Director of Public Prosecutions v A & J Australia Pty Ltd

[2024] VCC 211

IN THE COUNTY COURT OF VICTORIA

Revised

Not Restricted

Suitable for Publication

AT MELBOURNE

CRIMINAL JURISDICTION

Case No. CR-23-01237

CR-23-01272

CR-23-01314

Indictment: C2316356

DIRECTOR OF PUBLIC PROSECUTIONS

v

A & J AUSTRALIA PTY LTD

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JUDGE:	HER HONOUR JUDGE DALZIEL
WHERE HELD:	Melbourne
DATE OF HEARING:	12 February 2024
DATE OF SENTENCE:	29 February 2024
CASE MAY BE CITED AS:	DPP v A & J Australia Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VCC 211

REASONS FOR SENTENCE

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Subject:         Criminal Law

Catchwords:  Occupational Health and Safety

Legislation Cited:

Cases Cited:

Sentence:     Fine of $545,000 for all the charges

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Ms N. Kaddeche with Ms S. Tatas for the plea Ms S. Tatas of Counsel for the plea and sentence	Office of Public Prosecutions
For the Accused	Mr W. Smith of Counsel for the plea Mr M. Zanier for the sentence	Zanier Legal Services

HER HONOUR: 

1A & J Australia Pty Ltd ('the Company') has pleaded guilty to 16 charges in respect to breaches of the Occupational Health and Safety Act 2004 ('the Act').

2The dates of the offending commenced in July 2020 and conclude in November 2021. 

3The Company began trading in 1993, initially as an importer of items such as cleaning products.  In 2004 in changed its business to manufacturing, principally making plastic containers.  At the time of the charges it conducted its operations nationally, including from a factory in Laverton North.  It had around 100 employees at that factory and ran its production operation
24 hours a day.  It has recently moved to lighter premises.

4The Company is a family business. The sole director and principal shareholder is Mr Andrew Yu who entered the pleas of guilty on behalf of the Company.  Other family members worked for the Company, notably a cousin, Jason Xu and also Mr Yu's brother as a warehouse manager, and his sister-in-law in accounts.

Incident 1, Charges 1 and 2.

5Charges 1 and 2 relate to an incident on 7 July 2020 when an employee of the Company, Mr Wei Wang, was injured in the course of his employment.  He had been working for the Company for around two and a half years as a technician.

6On 7 July 2020, he was operating a machine used for blowing or moulding plastic containers.  Granules of plastic flowed down a funnel into the machine assisted by a mechanical spiral which maintained the flow of the granules. 
Mr Wang was attempting to scoop granules from the funnel with his hands when his finger was somehow caught and damaged.  He lost sensation in his finger and on trying to remove his hand the finger became caught on the spiral.  When he pulled his arm out of the funnel, Mr Wang saw blood spattering from his hand. 

7Mr Yu took Mr Wang to a doctor and then to the hospital for treatment. 
Mr Wang had surgery the next day shortening the bone of his finger and closing the injury.

8The Act puts a positive obligation on employers to notify WorkSafe of reportable incidents.  The incident causing injury to Mr Wang was a reportable incident because Mr Wang required immediate medical treatment for the amputation of any part of his body or serious lacerations.

9A reportable incident must be reported to WorkSafe immediately after the employer becomes aware it has occurred. There is a dedicated phone number for this purpose. Immediate reporting can allow prompt investigation by WorkSafe if it is considered necessary, and thus s39 of the Act requires the area where the injury took place to be kept preserved until an inspector arrives.

10The Company did not inform WorkSafe about this incident on the day of the injury, that is 7 July 2020.  The Company completed an employer injury claim report which was lodged with WorkCover the following Wednesday, that is
14 July 2020.  This claim report indicated that the tip of the worker's finger had been cut off and described how it occurred.  An incident report on 10 July 2020 was also completed, but notification of the incident to WorkSafe did not occur until 27 November 2020.

11The defence submission before me was that the Company did not realise any other notification than the employer injury claim report had been required.  Two charges arise from this incident: Charge 1, failing to notify the authority of a reportable incident; and Charge 2, failing to preserve incident site. 

