Nash v Glennies Creek Coal Management Pty Ltd; Nash v Integra Coal Operations Pty Ltd (No 9)

[2015] NSWIC 15

Industrial Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Nash v Glennies Creek Coal Management Pty Ltd; Nash v Integra Coal Operations Pty Ltd (No 9) [2015] NSWIC 15

Hearing dates:

3 September 2015

Date of orders:

18 November 2015

Decision date:

18 November 2015

Before:

Schmidt J

Decision:

Defendants found guilty of the charge to which it entered a plea and convictions entered accordingly.

 

Glennies Creek Coal Management Pty Ltd is ordered to pay a penalty of $204,000 and Integra Coal Operations Pty Ltd is ordered to pay a penalty of $195,500, with in each case, a moiety to the prosecutor.

 Glennies Creek Coal Management Pty Ltd and Integra Coal Operations Pty Ltd are also ordered to pay the prosecutor's costs, as agreed or as assessed by the Court, in the absence of agreement.

Catchwords:

OCCUPATIONAL HEALTH AND SAFETY – prosecution under s 8 of the Occupational Health and Safety Act 2000 (NSW) – mining accident – the nature and seriousness of the offences – moral culpability – aggravating factors – mitigating factors - pleas – deterrence – comparable cases – victim impact statement – parity – sentencing related companies – conviction entered – penalties imposed – costs

Legislation Cited:

Clean Waters Act 1970 (NSW)
Coal Mine Health and Safety Act 2000 (NSW)
Coal Mine Health and Safety Amendment (Validation) Act 2013 (NSW)
Crimes (Sentencing Procedure) Act 1999 (NSW)
Evidence Act 1995 (NSW)
Occupational Health and Safety Act 2000 (NSW)
Trade Practices Act 1974 (Cth)

Cases Cited:

Australian Competition & Consumer Commission v Dimmeys Stores Pty Ltd [1999] FCA 1175
Barbaro v The Queen [2014] HCA 2; (2014) 253 CLR 58
Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
Camilleri’s Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683
Department of Primary Industries (Inspector Morrison) v Glennies Creek Coal Management Pty Ltd (Chief Industrial Magistrate’s Court (NSW), 20 August 2009, unrep)
Inspector Estreich v Cement Australia (Kandos) Pty Ltd [2013] NSWIRComm 65
Inspector Green v Big River Timbers Pty Ltd [2006] NSWIRComm 279; (2006) 156 IR 341
Inspector Green (WorkCover) v Metropolitan Administrative Services Pty Ltd [2005] NSWIRComm 12
Inspector Bestre v Jontari Pty Ltd [2007] NSWIRComm 190
Inspector Trotter v BBC Hardware Limited and Bunnings Group Limited [2008] NSWIRComm 232
JT and LC Tippett Pty Ltd and RD and LF Tippett Pty Ltd v WorkCover Authority of New South Wales [2008] NSWIRComm 177; (2008) 184 IR 1
Lowe v The Queen [1984] HCA 46; (1984) 154 CLR 606
Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
Morrison v Centennial Coal Company Ltd [2010] NSWIRComm 4
Morrison v Fuchs Lubricants (Australasia) Pty Ltd [2010] NSWIRComm 5
Munda v Western Australia [2013] HCA 38; (2013) 249 CLR 600
Nash v Glennies Creek Coal Management Pty Ltd [2013] NSWIRComm 60
Nash v Glennies Creek Coal Management Pty Ltd (No 2) [2013] NSWIRComm 67
Nash v Glennies Creek Coal Management Pty Ltd (No 3) [2013] NSWIRComm 72
Nash v Glennies Creek Coal Management Pty Ltd (No 4) [2013] NSWIRComm 80
Nash v Glennies Creek Coal Management Pty Ltd (No 5) [2013] NSWIRComm 99
Nash v Glennies Creek Coal Management Pty Ltd (No 6) [2014] NSWIRComm 36
Nash v Glennies Creek Coal Management Pty Ltd (No 7) [2014] NSWIC 5
Nash v Glennies Creek Coal Management Pty Ltd (No 8) [2015] NSWIC 2
Nash v Resource Pacific Pty Ltd [2013] NSWIRComm 81
PTC v R [2011] NSWCCA 51
R v Borkowski [2009] NSWCCA 102; (2009) 195 A Crim R 1
R v Dodd (1991) 57 A Crim R 349
R v Olbrich [1999] HCA 54; (1999) 199 CLR 270
R v Martin [2015] NSWSC 521
R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566
R v Scott [2005] NSWCCA 152
R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
Rodney Dale Morrison v Peter Keith Ross; Rodney Dale Morrison v Glennies Creek Coal Management Pty Ltd [2006] NSWIRComm 205
Trade Practices Commission v Cue Design Pty Ltd [1996] FCA 192; 85 A Crim R 500
Tiger Nominees Pty Ltd v State Pollution Control Commission (1992) 25 NSWLR 715
Tyler v Sydney Electricity (1993) 47 IR 1
Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465
WorkCover Authority of NSW v CI & D Manufacturing Pty Ltd [1995] NSWIRComm 288

Category:

Principal judgment

Parties:

IRC 315 of 2011

 

Jennifer Ann Nash (Prosecutor)
Glennies Creek Coal Management Pty Ltd
(ACN 097 768 093) (Defendant)

 

IRC 316 of 2011

  Jennifer Ann Nash (Prosecutor)
Integra Coal Operations Pty Ltd (ACN 118 030 998) (Defendant)

Representation:

Counsel:
Mr C Magee (Prosecutor)
Mr A Moses SC (Defendants)

  Solicitors:
I V Knight, Crown Solicitor (Prosecutor)
Ashurst Australia (Defendants)

File Number(s):

IRC 315 of 2011IRC 316 of 2011

Publication restriction:

None

Judgment

1. On 4 April 2009, Daniel Hill was killed while working with Alex Jedniuk, Donald Mulligan, Bradley Quinn and Jeffery Weiss at Longwall Panel 9, in the Integra Coal Underground Mine at Glennies Creek. They were working together underground, when a broken shear shaft in a coal shearer had to be replaced. It was during this maintenance task that the shear shaft was ejected from the coal shearer, striking Mr Hill, who suffered fatal injuries.

2. It was not until August 2015 that the two defendants, Integra Coal Operations Pty Ltd, which operated the mine and Glennies Creek Coal Management Pty Ltd, which employed most of the employees at the mine, each entered a plea of guilty to a charge under s 8 of the Occupational Health and Safety Act 2000 (NSW). The pleas were entered after a second further amended application for orders was filed.

The charges to which pleas were entered

3. The charges to which the two defendants finally entered their pleas were:

“Matter IRC 316 of 2015

INTEGRA COAL OPERATIONS PTY LTD ACN 118 030 998, a company whose registered office is located at 653 Bridgman Road, Singleton, NSW ("the defendant"), on 4 April 2009 at its place of work, the Integra Coal Underground Mine, 640 Middle Falbrook Road, Glennies Creek in the State of New South Wales, which was a coal workplace within the meaning of the Occupational Health and Safety Act 2000 being a place of work to which the Coal Mine Health and Safety Act 2002 applies,

1.   was an employer, and

2.   failed to ensure that people other than its employees were not exposed to risks to their health or safety

3.   arising from the conduct of its undertaking,

4.   while they were at its place of work,

contrary to s. 8(2) of the Occupational Health and Safety Act 2000,

AND AS A RESULT

the health and safety of Daniel Hill, Alex Jedniuk, Donald Mulligan, Bradley Quinn and Jeffrey Weiss, was placed at risk, and Daniel Hill was killed.”

Matter Number IRC 315 of 2011

GLENNIES CREEK COAL MANAGEMENT PTY LTD ACN 097 768 093, a company whose registered office is located at 653 Bridgman Road, Singleton, NSW ("the defendant"), on 4 April 2009 at Integra Coal Underground Mine, 640 Middle Falbrook Road, Glennies Creek in the State of New South Wales, which was a coal workplace within the meaning of the Occupational Health and Safety Act 2000 being a place of work to which the Coal Mine Health and Safety Act 2002 applies,

1.   was an employer, and

2.   failed to ensure the health, safety and welfare at work of its employees,

contrary to s. 8(1) of the Occupational Health and Safety Act 2000,

AND AS A RESULT

the health and safety of Daniel Hill, Alex Jedniuk, Donald Mulligan, Bradley Quinn and Jeffrey Weiss, was placed at risk, and Daniel Hill was killed.”

4. The failures particularised in each case were:

“Risk to health and safety

1.   On the night shift from 10:00 p.m. on Friday 3 April 2009 to Saturday 4 April 2009 Mr Hill and his fellow workers Alex Jedniuk, Donald Mulligan, Bradley Quinn and Jeffrey Weiss, were not employees of the defendant but were engaged in the conduct of the defendant's undertaking at the defendant's place of work when working at Longwall Panel 9 in the Integra Coal Underground Mine.

2.   Coal was being cut at Longwall Panel 9 by an Eickhoff SL750 coal shearer ("the coal shearer"). In the early hours of 4 April 2009 an internal component of the coal shearer, known as a shear shaft, broke during the course of the coal shearer's operation. A replacement shear shaft was required to be inserted before the coal shearer could continue to operate.

3.   Mr Hill and his fellow workers were at risk of being injured or killed by the replacement shear shaft or any component attached to it if it were ejected from the coal shearer whilst it was being inserted.

Failures of the defendant

4.   The defendant failed to provide Mr Hill and his fellow workers with a safe system of work for the task of replacing the broken shear shaft in the coal shearer.

5.   The defendant failed to provide Mr Hill and his fellow workers with such information, instruction or training as was necessary to ensure their health and safety in carrying out the task of replacing the broken shear shaft in the coal shearer in that:

(a)   the workers, and in particular Mr Weiss, were not informed in, instructed or trained as to a safe procedure for inserting the replacement shear shaft into the coal shearer; and

(b)   the workers were not sufficiently trained in the prohibition against attempting the insertion of the replacement shear shaft into the coal shearer whilst the coal shearer was connected to a power source.”

5. The charges also identified that what ought to have been done was:

“6.   The prosecutor alleges that the defendant ought to have taken all or any of the following measures:

All references to "the shear shaft" are references to the shear shaft in the coal shearer at Longwall Panel 9 on 3- 4 April 2009.

