Comcare v Subsee Explorer Pty Ltd - [2011] FCA 837

FEDERAL COURT OF AUSTRALIA
Comcare v Subsee Explorer Pty Ltd [2011] FCA 837

Citation: Comcare v Subsee Explorer Pty Ltd [2011] FCA 837

Parties: COMCARE v SUBSEE EXPLORER PTY LTD (ACN 010 583 463)

File number: QUD 308 of 2009

Judge: COLLIER J

Date of judgment: 27 July 2011

Catchwords: INDUSTRIAL LAW – occupational health and safety – determination of quantity of pecuniary penalty – two employees and three members of the public died at sea when vessel made by respondent sank in the Torres Strait – breaches of s 18(1) and s 19(1) of the Occupational Health and Safety Act 1991 (Cth) admitted by respondent – principles in Comcare v Commonwealth of Australia [2007] FCA 662; (2007) 163 FCR 207 relevant to determining quantity of pecuniary penalty – seriousness of breach – consideration of mitigating factors

Legislation: Navigation Act 1912 (Cth)
Occupational Health and Safety Act 1991 (Cth) Sch 2, ss 18(1), 19(1)
Transport Operations (Marine Safety) Act 1994 (Qld)

Cases cited: Comcare v Commonwealth of Australia [2007] 163 FCR 207 cited
Comcare v The Commonwealth of Australia [2010] FCA 1331 related
Inspector Jelley v Lanza Management Pty Ltd [2008] NSWIRComm 125 cited

Date of hearing: 12 July 2011

Place: Brisbane

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 63

Counsel for the Applicant: Mr AK Herbert

Solicitor for the Applicant: DibbsBarker

Counsel for the Respondent: Mr J Trevino

Solicitor for the Respondent: Miller Bou-Samra Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 308 of 2009

BETWEEN:
COMCARE
Applicant

AND:
SUBSEE EXPLORER PTY LTD (ACN 010 583 463)
Respondent

JUDGE:

COLLIER J

DATE OF ORDER:

27 JULY 2011

WHERE MADE:

BRISBANE

THE COURT DECLARES THAT:
1.On and around 22 August 2005, the Respondent contravened subclause 2(1)(c) and subclause 2(1)(d) of Part 1 of Schedule 2 of the Occupational Health and Safety Act 1991 (Cth) (“OHS Act”), by reason of the Respondent having breached section 18(1) and section 19(1) of the OHS Act (“the contraventions”).
2.The conduct that constituted the contraventions was:
(a)the Respondent constructed six aluminium vessels under contract to the Commonwealth of Australia (“DIMA”), one of which was later named “Malu Sara”. Those vessels (including Malu Sara) were purchased by DIMA for the use of employees of DIMA in the course of their employment;
(b)the Malu Sara was not constructed in accordance with, and did not meet the standards prescribed by, the contract between the Respondent and DIMA and, in particular, was not compliant with material parts of AS1665, AS1799 and USL Code 2C;
(c)the Malu Sara was not constructed with any buoyant material positioned at the upper levels of the vessel, and was not otherwise designed or equipped, to ensure that the vessel remained upright if swamped, contrary to AS1799;
(d)the Malu Sara was not constructed with sufficient reserve buoyancy nor with sufficiently watertight compartments, to prevent it from sinking altogether when swamped, contrary to AS1799;
(e)the positive flotation statements for the vessels (including the Malu…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Comcare v Subsee Explorer Pty Ltd

Details

AGLC: Comcare v Subsee Explorer Pty Ltd [2011] FCA 837
Case: [2011] FCA 837
Decision Date: 27 July 2011

CaseChat Overview and Summary

The court was presented with a case involving Subsee Explorer Pty Ltd, which was contracted to build and supply six Immigration Response Vessels (IRVs) to the Department of Immigration and Multicultural Affairs (DIMA). Tragically, one of these vessels, the Malu Sara, sank in the Torres Strait, leading to the deaths of two employees and three members of the public. The Commonwealth, acting through Comcare, brought proceedings against Subsee for breaches of the Occupational Health and Safety Act 1991 (Cth). Subsee admitted to breaches of sections 18(1) and 19(1) of the Act, which relate to the design, construction, and supply of vessels that were not safe for use at work.