12The maximum penalty applicable to each charge is 1,200 penalty units which amounts to $198,264 per charge.

13In terms of the gravity of these two charges, it is apparent that the Company was not actively seeking to keep this incident from WorkSafe's attention.  As noted earlier, the claim form stated the nature of the injury and how it occurred.  It appears that the failure to notify and preserve the scene was due to ignorance rather than deliberate misconduct.  Nevertheless, the positive duty exists and was breached.

Incident 2, Charges 3-5 relate

14One of the machines at the Company's northern factory was a granulator.  This machine chops up rejected plastic products into plastic granules that can be reused.  It would happen from time to time that the granules would get stuck in the machine and need to be removed.  One method of doing so was to use an LPG torch to heat the clogged granules. 

15Some time prior to an incident on 17 November 2020, the Company's national operations manager, Mr Edwards, had observed a worker using the torch for this purpose and he put a stop to it.  He had purchased a hot air gun to be used instead of the open flame torch.  No risk assessment was carried out, nor was a formal procedure implemented of using the hot air gun rather than the torch.

16At the time of incident 2, the COVID-19 pandemic was in progress.  Unmarked containers of methylated spirits had been left around the factory workplace, apparently to be used as hand sanitiser.  There was no marking on these containers indicating that they contained methylated spirits.

17On 17 November 2020 Jason Xu was operating the granulator.  It became clogged and he attempted to clear the blockage using the LPG torch.  The plastic caught fire.  CCTV footage shows a small amount of flames on the floor, with Mr Yu looking at them. 

18Mr Xu returned to the fire having fetched a plastic bottle of what he must have thought was water, but which was actually methylated spirits.  He poured the content of the bottle on the small flame, causing the fire to expand rapidly so that both he and Mr Yu were caught in the flames. 

19Mr Xu ran from the fire in one direction stripping off his hi-vis shirt.  His glove was still on fire as he left the area captured by the CCTV.

20Mr Yu had fled down a walkway and was next seen on the CCTV rolling on the floor attempting to extinguish the flames on his upper clothing and pants.  Employees tried to extinguish the flames using cardboard and then they assisted him to remove his still burning clothing.  The fire at the granulator was put out by another worker with a hose.

21Both Mr Yu and Mr Xu suffered serious burns and were transported to hospital. 

22Charges 3, 4 and 5 are each a breach of s21 of the Act, relating to the failings regarding a safe method of removal of built-up plastic from the granulator, Charge 3; the storage of flammable liquids in unmarked containers on the production floor, Charge 4; and issues regarding fire safety training, Charge 5.

23After this incident the Company implemented policies for working with heat and open flame using a heat gun for clearing out jams from the granulator.  Meetings were held to discuss removal of plastics from the granulator and hot works generally. 

24WorkSafe was notified of the incident and inspectors attended on the day of the fire, that is 17 November 2020.  Six prohibition notices and six improvement notices were issued this day.  WorkSafe inspectors attended again on 25 November 2020.  Twelve improvement notices were issued, seven of which had a due date of 1 week later, and one, 4 weeks later.

25On 26 November seven prohibition notices were issued and a further
11 improvement notices.  The due date of six of the improvement notices was 1 February 2021, that is approximately three months later.

26Inspectors attended the factory three times in December and once in January 2021 to review the compliance with the notices.  At the visit on 21 December 2021, it was observed that a procedure had been put in place for the removal of the built-up plastic from the granulator, and that open flame torches had been removed from the workplace.  A further improvement notice was issued in January 2021.

27There were two further attendances in February 2021 for a review of compliance, and then on 12 March 2021 two more improvement notices were issued.  There were a further five visits by the inspectors over March/April 2021 and on 3 May 2021, the informant attended to take possession of documents.  WorkSafe officers continued to attend the workplace and in June 2021 it was noted that the employer had engaged a consultant to assist with identifying hazards and assess risk.

28On 30 June 2021 the Company's failure to comply with outstanding improvement notices was discussed.  Whilst the Company had made progress in rectifying issues identified in the notices, not all had been actioned. 

