Director of Public Prosecutions v Eliott Engineering Pty Ltd

[2014] VCC 266

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

CRIMINAL DIVISION

Revised
Not Restricted
Suitable for Publication

CR-12-02015

DIRECTOR OF PUBLIC PROSECUTIONS

v

ELIOTT ENGINEERING PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)  (ACN 100694246)

---

JUDGE:	HIS HONOUR JUDGE MURPHY
WHERE HELD:	Melbourne
DATE OF HEARING:	3–18, 21 February 2014
DATE OF SENTENCE:	27 February 2014
CASE MAY BE CITED AS:	DPP v Eliott Engineering Pty Ltd
MEDIUM NEUTRAL CITATION:	[2014] VCC 266

REASONS FOR SENTENCE
---

Subject:  Criminal Law.
Catchwords: Sentencing - Occupational Health and Safety Act 2004 - Unsafe Work
  Environment - Inadequate Training and Instruction - Inadequate
  Supervision.
Legislation Cited:     
Cases Cited:            
Sentence:                 Aggregate fine - $400,000.

---

APPEARANCES:	Counsel	Solicitors
For the DPP	Mr G. Lyon SC Ms C. Gwynn	Office of Public Prosecutions
For the Accused	Mr P. Rozen	M Addison & Associates

HIS HONOUR:

Introduction

1 After nearly two days of deliberations, the accused company was found guilty by a jury of two counts of failing to provide a safe working environment contrary to s.21 sub-s.(1) of the Occupational Health and Safety Act 2004. The jury found the company not guilty of a further charge of failing to provide a safe working environment by way of safe systems of work under the same provision. I am required to sentence the company in accordance with the jury verdict.

2       The charges alleged a failure to provide a safe working environment for two employees, the late Mr Rex Tarr, and Mr Brett Gibbs, on 1 and 2 February 2011 when they were unpacking an open top shipping container containing large steel components at the company’s factory in Kilsyth.

3       The allegation in charge 2, of which the company was found guilty, was that the company had failed to provide such information, instruction or training to theemployees as was necessary to enable the employees to perform their work in a way that was safe and without risk to health.  Charge 3, of which the company was found guilty, contained allegations that the employer did fail to provide such supervision as was necessary to enable employees to perform their work in a way that was safe and without risk to health.  Each of the charges carries a maximum penalty of 9,000 penalty units, which, at the time of the offending, made the maximum penalty applicable as $1,075,050.

Circumstances of the offences 

4       The company is in the steel fabrication business.  It operates at a location in Kilsyth and, at the time, employed approximately 40 to 50 employees within four factories located at 176 Colchester Road, Kilsyth.  It specialises in medium to heavy steel plate fabrication and also undertakes abrasive blasting and protective coating at the end of the manufacture of the product. 

5       In October 2010, the company obtained an order from a West Australian company, Duratray, to manufacture some of the steel components and then assemble, dump trays for large mining trucks.  The steel components for that contract were to be supplied direct to Eliott Engineering by a Chinese supplier.  The contract involved fabrication of smaller truck bodies and also larger bodies.  The components being received from China were contained in both closed and open containers.  They were shipped directly to the factory from the wharf.  Eliott Engineering was responsible for unloading the containers once they arrived at its premises and then assembling the components.  The total job was to be worth approximately $1.7 million.

6       The containers were two sizes;  40 feet and 20 feet.  They were both open top and closed top containers.  The larger open top containers might contain components weighing a total of 30 tonnes with individual components weighing up to 3 tonnes.  Part of the individual components would project above the top of the container. The components were packed side by side lengthwise in the containers.

7       A large 40 foot container arrived at the factory in mid-January 2011.  It was unloaded by three employees;  Mr Churchward, an experienced employee, the leading hand, Mr Horkings, and the late Mr Rex Tarr, who was also an experienced steel worker. The system of work undertaken on that particular job was that Mr Horkings was in an elevated work platform, while Mr Tarr was operating a gantry crane and Mr Churchward was assisting to attach the crane chains and assess the ability to remove each component through the open door of the container.  That particular container was unloaded without incident and without any written work system being in place.  However, the evidence was that each piece was individually assessed as to its stability and how it was to be attached by the three men before it was removed.  Within the container, the pieces were tied together with soft wire and some of them were tack welded to each other.  There was evidence that in the course of the removal of each of the pieces, some of the employees, including the late Mr Tarr, entered the container. 

