Director of Public Prosecutions v W.F. Montague Pty Ltd

[2018] VCC 1553

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR 17-01728

DIRECTOR OF PUBLIC PROSECUTIONS

v

W.F. MONTAGUE PTY LTD

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JUDGE:	HER HONOUR JUDGE GAYNOR
WHERE HELD:	Melbourne
DATE OF HEARING:
DATE OF SENTENCE:	21 September 2018
CASE MAY BE CITED AS:	DPP v W.F. Montague Pty Ltd
MEDIUM NEUTRAL CITATION:	[2018] VCC 1553

REASONS FOR SENTENCE
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Subject:
Catchwords:
Legislation Cited:
Cases Cited:
Sentence:

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Ms A. Ellis
For the Accused	Mr A. Mollison

HER HONOUR: 

1The accused company W.F. Montague Pty Ltd has pleaded guilty to one charge of failing to provide and maintain safe systems of work contrary to s.21 of Occupational Health and Safety Act 2004. The facts underlying the offending are as follows. The Montague Group of companies is a family-owned business comprising three divisions, one of which, Montague Cold Storage, specialises in temperature-controlled storage and inventory management. It has storage facilities in five locations in Victoria, one of which at 12-14 Horswood Road, Lysterfield was the worksite the subject of this charge.

2Alex Gruyich was the owner and sole director of Commercial & Industrial Refrigeration Services Pty Ltd, employed by Montague to maintain and service the refrigeration equipment at the various Montague sites.  He had been contracted in this capacity since 1993.  Mr Gruyich visited the various sites including Lysterfield approximately twice a week to do routine maintenance work and sometimes receive callouts to the sites. 

3On 20 and 21 November 2014, Mr Gruyich attended the Lysterfield workplace to remove tanks from the plant room roof which had to be replaced because of corrosion to the roof and guttering.  It was about 7.4 m high.  On 21 November 2014, he died after falling through the plant room roof whilst performing work there. 

4A quote from Outlook Building Services to replace the roof included work to install safety roofing mesh, safety hand railing and the company identified a safe work procedure which included the installation of harness connection points and harnesses, and identified a high risk of fall in their safe work method statement.  As of November 21, the roof did not have walkways, mesh safety railings or anchor points for persons working on it.

5Preparations for replacement of the roof required the cutting and removal of tanks and pipework on it, requiring a working at heights permit.  The specific work to be carried out required a Job Safety Analysis (JSA), identifying the hazards associated with the work and control measures to reduce those risks.  Additionally, a hot work permit was necessary for the removal of tanks and pipework. 

6On November 20 and 21, Mr Gruyich attended the site to carry out preparatory cutwork, cutting the pipes.  The plant manager assistant, Danny Lauland, had left a JSA and hot work permit on the dispatch clerk's table for Mr Gruyich to complete and which was to be approved by the maintenance coordinator, Ian Blencowe. 

7On November 20, the distribution manager Greg Klofa saw Mr Gruyich working near the edge of the roof.  He was concerned and soon after told
Mr Gruyich, "It looks very dangerous where you are working and you don't have any restraint on and it is very windy and I'm concerned about you being up there."  He raised his concerns with Mr Blencowe and also became aware
Mr Gruyich had not collected the JSA or hot work permit paperwork which had been left for him.  He asked Mr Gruyich to complete the paperwork Mr Lauland had left for him and reminded him that he needed to comply with Montague's policies and proceedings.  Mr Gruyich did not complete either the JSA or the hot work permit, nor did Mr Lauland, Mr Blencowe or anyone else check that it had been completed and the relevant permits approved.  On November 21, Mr Gruyich re-attended the site and spoke to Mr Lauland, telling him he didn't need a harness because there was a six-inch pipe around the roofline which was like a barrier.

8Later that day, independent contractor Mr Matthew Lattin. who was hired by Mr Gruyich's company to assist at the worksite, met him there and the two went up on the roof by a scissor lift.  While Mr Gruyich gave Mr Lattin instructions about sections of pipework to be removed, he walked across a section of the roof which Mr Lattin saw contained a skylight every ten metres or so.  Mr Lattin thought the roof was in poor condition and could see corrosion in different spots.  After giving Mr Lattin instructions, Mr Gruyich then walked towards the scissor lift but the roof gave way and Mr Lattin saw Mr Gruyich fall through the metal roof at a section of translucent sheeting to the plant room floor below.  Mr Gruyich died soon after being taken to hospital.