29Defence counsel submitted on the plea that there had been so many issues to attend to that it had not been possible to comply with every item on the notices.

30The opening sets out 17 improvement notices which had not been fully complied with by their due dates.  The issues addressed in the notices were traffic management, guarding (13 instances); pallet racking; a plant power source issue; and a lock out, tag out system of work.

31Charges 6-12 relate to the failures to comply with 17 improvement notices. Charges 13, 14 and 15 related to the Company directing employees to use machines which were the subject of prohibition notices.

32Charge 13 related to two such directions, 14 to two, and 15 to six occasions on which employees were directed to use machines contrary to the prohibition notices.

33The maximum penalty on each of Charges 6-15 is 2,500 penalty units, that is $413,050.

Gravity of offending

34The maximum penalty which applies to each of Charges 3, 4 and 5 is $1,486,980.  Charge 3 particularises the failings of the Company as failing to reduce a risk that the plastic would ignite on exposure to open flame, and not undertaking a risk assessment to identify hazards associated with the use of granulators, including addressing the use of open flames to clear built-up plastic, not implementing a safe operating procedure for clearing built-up plastic with a hot air gun rather than a naked flame, and not implementing a system where employees would get permission and training to use a naked flame in their work.

35The risk of the open flame igniting the built-up plastic was obvious.  Indeed, Mr Edwards was aware of it and had purchased a heat gun however, the change of procedure was not formally implemented, and it is not clear whether Mr Xu at least was aware of the heat gun and that it should be used instead.

36The extent of harm which could be caused by this failure to implement a safe system of work was not minimal.  The risk was that the plastic would catch fire and there was thus a risk at least of injury, and of serious injury at the upper end of the scale.

37Charge 4 relates to the failings of the Company in the storage of flammable liquids.  The bottle of liquid used by Mr Xu was not the only unmarked bottle of methylated spirits on the factory floor.  It would have been easy and inexpensive to mark the bottles as containing methylated spirits and that the liquid was flammable.  The potential harm which eventuated on 17 November 2020 was eminently foreseeable.  That is, it was entirely foreseeable that a person would not realise that the contents of the containers were not water and that they were indeed highly flammable.  One can also envisage other harms such as someone consuming the contents believing them to be water.

38This was a serious breach of duty.  The risks were high, the preventative measures simple and inexpensive, and there was a high likelihood of serious harm including serious injury or potentially death.

39Charge 5 is directed at the failure to train employees regarding fire safety and management.  The response of Mr Xu and Mr Yu to the small fire, and then the responses of the other employees once the two men had caught fire, demonstrate the inadequacy of the training of the employees about fire management.  Cardboard boxes were used to attempt to smother flames and then what appears to be a small water hose to extinguish the flames on the granulator.  The risk of injury, including serious injury and death due to uncontrolled fire, particularly in an environment with many flammable items about was high.

40I turn back to incident 3, which is Charge 16.

41On 30 November 2021 Pasin Imamphai was working at the factory. He was not a direct employee of the Company and so the charge to which the Company has pleaded guilty is pursuant to s23 of the Act, failing to ensure that persons other than employees are not exposed to health or safety risks.

42Mr Imamphai was working at Machine 13, a plastic blowing and moulding machine.  The take up unit of the machine would take a finished plastic item out of the machine and move it towards the worker.  Mr Imamphai was standing at the front of the table where the item was to drop from the takeout unit when he observed a bottle had become stuck.  He pressed the emergency stop button to prevent the machine closing.  Suddenly, the takeout unit fell and hit him on the head.  This unit weighed approximately
40 kilograms and fell around 2.3 metres.

43Mr Imamphai if suffered lacerations to his scalp and concussion as well as scratches and bruises when he fell to the ground.  The injury, in particular the concussion, reduced his ability to work at home and in paid employment.  He wrote in his victim impact statement 'After the accident I thought I was so lucky to be alive'.