The container the subject of the charges 

8       The charges on which the company has been found guilty allege that over the period 1 and 2 February 2011, in relation to a particular shipping container, it failed to provide a safe working environment for the two employees involved in the unpacking operation, the late Mr Rex Tarr and another employee, Mr Brett Gibbs.  In the course of that unpacking operation, the late Mr Tarr lost his life when a large steel component fell on him, crushing him.

9       The supervisor of the four factories operated by the defendant company was Mr Savage.  He was directly responsible for factories 1 and 2, and in factories 3 and 4 there was a leading hand, Mr Horkings, who reported to Mr Savage.  Mr Savage tasked Mr Horkings with the unpacking of the container the subject of these charges.  Mr Savage discussed with Mr Horkings that a container needed to be unloaded.  Mr Horkings in turn allocated the work to the late Mr Tarr and to an employee who had only commenced on 10 January, Mr Brett Gibbs.  Mr Tarr was a very experienced employee of the defendant company and had been involved in the unpacking of the earlier container.  Mr Gibbs was also experienced in steel work and had been involved in unloading shipping containers, but usually those that were bulk packed in his previous jobs.  He had not worked with Mr Tarr previously.  Mr Tarr was regarded as very experienced, very safety conscious and an overall very good worker. 

10      Mr Horkings discussed the job with the two men on the afternoon of 1 February.  He said he spent about 10 minutes discussing the method of work which involved the use of an elevated working platform and the gantry crane.  Mr Tarr was allocated to the job because of his experience and that he was quite a competent person, and Mr Gibbs was given the job because he had a background in the metal industry, could use a gantry crane, but he needed the guidance of a more experienced person. 

11      According to Mr Horkings, when the container was opened it was noted that the parts looked pretty messy and it was agreed that the employees had to be quite careful when they pulled each part out, as something might fall.  In relation to entering the container in the course of the operation, he indicated that the discussion was that the main point was not to go climbing on the parts and components.  If anyone was in the container, they were to exit the container before any particular part was lifted out.

12      Mr Gibbs’ evidence as to the system of work was that he and the late Mr Tarr agreed that in the course of the work neither of them were to enter the container.  They were told by Mr Horkings to take their time and be careful and he believed that Mr Savage actually popped his head in a couple of times.  The employees did not engage in any form of a written risk assessment or job safety analysis before they commenced work, nor was there any written safe work procedure established. Such a need for a written pre-task assessment was the subject of count 1, on which the company was acquitted.

13      The work on the subject container proceeded in the afternoon of 1 February and then recommended the following morning on 2 February.  At around 12.55 pm, Mr Gibbs was using the gantry crane to move the second last of the total of 12 components up the factory floor in order to lay it on the floor to be stacked for later assembly.  He had his back to the container, and heard a thud, and turned around and noticed that Mr Tarr was pinned by a large triangular steel section in the container.  He took immediate action to lift the steel plate from Mr Tarr using a crane.  An ambulance was called and CPR administered, but unfortunately Mr Tarr was unable to be revived. 

14      WorkSafe investigators were called and a prohibition notice was placed on the unpacking of open top containers.  Subsequently, on 4 February, the company, with the assistance of an OH and S consultant, established a risk analysis and safe work procedure for the unpacking of open top containers.  Thereafter, the prohibition notice was lifted by WorkSafe.  Subsequent containers for the job were unpacked by an agent and the individual parts delivered directly to the factory.

The Crown case as accepted by the jury 

15      Charge 1, of which the company was acquitted, was essentially that the company, faced with the risk of injury associated with unpacking the container, should have established, prior to the commencement of the job, a written risk assessment or job safety analysis in order to identify the hazards and risks and also a safe work procedure to provide a system of safe methods by which the container could be unpacked.  It was further alleged by the prosecution that it was reasonably practicable for the company to have done that.  The jury did not accept that the Crown had proved this beyond reasonable doubt and acquitted the company.

16      The second charge alleged a failure to provide such information, instruction and training as was necessary to unpack the container in a safe manner.  The specific allegations were a failure to provide sufficient information and instruction about the hazards and the potential consequences of walking into the container when steel components were still inside once the process had commenced.  Further, it was alleged that the workers were not sufficiently trained in safe methods and procedures to undertake the work, including the use and procedures associated with mechanised lifting equipment to be used in the work. 

