FEDERAL COURT OF AUSTRALIA
Comcare v John Holland Pty Ltd [2012] FCA 449
Citation: Comcare v John Holland Pty Ltd [2012] FCA 449 Parties: COMCARE v JOHN HOLLAND PTY LTD (ABN 009 282 242) and JOHN HOLLAND GROUP PTY LTD (ACN 050 242 147) File number: WAD 406 of 2010 Judge: MCKERRACHER J Date of judgment: 2 May 2012 Catchwords: INDUSTRIAL LAW - occupational health and safety - penalty - failure to provide and maintain a safe working environment - fall from a height at the Mount Whaleback mine site - unsecured metal grid mesh - fatal accident involving an employee after two near miss incidents - consideration of exercise of discretion in relation to agreed penalty and enforceable undertaking - declaration of contravention - maximum penalty imposed Legislation: Occupational Health and Safety Act 1991 (Cth) ss 16(1), 16(2), cl 2(1)(a), Pt 1, Sch 2, cl 4, Pt 1, Sch 2 Cases cited: Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114
Comcare v Commonwealth of Australia (2007) 163 FCR 207
Comcare v Linfox Australia Pty Ltd (2010) 198 IR 160
Comcare v National Gallery of Australia (2007) 98 ALD 67Date of hearing: 19 April 2012 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 53 Counsel for the Applicant: MD Howard SC Solicitor for the Applicant: DLA Piper Australia Counsel for the Respondents: T McEvoy Solicitor for the Respondents: Herbert Geer
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 406 of 2010
BETWEEN: COMCARE
ApplicantAND: JOHN HOLLAND PTY LTD (ABN 009 282 242)
First RespondentJOHN HOLLAND GROUP PTY LTD (ACN 050 242 147)
Second Respondent
JUDGE:
MCKERRACHER J
DATE OF ORDER:
19 APRIL 2012
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The Court declares that:
On 19 March 2009, the First Respondent contravened Clause 2(1)(a) of Schedule 2, Part 1 of the Occupational Health and Safety Act 1991 (Cth) by reason of it having breached Section 16 of the said Act in that it failed to take all reasonably practicable steps to protect the health and safety at work of its employees by:
(a)failing to provide and maintain a working environment, including plant and systems of work, that was safe;
(b)failing to ensure the safety at work of, and the absence of, risks at work to the health of its employees in connection with the placement and fixing of metal grid mesh at the BHP Billiton Iron Ore operated Mt Whaleback Facility (Facility) in the Pilbara region of Western Australia;
(c)failing to provide appropriate information, instruction, training and supervision to its employees in connection with the placement and fixing of metal grid mesh at the Facility;
(d)failing to adequately barricade and put in place warning signs in areas where it was possible for the grid mesh sheeting to fall;
(e)failing to ensure that a sufficient number of, initially, temporary clips and, subsequently, permanent bolted clops attaching the grid mesh sheeting…
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- Case
- [2012] FCA 449
- Decision Date
CaseChat Overview and Summary
Orders
Orders of the court
1. The Court declares that:
On 19 March 2009, the First Respondent contravened Clause 2(1)(a) of Schedule 2, Part 1 of the Occupational Health and Safety Act 1991 (Cth) by reason of it having breached Section 16 of the said Act in that it failed to take all reasonably practicable steps to protect the health and safety at work of its employees by:
(a) failing to provide and maintain a working environment, including plant and systems of work, that was safe;
(b) failing to ensure the safety at work of, and the absence of, risks at work to the health of its employees in connection with the placement and fixing of metal grid mesh at the BHP Billiton Iron Ore operated Mt Whaleback Facility (Facility) in the Pilbara region of Western Australia;
(c) failing to provide appropriate information, instruction, training and supervision to its employees in connection with the placement and fixing of metal grid mesh at the Facility;
(d) failing to adequately barricade and put in place warning signs in areas where it was possible for the grid mesh sheeting to fall;
(e) failing to ensure that a sufficient number of, initially, temporary clips and, subsequently, permanent bolted clops attaching the grid mesh sheeting to the structural steel were available to be used to secure the grid mesh;
(f) failing to ensure that the grid mesh sheeting was properly and adequately secured to ensure that it did not fall;
(g) failing to adequately assess the hazard of grid mesh sheeting falling;
(h) failing to ensure that formal or proper handover processes were in place to enable proper exchange of information between shifts; and
(i) failing to ensure that adequately trained supervisors were in the workplace at all times.
