Industrial Relations Commission New South Wales

• Medium Neutral Citation: Inspector Rand v Corcoran [2013] NSWIRComm 88
• Hearing dates: 20 September 2013
• Decision date: 03 October 2013
• Jurisdiction: Industrial Court of NSW
• Before: Staff J

Decision

In Matter No IRC 339 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The personal defendant is convicted of the offence, as charged.

(3) The personal defendant is fined an amount of $3250 with a moiety thereof to the prosecutor.

(4) The personal defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

In Matter No IRC 340 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The personal defendant is convicted of the offence, as charged.

(3) The personal defendant is fined an amount of $3250 with a moiety thereof to the prosecutor.

(4) The personal defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

In Matter No IRC 341 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The corporate defendant is convicted of the offence, as charged.

(3) The corporate defendant is fined an amount of $32,500 with a moiety thereof to the prosecutor.

(4) The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

In Matter No IRC 342 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The corporate defendant is convicted of the offence, as charged.

(3) The corporate defendant is fined an amount of $32,500 with a moiety thereof to the prosecutor.

(4) The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

• Catchwords: OCCUPATIONAL HEALTH AND SAFETY - prosecutions under s 11(1)(a) and s 11(1)(b) of the Occupational Health and Safety Act 2000 - metal fabrication industry - hoist cage disengaged - persons seriously injured - general and specific deterrence - capacity to pay - Fines Act 1996 - totality - penalty imposed - costs
• Legislation Cited: Crimes (Sentencing Procedure) Act 1999; Occupational Health and Safety Act 2000
• Cases Cited: Capral Aluminium Ltd v Workcover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610; (2000) 99 IR 29; Corinthian Industries (Sydney) Pty Ltd v WorkCover Authority of New South Wales (Inspector Wilson) [2000] NSWIRComm 46; (2000) 99 IR 159; Inspector Brandie v Hogan [2012] NSWIRComm 138; Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, Glynn and Cullen JJ, CT90/1214, 30 June 1992); Inspector Mason v Graham Allen Chapman & anor [2013] NSWIRComm 71; Inspector Mason v Wild Geese Building and Maintenance Group Pty Ltd [2006] NSWIRComm 350; 157 IR 313; Inspector Jelley v Albright & Wilson (Australia) Limited [2007] NSWIRComm 148; (2007) 164 IR 456; Inspector Scott Rand v Toffy Pty Ltd t/as ABC Tyrepower and Mechanical [2012] NSWIRComm 39; Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464; Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465; Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364; R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337; Nelmac Pty Ltd v Franke (Inspector) [2006] NSWIRComm 100; (2006) 151 IR 63; Rahme v R (1989) 43 A Crim R 81; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited [2000] NSWIRComm 277; (2000) 95 IR 383; WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284; WorkCover Authority of New South Wales (Inspector Mulder) v Yass Shire Council [2000] NSWIRComm 57; (2000) 99 IR 284
• Category: Principal judgment
• Parties: Inspector Scott Rand (Prosecutor); James Corcoran (First Defendant); The Metal Fabricators Pty Ltd (Second Defendant)
• Representation: Counsel: Mr A Casselden (Prosecutor); M K Gourlie Solicitor (Defendants); Solicitors: WorkCover Authority of NSW (Prosecutor); Watson & Watson (Defendants)
• File Number(s): IRC 339, 340, 341 and 342 of 2011

Judgment

1 Corcoran's The Metal Fabricators Pty Ltd ("the corporate defendant") is a company in the business of constructing metal fabrications for customers. Its registered office is situated at 44 Reilly Lane Sydenham in the State of New South Wales.

2 Mr James Corcoran ("the personal defendant") is the sole director of the corporate defendant.

3 In or around February 2005, the personal defendant was engaged by Toffy Pty Ltd, trading as, ABC Tyrepower ("ABC") to manufacture and install a metal frame to support a mezzanine floor at the premises of ABC situated at 577 Botany Road Rosebery in the State of New South Wales.

4 Between 30 April 2005 and 14 May 2005, the corporate defendant designed, manufactured and installed a hoist for ABC to provide access to the mezzanine floor of the premises. The hoist consisted of a guided fabricated metal cage within a metal perimeter enclosure powered by an overhead Hitachi electric chain hoist.

5 At approximately 1.20pm on 5 October 2010, Mr Goran Aralica and Mr Paul O'Keefe, employees of ABC, entered the hoist cage and proceeded to the mezzanine floor. Upon reaching the mezzanine floor, the hoist cage disengaged from the lifting hook of the electric chain hoist, resulting in the hoist cage falling approximately 3.3 metres to the workshop floor below.

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

7 Mr Goran Aralica sustained injuries to both his right and left legs. His injuries included a fractured left fibia and a fractured right calcaneus. Mr Aralica had four operations on the left leg including the insertion of metal plates. He has not returned to his pre-incident duties.

The charges

8 The corporate defendant and the personal defendant were charged with designing and manufacturing plant (the hoist) for use by persons at work and failing to ensure that the hoist was safe and without risk to health when properly used, contrary to s 11(1)(a) of the Occupational Health and Safety Act 2000 ("the OHS Act"). The defendants were also charged with failing to provide adequate information in respect of the hazards and risks associated with the hoist to ABC, contrary to s 11(1)(b) of the OHS Act. The personal defendant's charges arose pursuant to s 26(1) of the OHS Act.

9 These sections relevantly provide:

11 Duties of designers, manufacturers and suppliers of plant and substances for use at work

(1) A person who designs, manufactures or supplies any plant or substance for use by people at work must, so far as is reasonably practicable:

(a) ensure that the plant or substance is safe and without risks to health when properly used, and

(b) provide, or arrange for the provision of, adequate information about the plant or substance to the persons to whom it is supplied to ensure its safe use.

...

