Safe Work New South Wales v Austral Hydroponics P/L; Safe Work New South Wales v Eang Lam

[2015] NSWDC 295

District Court

New South Wales

Medium Neutral Citation:	Safe Work New South Wales v Austral Hydroponics P/L; Safe Work New South Wales v Eang Lam [2015] NSWDC 295
Hearing dates:	9 October 2015, 4 December 2015
Date of orders:	11 December 2015
Decision date:	11 December 2015
Jurisdiction:	Civil
Before:	Judge AC Scotting
Decision:	Penalty – Austral Hydroponics 1 The offender is convicted. 2 Taking all of those matters into account the appropriate penalty is $200,000. In recognition of the early plea of guilty that sum is to be discounted by 25%. 3 I impose a fine of $150,000. 4 I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. Penalty – Eang Lam 1 The offender is convicted. 2 Taking all of those matters into account the appropriate penalty is $20,000. In recognition of the early plea of guilty that sum is to be discounted by 25%. 3 I impose a fine of $15,000. 4 I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor
Catchwords:	CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – duty of employers – risk of death or serious injury – death of employee SENTENCE – mitigating factors – aggravating factors – fine – capacity to pay – circumstances – objective seriousness – specific deterrence – general deterrence – appropriate penalty COSTS – prosecution costs OTHER – background of offender – farming incident – relationship between offender and injured worker
Legislation Cited:	Work Health and Safety Act 2011, s32 Crimes (Sentencing Procedure) Act 1999, s21A Fines Act 1996, ss. 6, 122(2) Superannuation Industry (Supervision) Regulations 1994
Cases Cited:	Veen v R (No 2) (1988) 164 CLR 465 R v McNaughton (2006) 66 NSWLR 566 Baumer v R (1988) 166 CLR 51 BW v R [2011] NSWCCA 176 R v Wilkinson (No 5) [2009] NSWSC 432 Capral Aluminium Limted v Workcover Authority of New South Wales (2000) 49 NSWLR 610 R v Thomson & Houlton (2000) 49 NSWLR 383 R v Borkowski (2009) 195 A Crim R 1 Environmental Protection Agency v Barnes [2006] NSWCCA 246
Category:	Sentence
Parties:	Safe Work NSW (Prosecutor) Austral Hydrponics (Offender) Eang Lam (Offender)
Representation:	Counsel: Mr J Clarke (Prosecutor) Mr R Sweet (Offenders)     Solicitors: Safe Work New South Wales (Prosecutor) Stojanovic Solicitors (Offenders)
File Number(s):	2014/65547 (Austral Hydroponics P/L) 2014/65567 (Eang Lam)

sentence

1. Austral Hydroponics Pty Ltd (Austral Hydroponics) has pleaded guilty to an offence that as a person who had a health and safety duty under section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Savoeun Nuon to a risk of death or serious injury contrary to section 32 of the Act.

2. The maximum penalty for the offence committed by Austral Hydroponics is a fine of $1.5 million.

3. Eang Lam, the sole director of Austral Hydroponics, has pleaded guilty to an offence that as an officer of a company that had a health and safety duty he failed to exercise due diligence to ensure that the Austral Hydroponics complied with its duty, and thereby exposed Saveoun Nuon to a risk of death or serious injury contrary to section 32 of the Act.

4. The maximum penalty for the offence committed by Mr Lam is a fine of $300,000.

Facts

5. The parties presented an Agreed Statement of Facts for each offence that can be summarised as follows.

6. Austral Hydroponics conducted a business growing greenhouse truss tomatoes at 165 Gurner Avenue, Austral (the premises). At the date of the incident it had 5 employees. All employees were supervised by Mr Lam. Mr Nuon was employed as a farmhand and had commenced this employment in 2003.

7. On 7 March 2013 Mr Nuon was directed by Mr Lam to remove pliable plastic sheets from the roof of a hot house located at the premises. No instruction on how to perform this task was provided by Mr Lam.

8. The roof was curved forming an arch with a low point of 2.5 m and a high point of 4m.

9. Mr Nuon used a ladder to climb onto the roof of the hot house and stood on the gutter whilst undertaking the task of removing the plastic sheets.

10. At approximately 4:30pm, as Mr Nuon was trying to pull away damaged plastic he lost his balance and fell backwards approximately 2.5 metres.

11. Mr Nuon suffered a fracture to the spine which caused spinal cord damage and tetraplegia. Mr Nuon’s condition was considered catastrophic requiring high care. Mr Nuon remained in hospital until his death in late August 2014 from respiratory failure and recurrent aspiration pneumonia. The prosecution did not allege that Mr Nuon’s death was caused by the injuries he sustained in the fall.

