Kanawati v L'HARIDON Bight Mining Pty Ltd - [2023] WASC 262

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CRIMINAL

CITATION:   KANAWATI -v- L'HARIDON BIGHT MINING PTY LTD [2023] WASC 262
CORAM:   STRK J
HEARD:   1 SEPTEMBER 2021
DELIVERED          :   17 JULY 2023
FILE NO/S:   SJA 1021 of 2021
BETWEEN:   MAHAMMED SALIM KANAWATI
Appellant
AND
L'HARIDON BIGHT MINING PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :   MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram:   MAGISTRATE E DE VRIES
File Number            :   CA 708/2019

Catchwords:

Criminal law - State appeal against sentence - Respondent convicted on plea of guilty - Fine imposed - Whether sentence imposed manifestly inadequate

Legislation:

Criminal Appeals Act 2004 (WA)
Mines Safety and Inspection Act 1994 (WA)
Mines Safety and Inspection Regulations 1995 (WA)
Sentencing Act 1995 (WA)

Result:

Leave to appeal granted
Appeal allowed
Sentence set aside
Respondent to be resentenced

Category: B

Representation:

Counsel:

Appellant	:	J T Bishop
Respondent	:	B W Standish

Solicitors:

Appellant	:	State Solicitor's Office
Respondent	:	Max Crispe

Cases referred to in decision:

Al Hussein v Commissioner for Consumer Protection [2014] WASC 296
Ausdrill Ltd v Hanekom [2009] WASC 307
Ayton v City of Armadale [2020] WASCA 39
Balla v Jason Aaron Nominees Pty Ltd [2019] WASC 161
BHP Billiton Iron Ore Pty Ltd v Capon [2014] WASC 267
BHP Billiton Iron Ore Pty Ltd v Capon [2014] WASC 267 (S)
C E Oates & Sons Pty Ltd t/as Narrogin Retravision v Balla [2015] WASC 144
CMB v Attorney General for New South Wales [2015] HCA 9; (2015) 256 CLR 346
Debri Pty Ltd t/as R & K Installations v Morrison [2012] WASC 364
Fremantle Steam Laundry Pty Ltd v Shepherd [2000] WASCA 17
Gaskell v The State of Western Australia [2018] WASCA 8
Haysdale Nominees Pty Ltd v Shepherd (1998) 98 A Crim R 435
Henry Walker Eltin Contracting Pty Ltd v Briggs [2002] WASCA 53
Hussaini v Szolnoski [2013] WASC 64; (2013) 227 A Crim R 586
Kalgoorlie Consolidated Gold Mines Pty Ltd v Hanekom [2010] WASC 259
Keating v Fry [2012] WASC 15; (2012) 217 IR 186
Morrison v Winton (Unreported, WASC, Library No 960698, 12 December 1996)
Ninyette v Holmes [2015] WASC 287
Palynolab Resources Pty Ltd v Morrison (Unreported, WASC, Library No 960477, 22 August 1996)
Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473
Scherini v Cleveland Freightlines Pty Ltd [2018] WASC 5
Sgroi v The Queen (1989) 40 A Crim R 197
Shepherd v Co‑operative Bulk Handling [2001] WASCA 413
The State of Western Australia v AHD [2021] WASCA 13
The State of Western Australia v Saleh [2020] WASCA 205
The State of Western Australia v Wilson [2015] WASCA 119

STRK J:

Introduction

On 8 December 2020, the respondent pleaded guilty to a charge that on 18 May 2017, being an employer at a mine, it failed, so far as it was practicable, to provide and maintain a working environment in which its employee was not exposed to hazards, and by that contravention caused serious harm to Brian Peak, contrary to s 9(1) and s 9A(2) of the Mines Safety and Inspection Act 1994 (WA).
The maximum fine applicable to the respondent at the time of the offence for a first offence involving a contravention of s 9(1) of the Mines Safety and Inspection Act causing death or serious harm was $400,000.
On 9 March 2021, the learned magistrate sentenced the appellant to a fine in the amount of $20,000.
On 6 April 2021, the State filed an appeal on the ground that the sentence imposed was manifestly inadequate.