26 Officers of corporations required to exercise due diligence

(1) If a corporation has a duty or obligation under a relevant provision, an officer of the corporation must exercise due diligence to ensure that the corporation complies with that duty or obligation.

Particulars

10 The particulars of the s 11(1)(a) charge in respect of the corporate defendant were:

1. In or around February 2005 James Corcoran, a sole trader, installed steel frames to support a mezzanine floor at the premises of ABC Tyrepower located at 577 Botany Road, Rosebery in the State of New South Wales (the "premises").

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

3. Between mid April 2005 and 14 May 2005 the defendant designed and manufactured the Hoist for ABC Tyrepower to provide access to the mezzanine floor at the premises.

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

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

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

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

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

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

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

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

12. There was a risk of the Hoist falling to the floor of the premises whilst persons were present in it.

13. The Hoist was not safe and without risks to health when properly used in that:

a. In designing and manufacturing the Hoist the defendant failed to identify and assess the risks associated with using the Hoist to lift both personnel and tyres, in particular the risk of the hoist cage detaching from the hook of the electric chain hoist.

b. The defendant failed to include in its design or in its manufacture any device to prevent the hoist cage from falling in the event of the eyelet of the hoist cage detaching from the hook of the electric chain hoist, in particular a secondary (or emergency) braking mechanism.

c. The defendant failed to ensure that the Hoist was designed to include the safety features required for hoists or lifts designed to lift personnel and materials. In particular:

i. The hoist cage was not designed in accordance with Australian Standard 1418.17 - 1996 (Design and construction of workboxes).

ii. The Hoist was not classified in accordance with the requirements of Australian Standard 1418.1 - 2002 (Crane, hoists and winches - General Requirements) as required by Clause 2.1.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

iii. The drive mechanism of the Hoist did not incorporate an approved brake to safely control the vertical movement of the load and to bring it to rest as required by Clause 2.1.7 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

iv. The Hoist was not rated in terms of safe working load as required by Section 3 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

v. The Hoist, which was raised and lowered by the chain of the Hitachi electric chain hoist, was not fitted with a device that sustained the Hoist in the event of a broken chain as required by Clause 3.5.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

vi. No means were provided to sustain the Hoist at the top of its lift independent of the Hitachi chain electric hoist medium, as required by Clause 3.5.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

vii. The controls of the Hoist were not fitted with a device to prevent the chain of the Hitachi electric chain hoist overrunning as required by Clause 3.5.5 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

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

ix. No safe means of access were provided to allow inspection or maintenance of the Hoist as required by Clause 3.7.2 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

x. The Hoist did not have a mechanism to prevent inadvertent detachment of the hoist cage from the hook of the electric chain hoist (Clause 2.7 of Australian Standard 4991 - 2004 (Lifting devices)).

xi. The Hoist did not have an additional brake fitted to the hoist drum as required by Clause 7.12.8.5 of Australian Standard 1418.1 - 2002 (Crane, hoists and winches - General Requirements).

xii. The Hoist did not have a safety gear as required by Clause 2.9 of AS1735.2 - 2001 (Lifts, escalators and moving walkways (Part 2: Passenger and Goods Lifts, electric) or Clause 2.9 of AS1418.7 - 1999 (Cranes (including hoists and winches) Part 7: Builder's Hoists and Associated equipment).

xiii. The Hoist did not have a notice exhibited to it prohibiting persons from riding within the Hoist as required by Clause 3.6(f) of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

xiv. The Hoist did not have an isolation switch on or adjacent to the Hoist.

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

11 The particulars of the s 11(1)(b) charge were in identical terms, save and except for paragraph 13 which provided:

13. The defendant failed to provide, or arrange for the provision of, any or any adequate information to ABC Tyrepower about the Hoist to ensure its safe use at work. In particular:

a. The defendant failed to provide any or any adequate information to identify the hazards associated with the Hoist or assess the risks arising from those hazards, in particular the hazard of the hoist cage detaching from the hook of the electric chain hoist.

b. The defendant failed to provide any or any adequate information concerning the means for controlling the risks associated with using the Hoist to lift both personnel and tyres, in particular whether any modifications were required to the Hoist to make it safe.

c. The defendant failed to provide any or any adequate information on:

i. Testing or inspection to be carried out on the Hoist.

ii. Installation, commissioning, registration, operation, maintenance, inspection and cleaning of the Hoist.

iii. Systems of work necessary for the safe use of the Hoist.

iv. Emergency procedures for the Hoist.

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

12 The particulars of the offences with which the personal defendant was charged were identical to the particulars of the corporate defendant's offences, except that the personal defendant is a defendant by virtue of his directorship of the corporate defendant in accordance with s 26(1) of the OHS Act.

13 Each of the defendants pleaded guilty to the offences, as charged. Having received evidence and heard submissions from the parties on 20 September 2013, I was satisfied that the defendants were guilty of the offences. It follows that this judgment is concerned with the question of penalty.

Prosecutor's evidence

14 Mr AC Casselden appeared with Mr T Hickey of counsel for the prosecutor. Mr Casselden provided an agreed statement of facts in the sentencing proceedings which read as follows:

1. At all material times the Prosecutor was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 ("The Act") and empowered under Section 106(1)(c) of the said Act to institute proceedings in this matter.

2. At all material times CORCORAN'S THE METAL FABRICATORS PTY LTD [ACN 112 967 610] was a corporation whose registered office is situated at 44 Reilly Lane Sydenham in the State of New South Wales ("Corcoran's").

3. At all material times JAMES CORCORAN (date of birth 16 November 1979) of 136b King Street Mascot NSW ("Mr James Corcoran") was and continues to be a director of Corcoran's.