12. In December 2011 Safe Work Australia published a Code of Practice entitled: ‘Managing the Risk of Falls at Workplaces Code of Practice’. The Code of Practice set out the obligations of employers to manage the risk of employees falling including, that risk assessments be conducted, training be provided in respect of tasks where there is a risk of falling, that fall prevention or arrest devices are used where reasonably practicable and that, where possible, such tasks are carried out on a solid construction. This last obligation is also contained in clause 78(3) of the Work Health and Safety Regulation 2011.

13. Mr Lam failed to exercise due diligence by taking reasonable steps to ensure compliance with the Code of Practice. No risk assessment of the task being undertaken by Mr Nuon had been conducted and there was no safe work procedure in place. Mr Nuon was not adequately supervised, or provided with assistance in undertaking the task. Mr Lam did not take reasonable steps to ensure that workers were directed not to work on the roof of a hot house unless a risk assessment had been conducted and control measures to minimise risks to safety were implemented.

14. Mr Nuon had not received training for working at height. Mr Nuon informed WorkCover that he had learned how to perform the task he was performing at the time of the incident from other employees and that it was the normal practice to reach the roof by ladder and walk along the gutter. At the time of the incident no fall prevention or arrest device or work positioning system was being used.

15. Mr Lam told WorkCover that employees had been issued with a pole which had a Stanley knife attached to it to allow them to perform the task whilst on the ground. WorkCover were told by Mr Nuon that he had never been provided with such equipment and that it was not available at the premises.

16. The ladder used by Mr Nuon on the date of the incident was a damaged domestic ladder which should not have been used in an industrial setting. The ladder was extended and unsecured.

17. Following the incident Austral Hydroponics was issued with a Prohibition to discontinue use of domestic ladders and an Improvement Notice to address the risk of falling from height. To comply with these policies Austral Hydroponics obtained industrial fibre glass ladders, step ladders and fall arrest harnesses.

Offenders’ Evidence

Eang Lam

18. Mr Lam gave oral evidence at the sentencing hearing and was cross-examined.

19. Mr Lam grew up in Cambodia. His schooling was disrupted when he was sent to a forced labour camp and imprisoned by the Khmer Rouge. His son was born in Cambodia in 1980. Mr Lam then moved to Thailand with his wife and son where they lived in a refugee camp for two years. At about this time Mr Lam met Mr Nuon and they became close friends.

20. Mr Lam moved to Australia in 1983 and began an industrial sewing business. The business experienced difficulties in around 2002. Mr Nuon, an experienced farmhand, suggested that Mr Lam consider farming. Mr Lam gave evidence that he expressed concerns about the farming idea due to his lack of experience, but that Mr Nuon told him that he had experience and could teach Mr Lam how to farm

21. The farming business is run by Mr Lam in partnership with his wife and Austral Hydroponics was responsible for the marketing of the crops produced. Austral Hydroponics is no longer trading. Following the accident Mr Lam’s son, Hock Lam, incorporated Skyfresh West Pty Ltd (Skyfresh), and this company now markets the crops produced.

22. Mr Lam gave evidence that at approximately 4.30pm on the date of the incident he was working in the packing shed with his wife when they learned that Mr Nuon was lying on the ground. Mr Lam ran to Mr Nuon who told him to call an ambulance. The police attended the premises that afternoon and two Workcover Inspectors attended the following day. WorkCover also attended the premises around one month after the incident. Mr Lam assisted the police and WorkCover with their investigations.

23. Mr Lam visited Mr Nuon in hospital approximately 7 or 8 times. Mr Nuon had a wife and three children. Mr Lam apologised to Mrs Nuon and provided $1,200 to her. Mr Lam gave evidence that he could not give more due to his debts. Mr Lam spoke to Mrs Nuon on the telephone and would see her sometimes, however said it was very sad to see Mr Nuon’s family.

24. Mr Lam gave evidence that Austral Hydroponics had a pole with a knife attached to it, but that it was not used regularly at the time of the incident.

25. Mr Lam accepts responsibility for the accident and expressed deep regret and remorse. Following the accident Mr Lam did not work on the farm for around 6 months. Mr Lam described having changed significantly since the accident becoming withdrawn, not wishing to socialise and having difficulty sleeping. Mr Lam gave evidence that Mr Nuon was a very happy man who was always singing and that he now experiences very unpleasant intrusive memories of hearing his songs and seeing his smiling face. Mr Lam described Mr Nuon as his best friend.

