Director of Public Prosecutions v Retired AKZ Pty Ltd
[2024] VCC 1990
•5 December 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. AP-24-1100
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| RETIRED AKZ PTY LTD (previously known as AKZ REINFORCING PTY LTD) (ACN: 007 169 833) |
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JUDGE: | HIS HONOUR JUDGE HOLDING | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 October 2024 | |
DATE OF SENTENCE: | 5 December 2024 | |
CASE MAY BE CITED AS: | DPP v Retired AKZ Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1990 | |
REASONS FOR SENTENCE
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Subject:Criminal Law
Catchwords: Director’s Appeal against Sentence;
Legislation Cited: Occupational Health and Safety Act 2004 (Vic); Sentencing Act 1991 (Vic)
Cases Cited:Domtar Epp Pty Ltd v The Queen [2015] VSCA 241; DPP v Phelpsys Constructions [2018] VCC 394
Sentence: Total fine of $146,000 and costs in the amount of $15,836
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Peter Matthews SC | Office of Public Prosecutions |
| For the Accused | Robert O’Neill SC with Glenn Barr | Moray & Agnew |
HIS HONOUR:
1This is an appeal by the Director of Public Prosecutions against the sentence imposed in the Latrobe Valley Magistrates Court on 23 July 2024.
2Such an appeal is to be conducted as a hearing de novo. I have, accordingly, set aside the orders made in the Magistrates Court. The respondent, through his counsel, has entered pleas of guilty to three charges contrary to s 21 of the Occupational Health and Safety Act 2004 (Vic) (‘the Act’).
3I will only briefly recite the circumstances of the offending as the Statement of Material Facts runs to some 60 paragraphs and should be read in conjunction with these reasons.
4The respondent, AKZ Reinforcing Pty Ltd, operates a steel manufacturing and installation business in the Morwell area. It is an established company that has operated for a number of years, employing numerous employees, in the production and manufacture of steel. I was told during the appeal that it is a very successful company, often engaging in production for major infrastructure projects undertaken by the Government.
5Each of the three charges relates to incidents that occurred in the operation of machinery in the company’s factory.
6The first incident which constitutes charge 1 – occurred on 27 November 2020 on the ‘blue Table Bender machine’. Trevor Kosterman had a large order to complete, and whilst adjusting the position of a metal bar that was too bent in the machine, he accidentally stepped on a foot pedal that activated the machine at the wrong time. His hand was caught in the machine and he suffered an injury to his right thumb that required skin grafts.
7Before this incident, there had been concerns about the safe operation of this machine. In 2018, a safety notice had been issued by WorkSafe recommending the placement of a guard on the machine, or if it was to be operated without a guard, alternative safety measures be undertaken. While a guard was initially installed in response to the notice, over time, the guard was not used and the respondent has pleaded guilty on the basis that there was a failure to maintain the machine in a condition that, so far as reasonably practical, was safe. It was reasonably practical to reduce the risk to safety by the installation of an interlock button.
8Charge 2 (incident 2) occurred on 10 August 2021. The incident involved a ‘Double Bender machine’. Two people were needed to operate this machine effectively. The company relied on a level of training and experience to safeguard those working on the machine. Employees of the company regarded as qualified to operate the Double Bender machine undertook competency testing, and had at least 100 hours of plant operation under ‘side by side’ supervision.
9The machine consists of two operational areas, that is workstations, at the ends of the machine. The machine is controlled by a foot pedal on an elevated platform alongside the machine. The worker who was injured, Billy Porter, had limited experience with the machine. Mr Porter had been given instructions that the machine was dangerous. He was instructed where to place his left hand to hold bars in a particular position on the machine and to keep his right hand out of the way as there was a danger his fingers could get caught and crushed.
10On the day of the accident, Mr Porter, along with two other employees, was working on the machine; one of the employees, a man named Mr Bolding, was an experienced operator having been ‘signed off’ as competent. The other man, named Mr Batchelor, had not completed sufficient training and was not a qualified operator.
11Before the injury to Mr Porter happened, Mr Bolding left the machine to help a co-worker on a different machine. Mr Batchelor and Mr Porter continued to work on the Double Bender machine when neither was a qualified operator.
12When the machine was off, Mr Porter stretched and in doing so, placed his hands on the machine. The machine activated when it should not have and as a result, Mr Porter’s right hand was caught in a drive roller and he was injured. He lost the tip of his little finger and suffered a crush injury to his ring finger.
13A subsequent investigation resulted in improvement notices being issued in relation to the machine. Those notices were complied with by the company. A ‘double pendant’ control handpiece was installed so that a person who was in the position of Mr Porter, when he was injured, would have had control in activating the machine.