Background

4. In or around February 2005 James Corcoran was engaged by Toffy Pty Ltd trading as ABC Tyrepower to manufacture and install a metal frame to support a mezzanine floor at the premises of ABC Tyrepower, 577 Botany Road, Rosebery in the State of New South Wales ("the premises"). This work was carried out by James Corcoran as a sole trader (ABN: 48 305 691 033, 2 Ellen Street Randwick NSW 2031). The mezzanine floor was to be used by ABC Tyrepower for the storage of car tyres as part of its tyre fitting business.

5. Both the timber floor and the steel support structure of the mezzanine had a cut out section designed and fabricated into them.

6. On 16 February 2005 Corcoran's was incorporated as a limited company.

7. On 16 February 2005 James Corcoran was appointed as a director of Corcoran's. James Corcoran continues to be a director of Corcoran's.

8. Following the incorporation of Corcoran's ABC Tyrepower requested that Corcoran's install a Hoist to travel between the ground floor and the mezzanine floor at the premises.

9. Between 30 April 2005 and 14 May 2005 Corcoran's designed, manufactured and installed a Hoist for ABC Tyrepower to provide access to the mezzanine floor at the premises. The Hoist was plant within the meaning of the Act.

The Hoist

10. The Hoist was built into the cut out section of the previously fabricated steel frame that supported the mezzanine floor.

11. The Hoist consisted of a guided fabricated metal cage within a metal perimeter enclosure powered by an overhead Hitachi electric chain hoist.

12. The purpose of the Hoist was to provide access to the mezzanine floor at the premises. The Hoist was designed, manufactured and installed to carry both personnel and materials to and from the mezzanine floor of the premises. From in or around May 2005 there was no other means of access to the mezzanine floor.

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

14. The Hoist was used on a daily basis (often multiple times a day) by employees of ABC Tyrepower to transport both people and materials between the workshop floor of the premises and the mezzanine floor until 5 October 2010, the date of the incident. It was not uncommon for two employees of ABC Tyrepower to ride in the hoist cage.

The Incident

15. At all material times Goran Aralica and Paul O'Keefe were employees of ABC Tyre Power.

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

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

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

19. Mr Aralica and Mr O'Keefe were inside the hoist cage, at approximately mezzanine floor level, when the hoist cage disengaged from the lifting hook of the electric chain hoist, pulling through the lifting hook safety latch, resulting in the hoist cage falling approximately 3.3 metres to the workshop floor below.

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

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

Investigation

22. On 5 October 2010 Inspector John Whatman attended the premises and conducted an inspection of the Hoist.

The Hoist was not safe and without risks to health

23. The Hoist was not safe and without risks to health when properly used in that:

a. In designing and manufacturing the Hoist Corcoran's failed to identify and assess the risks associated with using the Hoist to lift both personnel and tyres, in particular the risk of the hoist cage detaching from the hook of the electric chain hoist.

b. Corcoran's failed to include in its design or in its manufacture any device to prevent the hoist cage from falling in the event of the eyelet of the hoist cage detaching from the hook of the electric chain hoist, in particular a secondary (or emergency) braking mechanism.

c. Corcoran's failed to ensure that the Hoist was designed to include the safety features required for hoists or lifts designed to lift personnel and materials. In particular:

i. The hoist cage was not designed in accordance with Australian Standard 1418.17 - 1996 (Design and construction of workboxes). The hoist installation was not designed in accordance with the AS 1418.7 Standard. Note 1 in Section 1.2.2 of the Standard provided "workboxes should not be used as transportation for personnel or bulk materials". Contrary to the Standard the primary purpose of the hoist was the transportation of people and materials.

Other Sections of the standard require that in a conforming workbox design, such items as handrails, attachments for safety harnesses, load testing and stamped metal data plates need to be provided. None of these items were present in the Hoist designed and manufactured by Corcoran's.

In addition, Section 1.4.7 defines "a workbox" as a device designed to provide a working area for persons working from the box. This was clearly not the mode of use adopted by Corcoran's.

ii. The Hoist was not classified in accordance with the requirements of Australian Standard 1418.1 - 2002 (Crane, hoists and winches - General Requirements) as required by Clause 2.1.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

Classification is a process specified in the Australian Standard as being required to be undertaken by the designer of any crane or hoist system so as to anticipate the whole-of-life use of the particular device and to cover matters such as metal fatigue, wear and tear and the like.

Post the design process, the classification given to a particular crane or hoist by the designer is normally discoverable from the nameplate on the machine or from the manufacturer's literature.

Section 3.6 (d) of AS 1418.8-2002 requires that a prominent notice be displayed on the platform hoist to indicate the classification of the platform hoist. No such notice was present on the installed hoist.

iii. The drive mechanism of the Hoist did not incorporate an approved brake to safely control the vertical movement of the load and to bring it to rest as required by Clause 2.1.7 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

The second paragraph of Section 2.1.7 states that "Where failure of a coupling would render the braking system (including safety brake) ineffective, the brake should be located on the load side of the coupling.

Corcoran's failed to adhere to clause 2.1.7 of Australian Standard 1418.8-2002 as no braking means were provided on the load side of the coupling.

iv. The Hoist was not rated in terms of safe working load as required by Section 3 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

Similar to the situation of classification above the failure to comply with this requirement lies in the failure to indicate via a public notice what the safe working load rating of the system is intended to be.