26. Mr Lam and Mrs Lam own a property in Canley Heights that they purchased in 1988 for approximately $100,000. He gave evidence that the equity in the property has been exhausted to support the farming business and to pay off debts. Mr Lam has had to borrow money from relatives and friends to pay $20,000 for the legal costs of these proceedings. Mr Lam deposed that the farming business has faced financial difficulties because sometimes crops fail.

27. Mr Lam gave evidence that the premises were purchased in around 2002 by the superannuation fund of himself and his wife and are currently owned by Golden Star Property Trust.

28. Mr Lam deposed that his son owned a house in Strathfield that he sold approximately 2 years ago. Mr Lam’s son lent him around $65,000 to assist Mr Lam with the farming business.

29. Mr Lam’s tax returns and the company’s tax returns for the financial years 2012-2014 were tendered. The taxable income of each is set out in the table below.

FY	Eang Lam	Austral Hydro
2012	$61,948	$63 969
2013	$66,450	$51 910
2014	$79,847	$99,609

30. In cross-examination Mr Lam provided that the partnership remains the grower of the crops and pays Skyfresh for the marketing services provided.

31. Mr Lam gave evidence that the last crop produced was sold for around $700,000, and that he would usually expect to produce and sell one crop per year.

32. Mr Lam estimated that the Canley Heights property would currently be worth approximately $700,000 to $800,000.

33. Mr Lam agreed that he knew he had a safety duty, that he had never approached WorkCover to seek assistance in understanding his responsibilities, and that he had never attended an open safety day.

34. When asked in cross-examination why he had not told WorkCover about the pole with the knife Mr Lam explained that he had been ashamed that the pole had been available but not been used on the date of the accident. Mr Lam had not seen Mr Nuon use the pole, but had seen others use it.

Mrs Lam

35. Mrs Lam gave evidence about the changes that she had seen in Mr Lam, whom she has been married to since 1978. Mrs Lam deposed that Mr Lam did not work for 6 months following the accident, has difficulty sleeping, gets upset easily and blames himself for Mr Nuon’s injuries.

36. In cross-examination, Mrs Lam said that she worked on the farm but leaves the business side of things to Mr Lam. Mrs Lam provided that Mr Lam visited Mr Nuon in hospital around 6 or 7 times without her, and once with her. Mrs Lam said that the pole with the knife attached had been on the premises for around 2 years, and that she did not talk to Mr Lam about this pole following the accident.

Hock Lam

37. Mr Hock Lam (Hock) gave evidence that after the accident Mr Lam became a broken man and lacked the capacity to continue running the business of Austral Hydroponics. Hock gave evidence that his father expressed regret to him almost every day for not having taken steps which would have prevented the accident.

38. Hock deposed that he had seen a pole with the knife attached at the farm and that he had seen it used. The first time he saw it used was around 5 years ago and the most recent time he saw it used was around 3 years ago.

39. Hock gave evidence that he sold his Strathfield property to allow him to provide a $65,000 loan to his parents. This loan was not documented.

40. Hock deposed that the premises are owned by Rawson Superannuation Fund and held on trust for the Golden Star Property Trust.

41. In cross-examination Hock agreed that he there was an element of risk in loaning money to his parents that he did not seek to protect himself from. He agreed that the understanding between himself and his parents was that if/when the business could pay him back, he would be repaid.

42. Hock was an employee of Austral Hydroponics from 2005 until the formation of Skyfresh, and said that he had seen Mr Nuon use the pole with the knife in approximately 2010 after plastic had been damaged by strong winds.

Report of Dr Zhen Zhang psychiatrist

43. A report of Dr Zhen Zhang, psychiatrist, dated 23 September 2015 was tendered on behalf of Mr Lam. The report was prepared for the sentencing proceedings.

44. Mr Lam gave a history to Dr Zhang that he experienced recurrent intrusive images of the accident and that he could not get a picture of the scene out of his mind. He often experienced sweating, chest tightness and palpitations. He would often wake from his sleep screaming and had recurrent nightmares. He had experienced feelings of irritability and poor memory. Mr Lam told Dr Zhang that he had become socially withdrawn did not want to leave the house. He had lost confidence and motivation to go to work and had increasing concerns for the safety of his workers. He stopped working for a period but had to resume work due to financial stress. He had no interest or joy and had been avoiding social events, including weddings. He had a poor appetite, had lost weight and his energy levels were low.

45. Dr Zhang diagnosed Mr Lam as suffering from Post Traumatic Stress Disorder (PTSD) and Major Depression as well as presenting with significant symptoms of anxiety. Dr Zhang opined that considering the severity of the trauma suffered by Mr Nuon and his subsequent death that the psychological damage to Mr Lam was severe. Dr Zhang believed that of Mr Lam’s prognosis is guarded and his condition is likely to be chronic and enduring. Dr Zhang recommended that Mr Lam engage in psychiatric treatment including psychotherapy and antidepressant medication.