9WorkSafe inspectors attended the site shortly after the incident and saw a large hole in the skylight sheeting of the roof which showed signs of corrosion and no safety wire mesh under it.  Pieces of plywood had been placed on the roof for people to work on.  A prohibition notice was issued.  Expert Russell Nisbert in his report of the systems and methods used to access the plant room roof and engagement of contractors to work on it said he noticed unfixed plywood timbered sheet panels resting on roof sheeting, the translucent sheeting zones were not clearly identified or marked, and there were no access barriers or edge protection such as guard rails or scaffolding next to the translucent sheeting zones or on the roof perimeter.  There were no designated walkway zones, essentially rendering travel on the roof unsafe. 

10In short compass, Mr Nisbert found that given that certain areas of the roof were visibly in poor condition, there was reason to restrict access to them and that there should have been "heightened awareness of the condition of the plant room roof from a management perspective" leading to the imposition of procedures relating to roof access.  This would have included restricting access to people weighing more than 112 kg.  Mr Gruyich weighed 174 kg. 

11Ultimately, Mr Nisbert concluded there was an apparent lack of safe work method and lack of training of personnel accessing the roof. 

12The previous plant manager, Chris Iles, who had overall responsibility for implementation of company safety procedures and methods had suddenly resigned two months before.  As of November 20, his position had not been filled and Mr Lauland and Mr Blencowe were told it was "business as usual" in the interim.  Mr Lauland was not trained in contractor management and the contract management structure was only implemented after Mr Gruyich's death. 
Mr Lauland knew a JSA was required for every job performed by a contractor as well as work permits.  

13A JSA was required for all jobs requiring roof access but neither a JSA or hot work permit had been signed off for Mr Gruyich to do his work.  Further, the JSA for this job was incomplete, in that apart from identifying the work to be carried out it was empty.  There was no work at heights permit and although the hot works permit had been signed by Mr Lauland and Mr Gruyich, the final check had not been signed off.

14Overall, it is the prosecution case that the system of work operating on 20 and 21 November 2014 was unsafe in that Montague failed to ensure the JSA for this work as well as the working at heights and hot work permits were completed and approved before work on the roof began.  Montague had its own requirements that this occur but on this occasion disregarded them.  Reasonably practicable steps to identify the hazards associated with work on the roof and the installation of additional risk controls such as walkways, safety mesh under the roof, anchor points and other fall prevention systems did not occur.

15Charges were filed on 9 May 2016.  There was a committal mention on
8 September 2016 and a contested committal was held on 29 August 2017 when the accused company was committed and pleaded not guilty.  After an initial directions hearing in this court on 30 August 2017, the accused was arraigned and pleaded guilty. 

16The maximum penalty for an offence under s.21 of the Occupational Health and Safety Act 2004 is 9000 penalty units for a corporate accused. At the time of offending, the value of a penalty unit was $147.61 so that the applicable maximum penalty is $1,328,490.

17The effect of this offending upon Mr Gruyich's family has been severe.  In her victim impact statement, Mrs Sharon Gruyich stated that she and her husband had been married for more than 34 years and had three sons together.  There was an amicable separation in place at the time of Mr Gruyich's death where contact was very much maintained and divorce never considered. 

18Indeed, it was Mrs Gruyich's belief that she and her husband would have eventually reconciled.  Mrs Gruyich wrote, "I don't know how to handle not being able to see him.. I especially miss the consideration and the care Alex gave me.  I just can't seem to get on with it."  She said she had struggled mentally and saw a psychologist monthly to help her deal with grief, being now diagnosed with severe anxiety and depression.  She said her husband had asked her three times to reconcile so that "I had a future we were planning and now it is gone."  Mrs Gruyich said that she now struggled financially as her husband paid most of her bills so that "it had been difficult for me to manage since he passed away." 