Thus by failing to comply with Section 3.6 (d) of the Code, the as-installed hoist system fails to comply with the more general requirements of Section 3 of AS 1418.8-2002.

v. The Hoist, which was raised and lowered by the chain of the Hitachi electric chain hoist, was not fitted with a device that sustained the Hoist in the event of a broken chain as required by Clause 3.5.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

The system that was installed at the premises failed to comply with Clause 3.5.4 of the Standard as no mechanical stops or brakes were present on the hoist system at the time of the incident that would have fully, or even partially, addressed this specific engineering design requirement.

vi. No means were provided to sustain the Hoist at the top of its lift independent of the Hitachi chain electric hoist medium, as required by Clause 3.5.4 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

The system that was installed at the premises failed to comply with Clause 3.5.4 of the Standard as no mechanical stops or brakes were present on the hoist system at the time of the incident that would have fully, or even partially, addressed this specific engineering design requirement.

vii. The controls of the Hoist were not fitted with a device to prevent the chain of the Hitachi electric chain hoist overrunning as required by Clause 3.5.5 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

The system that was installed at the premises failed to adhere to Clause 3.5.5 of the Standard as no functional systems on the hoist would have fully or even partially addressed this specific engineering design requirement in relation to either the chain (per se) or to the platform.

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

ix. No safe means of access were provided to allow inspection or maintenance of the Hoist as required by Clause 3.7.2 of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

x. The Hoist did not have a mechanism to prevent inadvertent detachment of the hoist cage from the hook of the electric chain hoist (Clause 2.7 of Australian Standard 4991 - 2004 (Lifting devices)).

Clause 2.7 of AS 4991, states that "Where there is a risk of the lifting devices becoming detached during operation, the lifting devices shall be provided with a mechanism to prevent inadvertent detachment."

The safety latch mechanism, as designed and installed, proved to be inadequate to prevent inadvertent detachment under the circumstances.

xi. The Hoist did not have an additional brake fitted to the hoist drum as required by Clause 7.12.8.5 of Australian Standard 1418.1 - 2002 (Crane, hoists and winches - General Requirements).

xii. The Hoist did not have a safety gear as required by Clause 2.9 of AS1735.2 - 2001 (Lifts, escalators and moving walkways (Part 2: Passenger and Goods Lifts, electric) or Clause 2.9 of AS1418.7 - 1999 (Cranes (including hoists and winches) Part 7: Builder's Hoists and Associated equipment).

The term "safety gear" refers to those systems set out and discussed in detail in Section 33 of AS 1735.2-2001 whose aim is to arrest or retard the fall of a moving lift or hoist cage.

In relation to Section 2.9 of AS 1418.7-1999 the system that was installed at the premises failed to comply with this provision of the Standard as no functional systems were present on the hoist system that resemble "safety gear" and which were designed to slow the fall rate of a descending cage.

xiii. The Hoist did not have a notice exhibited to it prohibiting persons from riding within the Hoist as required by Clause 3.6(f) of Australian Standard 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications).

The absence of a notice indicates a failure to abide by the provisions of AS 1418.8 Clause 3.6 (f).

xiv. The Hoist did not have an isolation switch on or adjacent to the Hoist.

No adequate information provided about the Hoist to ensure its safe use

24. Corcoran's failed to provide, or arrange for the provision of, any or any adequate information to ABC Tyrepower about the Hoist to ensure its safe use at work. In particular:

a. Corcoran's failed to provide any or any adequate information to identify the hazards associated with the Hoist or assess the risks arising from those hazards, in particular the hazard of the hoist cage detaching from the hook of the electric chain hoist.

b. Corcoran's failed to provide any or any adequate information concerning the means for controlling the risks associated with using the Hoist to lift both personnel and tyres, in particular whether any modifications were required to the Hoist to make it safe.

c. Corcoran's failed to provide any or any adequate information on:

i. Testing or inspection to be carried out on the Hoist.

ii. Installation, commissioning, registration, operation, maintenance, inspection and cleaning of the Hoist.

iii. Systems of work necessary for the safe use of the Hoist.

iv. Emergency procedures for the Hoist.

25. Corcoran's provided no information regarding testing or inspection or safe use of the Hoist to ABC Tyrepower. Corcoran's provided no written instructions for commissioning the Hoist to ABC Tyrepower.

26. Corcoran's did not provide a maintenance manual for the Hoist to ABC Tyrepower. In particular, Corcoran's did not provide any information regarding inspection and maintenance required to ensure the integrity of the key components of the Hoist.

After the Incident

27. Following the incident on 5 October the Hoist was removed by ABC Tyrepower from the premises.

Co-Operation with Workcover

28. Corcoran's and James Corcoran co-operated with Workcover during the investigation.

The Defendant's Prior Convictions:

29. Corcoran's and James Corcoran do not have any prior convictions under the Occupational Health and Safety Act 2000.

15 Mr Casselden also tendered the following material:

(1) Factual Inspection Report of Inspector Scott Rand dated 10 December 2010.

(2) Factual Inspection Report of Inspector Whatman dated 12 October 2010.

(3) Technical Report of Principal Inspector David Shoobert Engineering Team dated 7 March 2011.

(4) 22 colour photographs taken by Inspector John Whatman and Alice Cheng on 5 October 2010; 12 October 2010; 12 November 2010 and 24 November 2010 showing the location of the hoist in the premises; the mezzanine floor, a front and side view of the hoist and cage; electric chain hoist; hook position at the time of the incident, showing hook and damaged safety latch; the welded Lifting eye on the hoist and damage to the hoist caused by the fall.

(5) 5 colour photographs taken by Inspector Rand dated 22 March 2011 showing removal of hoist and installation of a stair ladder access to mezzanine level; installation of chain mesh on mezzanine level over office.

(6) Expert Report of Dr Jonathan O'Brien, Consulting Engineer dated 4 June 2012.

(7) Supplementary Report by Dr Jonathan O'Brien dated 6 December 2012.

(8) Addendum to Supplementary Report of Dr Jonathan O'Brien dated 15 January 2013.

(9) Invoices from James Corcoran Metal Fabrications to ABC re installation of the hoist.

(10) Extracts of relevant Australian Standard as referred to in the application for order:

(a) Australian Standard 1418.17-1996 (Design and construction of workboxes).

(b) Australian Standard 1418.1-2002 (Cranes, hoists and winches-General Requirements.