Magistrates Court proceeding

Facts of the offence

The facts alleged by the prosecution were as follows.
At all material times, the respondent was operating a mining operation at Shell Beach Mine, located approximately 45 kilometres from Denham. The respondent was the principal employer at the Shell Beach Mine and two people were directly employed by the respondent, Mr Peak and Damien Newman. On the date of the offence, Mr Newman was the most senior person at the Shell Beach Mine, and Mr Peak's supervisor.
Mr Peak had started working at the Shell Beach Mine on or about 25 February 2017 on a casual basis as a trade assistant. When he commenced, he did not receive formal training on how to de‑energise or isolate plant or machinery during maintenance work.
The Shell Beach Mine consisted of an open pit surface mining operation and a shell processing and bagging facility. At the shell bagging facility, the shell was tipped into the top of a hopper and would travel on a small conveyor belt into a small hopper and then into a 25 kilogram bag. A person's clothing or body being caught in one of the nip points between the conveyor belt and pulley of the shell bagging machine was a hazard.[1]
[1] Prosecution notice dated 8 August 2019, attachment 1 (Averments and Particulars), particular 3 (Hazard).
On 18 May 2017, Mr Newman and Mr Peak commenced work at the Shell Beach Mine at approximately 7.30 am. At some point that morning, Mr Newman was driving the loader and accidently struck the shell bagging machine, which required repair as a result. Mr Newman asked Mr Peak to assist him with the repairs.
Mr Newman turned the shell bagging machine off at the on/off button located at the front of the shell bagging machine near its bagging chute. Mr Newman did not de‑energise or isolate the shell bagging machine.
The guard around the tail pulley of the conveyor was readily removable; it had a limited number of fasteners which allowed the guard to be removed quickly. The repairs required necessitated the removal of the guard.
Mr Newman and Mr Peak removed the guard to each side of the conveyor by each taking two bolts out that held the guard in place.
Mr Newman completed the repair work then walked away. As Mr Newman walked away, Mr Peak turned the shell bagging machine on in order to check that the conveyor belt had been correctly adjusted. However, at this point, Mr Peak slipped and fell onto the conveyor. His right arm was then drawn into a nip point on the tail pulley.
Mr Newman heard Mr Peak scream and ran back to the shell bagging machine and stopped it. He had to use an angle grinder to cut a piece of the conveyor frame away to free Mr Peak's arm.
Mr Newman drove Mr Peak to the Shark Bay Health Centre where he was treated and subsequently flown to Perth for further medical treatment.
Mr Peak suffered a fractured right wrist, fractured right forearm, third degree burns over his right dorsal radius, and a laceration to his right hand and forearm.

An email from Mr Peak was read by the prosecution, updating the court as to his injuries:[2]
Due to my injury, I have been left with hefty scars covering the majority of my right wrist and a small amount on my hand. I believe that I have lost at least 50 [percent] grip strength and am only able to carry around half the weight of my opposite hand. The muscles in my wrist are aching daily. Scar tissue has adhered to tendons and bone as a result of the injury. Even after constant exercises, I believe I have and will only ever maintain 50 [percent] of what my hand used to be pre‑injury.
Mentally, I believe I have progressed a decent amount. At first, I would have nightmares on a nightly basis. I lost a lot of sleep during recovery. I still have bad dreams at least once a week; they are not pleasant. I have lost several job opportunities due to injury, but that was to be expected considering the magnitude of the injury.
[2] ts 5 (9 March 2021).
Two days after the incident on 18 May 2017, the respondent installed a lockable emergency stop device ('ESD') to the shell bagging machine. The ESD's purpose was to ensure that the shell bagging machine remained off during maintenance work.
At the time, it was well known in industry (and remains well known) that unguarded moving parts of machinery pose a hazard to workers. As was submitted on behalf of the prosecution, that hazard was identified in the following:[3]
[3] ts 4 (9 March 2021). See also statement of material facts par 21.
(a)MIAC Code of practice - Safeguarding of machinery and plant 2009;
(b)Mines Safety and Inspection Regulations 1995 (WA) reg 4.4(3) which stated:
Each responsible person at a mine must ensure that any moving machinery at the mine which creates a risk of injury to an employee through inadvertent contact is screened or guarded to prevent such contact;
(c)Mines Safety Bulletin No 96 issued on 30 November 2012 regarding conveyor guarding, which noted the Inspectorate was concerned at the increasing number of serious incidents involving conveyors where guarding is inadequate or absent; and
(d)Significant Incident Report No 248 issued by the Department of Mines and Petroleum (WA) (the Department) on 12 September 2016 regarding a worker seriously injured when caught in an unguarded moving conveyor.

Submissions made on behalf of the respondent

The Shell Beach Mine was purchased as a going concern in 2008. The sole director of the respondent is Joe Hawkins, but his son David Hawkins was heavily involved in the running of the respondent, which was essentially a small family business. The respondent had a mining licence which allowed it to collect cockle shells which were then sold, usually for adding to chicken feed. The operation could effectively be performed by a single person but for safety reasons, two people always worked on site.
Accordingly, the Shell Beach Mine was not a lucrative business. The profit and loss statements for the previous two financial years were adduced, showing a gross profit of $155,712 and net loss of $3,740 in financial year 2019‑20 and a gross profit of $129,568 and net loss of $7,368 the financial year before. Before the magistrate, these net loss amounts were misdescribed by counsel as net profit amounts.[4]
[4] ts 6 (9 March 2021).
Counsel for the respondent submitted that Mr Peak 'did sign and complete training'. While counsel asserted he had documents available indicating Mr Peak's 'induction and training', he did not adduce them. He also submitted there was 'an extensive safety - operations manual' which 'required the isolation of machines prior to working on it and guards to be restored'.[5]
[5] ts 6 (9 March 2021).
Department inspectors had inspected the shell bagging machine on 2 February 2021 and no issues were found with it. However, since Mr Peak's injury, there had been extensive changes to the shell bagging machine and the operating procedures. The changes to the shell bagging machine had cost about $10,000.
The respondent had no prior convictions and there had been no prior incidents.
The plea was entered before trial allocation. There was a lengthy prosecution brief, and the respondent was delayed due to issues with its insurer. Ultimately, the respondent was not insured in relation to the offence.
The respondent cooperated with the investigation and had since followed all instructions from the Department.
A number of sentencing decisions in other matters were cited by the respondent's counsel.
Counsel submitted that any fine imposed had to take into account the respondent's capacity to pay it. In this regard, even though it was a very small operation, the respondent was liable to the same maximum penalty as a large scale mining operation would be. However, its finances were on 'a knife's edge'. The director of the respondent had been unwell for the past year and was only just recovering. Counsel submitted that some or part of the fine should be suspended.