Affidavit of Lin Thai sworn 30 October 2015

46. The offenders relied on an Affidavit of Lin Thai sworn 30 October 2015. Ms Thai is Mr Lam’s accountant. Ms Thai was not required for cross-examination.

47. Ms Thai’s affidavit annexed the Trust Deeds for the Rowson Management Superannuation Fund and the Golden Star Property Trust and the Financial Report for the year ended 30 June 2014 of the Golden Star Property Trust.

48. An analysis of those documents revealed that the Golden Star Property Trust was a unit trust established in about June 2011 to be the legal owner of the premises that were beneficially owned by the superannuation fund. The contemporaneous documents show that the premises are held by Mr and Mrs Lam as trustees for the Golden Star Property Trust.

49. The property of the superannuation fund is held on trust for Mr and Mrs Lam until they reach the age of 65 years or are otherwise entitled to those funds by operation of the Superannuation Industry (Supervision) Regulations 1994

Findings based on the Offenders’ evidence

50. The prosecution made a number of challenges to the evidence led on behalf of the Offenders and it is therefore necessary for me to make the following findings.

51. First, I was impressed by the candour of Mr Lam’s evidence and the extent of his remorse and contrition. Mr Lam has been deeply affected by the serious injury to his best friend and has accepted responsibility for his failings and the failings of Austral Hydroponics that led to the injury to Mr Nuon. Mr Lam was doing his best to give honest evidence to the Court and I accept his evidence.

52. Second, there was a pole with a Stanley knife attached to it at the premises that could have been used to do at least part of the work Mr Nuon was doing when he fell. In this regard I accept the evidence of Mr and Mrs Lam, and Hock Lam, to this effect. Not much turns on this finding because I cannot be satisfied on the evidence that Mr Nuon was ever instructed to use it or was aware of its existence.

53. Third, neither of the offenders has the capacity to pay a significant fine.

54. Austral Hydroponics has ceased trading and its role has been taken over by Skyfresh. I am satisfied that this occurred because of Mr Lam’s inability to work following the incident and not as a means of avoiding any fine to be imposed in these proceedings.

55. Mr Lam is liable to the bank for all of the borrowings taken out to fund the farming operation and that indebtedness is secured by way of a mortgage on his home. He has no equity available to him at the present time. His future livelihood is dependent on the success of future crops, which are not guaranteed. The imposition of a substantial fine on Mr Lam would be equally borne by his wife. Mr Lam does not have access to the proceeds of the superannuation fund available to him to pay any fine imposed. Mr Lam’s ability to work has been seriously compromised by the psychological effect that the incident and the death of Mr Nuon has had on him.

Consideration

Objective seriousness of the offence

56. The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v R (No 2) (1988) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term “objective circumstances” was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton (2006) 66 NSWLR 566 at [15].

57. The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R (1988) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].

58. The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No 5) [2009] NSWSC 432 at [61].

59. The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relevant to the gravity of the offence: Capral Aluminium Limited v Workcover Authority of New South Wales (2000) 49 NSWLR 610 at [89]. The question of foreseeability of the risk is to be determined objectively.

60. The risk posed by workers falling from the roof of the hot house was foreseeable and obviously so. The ways in which that risk could be minimised were set out in the Code of Practice which was readily available to both offenders if any enquiry had been made.

56. The extent of the injury to Mr Nuon was catastrophic. He remained in high dependency care as a result of his injuries until his death.

57. For Mr Lam’s part he was dependent on Mr Nuon to provide him with the relevant ‘know-how’ to operate the farming business. That resulted in Mr Nuon being fairly independent in undertaking his role at the premises. That did not however alleviate Austral Hydroponics or Mr Lam of their obligations to provide for his health and safety.

Deterrence

63. There is a requirement for the penalty imposed in relation to this offence to provide for general deterrence. The penalty should draw attention to persons operating similar businesses which are inherently dangerous to employees that it is necessary to ensure that they operate without avoidable risk to the health and safety of their employees.

64. There is a requirement to provide for specific deterrence in this case, however it is reduced for the following reasons.

65. First, the offender has taken steps to improve the equipment provided to its employees to undertake the relevant task following the incident.

66. Second, Austral Hydroponics is no longer trading.

67. Third, the incident has had a substantial impact on Mr Lam such that I am satisfied that the safety of workers at the farm will in the future be of paramount concern to him.