2. Pursuant to Clause 4 of Part 1 of Schedule 2 of the Occupational Health and Safety Act 1991 (Cth), the First Respondent pay to the Commonwealth of Australia a pecuniary penalty in respect of the breach of Section 16(1) of that Act of 2,200 penalty units which equates to $242,000 within 45 days.
3. The First Respondent pay the Applicant’s costs to be taxed if not otherwise agreed.
4. The action against the Second Respondent be adjourned to Monday 21 October 2013 at 10.15 am.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
In particular, the first respondent has:(a)admitted the allegations relating to the fatality in its defence, and subsequently in its amended defence filed in response to the amended statement of claim;(b)entered into an Enforceable Undertaking (EU) with Comcare;(c)agreed to the statement of agreed facts;(d)agreed to the proposed declaration; and(e)agreed to submit, jointly with Comcare, that the Court impose upon the first respondent the maximum penalty of 2,200 penalty units for a contravention of item 2 of Sch 2 of the Act, being $242.000.CONSIDERATION It is unnecessary to discuss the cases concerning the reasons why declarations might be imposed by a court. The provisions of the Act (cl 2(1) of Sch 2 of the Act) make it mandatory in circumstances of a breach such as the present that the Court impose declarations. In any event, it would be proper to do so. As to the appropriateness of the penalty, although the respondents may have done much since this tragedy occurred, the maximum penalty itself is insignificant compared with the loss of a human life. A large corporation might be expected to pay substantially more than the prescribed maximum in the circumstances of this event. Additionally there would be much to be said for the payment to be received by the dependents rather than the revenue. But these are both considerations for regulator and the legislature. In fact under the 2012 Act, the penalties have greatly increased. In relation to penalty generally, as I noted in Comcare v Linfox Australia Pty Ltd (2010) 198 IR 160 (at [38]), the role of the Court is by no means one of mere rubber stamping when it comes to agreed penalty but a commonsense approach is to take the agreed figure and give consideration to whether it is within the range of appropriate figures: see, for example, Gyles J in Comcare v National Gallery of Australia (2007) 98 ALD 67 (at [8]) and the discussion by French J, as his Honour then was, in Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 95 FCR 114 (at [37]-[39]). In Comcare v Linfox I also discussed the approach taken by Madgwick J in Comcare v Commonwealth of Australia (2007) 163 FCR 207 (at [120] and [123]). I repeat what I said in that case (at [40]-[44]) that:[40]… the following matters ‘provided useful and logical general guidance as to the approach to be taken in consideration of penalties under the Act:(i)the penalty must be such as to compel attention to occupational health and safety generally, to ensure that workers whilst at work will not be exposed to risks to their health and safety;(ii)it is a significant aggravating factor that the risk of injury was foreseeable even if the precise cause or circumstances of exposure to the risk were not foreseeable;(iii)the offence may be further aggravated if the risk of injury is not only foreseeable but actually foreseen and an adequate response to that risk is not taken by the employer;(iv)the gravity of the consequences of an accident does not of itself dictate the seriousness of the offence or the amount of penalty. However the occurrence of death or serious injury may manifest the degree of the seriousness of the relevant detriment to safety;(v)a systemic failure by an employer to appropriately address a known or foreseeable risk is likely to be viewed more seriously than a risk to which an employee was exposed because of a combination of inadvertence on the part of an employee and a momentary lapse of supervision;(vi)general deterrence and specific deterrence are particularly relevant factors in light of the objects and terms of the Act;(vii)employers are required to take all practicable precautions to ensure safety in the workplace. This implies constant vigilance. Employers must adopt an approach to safety which is proactive and not merely reactive. In view of the scope of those obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the employer in the future. This is particularly so where the employer conducts a large enterprise which involves inherent risks to safety;(viii)regard should be had to the levels of maximum penalty set by the legislature as indicative of the seriousness of the breach under consideration;(xi)the neglect of simple, well-known precautions to deal with an evident and great risk of injury, take a matter towards the worst case category;(x)the objective seriousness of the offence, without more may call for the imposition of a very substantial penalty to vindicate the social and industrial policies of the legislation and its regime of penalties.[41]The view taken by Madgwick J in that case (at [125]) was that the maximum penalty would be appropriate where there had been a "conscious decision to flout the law". That approach was followed by North J in Comcare v Commonwealth (2009) 184 IR 441 (at [69]-[71]).[42]Similarly in Comcare v John Holland Rail Pty Ltd (2009) 188 IR 415, Barker J said (at [135]-[136]) speaking of the OHS Act:[135]Object (g) anticipates that where obligations are not met, effective remedies may be imposed through both the use of civil remedies and, in serious cases, criminal sanctions. To put the matter directly, the inclusion of Sch 2 in the OHS Act emphasises a legislative intention that contravention of the occupational, health and safety principles and duties created by the Act should be sanctioned, in appropriate cases, by civil or criminal orders.