Submissions made on behalf of the prosecution

The prosecution filed lengthy written submissions prior to the hearing. It was submitted that the respondent's culpability was high, as a result of:
(1)the seriousness of the hazard, demonstrated by the serious harm suffered by Mr Peak;
(2)the fact that it was notorious that moving machinery is a hazard in the mining industry; and
(3)the ease with which the hazard could have been guarded against.
The prosecution made a number of submissions as to the lack of an isolation or training procedure, the lack of supervision and formal training provided to Mr Peak, and a lack of written procedures or practices of carrying out risk assessments. It submitted that Mr Newman was inadequately trained as a manager and supervisor, and neither he nor Mr Peak were provided with personal locks to isolate machinery. Further, the respondent's director was aware of the specific issue with the non‑replacement of guards and did not act to prevent an incident.[6]
[6] Prosecution submissions dated 26 February 2021 pars 22 - 26, 29 ‑ 34.
However, in oral submissions, the prosecution did not take issue with the submissions made on behalf of the respondent as to the training provided to Mr Peak and the existence of the manual.
The prosecution noted the applicable maximum penalty (being $400,000), and the fact that workplace incidents have a serious impact on employees and their families.
The prosecution submitted that limited weight should be placed on the respondent's financial documents, noting that the business structure was, on counsel's information, complex, and that the financial documents were not on affidavit.
The prosecution acknowledged there was no tariff for offending against the provisions of the Mines Safety and Inspection Act, as a result of the wide variety of conduct which can constitute an offence under it. Nonetheless, the written submissions referred to a number of appellate and first instance decisions, identifying the penalty as a percentage of the maximum.

Magistrate's sentencing remarks

The learned magistrate found that the hazard was a 'serious failure' by the respondent and it ought to have been addressed before the offence. His Honour observed that it would have been relatively simple to alleviate this particular hazard and, in failing to do so, the respondent clearly failed to meet its safety obligations.
The learned magistrate made no finding as to the extent of the training given to Mr Peak.
His Honour took into account the following factors:
(1)the plea of guilty;
(2)the respondent had taken steps to rectify the situation;
(3)the respondent was a small enterprise with relatively small profit margins (reflecting counsel for the respondent's submission as to profitability);
(4)the shell bagging machine did have guards, but they had been removed;
(5)the need for general and specific deterrence; and
(6)the maximum penalty applicable to the offence.
The learned magistrate determined that the appropriate penalty was a fine of $20,000.

Ground of appeal

The sole ground of appeal is that the sentence was manifestly inadequate.

Statutory framework

Appeal from court of summary jurisdiction

The application for leave to appeal is made under div 2 of pt 2 of the Criminal Appeals Act 2004 (WA).
Section 7(1) of the Criminal Appeals Act allows an aggrieved party to appeal to this court in respect of a decision made by a court of summary jurisdiction, including a sentence imposed as a result of a conviction.[7] As the appeal was commenced within the prescribed period, the State does not require an extension of time to appeal.
[7] Criminal Appeals Act s 6(8).
As this is an appeal under pt 2 of the Criminal Appeals Act, the appellant requires leave to appeal on each ground of appeal.[8] Leave to appeal must not be granted on a ground of appeal unless the court is satisfied that the ground has a reasonable prospect of succeeding.[9] This means that the ground must have a rational and logical prospect of succeeding so that, in effect, it has a real prospect of success.[10] Unless leave to appeal is granted on at least one ground, the appeal is taken to have been dismissed.[11]
[8] Criminal Appeals Act s 9(1).
[9] Criminal Appeals Act s 9(2).
[10] Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473 [56].
[11] Criminal Appeals Act s 9(3).
On 3 May 2021, it was ordered that the State's application for leave to appeal be heard together with the appeal, which was appropriate in the circumstances.
An appeal against a sentence imposed by a Magistrates Court can be made on various grounds, including that the court imposed a sentence that was inadequate.[12]
[12] Criminal Appeals Act s 8(1)(a)(iii).
The court's powers on appeal include the power to allow the appeal and to vary a sentence imposed by the court of summary jurisdiction.[13]
[13] Criminal Appeals Act s 14(1)(b), s 14(1)(c).
Even if a ground of appeal might be decided in favour of the appellant, the court may dismiss the appeal if it considers that no substantial miscarriage of justice has occurred.[14]

Provisions of the Mines Safety and Inspection Act

[14] Criminal Appeals Act s 14(2).