(a)   The defendant should have included in its system of work for the replacement of a shear shaft a procedure whereby any person who had charge of the power supply to the coal shearer would, upon request by a member of a work crew with the task of replacing a shear shaft isolate the shearer from power, and not reconnect that power supply unless and until he/she was informed that the shear shaft had been replaced and the new shear shaft was secured in position; and

(b)   The defendant should have provided the workers with a system of work for replacing the broken shear shaft which included a system for aligning the new shear shaft manually by insertion whilst the coal shearer was unconnected to and isolated from any power source;

7.   The defendant should then have informed, instructed and trained sufficient personnel in that system of work (referred to in [6(b)] above), to enable it to be carried out safely during the night shift from 3 April 2009 to 4 April 2009.

8.   The defendant should have informed, instructed and trained all of the workers who were working anywhere in the vicinity of the coal shearer as the replacement of the broken shear shaft was being attempted on 4 April 2009 to ensure that that task was not undertaken whilst the coal shearer was connected to any power source.”

6. The amended charges differed from the original charges, by several particulars initially provided having been removed.

7. It was common ground that both defendants face maximum penalties of $825,000 for their offences, given their prior records (s 12 of the OHS Act).

Sentencing

8. In arriving at a sentence the Court must bear in mind the purposes of the OHS Act, the legislative scheme which established the offences to which the two companies entered their pleas. They were specified in s 3 to include:

“3   Objects

The objects of this Act are as follows:

(a)    to secure and promote the health, safety and welfare of people at work,

(b)    to protect people at a place of work against risks to health or safety arising out of the activities of persons at work,

(c)    to promote a safe and healthy work environment for people at work that protects them from injury and illness and that is adapted to their physiological and psychological needs,

(d)    to provide for consultation and co-operation between employers and employees in achieving the objects of this Act,

(e)    to ensure that risks to health and safety at a place of work are identified, assessed and eliminated or controlled,

(f)    to develop and promote community awareness of occupational health and safety issues,

(g)    to provide a legislative framework that allows for progressively higher standards of occupational health and safety to take account of changes in technology and work practices,

(h)    to deal with the impact of particular classes or types of dangerous goods and plant at, and beyond, places of work.”

9. Attention must also be paid to the purposes of sentencing specified in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW), which are:

“(a) to ensure that the offender is adequately punished for the offence,

(b)    to prevent crime by deterring the offender and other persons from committing similar offences,

(c)    to protect the community from the offender,

(d)    to promote the rehabilitation of the offender,

(e)    to make the offender accountable for his or her actions,

(f)    to denounce the conduct of the offender,

(g)    to recognise the harm done to the victim of the crime and the community.”

10. The maximum penalty must also be borne in mind, it reflecting the gravity of the offence perceived by the community (see Camilleri’s Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 at 698). Regard may be paid to sentences imposed in other comparable cases (see Barbaro v The Queen [2014] HCA 2; (2014) 253 CLR 58 at [40]).

11. The sentences imposed on each offender must also reflect the gravity of the offending, viewed objectively (see R v Dodd (1991) 57 A Crim R 349 at 354).

12. The seriousness of the offences must be assessed by taking into account the objective factors affecting the relative seriousness of the offences. The offender’s moral culpability for the offence must also be taken into account (see Munda v Western Australia [2013] HCA 38; (2013) 249 CLR 600).

13. Identified aggravating and mitigating factors revealed by the evidence, as well as any other objective or subjective factors that affect the relative seriousness of the offence, must also be taken into account (see s 21A of the Crimes (Sentencing Procedure) Act). Consideration must also be given to questions of general and specific deterrence.

14. The rules of evidence do not ordinarily apply at a sentencing hearing (see s 4 of the Evidence Act 1995 (NSW)), but nevertheless, the weight of the evidence which the parties lead, must be critically assessed.

15. Disputes about factual findings must be resolved in the way discussed in R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at [27]. That is, facts may not be taken into account in a way that is adverse to an accused, unless they have been established beyond reasonable doubt. However, if there are circumstances which the judge proposes to take into account in favour of the accused, it is enough if they are proved on the balance of probabilities.

16. All of the relevant factors must be taken into account by way of the instinctive synthesis discussed in Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [51]. That requires the sentencing judge to identify all of the factors that are relevant to be considered on sentencing in the particular case, discussing their significance and making a value judgment as to what the appropriate sentence for that offence is.

17. The sentence so imposed must ensure that there is a reasonable proportionality between the sentence and the circumstances of the crime committed (see R v Scott [2005] NSWCCA 152 at [15]).

Agreed facts

18. The facts which the parties agreed were complicated.

19. Integra operated and managed the mine and employed few employees. Glennies Creek employed the operations personnel working there, other than contractors. They are both part of the Vale group of companies, a multinational mining group. There is no issue that Glennies Creek and Integra acted as one in relation to the mine’s operation, including in relation to its safety systems, their operation and implementation. That is reflected by the offences with which they were each charged.

20. The mine is located in the Hunter Valley, about 10 kilometres north of Singleton. It is not currently operational. It commenced operations in May 1991, using the longwall mining method. Under this method of operation, plant known as a “shearer loader” travels the length of the coal face, cutting coal which falls onto a conveyor system known as the “Armoured Face Conveyer”.

21. On 4 April 2009 mining was being conducted at the panel known as Longwall 9. Mining was then operating 24 hours day, 7 days per week. The shearer loader in use was an Eickhoff SL750 model, comprising a cutting unit, electrical haulage wheel box and electrical unit. It weighed approximately 60 tonnes and measured 15.27 metres, with its ranging arm horizontal. This loader had two cutter motors which could reach maximum revolutions per minute of 1488 rpm very quickly, when not under load.

22. This shearer loader commenced underground operation on 23 May 2006 on Longwall 7. On 4 April 2009 it was installed and began operating at Longwall Panel 9.

23. To shear coal from the panel, the loader moved along the longwall coal face from one end, or gate, to another. It was moved on a track, by two electric haulage motors within the loader. Two rotating cutter drums, one at each end of the loader, sheared the coal away from the face of the panel. Each cutter drum was mounted on a ranging arm and powered by its own motor, located at the base of the arm, which allowed the drum to be raised and lowered across the coal face. Mechanical power, rotation, was transmitted from the motor to the drum through a “shear shaft” and a series of gears, known as the gear train.

24. There were documented systems for operation and maintenance of the shearer. A health and safety management system was also in operation at the mine, which included an October 2008 “Damaging Energy Control Procedure”, which required all maintenance and repair work to be done while the item of plant or equipment was isolated.

25. The shearer loader’s shear shaft was a drive shaft, which extended through the hollow shaft of each of the 620kW cutter motors, to the respective ranging arm and its gear train. It transmitted rotary power from the cutter motor to the cutter drum. The shear shaft had a predetermined breaking point, where it was machined into a narrower diameter. It had two components, the shaft itself and a coupling or clutch, which was attached to one end of the shaft, which was made of hardened steel, weighing approximately 28.5kg.

26. The shaft component was comprised of a cylindrical steel section, which had one set of splines (gear teeth) at the far output end of the gear shaft and a further set of splines at the near input end. Rotation from the cutter motor entered the shear shaft, through a splined interface. There was also a splined interface between the gear shaft and the first gear in the gear train.

27. The coupling was also made of hardened steel, weighing approximately 10kg. It had a device which moved the shaft in an axial direction, causing the shaft’s splines to be either engaged, or disengaged with the splines in the cutter motor and those in the gear train. Transmission of rotation from the cutter motor to the gear train and thus the cutter drum, could be interrupted by disengaging the coupling.

28. It is not necessary to outline the other components of the shear shaft. It operated not only as a drive component, but also as a mechanical protection divide which prevented overload of the internal transmission components of the shearer loader and the cutter motor. If subjected to sufficient level of torque or twisting, resulting for example from the cutter drum striking hard stone or the metal tip of the shields, the shaft broke at a predetermined narrow point. This prevented “breaking” force being applied further internally in the shearer and possibly damaging other critical components.

18. Replacing a shear shaft was the responsibility of a mechanical fitter appointed to undertake maintenance tasks, with assistance from other tradespersons for manual handling. The task also required an electrical tradesperson or engineer to effect electrical isolation, by isolating the shearer at the Direct Cutting Board.

19. Between May 2006 and 4 April 2009, a shear shaft had been replaced on approximately 35 occasions, on average, once per month. Replacements were not, however, required regularly. That depended on circumstances of operation resulting in the shaft breaking. Sometimes they had to be replaced days apart. On one occasion there was over four months’ gap.

20. The systems for shear shaft replacement were documented in the “Shear Shaft Replacement SWP”, which listed generic hazards and controls to provide a guide for developing a Job Safety Analysis, which had to be completed, by those completing the task, prior to commencement. That document, it must be accepted on the evidence, was both out of date and inadequate. It referred to the “Isolation – Longwall Procedure PRO_0105”, which had by 4 April 2009, been superseded by the Damaging Energy Control Procedure. That procedure was not referred to in the Shear Shaft Replacement SWP. Nor did it adequately deal with the work involved in shear shaft replacement, as the changes made to the document after the accident established.

21. The Shear Shaft Replacement SWP did not address, for example, how alignment of the splines of the shear shaft with splines of the cutter motor and gear train could be achieved. Alignment required either the shear shaft and/or gear splines to be rotated a few degrees. The document did not address what to do, if alignment of the splines could not be achieved, as transpired on 4 April 2009. Nor did it adequately identify the hazards, risks of injury or control measures for the risks involved in this work, particularly the risks which arose if manual attempts at shear shaft replacement failed.

22. A system of risk management tools was also in operation at the mine. This included the “Job Safety Analysis” and “Take 5” tools, which were used to identify, manage and control hazards, where the standard work procedure did not deal with particular matters. Given the deficiencies of the Shear Shaft Replacement SWP, these were tools which ought to have been used when manual attempts at shear shaft replacement failed.

23. Prior to 4 April 2009 the time taken to replace a shear shaft had varied from 30 to 200 minutes, taking an average of 94 minutes. It was often a lengthy and frustrating process for the employees involved.