44The Company reported the incident immediately and both police and WorkSafe investigators attended.  It was determined that there was insufficient guarding and protection for the operator of this machine, the takeout unit was in poor condition, it was missing several bolts, and it had fallen because the bolts which were in place had sheared.  It was also determined that there were no records of routine maintenance taking place on this machine.

45On the plea hearing it was noted by defence counsel that whilst a risk assessment had been carried out in July 2021 by a consultant engaged by the employer, the risk identified had been incorrectly copied on the same terms as other machines which operated in a different fashion.  It was submitted that the risk of a worker being hit by the takeout unit, or an item being dropped by that unit in the course of normal operations was not high, given the manner in which the unit operated and the location of a steel table under it.

46Having seen the videos tendered by defence counsel on the plea, it certainly appears that the risks associated with normal use of this machine were quite different to the other robot arm machines.  The greater failing in respect to this machine and this incident, is the failure to maintain it.  As I have noted, a number of bolts were missing from the takeout unit and those in place sheared, allowing the 40-kilogram unit to fall.

47Whilst I accept that the previous suggestions both by WorkSafe and the private consultant were focused on guarding, this did not obviate the need of the employer to maintain the plant.  Thus, while I accept that the Company was not directed or alerted by its consultant or the inspectors about this issue, this is the absence of an aggravating factor, not a mitigating factor.

48Given that regular and routine maintenance is a fundamental requirement to ensure the safe operation of any equipment, and that this unit was permitted to be in place with bolts missing, I consider this to be a mid-range breach of the employer's duty.  The maximum penalty for this charge is 9,000 penalty units, that is $1,635,660.

Sentencing considerations

49I turn now to the sentencing factors I must have regard to.

50Defence counsel noted that the Company had no prior convictions and that it had pleaded guilty at an early stage.  The prosecution agreed that the pleas of guilty had been entered at a relatively early stage.  I accept that the pleas of guilty have significant utilitarian value and have facilitated the administration of justice.  I also accept that Mr Yu, the sole director of the Company, is remorseful for the failings of his business.  The Company has pleaded guilty which is an acceptance of responsibility, and I also note that Mr Yu has made a generous donation to the Alfred Hospital Burns Unit.

51Whilst it is a factor in mitigation that the Company has no prior matters before a court, it certainly cannot be said that these offences were isolated instances of breaches of the Occupational Health and Safety Act 2004. On the contrary, the series of events and failings indicates that each breach occurred in the context of a broader failure to identify and deal with risks and to comply with the Act.

52The prosecution drew my attention to the importance of the objective gravity of the offending in arriving at sentence, noting the following authority:

The primary factor to look at in relation to the penalty to be imposed is the objective seriousness of the offence. Particularly in cases involving a serious breach of the OH&S Act, subjective factors, such as a plea of guilty, co-operation with the investigation and subsequent measures taken to improve safety, must play a subsidiary role in the determination of penalty to the gravity of the offence itself… the presence of the subjective factors referred to should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence.[1] 

[1] DPP v Amcor Packaging Pty Ltd (2005) 11 VR 557 citing Workcover Authority of New South Wales v Profab Inductries Pty Ltd (2000) 49 NSWLR 700, 714 [31]

53General deterrence is the significant factor. Employers must be proactive in identifying and ameliorating risk and one method of trying to bring this home to employers is the imposition of significant penalties where breaches of the Act occur. In respect to Charges 3, 4 and 5 one of the persons injured was
Mr Yu, the sole director of the Company.  Whilst he is not the accused, I take into account that as the sole director of the accused Company, he himself was injured and I will treat this as a form of extra curial punishment.

54In the circumstances of this case I accept that the Company has taken steps to address its failings in occupational health and safety.

55A consultant was engaged and many steps taken to address the issues identified by the WorkSafe inspectors.  Given the many failings over time by the Company I still consider that specific deterrence has some, although small, role to play in arriving at the appropriate penalties.