(c) Australian Standard 1418.8-2002 (Cranes, hoists and winches, Part 8: Special purposes applications).

(d) Australian Standard 4991-2004 (Lifting Devices).

(e) Australian Standard 1735.2-2001 (Lifts, escalators and moving walks-Part 2: Passenger and goods lifts-Electric clause 2.2).

(f) Australian Standard 1418.7-1999 (Cranes, including Hoists and Winches-Part 7: Builders, Hoists and Associated Equipment clause 2.9).

(g) Record of Prior Convictions showing no prior convictions.

Defendants' evidence

16 Mr K Gourlie, Solicitor, who appeared for the defendants, called the personal defendant to give evidence.

17 The personal defendant stated that he was born in Dublin in 1989 and migrated to Australia in 2000. He is married with two children aged eight and ten. His family were involved in the metalwork business in Ireland and he commenced a similar business in Australia, incorporating the business in 2005. The company currently has 13 employees, five being full time and the balance are casuals. Of the full time employees, one is an apprentice and another is a trainee.

18 Mr Gourlie took the personal defendant to questions that he was asked during a WorkCover interview on 2 March 2011, where the personal defendant stated that he believed that because he was employed as day labour, that he was not responsible for engaging an engineer to test and certify the hoist.

19 Similarly, he stated that he did not believe it was his responsibility to ensure that magnetic locks were fitted by electricians to prevent the doors of the hoist being open. His evidence was that his work finished with constructing the hoist.

20 The personal defendant stated that after the incident, he had undertaken a review of the corporate defendant's occupational health and safety policies and systems, together with carrying out an investigation of the incident. His evidence was that the corporate defendant would never build a hoist again because of the complexity of complying with Australian Standards.

21 The corporate defendant is currently reviewing all its processes and reviewing all Australian Standards that apply to its work. The personal defendant stated that the Director of ABC had provided him with drawings of the hoist. He stated that the hoist had never been commissioned for use by the corporate defendant as a hoist motor had to be obtained and installed by an electrician before the hoist was completed. He said that the corporate defendant did not install the winch so he could never have envisaged that the chain hoist would overrun the eyebolt thereby lifting the cage by the hook safety latch.

22 The personal defendant gave evidence in respect of his and the corporate defendant's financial positions. He stated that he does not own any property. He pays $680 per week rent on a house. His evidence was that he has no personal assets apart from shares valued at approximately $6000. His motor vehicle is owned by the corporate defendant. He stated that he was in debt with his credit card by approximately $3000 and that the corporate defendant has a debt of $116,000 to the Australian Taxation Office. The corporate defendant also operates out of leased premises.

23 The personal defendant's evidence was that with the exception of one company vehicle, the corporate defendant was slowly paying off everything that the company had purchased since it was established in 2005. In the last financial year the corporate defendant suffered a loss of $157,000 and has had difficulty obtaining work. During 2010 and 2011, the corporate defendant had significant work at the Star City Casino whilst it underwent renovations. This meant that the corporate defendant did not have to search for work. Part of the reason that the corporate defendant has employed more employees is to attempt to win larger jobs. The personal defendant's evidence was "it is tough out there at the moment".

24 During the personal defendant's evidence, Mr Gourlie tendered the following financial documents:

(1) Financial Report for the year ended 30 June 2013 for the corporate defendant.

(2) Financial Report for the year ended 30 June 2011 for the corporate defendant.

(3) Individual tax return for the personal defendant for the financial year 1 July 2011 to 30 June 2012.

(4) Individual tax return for the personal defendant for the financial year 1 July 2010 to 30 June 2011.

(5) Individual tax return for the personal defendant for the financial year 1 July 2009 to 30 June 2010.

(6) Invoice from Australian Taxation Office to the corporate defendant dated 15 June 2013 showing outstanding amount of $116,843.

(7) Invoice from Australian Taxation Office to the corporate defendant dated 24 August 2013 showing outstanding amount of $156,423, with an amount of $98,819.28 required to be paid immediately.

25 During cross-examination, the personal defendant stated that he received a gross income of approximately $117,000 per annum from the corporate defendant. He said that he did not take all of that income as he was constantly putting money back into the corporate defendant. He agreed that the corporate defendant had a healthy revenue in 2011 when it earned over $1M. For the financial year ended 2012, it earned almost $2M in revenue.

26 In the financial year ended 30 June 2012, the corporate defendant generated revenue of $1.348M. In the financial year ended 30 June 2013, the corporate defendant generated income of $912,000. The personal defendant stated that for the year ended 30 June 2013, he had lent the corporate defendant $237,856, which was shown as a shareholder's loan in the Financial Report to enable the corporate defendant money to "stay afloat". The personal defendant stated that he had always funded the corporate defendant with his own money. He had started off "with a suitcase in my hand and built it up to what it is now". His evidence was "I personally would be devastated if I was to have to do anything with my company because I put my life, blood and sweat and tears, everything into it". He stated that the corporate defendant does not have an overdraft facility with any bank.

Relevant principles

27 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the OHS Act. Their Honours stated at [8] - [15]:

"[8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing.

[9] In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]:

'[I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion.'

[10] The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474 as follows:

'[I]t is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ...

[11] The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) ("Capral") 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows:

'The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27:

Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence.'

[12] On the issue of foreseeability, the Full Bench in Capral also stated at 646; 62 - 63:

'The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd [1999] 92 IR 188 (at 209 - 210) in these terms:

'... reliance on "hindsight" must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to 'ensure ... health, safety and welfare at work' and the decided cases which make plain the nature of the obligation.'

[13] It is also necessary to consider the damage and injury suffered in the context of the evidence and "in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries which have been suffered, or which may have been suffered, and the gravity of the offence" (Capral at 650; 66). On that point the Full Bench in Capral stated:

'We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5, Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 377 at 378, Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456, Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131, WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and WorkCover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) (at [22]).'