24. Mr Paul Michalak was employed by Integra from 2006 to 2011 as a Leading Hand Fitter. On past occasions he had taken two steps to align and engage the shear shaft, known as “flicking” and “tramming”, when manually engaging the shear shaft failed, after a number of attempts. Other employees had also observed him utilising those measures. Mr Michalak said that they had been described in training he had been provided by Eickhoff, the manufacturer of the shearer. They were not, however, contained in the Shear Shaft Replacement SWP, or any other documented system maintained by the defendants. Those steps involved:

1. “Flicking” the cutter motor on the shearer, to assist in engaging the splines, with the cover plate of the shear shaft secured and bolted into place on the shearer, turning on the power to the cutter motor and causing the splines in the motor to rotate, then turning off that motor and when it has wound down, attempting to engage the splines of the shear shaft at the gear train end.

2. “Tramming” the shearer in order to turn the cutter drum, by restoring power to the shearer; starting the hydraulics motor to lower the cutter drum to the ground; allowing the shearer to turn the cutter drum, thereby moving the gear train, which turned the internal splines at the gear train side; and attempting to engage the shear shaft.

36. Mr Michalak was aware of the isolation procedures in place at the mine, but stated that he had not been provided with the Shear Shaft Replacement SWP, nor could he recall ever having seen it. Neither flicking nor tramming complied, however, with the Damaging Energy Control Procedure, which required that “[a]ll tasks shall be executed with sources of damaging energy isolated in accordance with this procedure.”

37. Other employees had observed a fitter attempting to engage the shear shaft, by physically turning the cutter drum to cause the gear train to move the splines at the gear train end. The fitter would then try and push the shear shaft in. It seems that it was when this failed, that flicking or tramming were attempted.

38. On 3 April 2009, the Longwall crew employed by Glennies Creek were rostered to perform underground duties at Longwall Panel 9 on the weekend shift, commencing at 10pm. A number of other persons were working at the mine that night. The Longwall crew attended a preshift meeting at about 10pm, on the pit surface. The crew then travelled underground to the crib room, where they met with the Deputy Supervisor, Mr Mulligan, for a further meeting, at which that night’s jobs were discussed and a “Take 5” informal risk assessment was undertaken.

39. Mr Smith and Mr King, the two shearer operators, commenced operating the shearer at about 11.50pm. It stopped operating at about 12.30am. They then attempted to restart the shearer and determined that it was likely that the shear shaft in the maingate cutter motor had broken. The on-duty fitter, Mr Weiss, was then called. He and the shift engineer, Mr Gallen, responded. On inspection it was found that the shear shaft had disengaged, with resulting damage to the shaft.

40. While training systems were in operation at the mine, Mr Weiss had been given no formal task specific training in how to safely replace the shear shaft, or in the Shear Shaft Replacement SWP. He could not recollect having seen that document, before 4 April 2009, although Mr Gallen recalled providing the document to him in January 2009 and Mr Weiss then saying that he had seen it previously.

41. During none of the discussions between Mr Weiss, Mr Gallen and Mr Mulligan, or those in which other members of the Longwall crew were involved that night, was any standard work procedure document, including the Shear Shaft Replacement SWP and the Damaging Energy Control Procedure, obtained or reviewed. Nor was any written job safety analysis undertaken, before the work of replacing the shear shaft was undertaken, as the Shear Shaft Replacement SWP required. That evidence establishes, it must be accepted, that the defendants’ paper safety systems were not adhered to that night.

42. Mr Hill, the maingate boot-end operator, and Mr Quinn, the chock and shearer operator, obtained a new shear shaft which, with the coupling fitted, weighed about 60kg. Mr Mulligan accompanied two shearer operators, Mr Smith and Mr Ling, and two other crew members, Mr Donaldson and Mr King, up to the tailgate end of the Longwall, in order to clear some spillage.

43. Mr Gallen and Mr Weiss then isolated the shearer, in preparation for the shaft replacement. Mr Jedniuk, the electrician, was at the shearer. When he observed that the power had been isolated, he assisted with the removal of the broken shear shaft, by removing four retaining bolts in the bearing bush of the shaft coupling.

44. Mr Weiss and Mr Gallen then undertook a “Take 5 risk assessment”. No reference was, however, made to the Shear Shaft Replacement SWP, or it appears, to the Damaging Energy Control Procedure. Mr Gallen stated, however, that Mr Weiss had acknowledged that he was aware of the Shear Shaft Replacement SWP and that it could be obtained from the crib room, if needed.

45. Mr Gallen was then called away to speak to Mr Attwood, the outbye fitter at the maingate, while Mr Weiss began removing the broken shear shaft. Mr Jedniuk, Mr Hill and Mr Quinn remained to assist him. Mr Hill helped remove the old shaft. When Mr Gallen returned, he and Mr Hill lifted the new shaft and placed it into the cutter motor. Mr Weiss replaced the four retaining bolts which held the shaft and its coupling in the motor and then attempted to engage the shaft, by using the coupling. He could not achieve full engagement of the shear shaft splines, because he could not align the motor splines with the motor gear.

46. Mr Weiss, Mr Quinn, Mr Hill and Mr Gallen made a number of attempts to engage the shear shaft over 40 minutes. They all failed. They then discussed alternative methods, which were rejected for safety reasons. It was then decided that “tramming” would be attempted. No written job safety analysis was undertaken by Mr Weiss or Mr Mulligan, as the Shear Shaft Replacement SWP required, before that process was undertaken. Nor was reference made to that document, or to the Damaging Energy Control Procedure, even though tramming required power to be restored to the shearer.

47. Mr Gallen restored the power and discussed the tramming process with Mr Weiss. He said that Mr Weiss should only attempt to reengage the shear shaft, after the shearer had been reisolated by Mr Jedniuk. Mr Weiss said he had done the task before and required no further information. Contrary to this, Mr Ling and Mr Donaldson had earlier overheard Mr Weiss say he was not comfortable doing the task and not sure how to do it, while Mr Gallen was not present. Mr Weiss had observed and assisted other fitters in undertaking a shear shaft change, on two or three earlier occasions, but he had not engaged a new shear shaft before and had not previously used the tramming method.

48. Mr Galen left and Mr Weiss returned to the shearer. Mr Quinn, Mr Hill and Mr Jedniuk were then present. Further attempts to align the splines, including by use of the tramming process, failed. After about an hour, the “flicking” method was discussed. Again, no written job safety analysis was undertaken, and no reference was made to the Shear Shaft Replacement SWP, or to the Damaging Energy Control Procedure.

49. Mr Quinn then momentarily turned the cutter motor on and off, using the shearer’s remote control device. He stopped, because he noticed that the tailgate drum was sitting in coal. Generally the tailgate cutter motor starts first. He then raised the level of the tailgate ranging arm, using the remote control, so that the cutter drum was clear of the ground.

50. At this point Mr Mulligan returned. He raised no concern about the use of the “flicking” method and made no enquiry as to whether a job safety analysis had been undertaken, to determine the hazards of that procedure, potential risks to safety, or control measures which could eliminate or minimise such risks. Nor did he raise the requirements of the Damaging Energy Control Procedure.

51. Mr Quinn then flicked the cutter motors on and off, causing the motors to quickly reach their maximum rpms. He asked Mr Weiss whether the shear shaft was engaged. Mr Weiss then attempted to engage the shaft, by turning the coupling almost immediately after the cutter motors were flicked. That had the effect of pushing the input end (external) splines into the cutter motor splines. As a result, the shear shaft and its coupling began rotating at considerable speed, migrating out of the cutter motor housing.

52. The shaft continued rotating in increasing spirals as it worked its way out of the motor housing. Within seconds it struck a handrail below and as a result of that impact, broke free and was propelled at high speed in the direction of the maingate, where Mr Hill was standing some 2 - 3 metres away. The shaft struck Mr Hill in the head and face, causing the injuries which later resulted in his death. The coupling continued travelling a further 6 - 7 metres, before falling to the floor.

53. It later emerged that before the cutter motor was flicked, the four bolts required to be inserted through the bearing bush of the coupling, into the cutter motor housing, to retain the shear shaft in place, had not been reinstalled. They were lying nearby. This is what had permitted the shear shaft assembly to migrate out of the cutter motor housing, once the rotational force of the motor interacted with the shaft, causing it to rotate.

54. It was Mr Jedniuk, the nominated first aid officer, who immediately administered first aid to Mr Hill and also assisted in his rescue, recovery and transportation. The shear shaft was initially still spinning in the motor. Mr Smith warned the other crew members who provided emergency response, including trauma kits, oxygen and a stretcher used to carry Mr Hill to the rescue basket. They had to negotiate their way past equipment and to interchange the carriers, in order to avoid fatigue. Mr Jedniuk drove the SMV to the surface with Mr Smith and Mr King, he attending to Mr Hill, who was then attended by paramedics on the surface. Tragically, he could not be resuscitated.

55. On later examination, Mr Hill was found to have suffered fatal blood loss and brain lacerations, as well as factures of the skull and jaw.

56. The defendants immediately activated the mine’s emergency response management plan, the area was barricaded and the scene preserved. Apart from the emergency response management team, all personnel were withdrawn and sent home; sentries were posted, underground and open cut mining operations stopped and oncoming shifts notified not to attend the mine. It was closed until 14 April 2009, in accordance with a notice issued by the Department of Industry, Skills and Regional Development.

57. The parties also agreed that the defendants’ failures were:

“162.   The Defendants failed to provide Mr Hill, Mr Jedniuk, Mr Mulligan, Mr Quinn, and Mr Weiss, with a safe system of work for the task of replacing the broken shear shaft in the Shearer.

163.   The Defendants failed to provide Mr Hill, Mr Jedniuk, Mr Mulligan, Mr Quinn, and Mr Weiss, with such information, instruction or training as was necessary to ensure their health and safety in carrying out the task of replacing the broken shear shaft in the coal shearer in that:

(i)    the workers, and in particular Mr Weiss, were not informed in, instructed or trained as to a safe procedure for inserting the replacement shear shaft into the coal shearer; and

(ii)    the workers were not sufficiently trained in the prohibition against attempting the insertion of the replacement shear shaft into the coal shearer whilst the coal shearer was connected to a power source.

164.   The Defendants ought to have taken all or any of the following measures:

(i)    The Defendants should have included in its system of work for the replacement of a shear shaft a procedure whereby any person who had charge of the power supply to the coal shearer would, upon request by a member of a work crew with the task of replacing a shear shaft isolate the shearer from power, and not reconnect that power supply unless and until he/she was informed that the shear shaft had been replaced and the new shear shaft was secured in position;

(ii)    The Defendants should have provided the workers with a system of work for replacing the broken shear shaft which included a system for aligning the new shear shaft manually by insertion whilst the coal shearer was unconnected to and isolated from any power source;

(iii)    The Defendants should then have informed, instructed and trained sufficient personnel in that system of work (referred to in [6(b)] above), to enable it to be carried out safely during the night shift from 3 April 2009 to 4 April 2009.