17      In closing address, counsel for the prosecution, Dr Lyon, who appeared at the trial with Ms Gwynn, referred to the fact that although Mr Savage had possession of the drawings of the components that were in each of the containers, he failed to provide those drawings or packing lists to the individual work team.  Further, the instruction given by Mr Horkings as to whether the two employees were to enter the container in the course of unpacking was ambiguous in that Mr Gibbs had said they had agreed that they were not to enter the container, yet the evidence of Mr Horkings was that, in circumstances, they were able to enter the container, as had occurred with the first container that had been unpacked by Mr Tarr.

18      Counsel referred to the safe work procedure that was established subsequently which had a specific instruction that the container was not to be entered in the course of the unpacking process and a provision to escalate any request to change the procedure.

19      The jury must be taken to have accepted the Crown case beyond reasonable doubt that the training, information and instruction provided to the two employees was insufficient to allow them to safely undertake the task. 

20      On count 3, the allegation against the company that it had failed to provide sufficient supervision as to the methods of unpacking the components in a way that was safe in that the company, by its leading hand or supervisor, did not provide sufficient supervision of the work by themselves or through others to ensure that the work was carried out in a safe manner.  It was submitted that this could have been done by requiring the supervisor and leading hand to understand and authorise the work methods and to provide a system of supervision to ensure that the employees were provided with sufficient information and instruction to perform the task safely.

21      The gist of the case put against the defendant company was that when the first container was unpacked there were three people involved in the job,  including the leading hand, Mr Horkings, whereas in this case there were only two, including Mr Gibbs, who had not previously unpacked the container. 

22      The Crown relied on expert evidence from Mr Taylor to the effect that this type of job, in the absence of a written safe work system, required constant supervision.  The Crown relied on the different team involved in the subject container, the ambiguity in whether or not there was an instruction not to enter the container, and the fact that the two employees each had their own piece of equipment and there was no third person assisting to assess each individual item to be removed, that Mr Gibbs, through part of his work, was not in a position to observe the late Mr Tarr, and that in the absence of proper supervision, the teamwork approach could not be properly implemented and ensured that in relation to each piece to be removed there was a proper assessment undertaken.  The Crown relied on the evidence that this was high risk work and that where one person is undertaking high risk work, then supervision is required.  The evidence of the expert, Mr Taylor, was supported by that of another WorkSafe inspector to the effect that written instructions were more effective to bring risks home to employees involved and thus involved a lower risk of non-compliance than with verbal instructions.

23      The jury must be taken to have accepted the Crown case that the supervision provided was insufficient to ensure that the work could be undertaken in a safe manner and without risk to health.  

Assessing the seriousness of the offences 

24      I accept the learned prosecutor’s submission that if there had been clear information provided to the two employees and adequate supervision, then the late Mr Tarr would not have entered the container.  Thus, although the gist of the two offences is not the death of the late Mr Tarr, the fact that he lost his life goes to increase the gravity of the offending here.

25      I regard the offences here as in the mid range of seriousness.

26      First, the company must be taken to have been fully aware that it was dealing with heavy steel sheets which are inherently dangerous. It had not dealt with the Chinese supplier before, and the evidence was that the containers arrived in a condition that presented immediate obvious difficulties to safely unpack them.

27      Next, it was operating a system of work that did not involve a formal written risk assessment for the particular task.  While there were no statutory obligations breached and the jury acquitted the company of the first charge, the absence of a written safe work procedure meant, as supported by the two experts, that there was a risk that the two employees would not comply with a system of work that provided that they remain outside the container during the unpacking process.

28      As Mr Taylor indicated, high risk work called for a need for proper supervision.  The conviction on count 3 must be taken that the jury accepted the Crown evidence on this issue.

29      In final submissions, the Crown pointed to the relative ease with which the company was able to put in place a risk assessment following the imposition of the prohibition notice.

30      Overall, this is not a case that can be categorised as one where the company acted in blatant disregard of the safety of its employees.  Rather, it is a case where it provided training, supervision and instruction which was manifestly insufficient and could have easily been remedied.

Victim Impact Statements

31      Ten victim impact statements were tendered and three of them were read out.  The late Mr Tarr was part of a large close knit family and his death has had a major impact on his spouse, his children, his siblings and other close family.

32      In her victim impact statement, read by his daughter, Mrs Katrina Tarr states that, “The anger I carry around inside of me doesn’t go away”.  She goes on;  “Since the incident, I suffer from depression and anxiety.  Everyday tasks seem overwhelmingly stressful and pointless.  I now lead a very lonely life, as Eliott’s criminal failings contributed to the death of my husband and my best friend”.  She says for the last three years she has not been able to sleep properly and ends by saying, “Since this crime, every day I think about how I should have stopped Rex from going to work at Eliott’s and I partly blame myself for letting him continue working there.  I constantly think about how I should have put my foot down when I had a chance.  If I had, Rex would have been with us today”. 