[14] The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows:

'[B]oth aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Workcover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [40]- 43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.'

[15] In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]:

'[I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c).' "

Consideration

28 The primary consideration, as set out in the above principles, requires a determination of the objective seriousness of the offences. This involves examining the nature and quality of the offences as set out in the Agreed Statements of Facts and the evidence.

29 The risk in these matters arose through the failure of the corporate defendant, in its design and manufacture of the hoist, to identify and assess the risks associated with using the hoist to lift both personnel and tyres. In particular, the defendants failed to identify the risk of the hoist cage detaching from the hook of the electric chain hoist.

30 The nature of the risk is evidenced by firstly, the corporate defendant's failure to include in its design or in its manufacture, any device to prevent the hoist cage from falling in the event of the hoist cage detaching from the hook of the electric chain hoist, in particular, a secondary or emergency braking mechanism.

31 Secondly, the hoist was defective in a variety of ways including that it was non-compliant with the relevant Australian Standard 1418.17 - 1996 (Design and construction of workboxes) and 1418.8 - 2002 (Cranes, hoists and winches, Part 8: Special purpose applications); lacked a safety mechanism to prevent the hoist cage disengaging; lacked emergency braking; lacked interlocking mechanisms to secure the host between floors; lacked a load rating; had a non-compliant lifting cage; had a non-compliant drive mechanism incorporating a brake for vertical movement; lacked a backup device in the event of a broken chain; lacked interlocking on access gate; lacked a mechanism to prevent inadvertent detachment of the lifting cage from the electric chain hoist hook; lacked safety gear; lacked a notice prohibiting persons from riding in the hoist and lacked an isolation switch.

32 Thirdly, the corporate defendant failed to provide any, or any adequate information to identify the hazards associated with the hoist or assessed the risks arising from those hazards, in particular, the hazard of the hoist cage detaching from the hook of the electric chain hoist. There was also a lack of adequate information in respect of controlling these risks, particularly in using the hoist to lift both personnel and tyres.

33 Fourthly, the corporate defendant failed to provide any or any adequate information in respect of testing or an inspection to be carried out on the hoist; installation, commissioning, registration, operation, maintenance, inspection and cleaning of the hoist; systems of work necessary for the safe use of the hoist and emergency procedures for the hoist.

34 Mr Gourlie submitted that in weighing up the objective seriousness of the incident, the court should take into account the circumstances surrounding how the defendants were engaged to build the metal cage for the hoist. Sketches were provided to them by ABC and the defendants constructed the metal cage from these sketches. In order for it to become operational, it was necessary for it to be fitted with an electric motor. This was work not carried out by the defendants.

35 Mr Gourlie further submitted that this was the first occasion that the defendants had carried out such work and they have not done it since and furthermore, do not intend to undertake this type of work again.

36 Mr Gourlie acknowledged that these offences were objectively serious.

37 Section 11 imposes duties and obligations on manufacturers and suppliers of plant to ensure that it is safe and without risks to health when properly used. The Australian Standards which the corporate defendant failed to comply with, are designed to eliminate, as far as practicable, risks to health and safety when plant is used by persons. The only measure to control or eliminate the risk in these matters was the removal of the entire hoist, which occurred. The hoist was inherently dangerous and it should never have been designed, manufactured and installed by the corporate defendant.

38 The foreseeability of the risk is a factor to be taken into account when assessing the level of culpability of the defendant: Capral Aluminium Ltd v Workcover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610; (2000) 99 IR 29 at [81] - [82]. It will be a serious offence when there is an obvious risk or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and foreseeable.

39 In my view, and I find that objectively, the risk was foreseeable. The hoist did not have an emergency braking mechanism or a mechanism to prevent detachment of the lifting cage from the electric chain hoist hook.

40 A further factor that should be taken into account in assessing the objective seriousness of the offence is whether death or serious injury occurred. The seriousness of an injury or a death does not dictate the size of any penalty but it does demonstrate the seriousness of the detriment to safety occasioned by the offence: Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, Glynn and Cullen JJ, CT90/1214, 30 June 1992) at 9; Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 (at 464); Tyler v Sydney Electricity (1993) 47 IR 1 at 5: see Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited [2000] NSWIRComm 277; (2000) 95 IR 383 at 428; Morrison v Powercoal Pty Ltd [2003] NSWIRComm 416; (2003) 130 IR 364 at [31] - [33].

41 In this matter, both Mr Aralica and Mr O'Keefe suffered serious injuries.

42 In my view, the offences should be assessed as being at the mid-range of seriousness.

43 The personal defendant was directly involved in building the hoist and was therefore complicit in the offences committed by the corporate defendant. The personal defendant, of course, ran the corporate defendant. In these circumstances, I find that the personal defendant's culpability must be assessed essentially in the same manner as the corporate defendant.

General deterrence

44 As to general deterrence, I consider it is appropriate in this case to once again draw attention to the need for employers and contractors involved in the design and manufacture of plant to ensure that employees and non-employees are not exposed to risks to their health and safety. Australian Standards should be complied with by all manufacturers to ensure that plan is safe when used by employees and non-employees. I include an element in the penalty for general deterrence.

Specific deterrence

45 In relation to specific deterrence, I accept, in light of the evidence relied upon by the defendants, that this is not a case which calls for the imposition of some additional significant punishment aimed at deterring the defendants from further offending against the OHS Act and/or for the purpose of compelling the defendants' attention to occupational health and safety issues, so that persons are not exposed to risks to their health and safety.

46 The personal defendant's evidence was that the defendants would never again build a hoist similar to the one involved in this accident. As the defendants are still operating, I include a small component in the penalty for specific deterrence.