At the time of the offence, the objects of the Mines Safety and Inspection Act relevantly included the following:[15]
(a)to promote, and secure the safety and health of persons engaged in mining operations; and
(b)to assist employers and employees to identify and reduce hazards relating to mines, mining operations, work systems and plant at mines; and
(c)to protect employees against the risks associated with mines, mining operations, work systems at mines, and plant and hazardous substances at mines by eliminating those risks, or imposing effective controls in order to minimize them; …
[15] Mines Safety and Inspection Act s 3(1)(a) - (c).
Pursuant to s 9(1) of the Mines Safety and Inspection Act, the respondent had a duty, so far as was practicable, to provide and maintain at a mine a working environment in which that respondent's employees were not exposed to hazards.
Section 9A(2) provided that the maximum penalty for a body corporate that contravenes s 9(1) and by the contravention causes the dealth of, or serious harm to, an employee, for a first offence, in circumstances which did not involve gross negligence, was $400,000.
The phrase 'serious harm' was relevantly defined in s 4(4) of the Mines Safety and Inspection Act to mean a bodily injury of such a nature as to endanger, or be likely to endanger, the person's life, or to result or be likely to result in permanent injury or harm to the person's health.

Legal principles

Sentence appeals

The framework in pt 2 of the Criminal Appeals Act differs slightly from the framework in pt 3, which deals with appeals to the Court of Appeal from superior courts. As a result, judicial observations made in relation to appeals under pt 3 cannot automatically be applied to appeals under pt 2.[16]
[16] Ninyette v Holmes [2015] WASC 287 [56(3)].
There are, however, core principles that apply to appeals against sentence under both pt 2 and pt 3. In particular, the court is not entitled to intervene merely because it would have exercised the sentencing discretion differently. It is only entitled to intervene if the sentencing court made an express or implied error.[17]

Manifest inadequacy

[17] Gaskell v The State of Western Australia [2018] WASCA 8 [127(1)].

A ground of appeal that contends that a sentence was inadequate, and not commensurate with the seriousness of the offence, is an allegation of implied error, that is, that in all the circumstances the sentence imposed was not open in the exercise of sound sentencing discretion. To succeed, the appellant must demonstrate that the disposition is unreasonable or plainly unjust.[18]
[18] The State of Western Australia v Wilson [2015] WASCA 119 [20]. See also The State of Western Australia v Saleh [2020] WASCA 205 [49] ‑ [50], and Balla v Jason Aaron Nominees Pty Ltd [2019] WASC 161 [17].
The principles to be applied in a State appeal against sentence were summarised by the Court of Appeal in The State of Western Australia v Saleh at [49] ‑ [50], as follows:
Where the State asserts manifest inadequacy, that is implied error, it is necessary to examine the sentences imposed from the perspective of the maximum penalty for the offence, the standards of sentencing customarily observed with respect to offences of that type, the place that the criminal conduct occupies on the scale of seriousness of offences of the kind in question and the personal circumstances and antecedents of the offender.
It is not sufficient for an appeal court to come to a conclusion that it would have imposed a different sentence had it been in the position of the primary judge. It must be established that the sentence imposed was unreasonable or plainly unjust so that error can be inferred.

If there are no directly comparable cases:[19]
[the] court is not precluded from deciding that an individual sentence is manifestly inadequate. It merely has the consequence that this court has no directly comparable cases to provide a yardstick against which to assess the sentence. Previous sentencing ranges are only one pointer to the inadequacy of a sentence.

Sentencing

[19] The State of Western Australia v AHD [2021] WASCA 13 [48].