(iv)    The Defendants should have informed, instructed and trained all of the workers who were working anywhere in the vicinity of the coal shearer as the replacement of the broken shear shaft was being attempted on 4 April 2009 to ensure that that task was not undertaken whilst the coal shearer was connected to any power source.”

58. After the incident the Shears Shaft Replacement SWP was revised. The “Integra Coal – Standard Work Procedure – SWP_0216 ‘Shearer – Shear Shaft Replacement’” was settled in April 2009, in response to a notice issued under s 51 of the Coal Mine Health and Safety Regulation 2006 (NSW). That introduced various changes in procedures. In May 2009 that document was revised again, introducing further changes, as the result of a further s 51 notice. There were further reviews undertaken in October 2010.

Further evidence

59. Affidavit evidence was led from Mr Freeman, a senior investigator and compliance officer (mine safety), employed by the Department of Industry Skills and Regional Development. He explained that he had gone to the mine on 4 April 2009 with Mr Millington, to investigate the incident. They were accompanied by a mine representative, Mr Thompson, a section deputy.

60. After notices were issued under s 70 of the OHS Act, they took identified items from the crib room, including reports, safety analysis work sheets and procedures. No documents for safe work procedures or written instructions for replacement or repair of the shear shaft were located there. A copy of the documents taken were shown to the defendants’ solicitor and Mr Freeman. Notices under s 70 and s 72 of the OHS Act were later issued to the general manager of Integra.

61. Various documents were tendered, including standard work procedure documents, job safety analysis worksheets, plans, site procedures, shear loader operating and training manuals, operations logs, general policies and plans, training and personal records, as well as photographs of the damaged shear shaft and the incident scene.

62. The defendants led unchallenged affidavit evidence from Mr Pike, employed by Glennies Creek in the position of Mechanical Coordinator/Supervisor - Care & Maintenance. Mr Pike there explained the defendants’ immediate response to the incident, none of which was criticised by the prosecutor as having been deficient. He also explained the assistance which had been provided to Mr Hill’s family.

63. Mr Pike’s evidence was that the mine had ceased operations in April 2014 and had been placed into care and maintenance. The open cut operation had ceased in September 2014 and had also been placed into care and maintenance. When Integra operated the mine, it employed the senior managers engaged there and Glennies Creek, one of its subsidiaries, employed the operations personnel working at the mine, at its peak, employing some 189 employees. Another subsidiary employed those who worked in the open cut operation. There are now only 18 employees engaged at the mine as part of the care and maintenance operation, 6 particularly focused on the mine.

The issues lying between the parties

64. At the sentencing hearing the parties identified the issues lying between them. The defendants summarised them to be:

“Approach to sentencing of the two defendants

1.   Is it appropriate to aggregate the penalties to be imposed on the two defendants?

Objective seriousness of the offence

2.   Were the defendants careless?

3.   Was there a "practice" or "system" of "tramming" the shearer, or "flicking" the cutter motor whilst the power was engaged prior to 4 April 2009, to engage the shear shaft within the shearer?

4.   What was the extent of knowledge of senior employees of the practice of tramming?

5.   Was it reasonably foreseeable that a decision would be made by crew members on 4 April 2009, to turn on the cutter motor of the shearer while the bolts which were required to be installed to hold the coupling mechanism into the shearer housing, had not been re-installed?

6.   The relevance or otherwise of the shear shaft change procedure not being in the crib room of the Longwall on 4 April 2009.

7.   The significance of the culpability of Mr Weiss, the Fitter, who was responsible for performing the shear shaft replacement task on 4 April 2009.

8.   Do the settled procedures and instructions in place on 4 April 2009 mitigate the seriousness of the offences under the OH & S Act?

Deterrence

9.   To what extent should the Court take into account specific deterrence in this matter in the circumstances where:

(a)   the mine where the incident occurred ceased its operations in July 2013 and is no longer operational; and

(b)   the Vale Group has entered into a binding agreement to divest the Mine, and on completion of the transaction the Vale Group (including the defendants) will hold no tenements or mines in NSW.

Aggravation

10.   Are the previous convictions of the defendants an aggravating feature of this matter?

Subjective features

11.   Did the defendants enter an early plea of guilty?

12.   The extent of the discount to be given to the defendants for the plea of guilty.

13. Contrition and remorse - has there been acceptance by the defendants of responsibility for actions or omissions that led to contravention of s.8(1) and s.8(2) of the Occupational Health and Safety Act 2000 (NSW).”

The nature and seriousness of the offences

65. It is long settled that the gravity of the consequences of an accident does not, of itself, dictate the seriousness of a particular offence. It is rather the gravity, or otherwise of the potential risk to safety flowing from a breach of the obligations imposed by the OHS Act, which is relevant to the assessment of the gravity of the offence and the culpability of the offender (see Tyler v Sydney Electricity(1993) 47 IR 1 at 5 in the context of the predecessor legislation).

66. There was no issue between the parties that these offences were objectively serious. The agreed facts reveal that they resulted not only in Mr Hill’s death, but also put the safety of those working with him when the shear shaft was replaced at risk. This must be reflected in the sentences imposed upon the defendants.

67. Like in Tyler, in this case, the ultimate risk, which so regrettably materialised was risk to life. In this case such risks had plainly been foreseen by the defendants, who had devised a paper safety system which required, by documented procedures contained in the Damaging Energy Control Procedure, in which it had trained its employees, that equipment be de-energised when maintenance tasks were undertaken.

68. They had also created the Shear Shaft Replacement SWP, a documented, specific procedure for the task of shear shaft replacement, which did not, however, refer to the Damaging Energy Control Procedure, but only to its predecessor. It did not warn of the risk of fatality, if isolation was not adhered to. Nor did the Shearer training manual. While there were also training systems in place, as well as systems for appointing qualified employees to undertake maintenance tasks, Mr Weiss had not been trained in the shear shaft replacement process.

69. The defendants were thus certainly not indifferent to the safety of their employees, but still what they did in practice, was inadequate.

70. Like so many other cases where safety risks have materialised, despite extensive safety systems being put in place, in this case neither of the two relevant documented safety procedures was referred to by those who had to undertake the shear shaft replacement on 3 April 3009, as the safety system contemplated that they should have. The paper safety system contemplated only manual replacement of the shear shaft. It required that the shearer be isolated and not reconnected, unless and until the shear shaft had been replaced. That was not adhered to by Mr Weiss and those working with him. He had not been trained or adequately instructed in the procedure and he and those working with him were, on the agreed facts, not sufficiently trained in the prohibition on attempting to replace the shear shaft while the shearer was connected to a power source.

71. Even if the Shear Shaft Replacement SWP had been referred to that night, it would not have provided those whose safety was put at risk with information as to how that task could be safely undertaken, if efforts at manual replacement of the shaft failed. Neither the previously used flicking nor tramming methods which were then attempted, were there documented. That being so, on the agreed facts, before either of those methods were attempted, a Job Safety Analysis and/or the Take 5 tool, which were designed to help identify, manage and control hazards, where a standard work procedure did not deal with particular matters, should have been utilised. They were not.

72. While it was argued for the defendants that there was a difference between a “practice” and a “system of work” and that the evidence did not establish that either a practice, or system of work involving either “tramming” or “flicking” existed, on the agreed facts, both flicking and tramming had previously been used when attempts at manually replacing the shear shaft had failed. That was known to relevant employees, including underground supervisory employees. Despite this, the Shear Shaft Replacement SWP did not address either of them.

73. On that evidence, that managers who provided the content of the defendants’ written safety systems were not aware of the flicking or tramming methods, does not lessen the seriousness of this offence, but rather reveals why the defendants agreed that there were available steps which ought to have been taken, as agreed at [164] of the agreed facts. .

74. This was not the first time that problems had been encountered with manually replacing a shear shaft. They had been dealt with by use of the understood tramming and flicking methods, confirming the seriousness of this offence. Given that it was necessary to re-energise the shear shaft when using both those procedures, the Shear Shaft Replacement SWP not dealing with how the shaft could safely be replaced, when attempts at manual replacement failed, was an obvious deficiency in the documented system.

75. The Shear Shaft Replacement SWP should unquestionably have been amended to include a reference to the Damaging Energy Control Procedure, when it was introduced. It should also have specified how the replacement task could be safely undertaken, when problems with manually replacing the shear shaft were encountered. That the procedure was amended after the accident, to attend to these deficiencies, confirms this.

76. Failing that improvement in the documented system, at the least, if either tramming or flicking was to be attempted on 4 April, the Job Safety Analysis and the Take 5 tools ought to have been utilised, if the defendants were to meet their statutory obligations.

77. The proper inference from the agreed facts is that despite the problems with the documented system, Mr Hill is likely not to have been fatally injured, if the shear shaft bolts had been replaced, before flicking was attempted. That failure can only have been the result of an oversight. It was not the case of either party, or suggested by the agreed facts, that it was the result of any deliberate action on the part of anyone involved in the work being undertaken. The question of carelessness was thus addressed by the parties.

78. The defendants argued that it was not reasonably foreseeable that the crew members would turn on the cutter motor of the shearer, when the bolts had not been replaced and that the incident was thus not foreseeable. While that may be accepted, it must also be accepted that it is foreseeable that employees will make mistakes which can have consequences of the most serious kind.

79. Tragically, as is so often the case in workplace accidents, this accident was the result of human error, people being, as they are, fallible. While the particular oversight which resulted in Mr Hill’s death was not specifically foreseen, the possibility of such human error materialising, is why the obligations created by the OHS Act are so widely imposed and why the defendants had devised such extensive safety systems, albeit they and their implementation proved to be inadequate. The legislative aim is to ensure that even where such an oversight occurs, one of those upon whom a relevant obligation is imposed, will take action which will ensure that a potentially damaging consequence of such an oversight, does not materialise.