[136]In the present case, the purpose of a civil pecuniary penalty, if imposed, is to deter the particular offender from offending again, as well as having the effect of generally deterring other employers from acting in a similar way. The imposition of a pecuniary penalty may be considered to have the advantage of reminding a particular employer of the importance of complying with the duties imposed on them by the OHS Act, as well as reminding other employers of the potential consequences should they fail to comply with the requirements of the Act. The imposition of an appropriate penalty is also calculated to give the community, and in particular relevant employees, confidence that the OHS Act is taken seriously.[43]His Honour continued on the topic of assessing the quantity of a pecuniary penalty (at [137] and [141]-[143]) to say:[137]When it comes to assessing what level of pecuniary penalty should be imposed, the courts have over a number of years, in a number of different regulatory settings, developed criteria that are considered relevant to the formulation of the quantum of a civil pecuniary penalty. Accordingly, in Comcare v Commonwealth (2007) 163 FCR 207, 162 IR 407, Madgwick J at [116] emphasised that the overriding principle in assessing penalty is that the amount of the penalty should reflect the Court's view of the seriousness of the offending conduct in all the relevant circumstances....[141]With respect, like North J, I agree with the observations of Madgwick J and consider these are all relevant criteria to the assessment of a civil pecuniary penalty under the OHS Act.[142]However, I also concur with North J, in his emphasis of the overriding caution expressed by Flick J in Comcare v Post Logistics Australasia Pty Ltd (2008) 178 IR 200, where His Honour said that care must be taken to ensure that any listing of potentially relevant considerations do not themselves become an impermissible substitute for considering the terms of the legislation in issue or an unnecessary constraint upon a discretion conferred in otherwise unconfined terms.[143]I should also add that I consider it is relevant to the assessment of a pecuniary penalty to acknowledge, where it is the case, an admission of contravention and particularly an early admission by a respondent of its liability to the imposition of a remedy under the OHS Act. Where, for example, a respondent in a proceeding such as these early on acknowledges fault and willingness to accept a declaration of contravention, then the respondent will ordinarily be entitled to additional consideration in the assessment of the penalty. In some contexts this process is termed giving credit or "discount" on penalty. There is no statutory entitlements to such credit or a discount but it serves public policy in that it encourages a respondent to act responsibly, and may achieve a reduction in the public resources that would otherwise be required to prosecute the proceedings against the respondent[44]Finally, it is to be noted (as Barker J did) that Flick J observed in Post Logistics Australasia Pty Ltd (at [39]) that penalties are not imposed by reference to penalties in other cases being considered a benchmark. His Honour said:[39]A final matter of principle should also be noted. It is inappropriate to fix a penalty simply by reference to the quantum of a penalty imposed in another case. It was thus understood to be common ground between the parties to the present proceeding that it was not appropriate to regard (in particular) the penalty of $198,000 in Comcare v Commonwealth as itself fixing a "benchmark" against which other penalties are to be determined in cases involving death. In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285, Burchett and Kiefel JJ observed (at 295):A hallmark of justice is equality before the law, and, other things being equal, corporations guilty of similar contraventions should incur similar penalties: Trade Practices Commission v Axive Pty Ltd [(1994) ATPR 41-368] (at 42,795). There should not be such an inequality as would suggest that the treatment meted out has not been even-handed: cf the criminal law case Lowe v The Queen (1984) 154 CLR 606. However, other things are rarely equal where contraventions of the Trade Practices Act are concerned. In the present case, differing circumstances, size, market power and responsibility for the contraventions, as well as other factors, complicate any attempt to compare the penalties imposed on the appellant with those imposed on the other corporations.Another form of comparison is not appropriate. The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case. The point was well made by Spender J in Trade Practices Commission v Annand and Thompson Pty Ltd [(1987) ATPR 40-772] (at 48,394) when he said:Each case must, of course, be viewed on its own facts and facts may be infinite in their variety.It follows, as his Honour also said, that "[t]he quantum of penalties imposed in other cases can seldom be of very much direct assistance".A comparison of the facts in Comcare v Commonwealth and the facts in the present proceeding only serves to underline the point there being made by Burchett and Kiefel JJ (and by Spender J) — namely that the facts and circumstances of individual cases are infinitely diverse. The quantum of any penalty to be imposed must necessarily be fixed by reference to the peculiar facts arising in each case as and when they arise.