Aggravating factors

The injury, emotional harm, loss or damage caused by the offence was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. I am satisfied beyond reasonable doubt that the injuries suffered by Mr Nuon were substantial. The resulting tetraplegia experienced by Mr Nuon puts this case in the worst category of serious injury.

Mitigating factors.

68. The offenders do not have any prior convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The farm has been operating since 2003, but Mr Lam operated an industrial sewing business before that without coming under notice of the prosecutor.

69. The offenders were persons of good character: section 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. Austral Hydroponics had no convictions prior to this offence and employed 5 people. Mr Lam, a director of Austral Hydroponics, provided a gratuitous payment of $1200 to Mr Nuon’s family following the accident, and visited both Mr Nuon and his family on a number of occasions.

70. The offenders are unlikely to re-offend: section 21A(3)(g) Crimes (Sentencing Procedure) Act 1999. Austral Hydroponics is no longer trading, and I am satisfied that appropriate steps were taken by Austral Hydroponics following the accident to purchase equipment to be used on the farm to ameliorate the risk of employees falling whilst working at height. Mr Lam has experienced Post-Traumatic Stress Disorder and Major Depression following the incident which diminished his ability to take a leading role in the farming business and heightened his awareness of the need for safety systems. I am satisfied on the balance of probabilities that both offenders are unlikely to re-offend.

71. The offenders have demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. Mr Lam, the director of Austral Hydroponics, expressed his deep remorse for the offence. Mr Lam has accepted full responsibility for the injury occasioned to Mr Nuon and apologised to Mr Nuon and his family. I am satisfied on the balance of probabilities that the offenders have demonstrated genuine remorse and contrition.

72. The offenders entered a plea of guilty to the Amended Summons at the earliest possible opportunity: sections 21A(3)(k) and 22 Crimes (Sentencing Procedure) Act 1999. The offenders are entitled to a discount on penalty that reflects the utilitarian value of that plea. The extent of the discount should generally be assessed in the range of 10-25%, but that is only a guide. The primary consideration in determining where in the range a particular case should fall, is the timing of the plea so that the earlier the plea the greater the discount: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32].

73. The appropriate discount for the plea of guilty is 25%.

74. The offenders co-operated with the investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.

Other Matters

75. Section 21A(1) Crimes (Sentencing Procedure) Act 1999 allows the Court to consider other relevant matters. In this case it is appropriate to take into account Mr Lam’s disrupted past by reason of his detention in a forced labour camp and subsequent residence in a refugee camp in Thailand before being relocated to Australia. At the time of his arrival in Australia he had limited skills, but has gone on to operate two businesses that have made a useful contribution to the community.

Capacity to pay a fine

76. Section 6 Fines Act 1996 provides:

In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider:

such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and

such other matters as, in the opinion of the court, are relevant to the fixing of that amount.

77. The Court is required to have regard to this provision before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the Court that it should exercise its discretion to limit the amount of the fine. The offender’s capacity to pay is relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.

78. On the basis of the findings that I have already made, Austral Hydroponics has very little, if any, capacity to pay a fine, such that any fine imposed is likely to lead to its winding up. However, this is a case that calls for the imposition of a substantial fine as a result of the objective seriousness of the offence and the need for general deterrence.

79. Mr Lam also has very little capacity to pay a fine, but the imposition of a substantial fine on him is likely to lead to financial ruin and to have a significant impact on Mrs Lam, which in my view would be an unjust result. Mr Sweet argued that the fine imposed on Mr Lam should be no more than $50,000 before applying a discount for the plea of guilty.

80. As a result of the precarious position of Austral Hydroponics I have decided that it is appropriate to order that Mr Lam pay all of the prosecution’s costs agreed in the sum of $20,000 so that they may, if necessary, be effectively enforced. I have taken that amount into account in deciding the amount of the fine to be imposed: Environmental Protection Agency v Barnes [2006] NSWCCA 246 at [78]. Based on my assessment of all of the evidence in this case, I have come to a different fine that that contented for on behalf of Mr Lam.

Penalty – Austral Hydroponics

81. The offender is convicted.

82. Taking all of those matters into account the appropriate penalty is $200,000. In recognition of the early plea of guilty that sum is to be discounted by 25%.

83. I impose a fine of $150,000.

84. I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

Penalty – Eang Lam

85. The offender is convicted.

86. Taking all of those matters into account the appropriate penalty is $20,000. In recognition of the early plea of guilty that sum is to be discounted by 25%.

87. I impose a fine of $15,000.

88. I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

Costs

89. I order that the Mr Lam pay the prosecutor’s costs as agreed in the sum of $20,000.

**********

Decision last updated: 11 December 2015