A sentence imposed on an offender must be commensurate with the seriousness of the offence.[20] The seriousness of an offence must be determined by taking into account:[21]
(a)the statutory penalty for the offence; and
(b)the circumstances of the commission of the offence, including the vulnerability of any victim of the offence; and
(c)any aggravating factors; and
(d)any mitigating factors.
[20] Sentencing Act 1995 (WA) s 6(1).
[21] Sentencing Act s 6(2).
The only sentencing options available to a court sentencing a body corporate are to impose no sentence, to impose a fine, or to impose a suspended fine.[22]
[22] Sentencing Act s 40(2).
In deciding the amount of a fine the court must 'as far as practicable' take into account the means of the offender and the extent to which payment of the fine will burden the offender.[23] The court may fine an offender even though it has been unable to find out those matters.[24]
[23] Sentencing Act s 53(1).
[24] Sentencing Act s 53(2).
This requirement is subject to the overriding principle that the sentence must be commensurate with the seriousness of the offence.[25] This means that:[26]
… whilst a court must take into account the means of an offender in considering the amount of any fine, that exercise should not result in a fine which is not commensurate with the seriousness of the offence. In some cases it may be necessary to impose a fine that is difficult for an offender to pay or even beyond the means of an offender, if a fine of any lesser amount would not be commensurate with the seriousness of the offence. This assumes that no other disposition is reasonably open.
However, the seriousness of an offence will rarely dictate the precise amount of an appropriate fine. There will usually be a range of fines that will be open to be imposed. It is in this context that the means of the offender and the extent of any burden on the offender will come into play. Where an offender is of very limited means and the burden of a fine would be very onerous, those factors will justify the imposition of a fine towards the lower end of the range that would be appropriate for an offence of the seriousness being dealt with by the court.
[25] Sentencing Act s 53(1); see also Hussaini v Szolnoski [2013] WASC 64; (2013) 227 A Crim R 586.
[26] Hussaini v Szolnoski [25] ‑ [26].
The court should not overlook the fact that a fine is a punishment and is intended to be a burden on the offender to give effect to appropriate sentencing principles of punishment and general and personal deterrence.[27]
[27] Al Hussein v Commissioner for Consumer Protection [2014] WASC 296 [16].
It is also relevant to note that the legislative regime provides a mechanism by which an offender may apply for a time to pay order in respect of the fine,[28] which can ameliorate the immediate effects of a heavy fine.[29]
[28] Fines Penalties and Infringement Notices Enforcement Act 1994 (WA) s 32(1).
[29] Al Husseinv Commissioner for Consumer Protection [11]; C E Oates & Sons Pty Ltd t/as Narrogin Retravision v Balla [2015] WASC 144 [90].
The fact that there is a mechanism to ameliorate the immediate effects of a heavy fine is a factor relevant to sentencing.
In Sgroi v The Queen (1989) 40 A Crim R 197 at 201, Malcolm CJ, with whom Rowland J agreed, said:
The question whether the amount of a fine is within the range of a sound discretionary judgment is to be determined in the same manner as the same question when asked with respect to a sentence of imprisonment, save that in the case of a fine considerations of the offender's financial means or capacity are relevant in determining the amount of a fine which will constitute punishment proportionate to the gravity of the offence in the light of the circumstances under which it was committed, the antecedents of the offender and, where appropriate the objective of general deterrence.

The principles stated in Sgroi v The Queen remain relevant to sentencing under the Sentencing Act.[30]

Sentencing under the Mines Safety and Inspection Act

[30] Al Hussein v Commissioner for Consumer Protection [12].

In BHP Billiton Iron Ore Pty Ltd v Capon [2014] WASC 267 (S) at [7], McKechnie J observed that there was a close alignment as to the applicable sentencing principles and guidelines under the Mines Safety and Inspection Act and those under the Occupational Safety and Health Act 1994 (WA).
In light of that observation, I consider it appropriate to approach this matter having regard to the following passage from Ayton v City of Armadale [2020] WASCA 39 at [52] ‑ [53], in which the Court of Appeal, in considering a State appeal against a sentence imposed under the Occupational Safety and Health Act, said:
The primary factor in determining the appropriate penalty is the objective seriousness of the offence. To a substantial extent, the seriousness of a breach must be assessed by reference to the foreseeable potential consequences and the measure of disregard concerning the safety of persons to whom the employer has a duty to protect in all of the circumstances of the case. Particularly in cases involving a serious breach of the Act, personal mitigating factors, such as a plea of guilty, cooperation with the investigation and subsequent measures taken to improve safety must play a subsidiary role, as against the gravity of the offence, in determining the appropriate penalty.
The conduct in question is the failure, so far as is 'practicable', to ensure that the safety or health of a non-employee is not adversely affected in the manner provided for in s 21(2) of the OSH Act. The conduct will be more serious where the severity of the potential injury or harm is serious. So too the degree of risk of such potential injury or harm occurring is relevant in assessing the seriousness of the contravening conduct. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken. The offender's state of knowledge about these matters should also be taken into account in assessing the seriousness of the offence. It is relevant to consider what the respondent's responsible officers knew or ought to have known.
I also approach this matter having regard to the non‑exhaustive list of general principles and guidelines for sentencing under the Mines Safety and Inspection Act, formulated by McKechnie J in BHP Billiton Iron Ore Pty Ltd v Capon [2014] WASC 267 (S) at [7]:
•A sentence imposed on an offender must be commensurate with the seriousness of the offence.
•The seriousness of an offence must be determined by taking into account:
-the statutory penalty for the offence; and
-the circumstances of the commission of the offence, including the vulnerability of any victim of the offence; and
-any aggravating factors; and
-any mitigating factors.
•Because of the infinite possibility as to the circumstances of a breach of duty there is no tariff for offences but an appropriate level of consistency with other fines should be maintained.
•The legislation should have a deterrent effect requiring employers to take appropriate steps to provide a safe working environment.
•The legislation is designed to bring home the consequences of failing to comply with necessary and prudent occupational health and safety requirements in the workplace.
•Whether a fine should be imposed for principles of general deterrence.
•Whether there is a need for personal deterrence.
•Whether the offending employer has pleaded guilty and at what stage in the proceedings.
•The absence of a plea of guilty does not aggravate the offence.
•Whether the event demonstrates a course of conduct or whether it is a single event where safety instructions are overlooked.
•Whether safety instructions were overlooked because of a failure to supervise over time.
•The nature of the risk and the serious harm that might flow from a breach of the employer's duty.
•The severity of the lack of care or other criminal conduct.
•Whether there was a knowing acceptance of danger for commercial reasons or convenience.
•Whether the employer has taken measures following the event to prevent a recurrence.
•The employer's general safety record.
•The employer's 'good character' sometimes demonstrated by its actions as a corporate citizen.
In its submissions, the appellant referred to a statement made by Hasluck J in Shepherd v Co‑operative Bulk Handling [2001] WASCA 413 at [84] as authority for the principle that 'there is no reason why a serious breach of the Occupational Safety and Health Act, even by a first offender, should in general be visited with a penalty of less than 10% of the maximum available fine'. However, in my view, in the passage referred to, Hasluck J was doing no more than summarising the appellant's submissions in that case, and accordingly I do not regard his Honour's reasons in Shepherd v Co‑operative Bulk Handling as being authority for a principle in those terms.