33      Mr Tarr’s daughter, Tracy Tarr, read her victim impact statement saying, “I am angry, because my life dreams all consisted of sharing my achievements with dad and now Eliott’s have taken that away from me.  I often think about how dad would feel knowing that he has missed out on the things and people that mattered most to him.  My personal life, career and relationships have suffered and I have trouble sleeping at night, as I just can’t stop thinking that I should have done more to have prevented his death”.  She goes on, “This has affected me financially, physically and emotionally to the point where I have had severe depression, and not been able to go to work, continue my field of qualifications or follow the career path I studied at university which I had just finished when dad was killed”. 

34      Mr Gary Tarr, a son of the late Mr Tarr, says, “There were many times I had to suppress my grief and sadness about my father’s death to appear strong for my family.  There were other times I wanted to unleash my anger over his death, but had to keep a cool head.  I felt despair and helplessness when trying to help my mother over her husband’s death.  How can you help someone who has experienced such a tragic loss.  Rex Tarr was not only my father, but had grown to be a close friend”.  He concludes, “I felt the severity of the criminal failings of Eliott Engineering Proprietary Limited are directly reflected by the fatal injuries inflicted upon my father.  It is not possible to inflict more emotional damage to myself or my family than to remove a loved family member from us.  It is like hope has been removed”.  He refers also to the financial impact of his father’s death.

35      Susan Smith, Mr Tarr’s daughter, says, “My life has been destroyed.  I am an emotional wreck.  I break down several times a day three years after the death of my father.  I hold so much anger within me and the smallest of things can set me off into an emotional stage”.  She goes on to say, “I find myself stressed out, depressed and unable to live a normal life”, and she also has had trouble sleeping and his death has caused a major financial impact on her. 

36      Cheryl Tarr, the late Mr Tarr’s sister-in-law, has also filed a victim impact statement where she refers to the major impact his death has had on family gatherings.  Russell Tarr, his brother, says that, as a result of his death, his life has changed forever and notes that the family grew up as a close knit of eight children and he is the first and only one to die in tragic circumstances.  Another brother, Wayne Tarr, refers again to the anger associated with his death.  He says, “The sudden death of my brother hurts me very deeply each passing day and it will for the rest of my life.  A brother I most admired and respected”. 

37      Mr Raymond Tarr, another brother, says, “It has been a terrible last few years.  I have Rex on my mind always”.  He says, “Rex was a master of trade.  He offered so much to the world.  We all go to work and expect to come home.  He was a real champion and gentlemen, and I and the family miss him so much.  So in closing, I would like to say that life stinks when a man like Rex has been taken from us”.  There is also victim impact statements from Maureen Gilbey, his sister, and from Brett Gittus, who is the fiancé of Tracey Tarr.  Again, he has been affected by it. 

38      I have considered all the victim impact statements. At times, there are irrelevant portions and hearsay material that I have not taken account of.

39      However, the substantial impact of his death on those close to him must be taken into account in the sentencing.  Nothing the Court can do will bring him back, but I have taken into account the impact of his death in sentencing the company.

Prior conviction

40 The company has admitted a prior conviction under the Occupational Health and Safety Act 2004. It was before the Ringwood Magistrates Court on 15 February 2010 when it was convicted and fined $60,000 on one rolled up count of failing to provide a workplace that was without risks to health and safety.

41      The plea summary was before the Court.  The event giving rise to the rolled up count occurred on 8 December 2008 and involved a failure by the company to provide a safe system of work in respect of forklift operations, including processes relating to licensing of operators, and instructions to supervisors, and training and work procedures for the safe use of forklifts.

42      From the summary, it is clear that the company undertook a number of remedial measures after the event.  Insofar as the allegation relates to unsafe systems of work, and lack of proper supervision and training of employees, the prior conviction has relevance to the company’s culpability for its conduct on the indictment.

Mitigating factors

43      I now turn to matters put by Mr Rozen for the company in mitigation.  Counsel for the company accepted that in these types of cases, matters personal to an accused company carry less salience than in other cases.  I have taken into account, however, the fact that the company did cooperate with the WorkSafe inspectors and did engage in the remedial action required.  In fact, the company had been considering its occupational health and safety position as it had retained a consultant in October 2010.  It appears, however, that the work of that consultant had not reached the issue of proper job safety analyses for the unpacking of containers.