Subjective factors

47 The prosecutor submitted that the personal defendant expressed no remorse. Although during his oral evidence, the personal defendant did not acknowledge the issue of remorse and contrition. Mr Gourlie submitted that the pleas of guilty and co-operation with WorkCover demonstrated remorse and contrition. I accept the defendants have accepted responsibility for the action.

48 Mr Gourlie submitted on behalf of defendants that the defendants' plea demonstrated remorse and contrition in respect of the offences. I accept that the defendants have accepted responsibility for their action.

Plea of guilty

49 The defendants entered formal pleas of guilty on the first day of a five day hearing without any prior notice to the prosecutor. Inconvenience was caused to the prosecution's witnesses by the late pleas. Mr Gourlie submitted that in Inspector Dall v Ullrich [2012] NSWIRComm 87, Walton J, Vice-President at [77] stated:

"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)."

50 It follows that the utilitarian value of the defendants' plea is diminished. In accordance with the principles found in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383, I find that the defendants are entitled to a discount of 10 per cent as a result of the utilitarian benefits offered by the plea.

Co-operation

51 I find that the defendants fully co-operated with the WorkCover Authority of New South Wales during its investigation of the incident and that it is appropriate to take this matter into account in determining penalty.

52 I also take into account the size and nature of the corporate defendant's business and the inherent risks involved in the work performed by the defendants. The defendants can now demonstrate a strong commitment to occupational health and safety and are entitled to be regarded as having a good industrial safety record. The defendants are both first offenders, which I take into account as a significant subject factor: Corinthian Industries (Sydney) Pty Ltd v WorkCover Authority of New South Wales (Inspector Wilson) [2000] NSWIRComm 46; (2000) 99 IR 159 at [17].

Fines Act 1996

53 The defendants rely on s 6 of the Fines Act 1996, submitting that there are circumstances where it is appropriate that the quantum of penalty imposed be reduced in light of its limited means.

54 The evidence of the personal defendant, as confirmed in the Financial Report for the year ended 30 June 2013 prepared by iEzy Business Accountants Pty Ltd, is that the corporate defendant had a trading loss of $157,874. In 2012, it had a trading profit of $198,128.

55 In 2010, the corporate defendant had a trading profit of $110,740 and in 2011, $167,078. Such profits are of course are before tax.

56 In the Financial Report for the year ended 30 June 2011, the corporate defendant's liabilities for 2011 were $802,381, with net assets of $167,080. In 2010, the total liabilities were $241,121, with net assets of $110,742. Similarly, in 2012, the total liabilities were $440,854 and net assets $198,130 and in 2013, total liabilities $492,185, with net assets ($157,825).

57 The personal defendant's salary in 2012 was $117,000. His evidence was that he has been lending money to the corporate defendant, which is reflected in the financial reports. It is clear that the corporate defendant is the alter ego of the personal defendant.

58 The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 are as follows:

"[83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50):

'It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as (2002) 112 IR 284 at 309 far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.'

[84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82):

'... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76).

However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed:

'... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. ......

When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ...'

[85] I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476:

'Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86.'

(See also WorkCover Authority (NSW) (Inspector Hopkins) v Michael Wheritt t/a M J Wherritt Concrete Pumping Services [2002] NSWIRComm 16 at pars 59-60.)"

The Full Bench in WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363 considered various judgments where s 6 of the Fines Act was considered and observed at [35]:

[35] The relevant principles in relation to the application of s 6 of the Fines Act have been collected in a number of decisions in this jurisdiction. We adopt those principles in this judgment: Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209; Department of Mineral Resources of NSW (Chief Inspector Terrey) v A M Hoipo & sons Pty Ltd (2000) 99 IR 137 at [48] - [51]; Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of NSW (Inspector Glass) (2001) 106 IR 435 at [56] - [57], [67], [81] - [83]; Inspector Green v Camilleri Properties Pty Limited at [21]. Applying these principles, we do not consider that there is any proper basis for the application of s 6 of the Fines Act in this case.

59 Mr Gourlie referred the court to a decision of the Supreme Court of New South Wales Court of Criminal Appeal in Rahme v R (1989) 43 A Crim R 81, where the majority, (Finlay and Studdert JJ; Smart J dissenting however agreeing in respect of this issue) considered various authorities which had discussed the relevance of an offender's means to pay. The majority stated that "If the offender would be unable to pay that amount, it may be reduced to take into account the offender's means and impecuniosity".

60 Mr Gourlie also referred to a decision of Walton J, Vice-President in Inspector Brandie v Hogan [2012] NSWIRComm 138, where his Honour observed at [45]:

"Nonetheless, the sentence imposed must reflect general sentencing principles. The Court should refrain, in the ordinary course, from imposing a crushing or oppressive penalty having regard to the circumstances of the offender (Retsos v Regina [2006] NSWCCA 85; R v Reader (Brian Henry) (1988) 10 Cr App R(S) 210 (at 214); Karabelas at [16] and Rahme v R (1989) 43 A Crim R 81 (at 86))."

See also his Honour's recent judgment in Inspector Mason v Graham Allen Chapman & anor [2013] NSWIRComm 71 at [141] - [143].

61 In light of the evidence relied upon by both defendants, I find that they have a diminished capacity to pay a fine and that the burden of any fine imposed upon the corporate defendant is likely to fall upon the personal defendant. I therefore propose to have regard to the financial circumstances of the defendants, although that consideration does not, of itself, mean that a substantial penalty could not be imposed.

62 The penalty imposed will reflect the matters discussed by Walton J in Schrader and Chapman. I should indicate that I do not consider that the penalty imposed is beyond the means of the corporate defendant.