The court had to determine the appropriate pecuniary penalty to impose on Subsee for these breaches. The decision-making process was informed by principles outlined in previous cases, particularly Comcare v The Commonwealth of Australia [2007] FCA 662; (2007) 163 FCR 207. The court considered the seriousness of the breach, the extent of non-compliance with relevant standards, and any mitigating factors. Subsee's admissions highlighted multiple failures in the construction and supply of the Malu Sara, including deficiencies in design, inadequate testing, and failure to provide essential information to DIMA. The court acknowledged the significant impact on the families of the deceased, particularly highlighting the pain and anguish of one bereaved sister.

After thorough consideration, the court found that Subsee's conduct was extensive and substantial, warranting a significant penalty. The court determined that the maximum penalty of $242,000 should be imposed on Subsee for the breaches of sections 18(1) and 19(1) of the OHS Act, noting that only one penalty could be imposed despite the dual contraventions stemming from the same conduct. The court also ordered Subsee to pay Comcare's costs, to be taxed or agreed upon. This decision underscored the importance of stringent compliance with occupational health and safety standards in high-risk industries.

Orders

Orders of the court

1. Pursuant to clause 4 of Part 1 of Schedule 2 of the Occupational Health and Safety Act 1991 (Cth) the Respondent pay a pecuniary penalty of $242,000 within 28 days of the date of judgment.

2. The Respondent pay the Applicant’s costs to be taxed, unless otherwise agreed.

Note:

Background

Background to the litigation

In considering the question of penalty, it is appropriate to describe the background to these proceedings. While many relevant facts were described in Comcare v The Commonwealth of Australia [2010] FCA 1331, it is necessary to examine all relevant facts relating to Subsee and it role in the events culminating in the loss of the Malu Sara and all on board.Background The Department of Immigration and Citizenship is a Department of the Commonwealth of Australia. At all times relevant to these proceedings prior to 30 January 2007 the Department was known as the Department of Immigration and Multicultural Affairs (“DIMA”). Unique migration issues arise in the Torres Strait because of a treaty signed by the Commonwealth of Australia and Papua New Guinea in 1978 which sought to resolve uncertainty as to the international boundary between the two countries. The treaty recognises and seeks to preserve the traditional rights of the inhabitants of the Torres Strait to travel throughout the region for trade and cultural activities without the imposition of the burdens usually associated with international travel. DIMA was charged with the responsibility for managing immigration and border control through the Torres Strait. Movement Monitoring Officers (“MMOs”) were recruited by DIMA to assist in patrolling the reefs and islands of the region. The MMOs used immigration response vessels (“IRVs”) to conduct such patrols. At the time of the sinking of the Malu Sara, DIMA had a regional office on Thursday Island, which was staffed by four full-time employees and supported by twenty-seven MMOs. Towards the end of 2002 Mr Garry Chaston was appointed as DIMA’s regional manager on Thursday Island. In February 2004 Mr Chaston put a business case to DIMA to replace the existing fleet of vessels with new IRVs. Expenditure for the new IRVs was approved by DIMA. The procurement of the new IRVs remained the primary responsibility of Mr Chaston but he was assisted by Mr Paul Nemes, DIMA’s senior contract adviser. Mr Chaston also consulted Mr Greg Hellessey who was a qualified marine engineer, the MMOs and a range of other government agencies. After advertising, eight tenders were received. Criteria for assessment of the tenders were settled by Mr Chaston and Mr Nemes, and a team was established to evaluate each tender received. Subsequently, Subsee was contracted for the supply of the six IRVs. The contract with Subsee contained specific descriptions of the proposed vessels, the equipment to be fitted, the standards of construction, and the certificates required to accompany the vessels. Further, the contract stipulated that the vessels be supplied to the certified requirements of the Uniform Shipping Laws Code (“USL Code”), Class 2C, and comply with the Australian Standard (“AS”) 1799 and AS 1665. The contract also made provision for a prototype vessel to be delivered to Thursday Island within seven weeks of the contract being signed. The prototype vessel was to be subjected to various tests stipulated in the contract, including a sea trial, to ensure that any minor alterations required to the remaining vessels could be undertaken prior to finalisation of construction.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I agree.Conclusion Clause 7 of Pt 1 Sch 2 of the Act provides as follows:7 Conduct constituting a breach of 2 or more provisions listed in subclause 2(1)Proceedings may be instituted under this Act against a person in relation to one or more contraventions of subclause 2(1). However, the person is not liable to more than one pecuniary penalty under this clause in respect of the same conduct. In this case the same conduct is relied on in relation to both contraventions alleged, and only one pecuniary penalty may be imposed on the respondent despite admission of liability in relation to both matters. In my view the maximum penalty of $242,000 should be imposed on the respondent on account of the contravention of s 18(1) and s 19(1) of the OHS Act. Finally, an impact statement has been filed in these proceedings by Ms Racquel Banister, the sister of Mr Wilfred Baira. The Court acknowledges the extreme pain and anguish caused to Ms Banister and her family by the loss of Mr Baira.