80. The risk of an oversight such as not replacing the bolts during a maintenance procedure occurring, explains why the defendants’ Damaging Energy Control Procedure required maintenance procedures not to be undertaken while machinery was energised. It also explains why the defendants pleaded guilty to charges which, amongst other things identified that what they ought to have done was:

“(a)   … included in its system of work for the replacement of a shear shaft a procedure whereby any person who had charge of the power supply to the coal shearer would, upon request by a member of a work crew with the task of replacing a shear shaft isolate the shearer from power, and not reconnect that power supply unless and until he/she was informed that the shear shaft had been replaced and the new shear shaft was secured in position…”

81. The defendants also argued that there was no evidence that senior employees were aware that replacement of the shear shaft would be done in circumstances where the energy source had not been isolated or, further, that they were even aware of that practice. The difficulty with the submission was what was agreed in relation to the involvement on 4 April of supervisory staff on duty underground, in the shear shaft replacement task.

82. The agreed facts included, as I have explained, that the flicking and tramming which was not documented or otherwise dealt with in the written system, had been previously undertaken (at [60]). It was also agreed that attempting to engage and align the shear shaft by flicking the cutter motor, or tramming the shearer was not in compliance with the Damaging Energy Control Procedure, which contemplated that the machine would remain isolated (at [68]); that the operators, Mr Donaldson and Mr Ling, had previously seen flicking being undertaken (at [64]); and that the Deputy (Mr Mulligan), the Night Shift Undermanager (Mr Tisin), the electrician (Mr Jedniuk), as well as fitters and operators, had all previously observed tramming being undertaken (at [65] – [66]).

83. It was also agreed that Mr Gallen, the Shift engineer, Mr Mulligan and the fitter Mr Weiss, had discussed the shear shaft replacement, but that they did not obtain or review the two applicable procedures and did not undertake a written job safety analysis (at [90] - [91]). Mr Gallen and Mr Weiss had discussed the requirements for isolation (at [98]), before the shearer was isolated and the replacement of the shear shaft was attempted manually, after a Take 5 Risk Assessment (at [101]).

84. There was no such risk assessment evaluation for either the tramming or flicking methods. When the manual replacement of the shear shaft did not succeed, after some 40 minutes, Mr Gallen, Mr Weiss, Mr Quinn and Mr Hill discussed using other methods, including those which required restoration of power (at [111]). It was Mr Gallen and Mr Weiss who agreed to try tramming, again without reviewing the two relevant procedures, or undertaking a job safety analysis or Take 5 procedure. It was Mr Gallen who restored the power and directed that the shear shaft should be re-engaged, only after the shearer was again isolated, but he did not remain to supervise the work unsuccessfully pursued over the next hour.

85. It was then that flicking the main gate cutter motor was discussed. It also required the shearer to be energised, contrary to the applicable procedures. Again no job safety analysis or Take 5 was undertaken. Mr Gallen was not involved in those discussions between Mr Weiss, Mr Hill, Mr Quinn and Mr Jedniuk, but Mr Mulligan returned to ascertain what the delay was (at [129]-[135]). No concern was then raised about the flicking being attempted, or what safety precautions had been pursued, when the motor was flicked on and off and Mr Weiss again attempted to engage the shear shaft, with tragic results.

86. In the face of those agreed facts as to the admitted breach of the obligations imposed by the OHS Act, I am satisfied beyond reasonable doubt, both that supervisory employees were aware that tramming and flicking, which involved re-energisation, was to be undertaken that night and that the flicking undertaken involved an attempt at engaging the shear shaft, while the shearer was energised, contrary to the Damaging Energy Control Procedure.

87. Had the bolts been replaced, what occurred during the attempt at flicking while the machine was energised, it appears, would have been unlikely to have materialised. Nevertheless, given the potential risks to safety flowing from the defendants’ admitted breach of their obligations under the OHS Act, involving as they did the risk of loss of life, a risk which materialised, it is unarguable that the gravity of these offences were serious indeed.

88. The steps taken after the accident to address the risk to safety which had materialised, were steps which could plainly have been taken beforehand. There is no suggestion that they were difficult, onerous or would have involved significant time or cost, understandably including as they did, amendment of the written procedures to document the hazards arising when the shaft could not be aligned manually and how they should be dealt with.

Moral culpability

89. The defendants’ moral culpability for their offences was no doubt less than it would have been, had they not devised an extensive, albeit somewhat deficient, paper safety system which nevertheless, had it been properly adhered to, would have ensured safety. This was certainly not a case where the defendants were paying mere lip service to the important obligations which this legislative scheme imposed upon them, as has been established in other cases.

90. On the evidence it must, however, be concluded that their culpability was more significant than they accepted, given the agreed deficiencies of their systems and their implementation.

91. There were available steps which could and ought to have been taken beforehand, given the deficiencies of the paper system and employees’ adherence to it, in practice, at this dangerous workplace. Had they been taken, they would have precluded this most serious of all risks to safety from materialising.

92. The agreed facts thus establish that the defendants had considerable culpability for this offending.

Aggravating factors

93. The aggravating factor which arises for consideration under s 21A(2) of the Crimes (Sentencing Procedure) Act is:

“(d)   the offender has a record of previous convictions”

94. The operation of this provision was considered by a five member bench in R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566. There, reference was made at [18] to what was discussed in Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 477 - 478:

“[T]he antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell (1970) AC 642, at p 650. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties.”

95. In Rodney Dale Morrison v Peter Keith Ross; Rodney Dale Morrison v Glennies Creek Coal Management Pty Ltd [2006] NSWIRComm 205, Glennies Creek was fined $80,000 when the maximum penalty was $550,000. Then two mine workers were exposed underground to a high voltage arcing fault, during isolation procedures at an underground long wall panel.

96. In Department of Primary Industries (Inspector Morrison) v Glennies Creek Coal Management Pty Ltd (Chief Industrial Magistrate’s Court (NSW), 20 August 2009, unrep), Glennies Creek was charged with an offence under s 8(1) and Integra with an offence under s 8(2), when a mine worker sustained serious injury to an eye, when using a screw driver to deal with a blockage, instead of turning a machine off and depressurising. The maximum penalty for Glennies Creek’s offence was $825,000. It was fined $55,000, the Local Court’s jurisdictional limit, the penalty having been assessed to be $120,000. The maximum penalty for Integra’s offence was $550,000 and it was also fined the jurisdictional limit, the penalty having been assessed to be $80,000.

97. That history must, accordingly, be taken into account in determining the sentence for this offence, given the nature of the failures involved in that earlier offending and what they have in common with these offences, which include inadequacies in the paper safety system and its implementation, as well as failures to isolate plant.

Mitigating factors

98. Relevant mitigating factors which arise to be considered under s 21A(3) include:

“(i)     the remorse shown by the offender for the offence, but only if:

1. the offender has provided evidence that he or she has accepted responsibility for his or her actions, and

2. the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both)”

99. There is no question that the defendants took their safety obligations seriously, as I have explained. Their extensive safety systems were designed to ensure that they met their statutory obligations, but both their detail and their implementation proved to be inadequate.

100. The prosecutor accepted that the defendants had co-operated in the investigation by providing documents requested and making persons available for interview, but questioned whether, even despite the entry of their pleas, the defendants had accepted responsibility for their offending. I am satisfied that they have.

101. At the sentencing hearing deep regret and sorrow over Mr Hill’s death was expressed on their behalf by their counsel. It was also then said that:

“The victim impact statements of his wife Melanie, mother Margaret and brother Gavin confirm that he was a young special and loved man, whose death has had a significant impact on his three children, wife, mother, brother and extended family. And no matter what the defendants say or do in respect of this matter that will not heal the sorrow and the grief that has been caused to the family and the words would no doubt ring hollow to some extent with the family but nonetheless those matters are expressed in open court to the family.”

102. Those words of remorse, it must be accepted, were genuinely advanced, consistent as they were with the deep regret that Mr Pike spoke of in his affidavit on the part of the defendants’ officers. Mr Pike said that they had felt profound grief and anguish about what had happened and had also been deeply affected by Mr Hill’s death. That is consistent with the reality that corporate offenders cannot feel such emotions. It is only the people who are involved in their management who can have, express and act on regret such as this.

103. The defendants’ acceptance of their responsibility for their offending was also consistent with the steps they had earlier taken to assist Mr Hill’s family, which were explained. They included financial assistance; meetings with his family; the provision of counselling services; assistance with his funeral arrangements; as well as the establishment of scholarships for his three children’s tertiary education.

102. Contrary to what was advanced on the prosecutor’s written submissions, all this, when considered with the steps taken by the defendants to address the deficiencies in their systems, which the incident had revealed and the guilty pleas finally entered, I am satisfied, does reflect that the defendants have accepted responsibility for their offending and are genuinely remorseful.

The pleas

105. Section 22 of the Crimes (Sentencing Procedure) Act requires that in sentencing the defendants account must be taken of the fact of their pleas; when they pleaded guilty or indicated an intention to plead guilty; and the circumstances in which that occurred, with the result that a lesser penalty than would otherwise have been imposed, can be imposed on the defendants. Such a penalty must not, however, be unreasonably disproportionate to the nature and circumstances of their offences.

106. The guideline judgement delivered in In R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 provides for a maximum 25% utilitarian discount for a plea, but creates no presumption or entitlement to a particular discount. In R v Borkowski [2009] NSWCCA 102; (2009) 195 A Crim R 1, “principles of general application” for determining such a discount were discussed at [32]. Relevantly they include:

“1.   The discount for the utilitarian value of the pleas will be determined largely by the timing of the plea so that the earlier the plea the greater discount: Thomson at [154]; Forbes [2005] NSWCCA 377 at [116].

2.   Some allowance may be made in determining the discount where the trial would be particularly complicated or lengthy: Thomson at [154].

3.   The utilitarian discount does not reflect any other consideration arising from the plea, such as saving witnesses from giving evidence but this is relevant to remorse: Thomson at [119] to [123]; nor is it affected by post-offending conduct: Perry [2006] NSWCCA 351.

4.   The utilitarian discount does not take into account the strength of the prosecution case: Sutton [2004] NSWCCA 225.

5.   There is to be no component in the discount for remorse nor is there to be a separate quantified discount for remorse: MAK and MSK [2006] NSWCCA 381; Kite [2009] NSWCCA 12 or for the ‘Ellis discount’; Lewins [2007] NSWCCA 189; S [2008] NSWCCA 186.

6.   ..

7.   There may be offences that are so serious that no discount should be given: Thomson at [158]; Kalache [2000] NSWCCA 2; where the protection of the public requires a longer sentence: El-Andouri [2004] NSWCCA 178.

8.    Generally the reason for the delay in the plea is irrelevant because, if it is not forthcoming, the utilitarian value is reduced: Stambolis [2006] NSWCCA 56; Giac [2008] NSWCCA 280.