Maximum penalties

63 The maximum penalty for the corporate defendant is $550,000 and for the personal defendant $55,000.

Comparison of sentences

64 Mr Casselden drew the court's attention to a judgment of Kavanagh J in Inspector Scott Rand v Toffy Pty Ltd t/as ABC Tyrepower and Mechanical [2012] NSWIRComm 39. In that matter, the defendant pleaded guilty to a breach of s 8(1) of the OHS Act. Her Honour imposed a penalty of $65,000. Mr Casselden submitted that there were a number of matters that distinguished the prosecutions in this matter from ABC.

65 It has been held on a number of occasions by this Court and the Supreme Court of New South Wales, Court of Criminal Appeal that comparisons with sentences passed in other cases is not helpful. See Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; (2010) 243 FLR 28 at [303]. In WorkCover Authority (NSW) (Inspector Mason) v Wild Geese Building and Maintenance Group Pty Ltd [2006] NSWIRComm 350; (2006) 157 IR 313, the Full Bench observed at [38]:

[38] We consider that there are real difficulties in comparing penalties imposed under the Occupational Health and Safety Act , even in cases where there is an essential common feature, such as a falling incident, crushing incident etc, because of the myriad of differing surrounding factual circumstances in the cases. ...

See also Nelmac Pty Ltd v Franke (Inspector) [2006] NSWIRComm 100; (2006) 151 IR 63; Inspector Jelley v Albright & Wilson (Australia) Limited [2007] NSWIRComm 148; (2007) 164 IR 456.

66 I proceed to sentence noting the statements of the Full Benches regarding the proper approach to be adopted in reaching a sentence.

Totality

67 As the four offences found to have been committed by the defendants arose out of the same course of events, the principle of totality therefore has application.

68 The principles of totality require consideration of the overall culpability or criminality attributable to the defendants from both convictions, and in the process ensures that there is no "double counting of the culpability of the defendant from the respective offences": WorkCover Authority of New South Wales (Inspector Mulder) v Yass Shire Council [2000] NSWIRComm 57; (2000) 99 IR 284 per Wright J at [37].

69 The approach to the application of the principles of totality is found in the decision of the Full Bench in Crown in Right of the State of New South Wales (Dept of Education and Training) v Keenan [2001] NSWIRComm 313; (2001) 105 IR 181, which considered the High Court's ruling in Pearce v The Queen (1998) 194 CLR 610. The Full Bench held that:

"[23] The effect of Pearce is that, in sentencing a defendant for more than one offence, the Court is required to fix an appropriate sentence for each offence and then consider questions of cumulation, concurrence and totality. It is only after determining an appropriate sentence for each offence that the Court should consider whether the sum of the separate sentences properly reflected the totality of the criminality involved.

...

[29] In an appropriate case, however, it may still be appropriate to impose a single penalty for multiple offences under the Act, but only as the result of the operation of the principle of totality after separate penalties have been assessed for each offence. However, we consider that the preferable course is that separate penalties should be imposed after the principle of totality is applied.

....

[51] In view of our conclusion that the two offences contained very substantial common elements, it could not be considered that the deduction made by her Honour was appropriate and sufficient. In a case such as this, the totality principle must be applied to ensure that the defendant is not punished more than once for the common elements of the offences and that the resultant penalty is appropriate to the overall criminality of the offences for which the defendant is being sentenced."

70 In determining the penalty to be applied to the defendants, taking into account the total criminality of the offences under s 11(1)(a), s 11(1)(b) of the OHS Act, and having regard to the various mitigating features, I consider the appropriate penalty to be:

(1) In matter No IRC 339 of 2011 - $5500.

(2) In matter No IRC 340 of 2011 - $5500.

(3) In matter No IRC 341 of 2011 - $55,000.

(4) In matter No IRC 342 of 2011 - $55,000.

71 I consider that the overall culpability of the defendants, bearing in mind the significant overlap between the four offences and the aggregate culpability arising from the effect of the breaches occurring at the same time (and being evidenced by a single incident) would result in a total fine of $65,000 in respect of the corporate defendant's breaches of s 11(1)(a) and s 11(1)(b) and $6500 in respect of the personal defendant's breaches of the same sections. Having regard to the separate assessments of the culpability of the corporate defendant and the personal defendant in relation to the offences, fines of $32,250 should be imposed in each matter relating to the corporate defendant and fines of $3250 should be imposed in each of the matters relating to the personal defendant.

72 I should note that in determining penalty, I have also had regard to the decision of the Full Bench in WorkCover Authority (Inspector Yeung) v Wilson (t/as Wilson's Tree Service) [2005] NSWIRComm 158; (2005) 143 IR 187, (at [122] - [133]), in particular that there will be a cost impact on the defendant in respect of the orders I make. I have taken this into account.

Costs

73 The prosecutor seeks a moiety and costs which I propose to grant.

74 I note that s 10 of the Fines Act provides that the defendants can apply to the Registrar of the Industrial Court for time to pay any fine. Should such an application be made, I would encourage its favourable consideration by the Registrar.

Orders

75 I make the following orders:

In Matter No IRC 339 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The personal defendant is convicted of the offence, as charged.

(3) The personal defendant is fined an amount of $3250 with a moiety thereof to the prosecutor.

(4) The personal defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

In Matter No IRC 340 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The personal defendant is convicted of the offence, as charged.

(3) The personal defendant is fined an amount of $3250 with a moiety thereof to the prosecutor.

(4) The personal defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

In Matter No IRC 341 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The corporate defendant is convicted of the offence, as charged.

(3) The corporate defendant is fined an amount of $32,500 with a moiety thereof to the prosecutor.

(4) The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

In Matter No IRC 342 of 2011

(1) The offence is proven and a verdict of guilty is entered.

(2) The corporate defendant is convicted of the offence, as charged.

(3) The corporate defendant is fined an amount of $32,500 with a moiety thereof to the prosecutor.

(4) The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed.

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Amendments

09 October 2013 - corrected paragraph numbering
Amended paragraphs: 75

Decision last updated: 09 October 2013