19Mr Yovan Gruyich said his father's death had had a severe impact on his life, causing him distress, that he had become heavily depressed, had trouble sleeping and suffered severe anxiety, panic attacks and for a time became suicidal and withdrew from his family.  He had a complete mental breakdown in early 2017, causing him to leave his career in the refrigeration and air-conditioning industry and for six months became a recluse.  He has been diagnosed with severe post-traumatic stress disorder, forced regularly to see a therapist to deal with his depression and anxiety and is medicated for this. 

20Having to leave the industry in which he was a highly skilled technician, he now works in a menial job earning extremely low wages, well below the high wages he had once earned.  He described his father as his best friend, writing, "I have lost so much more than a father and I'm left with a hole in my heart that can never be filled." 

21Mr Adam Gruyich in his victim impact statement said his father's death had caused him extreme emotional pain and a permanent loss of milestone moments as he was still quite young when his father died.  He said his father had been the sole financial provider in the house where they lived together and that Mr Gruyich had previously financially supported him while he was studying.  Due to the financial strain caused by his father's death, he has had to take on full-time employment and part-time studies only. 

22The third son, Mr Lucan Gruyich, wrote a victim impact statement which unfortunately due to a printing error was illegible.  I have no difficulty accepting that like his two brothers and his mother, Mr Lucan Gruyich has suffered grief and loss which is ongoing. 

23In DPP v Frewstal Pty Ltd [2015] VSCA 266, at paragraph 686, the Court of Appeal laid down the following principles applicable to sentencing in cases of this kind:

24(1) as the occurrence of death or serious injury is not an element of the offence charged, an accused is punished according to the gravity of the breach owed under the Occupational Health and Safety Act, not according to the result or consequences of the breach; 

25(2) the gravity of breach is measured by two factors - they being the seriousness of the breach itself and the extent of risk or serious injury which might result from the breach;

26(3) assessment of the extent of the risk itself involves consideration of two factors - firstly, the likelihood of the event occurring as a result of the breach which endangered the safety of employees or others, and secondly, the potential gravity of the consequences of the breach.  That is so particularly where there is a risk of death or serious injury; and

27(4) the fact that the breach of the particular case resulted in death is only relevant in that it might manifest or demonstrate the degree of seriousness of the threat to health or safety resulting from the breach.

28The prosecution submitted that the accused was aware or ought reasonably to have been aware of the risk associated with works being carried out on the plant room roof and ought to have been aware of ways to eliminate or reduce the risk associated.  It is admitted that the gravity of the breach of duty owed under the Act was significant and objectively very serious as work on the roof posed a risk of fall from height with the obvious well-known and well-documented attendant potential dangers of death or serious injury.

29The evident poor condition of the partly corroded roof, the unprotected roof edge, lack of safety mesh, designated walkways or anchor points clearly necessitated control measures be taken.  A risk assessment should have been undertaken to identify those hazards and document of risks.  Completion and approval of a JSA, hot works permit and work at heights permit would have been relatively easy to implement and not cost-prohibitive.

30Finally, the prosecution submitted the fact that the breach in this case resulted in Mr Gruyich's death was relevant because it demonstrated the degree of seriousness of threat to health or safety resulting from the breach.  That is that the death of Mr Gruyich was evidence of the risk which eventuated. 

31Counsel for Montague said his client agreed there had been a failure to go through processes that were already in place at the company.  He said while the company was actively seeking to fill a maintenance manager's position after the sudden and unexpected departure of Mr Iles, this had proved difficult as the position required occupational health and safety engineering and contract management skills which were difficult to find.  In the meantime, Mr Lauland and Mr Blencowe took over that role and it was accepted that both lacked the required experience in contractor management, nor were they on-site at all times.

32Mr Stafford for the accused said that at the time Mr Gruyich had been asked to disconnect the pipes from equipment on the roof, a JSA had not been completed because the procedure was that the contractor would be met at the dispatch office and asked what work would take place.  They would then speak to someone from the maintenance department and if permits were required, they would be obtained and a JSA filled out. 

33On this occasion, Mr Gruyich rang ahead and asked that a JSA and a hot works permit be prepared and Mr Lauland did that.  He had to leave.  Mr Gruyich arrived and normally Mr Blencowe would have come down with him, filled out the JSA, analysing the job and filling in terms of it.  If this had been done, the risks would have been identified and Mr Gruyich would not have been allowed on the roof until the identified steps be taken and had first been implemented.  However, without the JSA being filled out or discussion taking place, Mr Gruyich had gone on the roof on November 20 when he was seen by the distribution manager who called him down. 