9.   The utilitarian value of a delayed plea is less and consequently the discount is reduced even where there has been a plea bargain: Dib [2003] NSWCCA 117; Ahmad [2006] NSWCCA 177; or where the offender is waiting to see what charges are ultimately brought by the Crown: Sullivan and Skillin [2009] (sic [2008]) NSWCCA 296; or the offender has delayed the plea to obtain some forensic advantage: Stambolis [2006] NSWCCA 56; Saad [2007] NSWCCA 98, such as having matters put on a Form 1: Chiekh and Hoete (sic Cheikh) [2004] NSWCCA 448.

10.   …

11.   The discount can result in a different type of sentence but the resulting sentence should not again be reduced by reason of the discount: Lo [2003] NSWCCA 313.

12.   The amount of the discount does not depend upon the administrative arrangements or any practice in a particular court or by a particular judge for the management of trials or otherwise.”

107. Contrary to the case which the defendants advanced, this was not a case where a plea was offered at the earliest opportunity. Attention must be paid to the procedural history.

108. The prosecutions were brought in 2011. The inquest into Mr Hill’s death concluded in November 2012. Pleas of not guilty were entered in December 2012 and a hearing of the two charges commenced in July 2013 before Boland J, then President of the Industrial Relations Commission of NSW. It was adjourned following the prosecutor’s application to amend the charges, which was opposed on the basis that they would be futile, the original prosecutor Mr Regan, not having authority to prosecute. Those amendments were later permitted (see Nash v Glennies Creek Coal Management Pty Ltd [2013] NSWIRComm 60).

109. In August 2013, Boland J dealt with motions brought by the Department of Trade and Investment, Regional Infrastructure and Services. His Honour then refused to set aside summonses and notices to produce documents concerning the appointment of Mr Regan, on the basis of public interest immunity and legal professional privilege (see Nash v Glennies Creek Coal Management Pty Ltd (No 2) [2013] NSWIRComm 67). Later in August 2013, Boland J declined an application that certain questions be stated to a Full Bench of the Court (see Nash v Glennies Creek Coal Management Pty Ltd (No 3) [2013] NSWIRComm 72). Those questions were reformulated and in September Boland J stated a case to the Full Bench in relation to specified questions of law (see Nash v Glennies Creek Coal Management Pty Ltd (No 4) [2013] NSWIRComm 80).

110. Later in September 2013, Boland J dealt with an application for access to the Court file, by an unrelated party (see Nash v Resource Pacific Pty Ltd [2013] NSWIRComm 81). In November Boland J dealt with an application to refer a further question (see Nash v Glennies Creek Coal Management Pty Ltd (No 5) [2013] NSWIRComm 99).

111. In July 2014, the Full Court dealt with the questions referred and remitted the matter to Boland J (see Nash v Glennies Creek Coal Management Pty Ltd (No 6) [2014] NSWIRComm 36). In November 2014, Boland J dealt further with questions of public interest immunity and legal professional privilege, in the context of the enactment of the Coal Mine Health and Safety Amendment (Validation) Act 2013 (NSW), which on 31 October amended that Coal Mine Health and Safety Act 2002 (NSW), by inserting a new s 24A “Validation”. That amendment varied both the appointments of certain persons to office under the Act and their commencement, for the purpose of institution of criminal proceedings, including those commenced by Mr Regan (see Nash v Glennies Creek Coal Management Pty Ltd (No 7) [2014] NSWIC 5).

112. In January 2015, Boland AJ dealt with the question of costs (see Nash v Glennies Creek Coal Management Pty Ltd (No 8) [2015] NSWIC 2).

113. The matter was later again listed for a 4 week hearing, to commence on 24 August 2015. It was on 21 August 2015 that the defendants announced their intention to enter pleas. The hearing was then adjourned to 1 September 2015. The pleas were entered on 31 August 2015 and the sentencing hearing proceeded on 3 September 2015, after an adjournment because the parties had encountered difficulties in reaching an agreement on a statement of facts.

114. The amended charges to which the pleas were entered was not to some different, or lesser offence. What changed was that some of the particulars originally provided were removed. While the facts finally agreed were certainly complex, the nature of the defendants’ offending was not, involving as it did both an inadequate paper safety system and inadequate adherence to even that system, as I have discussed.

115. It was observed in PTC v R [2011] NSWCCA 51 at [28]:

“… In most cases an offender will be aware of his or her actions and, with appropriate advice, will be aware of what if any offence he or she may have committed. The fact that they may delay entering a plea until they can assess the strength of the evidence available to the Crown and decide on their prospects of escaping conviction for an offence which they know they have committed does not entitle them to any particular concessional treatment. The utilitarian value of a plea entered at an early stage will include the fact that by acknowledging their guilt an accused relieves the Crown of a necessity to prepare evidence for the trial.”

116. PTC was quite a different case to this one, because it was found that the offender was, without advice, unable to appreciate whether his actions amounted to the crime of manslaughter, or indeed any crime and was beholden to his advisers, who were found quite properly not to have been prepared to advise him to enter a plea, until the entirety of the Crown brief had been served (see at [29]).

117. This was quite a different situation, where what transpired at the first hearing before Boland J was not the result of litigation as to what, if any, crime had been committed, but whether the prosecution had been properly brought. Here there was no suggestion that the defendants were unaware of their failures before they entered their pleas. There was certainly a long delay before the matter was listed for further hearing, flowing from the pursuit of the question of Mr Regan’s authority to prosecute. That was finally resolved by the legislation enacted in October 2013. Still no plea was entered until shortly before the trial in August 2015.

118. That was the result of a plea bargain, reflected in the amendment made to the charges, but as discussed in Borkowski, that still had the consequence that the utilitarian value of the defendants’ plea was less than it would have been, had they been entered earlier, so that the prosecution did not have to prepare for a lengthy trial.

119. The entry of the pleas, it was not in issue, still had real utilitarian value, avoiding as it did a lengthy trial. That must be reflected in a discount. In all of the circumstances I have discussed, I consider that the proper discount is 15%, not the 20% for which the defendants contended. Any greater discount, I consider, would not properly reflect the relevant factors discussed in Borkowski and the timing of the belated pleas entered so close to the scheduled hearing.

Deterrence

120. There was no issue between the parties that usually both general and specific deterrence must feature in the sentence imposed on a defendant, as discussed in Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [73] – [74]. There, it was also recognised that specific deterrence may play a lessor role in certain circumstances, including where the offender will not have the opportunity to commit a similar offence in the future (at [77]).

121. The prosecutor argued that at the time of the offences, the defendants were experienced operators in the coal mine industry and that there was still even now some role for specific deterrence. Given that they no longer operate the mine, the defendants argued that specific deterrence has a lesser role to play in this case.

122. I consider that in the circumstances which prevail on sentencing, the role that specific deterrence has to play in this sentence is less than it would have played, had the mine still been operational.

123. The mine is in care and maintenance mode. Managerial and some 18 care and maintenance staff are still employed there. In those circumstances, specific deterrence still has some role to play, given the defendants’ ongoing obligations to those employees and the work which they are required to perform, in the ongoing care and maintenance of the mine. The Vale Group has entered a binding agreement to divest itself of these holdings, but when that transaction will be completed, is not clear.

124. General deterrence must be approached in the context of the mining industry and underground coal mining operations in which the defendants were engaged, that unarguably being a dangerous industry, where workers are often exposed to risks of death and serious injury. That underscores the necessity of the attention which must be paid by those who operate in that industry, to the obligations which the OHS Act imposes upon them. That must be reflected by a penalty which pays proper regard to the role which general deterrence must play, when sentences are imposed on offenders such as the defendants.

Parity

125. The prosecutor submitted that the parity principle was relevant in determining the penalty appropriate for each offender, reflective of their respective culpabilities, as discussed in Inspector Green v Big River Timbers Pty Ltd [2006] NSWIRComm 279; (2006) 156 IR 341. There, the Full Court held that the totality principle had no work to do in a context where two corporate offenders were each charged with an offence under the OHS Act and that such defendants could not be sentenced as if they were but one entity.

126. The defendants argued that it was nevertheless relevant that while charged respectively under s 8(1) and s 8(2) of the OHS Act, both the failures alleged against each of them and the measures which they ought to have taken, as particularised, were identical. Further, the prosecutor had directed its notices primarily to Integra and had issued only one notice to Glennies Creek. The two companies also had common ownership, boards, management structures and systems. In the result, it was submitted, an appropriate adjustment to the penalties imposed upon the two corporate defendants should be made, in order to ameliorate the aggregation of penalties which would otherwise be imposed on two such closely related entities, who had been charged with offences arising out of the one incident.

127. This was in issue. On the authorities, what lay between the parties was not easy to resolve. It raises, however, a very important question, given that nowadays, investment in companies is so widespread in Australia, as a consequence of the compulsory superannuation which most working people have the benefit of. Nowadays, during their working lives most people will either become shareholders themselves, or will at least invest in companies through their superannuation funds.

128. The defendants relied on Inspector Green (WorkCover) v Metropolitan Administrative Services Pty Ltd [2005] NSWIRComm 12, where Marks J concluded:

“30    It is a trite observation that the duty of the court is to impose such penalty which is appropriate in all the circumstances so as to reflect the intention of the legislature. There can be no doubt that if the shareholders, who are identical in both companies, had resolved to utilise the one corporate entity to operate the business of both defendants there would only be one prosecution before the Court, alleging a breach of s 15(1) of the Act and that there would be no prosecution brought under s 16. Whilst I acknowledge that the different approaches, which are to be found in the authorities to which I have referred, are available and can both be justified, it seems to me on balance that it is preferable to adopt an approach which ameliorates the aggregation of penalties which would otherwise have been imposed on two corporate entities which are closely related by way of identical shareholders and which share common overall management, especially where only one incident gives rise to the proceedings and there is a large degree of overlap in the factual circumstances which have created the breaches. Ultimately, it was the failure to ensure that Mr Sagiotis was adequately supervised so as to ensure that he wore the safety harness when operating the equipment that brought about his untimely death. For these reasons I propose to test the resultant aggregate penalties against what might otherwise be ordered to be paid by way of penalty in the event of one defendant, making due allowance, of course, for the differential maximum penalties and for the differential subjective features.

31    As previously indicated the first defendant would otherwise be fined the sum of $78,000 and the second defendant the sum of $144,000. I propose to reduce these penalties so as to reflect in the aggregate what I perceive to be a more appropriate overall penalty and to apportion the reduction accordingly.