Ratio Decidendi

Legal Principle Established

Subsee has admitted to extensive and substantial contraventions of the OHS Act. They are as follows:1.At all material times Subsee knew that the Malu Sara would be used by employees within the meaning of s 9(1) of the OHS Act, at work, and in the sea conditions that were likely to occur in the waters of the Torres Strait (including up to 15 miles offshore).2.Pursuant to s 18(1) of the OHS Act, Subsee had an obligation as manufacturer of the Malu Sara to take all reasonably practicable steps to:(a)ensure that the Malu Sara was designed and constructed so as to be, when properly used, safe for use by employees of the Commonwealth and without risk to their health;(b)carry out, or caused to be carried out research, testing and examination necessary in order to discover and to eliminate or minimise, any risk to the health or safety of employees of the Commonwealth that may arise from the use of the Malu Sara; and(c)to make available to the Commonwealth, in connection with the use of the Malu Sara by its employees, adequate information concerning:(i)the use for which it is designed and had been tested;(ii)details of its design and construction; and(iii)any conditions necessary to ensure that, when put to the use for which it was designed and tested, it would be safe for employees of the Commonwealth and without risk to their health.3.Pursuant to s 19(1) of the OHS Act, Subsee had an obligation as supplier of the Malu Sara to take all reasonably practicable steps to:(a)ensure that, at the time of supply, the Malu Sara was in such a condition as to be, when properly used, safe for all employees of the Commonwealth and without risk to their health;(b)to carry out, or cause to be carried out, the research, testing and examination necessary in order to discover, and to eliminate or minimise, any risk to the health or safety of employees of the Commonwealth, that may arise from the condition of the Malu Sara; and(c)to make available to the Commonwealth, in connection with the use of the Malu Sara by Commonwealth employees at work adequate information concerning:(i)the condition of the vessel on supply to the Commonwealth;(ii)any risk to the health and safety of Commonwealth employees to which the condition of the vessel may give rise unless it was used properly;(iii)the steps that need to be taken in order to eliminate such risk.4.Subsee accepts that it contravened s 18(1) and s 19(1) of the OHS Act in the following respects:(a)the Malu Sara was not constructed in accordance with, and did not meet the standards prescribed by, the contract between Subsee and DIMA, and in particular, was not compliant with material parts of AS166520, AS1799 and USL Code 2C as required;(b)the scuppers draining the weather deck on the Malu Sara were substantially smaller than the minimum required of AS1799;(c)a single centre line freeing port in the outboard well was of insufficient size and did not comply with AS1799;(d)the above deficiencies referred to in the preceding two sub-paragraphs, in combination with the effect of a flap fitted to the outboard motor side of the scuppers and freeing port, restricted drainage of water overboard from the weather deck and limited the effectiveness of the items;(e)the Malu Sara did not meet level flotation or swamp stability requirements, in that:(i)it was not constructed with any buoyancy situated at upper levels of the vessel to ensure that the vessel remained floating upright if swamped, contrary to AS1799; and(ii)it was not constructed with sufficient reserve buoyancy to prevent it from sinking altogether when swamped, contrary to AS1799.(f)the positive flotation statement for the vessels supplied by Subsee (including the Malu Sara) was irregular on its face, in that it incorrectly cited void air compartments as being “buoyant material”, did not correctly assess or describe the standard and calculations used to assess the allowable flotation under AS1799 or USL Code 2C, and falsely declared a condition of positive buoyancy that the Malu Sara (and each of its sister vessels) did not have;(g)when the Malu Sara was fully loaded, it exhibited negative freeboard, which permitted ingress of water through scuppers onto the weather deck, affecting the weight and stability of the vessel;(h)on the basis of tests conducted on two of the sister-ships, the weather deck on the Malu Sara was not water tight, which allowed the ingress of water into the bilge, also affecting the weight and stability of the vessel, and compromising the only void relied upon for buoyancy in the vessel;(i)Subsee did not conduct swamp tests or sea trials on the Malu Sara for the purpose of verifying the accuracy of the statements made on behalf of Subsee in the positive flotation statement;(j)Subsee did not have the Malu Sara assessed or inspected by any qualified person to determine whether or not the vessel met all requirements of the contract or AS1799 or the standards required by USL Code 2C;(k)the fuel tank gauge was faulty as it read incorrectly and was not calibrated;(l)it was probable that the welding and sealing of void spaces in the Malu Sara were faulty, such that the water tight integrity of the vessel was not able to be maintained;(m)the weather deck draining provision was such that the Malu Sara’s decks would not be able to be sufficiently cleared of water in conditions of weather and sea, which could reasonably be expected to be encountered;(n)no bilge alarm was fitted;(o)the fuel lines on the Malu Sara were not sufficiently protected;(p)no operational manuals or other information about the use, operation (including safe operation) or maintenance of the vessel were provided to the Commonwealth by Subsee (although operations manuals for the outboard motor were provided by Subsee); and(q)no plate or sign was affixed to the Malu Sara to indicate to the operator the safe carrying capacity of the vessel.Consideration of relevant principles