34The next day, Mr Gruyich again attended the site advising, as I have already described, Mr Lauland that he did not need a harness because of existing pipework on the roof.  In his statement, Mr Lauland said he was not aware
Mr Gruyich was heading off to go on the roof that day and he then left the site.  It was agreed, however, that no active steps had been taken to ensure proper safety of the work carried out.  He said Mr Blencowe was meant to come down and talk to Mr Gruyich.

35Mr Stafford said Mr Gruyich was a greatly valued and trusted employee of the accused and that his death had caused great distress.  In essence, it was Mr Stafford's submission that despite having appropriate policies and procedures, governing OHS and contractor management, the system was not enforced, resulting in Mr Gruyich accessing the roof without having completed a risk assessment and without adequate protections in place. 

36He submitted the contested committal in August 2017 was limited, requiring only one civilian witness, two experts and two work safety inspectors.  There were then negotiations as to the appropriate form of the charge and particulars, and the matter resolved to a plea of guilty.  The accused was arraigned and pleaded guilty on 5 December 2017, Mr Stafford submitting that his client had pleaded guilty to the indictment at an early stage.  This he submitted was evidence of remorse, showing an acceptance of responsibility of the offence and a willingness to facilitate the course of justice. 

37Mr Stafford pointed out that his client was a one hundred per cent Australian family-owned business with 12 sites, employing 382 full-time employees, the average tenure being 7.3 years with 28 employees who had been with the company for over 20 years.  Additionally, Montague employs over 1000 casual employees per year during harvest time.  He said the company expressed its remorse for the incident, accepted responsibility for the risk to which Mr Gruyich was exposed and acknowledged the devastating and ongoing impact of the incident on Mr Gruyich's wife and sons. 

38After WorkSafe issued the prohibition notice, improvement notices regarding contractor management including interim directors were issued, all of which were complied with.  At the request of Montague, WorkSafe attended the site on April 8 2015 to review and discuss methods of work for contractors to conduct works on the plant room roof which was ultimately safely carried out and completed and the prohibition notice was lifted on October 1 2015. 

39Following the incident, Montague reinforced its safety policies and procedures already in place by updating the contractor management handbook and retraining all staff in its content, all contractors were re-inducted, contractor refresher inductions were conducted twice a year, eight full-time dedicated OHS officers were seconded to the staff for 18 months to audit, monitor and ensure OHS compliance.  And the OHS manager for all Montague sites is now physically based at the Narre Warren North site, assisting with reinforcing a safety culture and ensuring compliance.

40A Target Zero safety campaign was relaunched in October 2017 with a roadshow to all sites.  The company has continued to review its safe operating procedures.  All staff were re-trained in relation to their area of work and each department has a designated trainer who has completed an externally accredited "Train the Trainer" course to ensure effective delivery of the training. 

41A database was developed to keep records of training completed by Montague employees.  Montague's lost-time injury has reduced from six in 2013 to 2014 to zero in 2017 to 2018 and its Workers' Compensation premium has reduced by 15 per cent between 2015 and 2018.

42Mr Stafford detailed the boarder community efforts undertaken by the accused through sponsorship of local community activities and donations of fresh produce, for example donating one million apples in 2017 to school children and $150,000 per year in cash and fruit donations to organisations including

St John of God Hospital, Cabrini Cancer Research, Berwick Soup Kitchen and local sporting clubs.  Mr Stafford said this was the first workplace fatality Montague had had and that it had affected the company deeply.  He submitted that in the circumstances, including the response by his client, specific deterrence was of limited application in this case and I agree with that submission.  He accepted that general deterrence was relevant in cases such as this. 

43He submitted that the failing here by his client was a failure to implement the system, rather than a failure to have a system so that the breach was not the result of a deliberate action to save money or cut corners.  It was accepted that a safety management system could not have the intended beneficial effects unless it was actively implemented and managed. 

44Relevant decisions were submitted by both prosecution and defence to all of which I have had regard. 