44      I have also taken into account the manner in which the trial was conducted by the company.  Although it has been found guilty of two counts, the trial was conducted in an expeditious manner and the issues narrowed.  The company is entitled to have that taken into account in the sentencing process.

Sentencing submissions

45      The learned Crown prosecutor put before the Court a comprehensive submission as to the principles to be applied in cases of this type.  It was not really disputed by Mr Rozen, and I have sought to apply the principles articulated in the submission and in the leading recent cases such as DPP v. Nationwide Towing and Transport Proprietary Limited [2011] VSCA 291, Orbit Drilling Proprietary Limited v. R [2012] 35 VR 399 and DPP v. Coates Hire Operations Proprietary Limited [2012] VSCA 131.

46      General deterrence is to be a central sentencing consideration.  Further, I am to have regard to current sentencing practices.

47      The Crown provided a comprehensive table of cases involving different types of events, and cases involving serious injuries and fatalities at both a summary and higher court level.

48      I have considered those cases as providing some guidance as to current sentencing practices.

49      Mr Rozen submitted that the ability of the company to pay is relevant.  He tendered a document that indicated that the company is subject to a deed of company arrangement and is no longer trading.  It has significant debts,  including to related companies and to the ATO.

50      I was referred to a decision of Teague J in the Supreme Court in Denbo Proprietary Limited v. R (14 June 1994).  There, the company, at the time of the event, had employed 200 employees, but by the time of sentence a liquidator had been appointed and no funds would be available to pay a fine. He said, “In the circumstances, I propose to fix a fine at the amount which would have been appropriate if the company had remained as thriving as it appeared to be as at February 1991, but otherwise reflects the need to take account of normal sentencing principles.  That includes taking into account the plea of guilty, although that is hardly a matter of great moment in the company’s present position.  It also includes that the amount of the fine ought to be directed at achieving a generally deterring effect.  Put another way, the safety of its employees must be given the highest possible priority by every employer.  If it is not, the employer should have to pay dearly”. 

Purposes of Sentencing

51      The purpose of criminal punishment is to exact retribution for past breach of the laws and to induce further compliance with the law by the offender and others through the company’s example.  Conduct sought to be induced by the instant legislation is the provision by employers of a safe workplace.  Such a workplace is constituted by the provision of safe premises and equipment, and by the provision of systems of work, and instructions and supervision which preserve the employee’s health and life. 

52      In order to effect these provisions, an employer is required to exercise a high degree of foresight, imagination and judgment in examining the premises, the tools, the habits of employees and the company’s system of work with a view to finding and eliminating a risk to life and health.  It may be that the employer is required to hire or employ experts to supplement their own knowledge and expertise.  The employer must do whatever is reasonably necessary to achieve a safe workplace and the sentencing process must advance this.

53      The Crown submitted, in accordance with authority, that principles of general deterrence are a predominant sentencing consideration.  I accept that. 

54      Principles of specific deterrence have a role here.  As I have indicated, the company has a prior conviction for an event involving an unsafe system of work.  While it appears to be no longer be trading, given that the site is apparently still in operation, specific deterrence still operates. 

55      Here, the jury has found that the two employees involved did not have sufficient training, instruction and supervision to safely undertake their duties in unpacking the container.  Thus there is some similarity, and given that the company had only been before the Magistrates Court less than a  year prior to this event, specific deterrence is a relevant consideration.

56      An important consideration is the seriousness of the breaches.  As I have said, I place these offences in the mid range of seriousness.

57      In sentencing, I have had regard to all the submissions of the company.  While the company has been found guilty of two separate counts, I accept the submission of Dr Lyon that the two counts arise out of a single course of conduct and therefore an aggregate sentence is appropriate.

58      The company, at the time of the offending, was what could be described as a small to medium manufacturing company given its 50 or so employees.  It was privately owned.  Although it is privately owned,  the general deterrent effect of a conviction and sentence remains a matter of considerable weight in the sentencing process.

59      The high maximum penalty under the 2004 Act is to take into account the most serious offences, including those by repeat offenders and including those where, in an economic calculus, the company cuts corners to save money, but puts the health of employees at risk, particularly where the risk was obvious.  This is a case where the company could have done more to ensure the health and safety of its employees on 1 and 2 February 2011.

60      Weighing all the competing considerations, I sentence the company as follows.  On counts 2 and 3, the company is convicted and sentenced to an aggregate fine of $400,000.  I grant a stay of three months.  

61      I thank the counsel for their assistance in the trial and on the plea. 

---