Citation:		Comcare v Subsee Explorer Pty Ltd [2011] FCA 837
Parties:		COMCARE v SUBSEE EXPLORER PTY LTD (ACN 010 583 463)
File number:		QUD 308 of 2009
Judge:		COLLIER J
Date of judgment:		27 July 2011
Catchwords:		INDUSTRIAL LAW – occupational health and safety – determination of quantity of pecuniary penalty – two employees and three members of the public died at sea when vessel made by respondent sank in the Torres Strait – breaches of s 18(1) and s 19(1) of the Occupational Health and Safety Act 1991 (Cth) admitted by respondent – principles in Comcare v Commonwealth of Australia [2007] FCA 662; (2007) 163 FCR 207 relevant to determining quantity of pecuniary penalty – seriousness of breach – consideration of mitigating factors
Legislation:		Navigation Act 1912 (Cth) Occupational Health and Safety Act 1991 (Cth) Sch 2, ss 18(1), 19(1) Transport Operations (Marine Safety) Act 1994 (Qld)
Cases cited:		Comcare v Commonwealth of Australia [2007] 163 FCR 207 cited Comcare v The Commonwealth of Australia [2010] FCA 1331 related Inspector Jelley v Lanza Management Pty Ltd [2008] NSWIRComm 125 cited
Date of hearing:	12 July 2011
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	63
Counsel for the Applicant:	Mr AK Herbert
Solicitor for the Applicant:	DibbsBarker
Counsel for the Respondent:	Mr J Trevino
Solicitor for the Respondent:	Miller Bou-Samra Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 308 of 2009

BETWEEN:	COMCARE Applicant
AND:	SUBSEE EXPLORER PTY LTD (ACN 010 583 463) Respondent

JUDGE:	COLLIER J
DATE OF ORDER:	27 JULY 2011
WHERE MADE:	BRISBANE