45The accused has a prior conviction for failing to provide a work environment that was safe and without risks in contravention of s.21(2) of the Act. On that occasion, in August 2012, an employee at a Montague apple orchard was working on fitting a new speed sensor to the spray trailer attached to a tractor, the trailer being raised off the ground at one side with a trolley jack. The victim, Darren Eals, was lying on his back fitting electric cables to the spray trailer when a second employee started the tractor engine, causing the spray trailer to dislodge from the tractor and fall to the ground, trapping Mr Eals' arm, causing numerous fractures to the right elbow and arm bones.

46On 23 August 2012, the Castlemaine Magistrates' Court imposed a non-conviction $15,000 fine and costs. 

47Whilst it is evidence of a prior breach, I do not regard it as having particular relevance to the sentencing exercise before me.  Having reviewed the case law submitted, I agree with the prosecution submission that the most comparable case is DPP v Hansen Yuncken, a decision of His Honour Judge Dean’s delivered on 28 June 2013.  In that case, a worker was on an elevated platform which tipped and killed him in circumstances where the company knew the ground was unsuitable for use of the platform due to two previous non-fatal accidents in that area.  In that case, His Honour described the provision of the safe system of work in those circumstances as being straightforward. 

48It is my view that His Honour's terminology has description and application to this case.  It was clear the roof upon which Mr Gruyich was to work was corroded.  Indeed, that was why it was being replaced.  An appropriate system to identify to risks and hazards which would then be attended to may have been in place but enforcement was entirely lacking on this occasion.  I am satisfied that the breach was grave, the work involving an obvious risk of fall from a considerable height and obvious risk of death or serious injury. 

49Quite apart from that fact that Mr Gruyich was of a weight which an expert found the roof could not bear, he fell through a section of translucent sheeting, that is a skylight, which itself posed an obvious danger.  It was clear in my view that no one should have been allowed on that roof without appropriate safety assessments and measures being taken.  It may have been that Mr Gruyich's long association with the company and experience may have led to a lesser overseeing by Mr Blencowe and Mr Lauland who were filling a role they had not previously filled.  But it was also evident that without those assessments and measures, serious injury or death could well result by anyone working on that roof.  The breach was both grave and a significant departure from reasonably implemented safety procedures. 

50Finally, I am satisfied that Mr Gruyich's death was a demonstration of the seriousness of the threat posed by the failure to implement the system in place and of the breach itself.  I accept that the accused is remorseful, distressed by Mr Gruyich's untimely death and has taken thorough, commendable and widespread steps throughout its organisation to ensure such a breach never occurs again.  I accept that the company is a good citizen and that overall, given the breadth of its activities and the number of its employees, that generally speaking, it has a good work record despite the prior charge. 

51However, in my view, general deterrence is a very important principle to be applied in this case and the accused's efforts to cover the gap caused by the departure of the maintenance manager were woefully inadequate and the consequential departure from fundamental safety checks around the work to be carried out by Mr Gruyich does mean that the breach was extremely grave and that general deterrence and punishment of principles to which this court must have particular regard in this sentencing exercise. 

52I therefore sentence the company by imposing a fine in the sum of $380,000. 

53Pursuant to s.6AAA, I declare that had the accused not pleaded guilty, I would have imposed a fine of $580,000.  Thank you. 

54COUNSEL:  As Your Honour pleases.

55HER HONOUR:  Thank you.  Is there anything further that I need to attend to?

56MS ELLIS:  No, Your Honour.  

57HER HONOUR:  Could you hear all that, Mrs Gruyich?

58MRS GRUYICH:  Yes, I could.  Thank you.

59HER HONOUR:  Thank you very much, Mrs Gruyich. 

60MRS GRUYICH:  Thank you.

61HER HONOUR:  Yes, thank you.  We will adjourn the court sine die.  Thank you. I am going on circuit next Monday.  Thank you very much.  I am sorry.  Was time sought for payment?  Would you like to seek some instructions?

62MR MOLLISON:  Yes, Your Honour.

63HER HONOUR:  Sorry about that.

64MR MOLLISON:  Your Honour, would three months be appropriate?

65HER HONOUR:  Yes, I will grant a stay of three months for the payment of the fine.

66MR MOLLISON:  Thank you, Your Honour. 

67HER HONOUR:  Thank you very much.

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