Assessment of merits of the appeal

The potential consequences of the breach of duty on the part of the respondent in this case were both severe and readily foreseeable. The very fact that the shell bagging machine ordinarily had a fixed guard to protect those using it from harm makes such a conclusion inevitable. Further, the failure on the part of the respondent to take steps to avoid such an obvious risk involved a relatively high level of disregard for the safety of its employees.
The fact that, following the offence, the respondent immediately installed the lockable ESD indicates the ease with which mitigating steps could have been taken. However, more fundamentally, robust and targeted training specifically highlighting the need not to operate machinery without all safety equipment in place, and ensuring that at all times when safety equipment was not in place Mr Peak was appropriately supervised, would also have protected him from the serious harm he suffered.
The State asserted it as a fact that no formal training had taken place in relation to this issue. The respondent pointed to Mr Peak having completed training and the existence of a manual containing relevant procedures and indicated that documentary evidence to this effect was available. In those circumstances, it was incumbent on the State to prove the lack of training beyond reasonable doubt, if it were to constitute an aggravating factor. It did not seek to do so, and thus no finding to that effect was open.
However, in my view the submissions on the part of the respondent were also inadequate to demonstrate that sufficient training was given to Mr Peak to protect him from the hazard posed. In seeking to establish a mitigatory factor, the onus was on the respondent to prove it on the balance of probabilities. The evidence was not sufficient to establish anything other than that some training had taken place and a manual existed.
The inadequacy (but not absence) of training provided is a factor in determining the extent of the breach of the duty in this case.
The seriousness of the injury sustained by Mr Peak is such as to make the breach more serious. Mr Peak suffered a severe injury to his right arm, which at the time of the sentencing was likely to cause ongoing pain and disability, with permanent implications for Mr Peak.
Without in any way detracting from the seriousness of Mr Peak's injuries, and their undoubtedly severe impacts on him, it is important to take account of the fact that the relevant sentencing band under which the respondent falls to be sentenced is intended to encompass a very wide range of conduct and consequence; limited only by being a first offence by a corporation of any breach of duty, other than by gross negligence, which causes death or serious harm to an employee.
That said, the breach in this case carried the potential of even more severe injury than occurred. While the State concedes that death was an unlikely outcome in this case, it submits, correctly in my view, that the potential for a degloving injury was very real.
Having regard to the nature of the breach, the potential risk posed by the breach, and the actual outcome of the breach, I consider the offending to be in mid-range on the scale of seriousness for an offence of this kind.
While the respondent had no record of offending under the Mines Safety and Inspection Act or any equivalent legislation, specific deterrence remained an important sentencing consideration. It was necessary to reinforce to the respondent that its small size and few employees did not make it less important to rigorously fulfil its obligations under legislation which had as its object the protection of those employees.
Balanced against this was the fact that the respondent had taken immediate and substantial steps to prevent the hazard arising again in the future, at not inconsiderable expense. Not only did this reduce the likelihood of re-offending in such a manner in the future, it also reduced, while not removing, the need to give effect to the principle of specific deterrence.
General deterrence was also a prominent consideration in the sentencing process. Judicial notice can be taken of the fact that the type of hazard which arose in this case is one which is relatively common. Employers of any size need to be made aware that the presence of a guard, without more, does not constitute adequate protection of employees. Effective mechanisms need to be in place to prevent the operation of machinery without a safety guard, or, if it is not possible to prevent it, supervision and joint operation must be put in place to prevent one person acting outside safety rules. Further, the existence of written processes alone is insufficient; active and robust steps must be taken to make sure it is understood and followed.
Employers also need to know that failure to take such steps will be met with significant punishment, which places at a premium the health and safety of the people they employ. In particular, the punishment must be such as to be seen as more than an incidental cost of doing business.
The respondent was entitled to credit for its unblemished record in health and safety matters, although that was to some extent factored into the maximum penalty of $400,000, which only applied in the case of a first offence.