56Defence counsel submitted that in view of the Company's lack of prior convictions, no conviction should be recorded.  I do not accept that submission.  Whilst it has some force in respect to Charges 1 and 2, when I come to consider the remainder of the charges, the impact of the lack of prior convictions is considerably less.  Even if Charges 3, 4 and 5 and indeed Charge 16 were the only charges before the court, they are far from insignificant breaches of the Company's duty to its employees and others, and each would warrant a conviction with the fine even in isolation.  Furthermore, there were so many failings to comply with the notices that a conviction is warranted on those charges also.

57No submissions were made as to the financial capacity of the Company beyond submitting that the Company could pay a fine.

Extent of current sentencing practice

58Defence counsel provided a number of summaries taken from the WorkSafe website which provided a summary of the facts and sentencing remarks upon matters concluded in the Magistrate's Court.  I was also referred to three cases by the prosecution with some similarities in the facts.

59The summaries and cases provided by the parties have been of assistance to me in formulating the sentences on the charges but as is well known, they do not provide upper or lower limits on sentences to be imposed in any individual case.  My focus in reviewing those summaries and cases has not been on the injury suffered by a worker or other person.  Injury is not an element of any of the charges.  The extent of any injury is relevant in assessing the gravity of a risk of harm, but that assessment must have regard to more than the injury suffered in any particular instance.

60Defence counsel also provided specifics as to the quantum of the fines he submitted should be imposed.  As discussed on the plea hearing, I must have regard to current sentencing practice but the submission of precise figures is unusual and has been of no assistance to me in determination of the sentences.

61I make the following comments on the County Court sentences to which I was referred.  In Mainline Developments[2] the conduct was quite dissimilar, and in my view, not as serious as the conduct in Charge 4 in the present matter.  The culpability of the employer in BPL Melbourne[3] was much less than here.  The employees had received appropriate training and the learned sentencing judge considered the case was quite different to one where an employer had turned a blind eye to workplace safety.  And in Dotmar[4], in view of the culpability of that employer for Charge 1, which was very high, I consider the sentence imposed on that charge by the learned sentencing judge to have been very moderate indeed.

[2]DPP (Vic) v Mainline Developments Pty Ltd [2020] VCC 47

[3]DPP v BPL Melbourne Pty Ltd [2016] VCC 282

[4]Dotmar Epp Pty Ltd v The Queen [2015] VSCA 241

62There was some discussion on the plea hearing as to whether aggregate sentences should be or could be imposed on some of the charges. An aggregate sentence may be imposed on two or more offences which are founded on the same facts, or form or are part of a series of offences of the same or similar character. Charges 1 and 2 are closely related in their facts although each is a breach of a different section of the Act. I will impose an aggregate fine for those charges.

63Similarly, Charges 2-12 are each a breach of s111(4).  Whilst some of those charges encompass more than one improvement notice, I consider that they are part of a series of offences of the same character and so that an aggregate sentence can be imposed.

64Similarly, Charges 13, 14 and 15 are offences of the same character and involve similar conduct and again, I will impose an aggregate sentence on those three charges.

65Whilst imposing an aggregate sentence on Charges 3, 4 and 5 was discussed, having reviewed the facts and having regard to the authority in DPP v Vibro-Pile[5], I will not impose an aggregate sentence on those charges. Each breach of the Act is founded on a different failing of the company and each varies in its gravity, both by reference to the extent of the breach of duty, and the risk of harm by reason of the breach.

[5] [2016] VSCA 55

66The sentences are:

§  On Charges 1 and 2 I impose an aggregate fine without conviction of $5,000.

§  On Charge 3 with conviction I impose a fine of $75,000.

§  Charge 4 with conviction a fine of $250,000.

§  Charge 5 with conviction a fine of $100,000.

§  Charges 6-12 an aggregate fine of $25,000 with conviction.

§  Charge 13, 14 and 15 an aggregate fine of $15,000 with conviction.

§  On Charge 16, the fine is $75,000 with conviction.

67The combined total of these fines is $545,000.

68I state pursuant to s6AAA that if the Company had not pleaded guilty I would have imposed a total of $750,000 worth of fines.

69Ms Tatas, are there any ancillary orders that needed to be made?

70MS TATAS:  No, Your Honour.

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