt the following principles which may be distilled for present purposes from the discussion of the authorities contained within the judgment in Inspector Mansell v Eleven Lighting Pty Ltd:

1. This court is obliged to take into account the means of a defendant to pay any penalty by virtue of s 6 of the Fines Act.

2. The imposition of a fine on a corporation may have different ramifications to the imposition of a fine on an individual where imprisonment or some other penalty may be available as an alternative sanction. That alternative is not available in the case of a corporation.

3. A defendant who wishes to rely on the provisions of s 6 to temper the amount of any monetary penalty bears the onus of putting such evidence in support as is appropriate before the court and bears the onus on the basis of the balance of probabilities of satisfying the court as to the truth of such evidence and its relevance to the fixing of penalty.

4. Whilst it is for a corporate defendant to fully disclose its financial state, it is for the prosecutor to check that information in order to assist the court in determining the propriety of taking that evidence into account in imposing a monetary penalty. It is inappropriate for the court to exercise an inquisitorial role in this regard.

25 In addition, we note the following principles which have been settled for the consideration of the financial situation of the defendant:

1. In the context of determining penalties in prosecutions for a breach of occupational health and safety legislation by a corporation, it may be appropriate, in some limited circumstances, for the Court to have regard to whether the defendant's corporate structure is little more than a means of distributing earnings arising from personal exertion or where the burden imposed by a fine will fall on one person or family, compared with a corporation which is functioning as "a company with assets of a substantial kind": see Haynes v CI&D Manufacturing (1995) 60 IR 455 at 457. However, it is now also clear that the fact that a corporation may represent the alter ego of a person or family and that any penalty imposed on the corporation will consequently have a financial impact on that person or family does not, of itself, warrant a reduction in penalty: WorkCover Authority of New South Wales (Inspector Mansell) v Jian Chen and Obing Pty Ltd trading as Old But New [2004] NSWIRComm 247; Inspector Gregory Maddaford v Graham Gerard Coleman & Anor [2004] NSWIRComm 317.

2. The financial position and the means of a defendant should be taken into account when determining penalty. It is well established that, notwithstanding such considerations, the penalty must ultimately reflect the objective seriousness of the offence: Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209; WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 at 308-309; Manpac Industries Pty Ltd v WorkCover Authority of New South Wales (2001) 106 IR 435.

88 By s 6 of the Fines Act, the Court is required to consider "such information regarding the means of the accused as is reasonably and practicably available to the court for consideration" and "such other matters as, in the opinion of the court, are relevant to the fixing of that amount". Those words leave the Court to assess the appropriateness and adequacy of the information according to the circumstances of the case (Karabelas at [17]). However, I accept the submission of the prosecutor that, where a defendant seeks the benefit of s 6 of the Fines Act, the defendant bears the evidentiary onus of convincing the Court that it should exercise its discretion under that section. That submission is in line with the relevant authorities in the area (set out above). Thus, the onus was upon the defendant to put appropriate financial evidence before the Court and to satisfy the Court, on the balance of probabilities, that the evidence was truthful and relevant to the issue of penalty (McColl v John Watson Building Services).

144 There was evidence presented to the Court (and some concessions made by the prosecutor) which bore upon the question as to whether the Court should exercise its discretion under s 6 of the Fines Act with respect of each of the defendants in these matters.

145 As to the corporation, the defendant submitted the following facts were relevant: the corporation had no employees and was not trading at that time (nor were there any plans to trade in the future), the corporation had no assets (the premises being an asset of the trust), and the tax returns for the trust (for which the corporation is trustee) for the years 2009 to 2012 each show net losses.

146 I am satisfied that the corporation has demonstrated a diminished capacity to pay any fine imposed, evidenced by the fact that it no longer trades and holds no assets (accepting that, whilst the corporation owns the premises, it does so as trustee for the trust; the value of the premises, therefore, resides in the trust and not the corporation). In the result, the Court shall exercise its discretion under s 6 of the Fines Act in favour of the corporation and reduce the amount of any penalty imposed accordingly.

147 As to Mr Chapman, the prosecutor conceded the following facts: Mr Chapman had minimal taxable income, and was not currently able to work due to his health (and was unlikely to be able to work in the future). The defendant submitted that the following further facts were also relevant: Mr Chapman's taxation records indicated that his income had declined in the years between 2009 and 2012 (from $20,324 in 2009 to $35 in 2012); due to a lack of income, Mr Chapman had needed to draw on his superannuation; Mr Chapman suffered further financial detriment as a result of the 2012 floods; Mr Chapman owed the bank $140,000 on a loan taken out to purchase the Imperial Hotel; whilst that hotel is on the market it has remained unsold for six years; the premises is an asset of the trust; and, the premises is on the market but has remained unsold for three years.

148 I am also satisfied that Mr Chapman has demonstrated a diminished capacity to pay any fine imposed. Whilst I accept, as was conceded by the defendant, that Mr Chapman stood to benefit financially from any future sale of the Imperial Hotel, as part owner, and the premises, as a beneficiary of the trust, I am also cognisant of the fact that those properties have been (and remain) on the market for some years. Mr Chapman and his brother owe some $140,000 on a bank loan used to purchase the hotel (although, as noted, it was conceded by the defendant that, if the hotel was ultimately sold, there would likely be some net profit, following the repayment of that loan, to be divided equally between Mr Chapman and his brother). Mr Chapman currently has no income, save for drawings made on his superannuation, due to an inability to work for health reasons. He is unlikely to be able to return to work at any stage in the future. He owns his home. However, the damage caused to it by the 2012 floods (for which he was not covered by insurance) has reduced the value of that property. It is clear that, despite the assets he has an interest in, Mr Chapman suffers significant financial hardship.

149 I furthermore accept that the financial hardship suffered by Mr Chapman is exacerbated by the fact that the burden of any fine imposed upon the corporation is likely to fall upon him; the corporation, as mentioned, cannot be described as one which is functioning as "a company with assets of a substantial kind": Haynes at 457.

150 In the circumstances, the Court shall also exercise its discretion under s 6 of the Fines Act in favour of Mr Chapman and reduce the amount of any penalty imposed accordingly.

Conclusion

151 The Court must ensure that subjective factors, however strong, do not produce a sentence which fails to sufficiently take into account the objective seriousness of the offence. The offence, as noted, was reasonably serious, resulting in the serious injury to a person working at the premises, that is, Mr Smith.

152 The defendants have demonstrated a diminished means to pay any fine imposed for the purposes of s 6 of the Fines Act. Accordingly, whilst the seriousness of the offence shall be the primary factor taken into account by the Court in determining penalty, the defendants shall receive a reduction in their penalties taking into account financial matters and the subjective features of the case, including those matters discussed in the context of s 10A of the CSP Act.

Orders

153 In all the circumstances, the Court makes the following orders:

Matter No IRC 1550 of 2011:

1) The defendant is convicted of the offence as charged.

2) The defendant in fined in the sum of $4,000 with a moiety to the prosecutor.

3) The Court further orders that the defendant shall pay the costs of the prosecutor for these proceedings as agreed or, in default, as assessed.

Matter No IRC 1551 of 2011:

1) The defendant is convicted of the offence as charged.

2) The defendant is fined in the sum of $40,000 with a moiety to the prosecutor.

3) The Court further orders that the defendant shall pay the costs of the prosecutor for these proceedings as agreed or, in default, as assessed.

 

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ANNEXURE A

Decision last updated: 28 August 2013