32    Having regard to this approach I propose to reduce each of the penalties by 40%, leaving a final penalty to be imposed on the first defendant of $46,800 and the second defendant of $86,400. The 40% reduction is intended to accommodate the overlapping areas of factual breach.”

129. A similar approach was taken in Inspector Trotter v BBC Hardware Limited and Bunnings Group Limited [2008] NSWIRComm 232, applying the approach adopted in WorkCover Authority of NSW v CI & D Manufacturing Pty Ltd [1995] NSWIRComm 288, as to which Marks J observed at [43]:

“The Full Court did not embark upon any detailed discussion of the rationale for adopting the approach that it did. Perhaps, no such detailed discussion was necessary because the rationale is obvious. Each of the defendants was charged with an offence of creating a risk to the health, safety and welfare at a place of work of, respectively, its employees and people other than its employees, arising from the conduct of the undertaking at that place of work. If there was but one defendant then, in appropriate circumstances, in so far as the one incident involved a breach of the absolute duty created by the legislation with respect to persons who were its employees and persons who were not its employees, the principle of totality would apply and the penalty would be subject to reduction in accordance with that principle. Any financial penalty which is imposed upon a corporation will ultimately be borne by the corporations’ shareholders. Where two corporations are closely related in circumstances that their ultimate ownership vests in the same body of shareholders, penalties imposed on those corporate defendants will be borne by the ultimate shareholders. In those circumstances, it is appropriate to acknowledge that treating the two related corporate defendants as if they were entirely independent would result in the ultimate shareholders being penalised twice as a result of the same incident. In these circumstances, consistent with appropriate principles applying to the sentencing of offenders, there should be an adjustment of the penalties imposed so as to minimise any such injustice. Such a rationale would appear to me to be consistent with the approach in Cue Design Pty Ltd and Dimmeys Stores Pty Ltd in the Federal Court of Australia, which I have previously referred to.”

130. In Big River Timbers Pty Ltd, the Full Court had held at [21], however, that C I & D Manufacturing Pty Limited was wrong on the issue of totality and at [18], that it was not open for two such related corporations to be sentenced as if they were one corporation.

131. At [52] - [53] in BBC Hardware Limited and Bunnings Group Limited, Marks J observed that his judgment in Metropolitan Administrative Services Pty Ltd had not been considered in Big River Timbers Pty Ltd and concluded at [53], that in those circumstances, it could not be concluded that on sentencing, any approach inconsistent with ignoring completely the ultimate burden to be borne by the imposition of monetary penalties on more than one closely related corporation, had to be adopted.

132. In Trade Practices Commission v Cue Design Pty Ltd [1996] FCA 192; 85 A Crim R 500, which concerned prosecutions of related companies for offences under the Trade Practices Act 1974 (Cth), O’Loughlin J concluded that it was appropriate to sentence as if there had been one offender, but to acknowledge the existence of the two defendants by imposing upon each a penalty equal to 50% of the whole. In Australian Competition & Consumer Commission v Dimmeys Stores Pty Ltd [1999] FCA 1175, Weinberg J took a somewhat different approach, in another Trade Practices Act prosecution, where one company was beneficially owned by a Mr Zappelli and the members of his family, who also had a substantial interest in the other company. His Honour took the view that by fining each defendant separately, the Court is, in effect, punishing Mr Zappelli and his interests twice. He took the view that while their conduct may warrant separate punishment, some recognition should be accorded to the fact that the two offences were closely related, with the result that a somewhat lower penalty than would otherwise be merited, was imposed upon one of the defendants.

130. Marks J’s approach in Metropolitan Administrative Services Pty Ltd was, however referred to in Big River Timbers Pty Ltd at [7], where it was noted that the respondents urged the view that his Honour’s approach should be adopted. The conclusion reached by the Full Court at [18], after review of other authorities, was that it was not open for two such related corporations to be sentenced as if they were one corporation. It was also concluded that the totality principle, which arises to be considered where a single offender is being sentenced for more than one offence, did not operate when two separate defendants, even if closely related corporations, were being sentenced for two different offences arising out of the one incident. In such a case, it is the parity principle which must be applied, it being relevant to the assessment of the appropriate penalty for such co-offenders. It was also observed that required such defendants, even though prosecuted under different sections of the Act, to be treated consistently, in accordance with the principles discussed in Lowe v The Queen [1984] HCA 46, (1984) 154 CLR 606 at 610-611:

“Just as consistency in punishment – a reflection of the notion of equal justice – is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under the law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice. It is for this reason that the avoidance and elimination of unjustifiable discrepancy in sentencing is a matter of abiding importance to the administration of justice and to the community.”

134. In BBC Hardware Limited and Bunnings Group Limited, Marks J also referred to the view taken in Inspector Bestre v Jontari Pty Ltd [2007] NSWIRComm 190, by Haylen J, who also had to consider separate charges brought against a company and its subsidiaries. His Honour noted that following Big River Timbers, the principle of totality did not apply in relation to the subsidiary companies, but also considered that there was an artificiality about any suggestion that the labour hire company being sentenced in that case, as the legal employer, had the power to act independently and impose safe systems for the engagement of their employees on the operating company, given the nature of the corporate arrangements and directorships. In the result, his Honour concluded that a penalty should be imposed on the operating company and good behaviour bonds on the labour hire companies, having observed at [49]:

“The need to ensure that the offender is adequately punished for the offence is essentially linked to the concept that the sentence must ultimately reflect the objective seriousness of the offence. In the present case there is no doubt that each offence is a serious breach of the Act for reasons already set out. However, in a real sense the breaches are those brought about by the actions and omissions of Tempo and not of the conduit entities. It may be argued that Tempo has chosen its own corporate structure and if that left it open to charges in relation to the same incident in relation to itself and its wholly owned subsidiaries, then so be it. However, the circumstances of each case are to be scrutinised in the sentencing process: not every wholly owned subsidiary or closely related defendant charged in relation to the same offence will be a mere conduit exercising no control and playing no part in the day to day employment relationship. Further, while it may be for the prosecutor to lay charges that cannot limit the Court in the way in which it approaches the sentencing exercise. A related consideration is that while the wholly owned subsidiaries acted as mere conduits, in fact they had the power to exercise control over the employees and did not do so. In the circumstances of the present case that type of analysis has little potency because the directing minds of the corporate entireties were the same persons: they chose to have the labour hire entities act without control and as mere conduits and chose to use Tempo as the de facto employer and in a practical sense standing in the shoes of the employer. The seriousness of the offence of the labour hire entities has to be judged in that context.”.

135. In BBC Hardware Limited and Bunnings Group Limited Marks J also referred to JT and LC Tippett Pty Ltd and RD and LF Tippett Pty Ltd v WorkCover Authority of New South Wales [2008] NSWIRComm 177; (2008) 184 IR 1, where there were two corporate defendants that were carrying on a partnership which employed the employees. They were each charged with the same breach of the Act, arising out of the same incident. It was concluded by the Full Bench at [99] as to their sentence that:

“Although the defendants have been found guilty of the same offence that was in the same terms and arose out of the same circumstances, their offences relate to corporate co-offenders who are in a partnership that is the employer. There is, therefore, a critical factual difference to that found to exist in Big River Timbers: in this case, the issue of totality does not arise because, as a result of the partnership, there is but one employer entity in law. We propose to proceed to sentence on this basis.”

136. Marks J also referred to a similar approach taken by Gleeson CJ in Tiger Nominees Pty Ltd v State Pollution Control Commission (1992) 25 NSWLR 715 (Mahoney JA and Campbell J), where in proceedings concerning breach of the Clean Waters Act1970 (NSW) by two corporate defendants who were in partnership and who were held vicariously responsible for the conduct of the employees of that partnership, it was observed at 722:

“It is, of course, easy to imagine cases where justice would require that penalties be reduced below what otherwise might be in recognition of the circumstances that a multiplicity of offenders is accidental and quite unrelated to the merits of the case. In the present case, however, there is no reason in principle why Hemmings J was obliged to approach the penalising of the appellants as though they were in substance only one offender although, as I have indicated, the circumstance that his Honour was dealing with a partnership employer was an aspect of the facts that it was appropriate for him to bear in mind.”

137. Marks J thus concluded it to be relevant that Bunnings, as part of the process of integration of the BBC Hardware business, had taken overall responsibility with respect to occupational health and safety matters for staff, to the exclusion of BBC Hardware. In the result, his Honour took the view that:

“66    It is quite clear that in an overall sense, the control of the store was in the hands of Bunnings personnel and that overall Bunnings operational and other systems, including occupational health and safety systems, were utilised. Although BBC Hardware is not entitled to escape liability, in the sense that it cannot hide behind the requirement to abdicate the implementation of occupational health and safety measures to Bunnings, the more substantial culpability is that of Bunnings. In these circumstances, I would impose a monetary penalty of $130,000 on Bunnings.

67    This leaves for consideration the circumstances of BBC Hardware. It has a lesser culpability because of the matters which I have described, but it is not in the same category as the “mere conduit” described by Haylen J in Jontari. Without any further amelioration, I would have imposed on BBC Hardware a penalty of $95,000. However, I propose to further reduce the penalties so as to ensure that the shareholders of the Wesfarmers group, who will ultimately bear the burden of both penalties, are not unduly and unfairly penalised in circumstances where each of the prosecutions has been initiated by reason of the same incident and involves the exact same particulars of breach.

68    The aggregate penalty, without the application of any further mitigating circumstances, would be $225,000. The WorkCover Authority of New South Wales asserted that there should be no further discount applied by reason of the close relationship of the defendants and that it should be entitled to a moiety of that amount.

69    However, having regard to the approach to the assessment of penalty in the circumstances of these proceedings, which I prefer for the reasons that I have earlier set out, I propose to reduce the aggregate penalty by $85,000 leaving a net aggregate penalty of $140,000. This should be borne as to $130,000 by Bunnings and as to the balance, namely $10,000, by BBC Hardware.”

138. As discussed in Lowe, the parity principle generally requires that those who have been parties to the commission of the same offence, should, if other things are equal, receive the same sentence.