The plea of guilty was mitigatory. Not only did it save the community the significant resources involved in a trial, and give finality to the conviction, but it meant that Mr Peak and Mr Newman were relieved of the further trauma likely to be involved in having to give evidence at such a trial, and other witnesses were not inconvenienced by having to give evidence. The plea was not entered at the earliest stage, although there was some explanation for the delay.
The plea was also, in the circumstances, demonstrative of an acceptance of responsibility, and remorse.
In considering the means of the respondent, and the extent to which it will be burdened by the fine, the learned magistrate was provided with the profit and loss statements from the 2018‑19 and 2019‑20 financial years. These disclosed a gross profit of $129,568 and $155,712 (after deducting costs of sales, including royalties and wages) respectively, and net losses of $7,368 and $3,740 respectively.
It is difficult, without more, to make a proper assessment of a company's means to pay a fine on the basis of such documents alone. Some exploration of what they showed and the true state of affairs of the respondent may well have been warranted. For example, the profit and loss statements show that by far the greatest operating expense of the respondent in both financial years was 'management fees', being $42,000 in 2018‑19 and $89,400 in 2019‑20. In the absence of those, the respondent would have made a net profit, albeit a small one. Further, the assessment may have been aided by provision of the respondent's balance sheet.
Having indicated that, generally speaking, written submissions are unnecessary in matters of this kind, the learned magistrate asked the prosecution for submissions as to disposition. At that point, prosecuting counsel sought to make a submission that limited weight ought be given to the profit and loss statements. However, his Honour's response to that submission was, 'You haven't answered my question: what are your submissions with respect to disposition?' In response, the prosecutor submitted that that an appropriate fine would be a 'high fine' and referred to the appendix of comparable cases filed by the prosecution.[31] The learned magistrate then proceeded to sentence, without reference to the respondent's capacity to pay.
[31] ts 10 (9 March 2021).
In Scherini v Cleveland Freightlines Pty Ltd [2018] WASC 5 at [124], Fiannaca J held that:
… for the purpose of comparison with other cases of a broadly similar nature, in particular where the maximum penalty may be different, consideration of the relative penalties as a percentage of the maximum in each case may provide some indication of whether a particular sentence is manifestly excessive or inadequate.
However, his Honour expressed caution as to the utility of comparison of cases by reference to percentages of the maximum penalty, in part because his Honour considered such an approach to be problematic unless all of the factors relevant to the offending and the personal circumstances of the offender in the other cases are known.[32]
[32] Scherini v Cleveland Freightlines Pty Ltd [121] - [123].
The prosecution referred to a number of appellate authorities, relating to sentences for offences under the Occupational Safety and Health Act and Mines Safety and Inspection Act. The majority of the referenced authorities involved fatalities: Palynolab Resources Pty Ltd v Morrison (Unreported, WASC, Library No 960477, 22 August 1996), Morrison v Winton (Unreported, WASC, Library No 960698, 12 December 1996), Shepherd v Co‑operative Bulk Handling, Henry Walker Eltin Contracting Pty Ltd v Briggs [2002] WASCA 53, Ausdrill Ltd v Hanekom [2009] WASC 307, Kalgoorlie Consolidated Gold Mines Pty Ltd v Hanekom [2010] WASC 259, Keating v Fry [2012] WASC 15; (2012) 217 IR 186, and BHP Billiton Iron Ore Pty Ltd v Capon [2014] WASC 267.
A review of the authorities reveal that they involved both sentencing after pleas of guilty and convictions after trial, and varying degrees of negligence. The fines imposed ranged from 12% (Shepherd v Co‑operative Bulk Handling) to 37.5% (Henry Walker EltinContracting Pty Ltd v Briggs) of the maximum penalty. Appeals against fines at first instance which constituted 70% (Palynolab Resources Pty Ltd v Morrison) 60% (Ausdrill Ltd v Hanekom) and 40% (Kalgoorlie Consolidated Gold Mines Pty Ltd v Hanekom) were allowed. The State appeal in the case of Shepherd v Cooperative Bulk Handling was upheld, and the fine increased from 7.5% of the maximum to 12% of the maximum.
There were three cases to which I was referred which involved serious injuries. In Haysdale Nominees Pty Ltd v Shepherd (1998) 98 A Crim R 435, an employee of the appellant sustained a fractured right femur and broken right forearm, as well as extensive abrasions and bruising, requiring 10 days in hospital, when the bucket of a 22 tonne excavator being operated in the same trench in which the employee was working struck him in the arms and legs. The appellant pleaded guilty to the offence, which carried a maximum penalty of $100,000. On appeal, Owen J found that the offence arose as the result of unusual circumstances and the appellant's routine instructions were overlooked. The appellant had never been charged with an offence under the Occupational Safety and Health Act. Justice Owen found that the offence was at the lower scale of criminal negligence, and held that the fine of $25,000 was manifestly excessive. A fine of $12,500 was substituted. (That is, the fine which constituted 25% of the maximum penalty was substituted for a fine which constituted 12.5% of the maximum penalty.)