14Charge 2 is a rolled-up offence. The company has pleaded guilty on the basis of having failed to provide or maintain this machine in a condition that was, so far as reasonably practical, safe and without risks to health, and failure to provide such supervision as was necessary to enable its employees to work safely on the machine. It is conceded by the plea that it was reasonably practical to reduce the risks to health and safety, by installing the ‘double pendant control’ and ensuring employees who were not sufficiently qualified, were supervised by a certified operator when working on the machine.
15Charge 4 (incident 3) occurred on 27 February 23 on a ‘Ring Binder’ machine. The worker on this machine, Jeremy Taylor, had been ‘signed off’ as being a competent operator of the machine having been supervised for over 100 hours.
16While Mr Taylor was not trained by the supplier of the machine, he had been trained and supervised by Mr Markes, a person who was fully trained by the supplier of the machine. However, it was subsequently determined after Mr Taylor was injured, that the safe operation of the machine was ‘severely compromised’ by a number of defects.[1] A guard on the machine was also not being used. The respondent has pleaded guilty on the basis that the machine was not maintained in a condition where its operation was safe; the company should have ensured it was operated with the guard closed, and the company failed to provide or maintain a safe system of work. Unfortunately, Mr Taylor’s right hand got caught in the machine and his fingers were crushed. He lost the ends of his middle and ring fingers and sustained multiple fractures to his little finger.
[1] See paragraph [55] of the Statement of Material Facts.
17Charge 4 is a rolled-up offence. The respondent company has pleaded guilty on the basis that it failed to provide or maintain the machine in a condition that was, so far as reasonably practicable, safe without risks to health, and provide a safe system of work. It is agreed that it was reasonably practicable to inspect and repair the features of the machine that were found to have ‘severely compromised’ its safe operation; to ensure the machine was operated with the guard in the closed position; and that the standard operating procedure for the plant was reviewed and revised.
18It is not in dispute that after each of these incidents, improvement notices in relation to the safety concerns of the particular machines involved were addressed.
Victim Impact Statement
19In relation to charge 4, Mr Taylor’s victim impact statement was tendered and read to the court. It is apparent that his injury has had a profound effect on his life. Without recounting all of the adverse effects, he has mentioned in his statement :
· He has had to undergo a number of surgeries;
· His Workcover payments have reduced over time, adversely affecting his lifestyle;
· He cannot play cricket with the skill and proficiency he had prior to the incident;
· The injury is still affecting him at least a year after he sustained the injury;
· He has concerns about whether he will be able to perform labouring jobs in the future which has always been a line of work that he describes as providing a level of security for him; and
· He was unable to work for over a year and the adverse effects of this, such as gaining weight and lacking motivation.
20During the appeal, the legal principles applicable to offences pursuant to these provisions were discussed. It was not in dispute that the injury suffered as a consequence of the offending, while not an irrelevant consideration, is not how the gravity of the offending is to be assessed.
21The principles for evaluating the gravity of the offence are helpfully encapsulated by the Court of Appeal in the case of Dotmar[2]. The court stated:
Hence, in determining the gravity or seriousness of the offence, the sentencing court must assess, first, the extent of the departure from the duty owed; secondly, the extent of the risk to health and safety thereby created; and, thirdly, the likelihood or risk of particular harm resulting.
[2] Dotmar Epp Pty Ltd v The Queen [2015] VSCA 241.
22The parties are not in dispute regarding these principles. The issues addressed, quite helpfully by the parties, related to the gravity of the offending.
23The appellant has referred to comparable cases and has emphasised the maximum penalties applicable. The appellant has emphasised provisions of the Act, requiring the company to be proactive in taking measures to ensure injuries of this type do not occur. The appellant submits that the improvement notice issued in 2018, alerted the company to the specific dangers of the specific machine involved in Charge 1. Further, that the incidents underlying the charges are similar ‘entanglement’ injuries, and the chronology as to when the incidents occurred bears on the culpability of the company in a way that is analogous to a company having prior convictions. The appellant submits that taking into account the gravity of the breaches, the penalties imposed in the Magistrates’ Court do not adequately reflect the principles of sentencing, and in particular, the weight to be attached to general and specific deterrence in the circumstances of this case.
24The respondent relies on matters of mitigation, such as the early plea of guilty, the measures taken by the company to remedy the concerns expressed in the improvement notices, and the overall contribution the company makes in supporting the local community by providing employment and supporting community and charitable activities. That is the good character, so to speak, of the company.
25The respondent emphasises that the company has no prior convictions and argues that appearing before a court and being sentenced for an offence has a particular salutary effect in bringing home the consequences of the offending. The point was made that improvement notices do not alter the ongoing continuing obligation of a company to be proactive in addressing safety concerns and should not be given undue weight in assessing the culpability of the offending. The respondent referred me to a number of cases that it relies upon as being comparable and submits that the penalties imposed in the Magistrates’ Court were appropriate, thus the appeal should ultimately be dismissed.