139. In this case, presumably for reasons of commercial advantage, the Vale Group of companies took steps, the result of which were that Integra operated and managed the mine, as well as employing certain managerial employees and Glennies Creek employed the operations personnel working there, other than contractors. One of the consequences of those decisions was that differing obligations were imposed on the two defendants by the Act. The boards of the two companies acted to ensure that all of those obligations were met, by the two companies acting as one in relation to the mine’s safety system, its implementation and operation by those working there.

140. The result was, it was agreed, that the obligations imposed by s 8(1) on Glennies and by s 8(2) on Integra were both breached in the incident which gave rise to the charges to which they have each entered their plea. Neither the charges nor the agreed facts distinguish between the two companies’ responsibility for the failures which resulted in their respective offending. They do not reveal that one of these two closely related companies was more culpable than the other, for all that occurred the night that Mr Hill was killed.

141. It follows that according to the parity principle, they should receive similar sentences for their offences. Their case was, however, that those sentences should be discounted because of their identical shareholding and that not to do so would, as Marks J considered, result in unfair and undue penalty, necessarily borne by their common shareholders, for the one incident.

142. The difficulty, it seems to me, is that this approach does not accord with that discussed in Big River Timbers, which does not permit two such corporate entities to be sentenced as if they were one. The two companies were not operating in a partnership which employed the employees, as was the case in JT and LC Tippett Pty Ltd. Unlike Tiger Nominees Pty Ltd, there is no suggestion here that the fact of a multiplicity of defendants is accidental. Nor was there evidence of the kind considered in Jontari or in BBC Hardware Limited and Bunnings Group Limited, where one corporate defendant was shown to have had greater responsibility and resulting moral culpability for what had occurred in the incident in question, than the other.

143. Here the two defendants acted as one, in attempting to meet the differing obligations imposed on each of them by the Act. That was an aspect of decisions made no doubt for good and lawful commercial reasons, to operate the mine by way of two separate corporate entities, each having responsibility for differing matters. What each company implemented, however, as the result of decisions made by their two boards, which had common membership, failed to ensure that either company met those obligations, on the day that the safety of Mr Hill and those working with him was put at risk in the way revealed in the agreed facts.

144. The issue lying between the parties is thus whether, in those circumstances, the sentences which would otherwise be imposed on each defendant may be reduced. Having given this issue considerable, anxious thought, it is to my mind difficult to see in this case that there can be any reduction in the penalty imposed on either defendant on that account, under this legislative scheme.

145. As I observed earlier, the scheme of the OHS Act is to impose obligations intended to ensure safety at work widely and in differing ways, in the hope that if there is a failure on the part of one individual or corporation to meet those obligations, other individuals or corporations will, by adhering to the separate obligations as to safety imposed upon them, ensure that when a person makes a mistake, whether as the result of carelessness or even a deliberate decision, he or she will be protected from harm.

146. To reduce a penalty otherwise properly imposed on a corporate defendant who failed to meet its obligations under this statutory scheme, because another closely related corporate defendant did the same, appears to me to be inconsistent with the purpose of the Act. The position would be different if the one corporate offender was being sentenced for offences committed under various provisions of the Act, given the principle of totality, but that is not this case.

147. That conclusion can be tested in various ways. If there had been a third, individual, defendant who had entered a plea in this case, a director of the defendants, or a senior executive employed by one of them, for example, upon whom the OHS Act also imposes relevant obligations, who also happened to be a shareholder of one or both of the corporate defendants, would he or she also be entitled to a reduction in penalty, because otherwise he or she would bear an unfair and undue penalty for the incident? It is difficult to see that such an approach to sentencing is available, consistent with the sentencing principles I have discussed.

148. If it had been two individuals who had a relationship, a husband and wife for example, who had operated this mine, dividing responsibilities as between themselves in the way in which these corporate defendants did and who had acted together to meet their respective obligations under the Act, through the one set of safety systems, as these defendants did, could they each be given a discount on sentence if they had committed these offences? Could they argue that otherwise they would bear an unfair and undue penalty for the incident because their penalties would be borne out of the funds available to them, as members of a family?

149. Certainly if a death at the mine had resulted from a deliberate act, rather than acts and omissions of the kind here in question, a reduction in the sentence imposed on two or more individuals for murder or manslaughter could not be contemplated, if the offenders who had acted together in bringing about that death were related. How can the result be different because it is money penalties which the OHS Act imposes for the offences here in question, or because it is corporations with common shareholdings, rather than related individuals, who committed these statutory offences?

150. As I have discussed, the penalty for each offender must reflect the nature and seriousness of the offence and each offenders’ moral culpability for the offending, as well as the other matters I have discussed, including the parity principle.

151. Applying these various sentencing principles, I am unable to see any just basis on which the approach urged by the defendants can be adopted. True it is that it is the ultimate shareholders of the Vale group of companies who must bear the burden of the penalties imposed on each defendant, even though it was not they who made the decisions which resulted in this offending. That, however, is the natural consequence of a decision to acquire a shareholding in a company, created by law to be a separate legal entity. Such a company’s activities are required to be directed by its directors, in the interests of its shareholders, but also in accordance with the laws which bind the company.

152. On the one hand, such an investment shelters shareholders from potential economic losses, if the company’s commercial ventures fail, because the corporate veil cannot be pierced to permit pursuit of shareholders. Nor, however, can the corporate veil be pierced in order to shelter such shareholders from the consequences of any criminal conduct in which such a company engages. That is the point at which our society has determined that shareholders cannot benefit from acting through a company, rather than as individuals, in pursuit of their economic interests.

153. It follows that while the defendants’ shareholders are entitled to share in the economic benefits which flow from the decision to conduct this mining operation through two separate corporate entities, they must also bear the burden of the results, if, as here, both companies each commit offences under this legislative scheme, having decided to act as one in their pursuit of the respective obligations imposed upon them by the OHS Act.

154. In the result, it seems to me on the facts here arising for consideration, that it cannot be concluded that any discount on sentence can result for either defendant, either from the fact of its common shareholding with the other, or from the decisions of the two boards to devise, implement and operate the safety systems devised to meet the two companies’ respective statutory obligations.

Comparable cases

155. A schedule of cases said to be comparable was provided. They included cases where the maximum penalty was only $550,000, not the $825,00 which applies in this case.

156. The penalties imposed ranged from a case where a fatal injury occurred at a mine during the reinstallation of a conveyor boom, which resulted in a fine of $100,000 (wrongly identified in the schedule to have been $90,000) for a s 8(1) offence attracting a $550,000 maximum, after a 25% when a worker was fatally crushed, while performing maintenance work on a machine which had not been isolated as it ought to have been (Inspector Estreich v Cement Australia (Kandos) Pty Ltd [2013] NSWIRComm 65). There was also fine of $256,000, in an offence attracting a maximum of $500,000 imposed after a 20% discount for a s 8(1) offence, where an employee was also fatally injured (Morrison v Fuchs Lubricants (Australasia) Pty Ltd [2010] NSWIRComm 5). At the upper end of penalties imposed was a fine of $288,00 after 20% discounts for an offence under s8(2) where the maximum penalty was $825,000 (Morrison v Centennial Coal Company Ltd [2010] NSWIRComm 4).

157. These cases were of some, albeit limited, assistance in determining the penalty to be imposed in this case, given the very different factual circumstances which arose to be considered on these pleas.

Victim Impact Statement

158. The parties accepted that I would approach the victim impact statements tendered in the way I discussed in R v Martin [2015] NSWSC 521. There I observed at [169] that under s 28(4) of the Crimes (Sentencing Procedure Act), on the application of the prosecutor and if the Court considers it appropriate to do so, such statements may be considered and taken into account on sentencing the defendants, on the basis that the harmful impact of a death on the members of his immediate family, is an aspect of the harm done to the community.

159. I am satisfied that, in this case, too, those statements should so be taken into account on sentencing. It has often been observed that all human life is precious and that the death of any person is a harm inflicted on the community generally and that one life cannot be valued over that of another.

160. Nevertheless, in this case, I consider that these victim impact statements should be taken into account on sentence, shedding light as they do on the particular harm which was done when Mr Hill died. Accordingly, I have taken them into account in sentencing the defendants.

161. At the sentencing hearing, I expressed my sympathy to Mr Hill’s family in open court. I will not here detail what was said in the victim impact statements of his wife Melanie Hill, his mother Margaret Hill and his brother Gavin Hill.

158. Those statements reveal, in moving terms, the awful circumstances in which they learned of Mr Hill’s death and its ongoing difficult and varied consequences, especially for his young family. Mr Gavin Hill, in particular expressed gratitude for those who had assisted Mr Hill, in undoubtedly very difficult circumstances after he was injured. Understandably, it is hard for his family members to comprehend how it was that Mr Hill went to work to die as he did. Their interest in the ongoing pursuit of safety for others who work in the dangerous work involved in mining was also explained in terms which can be well appreciated, but those views can have no impact on the penalty which is imposed on these defendants.

159. The outcome of these proceedings, even the sentences imposed on the defendants cannot, it must be accepted, provide real assistance to Mr Hill’s family and friends, who must continue to bear their grief over his death, in the regrettable circumstances I have discussed in this judgment. It is to be hoped that the pleas finally entered, the evidence led at the hearing and this judgment will provide them with some small measure of comfort, by providing an explanation of how the system of justice our society has devised, has dealt with the circumstances of Mr Hill’s death and the failures from which it so unfortunately resulted.

Costs

164. The defendants conceded that it would be appropriate to order that they pay the prosecutor’s costs as agreed or assessed.

The sentences

165. Having considered all of the matters I have discussed, I have concluded that a somewhat lesser penalty must be imposed on Integra, given the respective records of the two companies considered in light of the matters discussed in Veen (No 2), which I earlier referred to. I have concluded that the starting point for the penalty in Glennies’ case must be $240,000 and in Integra’s case $230,000. After a 15% discount, that results respectively in penalties of $204,000 and $195,500.

Orders

166. For the reasons given, in each case I find the defendant guilty of the charge to which it entered a plea and enter convictions accordingly.

167. Glennies Creek Coal Management Pty Ltd is ordered to pay a penalty of $204,000 and Integra Coal Operations Pty Ltd is ordered to pay a penalty of $195,500, with in each case, a moiety to the prosecutor.

168. Glennies Creek Coal Management Pty Ltd and Integra Coal Operations Pty Ltd are also ordered to pay the prosecutor's costs, as agreed or as assessed by the Court, in the absence of agreement.

**********

Amendments

19 December 2016 - typographical error in [167] - $195,000 amended to $195,500

Decision last updated: 19 December 2016