In Fremantle Steam Laundry Pty Ltd v Shepherd [2000] WASCA 17, an employee of the appellant attempted to clear a jammed conveyor belt by pulling a mat free. The conveyor belt resumed operating as he was doing so, dragging his left hand between a roller and the belt. The conveyor belt was stopped, but not before the employee suffered significant injury to his left ring finger. Following surgery, he made a good recovery, although his finger had limited movement and he potentially had arthritis in his hand.
The appellant pleaded not guilty and was convicted after trial. Heenan J considered that the employee had been following the procedure set out by his employer but had accidentally turned the switch to the wrong setting, in a lapse of concentration, which was neither stupid nor reckless.
The appellant had no prior convictions, and Heenan J was of the view that there was nothing deliberate or flagrant in its breach of the Occupational Safety and Health Act. After the offence, it undertook a safety assessment which was favourable. His Honour considered the penalty of $10,000 (from a maximum penalty of $100,000) to be 'entirely appropriate.'[33] (That is, the fine which constituted 10% of the maximum penalty was imposed.)
[33] Fremantle Steam Laundry Pty Ltd v Shepherd [15].
In Debri Pty Ltd t/as R & K Installations v Morrison [2012] WASC 364, an employee of the appellant carrying out roof plumbing at a warehouse fell approximately nine metres from the roof. The employee had never worked at such a height before. He had been given a harness and lanyard. The appellant was convicted after trial of a breach of duty under the Occupational Safety and Health Act. The employee suffered a spinal cord injury involving burst fractures of two lumbar vertebrae, a fracture/dislocation of his knee and wrist, and dislocation of his ankle. He was left with permanent injuries, including loss of about 40‑50% of the use of his back. The risk of death from the breach was real. The breach was constituted by inadequate instruction and supervision. A penalty of $40,000 (of a maximum of $200,000) was held to be substantial but 'well justified'.[34] (That is, the fine which constituted 20% of the maximum penalty was imposed.)
[34] Debri Pty Ltd t/as R & K Installations v Morrison [35].
A consideration of all of the cases cited does not reveal, in my view, an established range for offences of the kind committed here. However, what is revealed is that the penalty imposed on the respondent in this case, being 5% of the maximum, was substantially less than the penalty imposed in any other appeal case, even those in which the culpability of the offender was less or equal to that in this case, and even where the consequence was less severe.
The learned magistrate provided limited reasons as to why he was imposing a penalty of such a relatively low amount. His Honour found that the respondent was a small enterprise with 'relatively small' profit margins and not a 'multimillion dollar' concern like many mining companies. However, his Honour did not appear to give any consideration to the ameliorating impact of s 32 of the Fines Penalties and Infringement Notices Enforcement Act on any fine his Honour might impose. The learned magistrate also made no finding as to the respondent's level of culpability, other than to find that the respondent 'clearly failed to meet its safety obligations'. His Honour did acknowledge that general and specific deterrence were said to be 'major considerations'.
In my view, taking into account the seriousness of the offence, the mitigating factors which applied and what was known of the financial circumstances of the respondent, the penalty was insufficient to properly punish the respondent and give effect to the principles of general and specific deterrence.
Consistent with the observations of Hall J in Hussaini v Szolnoski, the penalty imposed was required to be commensurate with the seriousness of the offence, even if that would create difficult financial circumstances for the respondent. The fine imposed in this case did not meet that requirement.
Having regard to all of the circumstances of the offence and the respondent's circumstances, as well as the mitigating factors of the case, I am satisfied that the penalty imposed on the respondent in the present case was unreasonable or plainly unjust.

Residual discretion

There is no onus on the respondent to establish that the residual discretion should be exercised in its favour.[35] The State is required to negate any reason why the residual discretion not to interfere should not be exercised.
[35] The State of Western Australia v Wilson [45]; CMB v Attorney General for New South Wales [2015] HCA 9; (2015) 256 CLR 346.
The respondent argued that:
It is inconceivable that multinational ASX listed mining corporations would look to the outcome in the present case in order to inform their decisions as to workplace health and safety.
While that may be so, the review of cases which I have carried out indicates that these offences do not always, or even generally, involve 'multinational ASX listed mining corporations'.
A further matter of relevance is that, since the hearing of the appeal, the Work Health and Safety Act 2020 (WA) has commenced, substantially altering the offences and penalties relevant to workplace incidents, including those on mine sites.
However, the penalties for offences of this nature have steadily increased over many years, and that has not prevented less recent cases being of utility in establishing and maintaining appropriate sentencing standards for breaches of workplace duties. In my view the intervention of the court in this case is necessary in order to reflect the public interest in the maintenance of appropriate sentencing standards for offending of this kind.

Conclusion

The appeal should be allowed and the respondent resentenced.
I will hear from the parties as to the re-sentencing of the respondent, among other things, affording the respondent an opportunity to be heard in relation to its current financial circumstances.
For the above reasons, I will make the following orders.
1.Leave to appeal is granted.
2.The appeal is upheld.
3.The sentence imposed by Magistrate De Vries is set aside.
4.The respondent will be resentenced on a date to be fixed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
LP
Associate to the Honourable Justice Strk
17 JULY 2023