26It is not in dispute that the company has entered early pleas of guilty to these charges. It has acknowledged responsibility for these offences and must be accorded an appropriate discount for saving the expense and time of contested hearings. I am also of the view that the subsequent actions in remedying the safety concerns by acting on the notices must be afforded weight and is consistent with the company accepting responsibility for these transgressions and having a degree of remorse.
27The respondent points out that since the offending, the company has been sold. The original directors, who are no longer in control of the company, are mature-aged persons and have retired. Further, while the company continues to operate, over 3 million dollars has been invested in new machinery, which has effectively eliminated the previous ‘entanglement’ risks. Therefore, given the change in the machinery operating in the company, there is no prospect of such incidents occurring in the future and no weight should be placed upon specific deterrence.
28In relation to specific deterrence, the appellant relied upon a case in this court, DPP v Phelpsys Constructions [2018] VCC 394, where His Honour Judge Tinney made comments in relation to a company, that specific deterrence really applies to ‘seeking to deter those responsible for the running of the company’. The appellant points out that one of the current directors is Mr Johnson, who was a manager in the company at the time of the incidents. Although no issue was taken with the assertion that the directors of the company, at the time of the incidents had retired, the appellant argued the court could never be certain as to whether there might be some future involvement by those past directors in the operation of dangerous machinery.
29The respondent sought to distinguish the comments of Judge Tinney as not having any application in the circumstances of this case, particularly as the machines involved in this incident had been replaced and the unlikelihood of the directors ever working again.
30I am of the view that the retirement of the directors, their mature age, and in particular, the replacement of the machines, has reduced the weight to be attached to specific deterrence. If the same people were still managing a company with the same machines operating, specific deterrence would be a more significant sentencing consideration. However, I am not persuaded that these circumstances have entirely eliminated that consideration, but perhaps more to the point, it is the predominance of general deterrence as a sentencing consideration that influences me in considering what is a just and appropriate penalty in this case.
31While I accept the respondent’s submission that the act itself imposes upon an employer the obligation to take proactive measures so that prior improvement notices must be kept in perspective, I accept the appellant's submission that the notice in 2018 and the chronology of incidents is an important consideration bearing on the gravity of the offending.
32These machines involved manipulating steel and obviously had significant potential to cause injury. In respect of charge 1, the improvement notice led to the installation of a guard that was no longer in place when the first injury occurred. The importance of appropriate guarding was emphasised for that particular machine as well as the potential injury on other unguarded machines.
33The company recognised the need for many hours of training on the machine involved in the second incident but then allowed a work practice that led to unqualified workers operating the machine.
34The third incident was a similar entanglement incident and the legislation is clear that employers have a duty to be proactive in ensuring safe work practices.
35The cases I have been referred to are not precedents but offer some guidance in terms of a ‘yardstick’ of the fines imposed in broadly comparable cases. I am of the view that while this company does not have prior convictions, the chronology of events does reflect adversely on the level of culpability involved in the offences and the extent to which the company departed from the duty it owed to its employees to safeguard their health and safety.
36Both parties refer in their submissions to a question as to whether the fines imposed in the Magistrates’ Court could be regarded as manifestly inadequate. This in my view, misinterprets my task, which is to conduct a hearing de novo and determine for myself the just and appropriate penalty.
37I am of the view that charges 2 and 4 warrant a larger fine than charge 1, partly because of the chronology of the events, and the fact that they are rolled-up offences. In my view, the penalties should be the same for those two offences. Charge 2 had a particular aspect relating to non-supervision and charge 4 occurred later in time, after the company was again reminded of the dangerousness of these machines. In relation to charge 1, I accept that it was an aggravating circumstance that an improvement notice was issued in respect of the specific machine involved in causing the injury.
38There is no issue that I must apply the principle of totality and, in the end, consider the totality of the fines and costs in relation to the entire offending.
39Balancing as best I can the competing sentencing considerations and having regard to all relevant matters and the submissions of the parties, I impose the following penalties:
40Charge 1, the company will be convicted and fined $40,000
41Charge 2, the company will be convicted and fined $53 000
42Charge 3, the company will be convicted and fined $53,000
43That makes the total of the fines $146,000, plus an order for costs in the amount of $15,836.00.
44I declare pursuant to s 6AAA of the Sentencing Act, that had the company not pleaded guilty to these offences I would have imposed convictions and fines totalling $185,000.
45It was agreed that in the circumstances of a Director’s Appeal, it is appropriate that I grant a certificate under s 15 of the Appeal Costs Act relating to the respondent's costs of the appeal and accordingly, I grant that certificate.
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