SafeWork NSW v Enviro Pallets Pty Ltd

[2024] NSWDC 59

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

SafeWork NSW v Enviro Pallets Pty Ltd [2024] NSWDC 59

Hearing dates:

5 March 2024

Date of orders:

8 March 2024

Decision date:

08 March 2024

Jurisdiction:

Criminal

Before:

Russell SC DCJ

Decision:

(1)   Enviro Pallets Pty Ltd is convicted.

(2)   The appropriate fine is $400,000 but that will be reduced by 25% to reflect the early plea of guilty.

(3)   Order Enviro Pallets Pty Ltd to pay a fine of $300,000.

(4) Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

(5)   Order Enviro Pallets Pty Ltd to pay the prosecutor’s costs.

Catchwords:

CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury

SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence – capacity to pay – appropriate penalty

COSTS – prosecution costs

OTHER – pallet making machine – worker underneath – struck while performing maintenance – fatal injuries – failure to conduct risk assessment – failure to electrically isolate – failure to guard

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22

Fines Act 1996 (NSW), ss 6, 122

Work Health and Safety Act 2011 (NSW), ss 3, 19, 32

Cases Cited:

Baumer v R [1988] HCA 67; (1988) 166 CLR 51

Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338

BW v R [2011] NSWCCA 176

Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610

Mahdi Jahandideh v The Queen [2014] NSWCCA 178

Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120

Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96

R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566

R v Wilkinson (No. 5) [2009] NSWSC 432

Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266

Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465

Texts Cited:

SafeWork NSW Code of Practice Managing the risks of plant in the workplace, August 2019

Australian/New Zealand Standard AS/NZS 4024.1201:2014 Safety of Machinery

WorkSafe Victoria, Checklist - isolating plant, June 2011

WorkSafe Victoria, Guidance Note Isolating plant, June 2011

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
Enviro Pallets Pty Ltd (Defendant)

Representation:

Counsel:
M Moir (Prosecutor)
M Shume (Defendant)

Solicitors:
Department of Customer Service (Prosecutor)
Hamilton Locke (Defendant)

File Number(s):

2021/256600

Judgment

1. On 11 September 2019 Mr Mathew Spann, an employee of Enviro Pallets Pty Ltd (Enviro), was underneath a pallet making machine (the machine) investigating a problem with a sensor. The machine’s metal arm struck and trapped Mr Spann’s head. Mr Spann’s injuries were fatal.

2. Enviro Pallets Pty Ltd has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (NSW) (the WHS Act) it failed to comply with that duty and thereby exposed Mr Spann to a risk of death or serious injury contrary to s 32 of the WHS Act.

3. The maximum penalty for the offence is a fine of $1,500,000.

The Risk

4. The risk described in par 10 of the Amended Summons is as follows:

“The risk was the risk of workers, in particular Mr Spann suffering serious injury or death as a result of coming into contact with the unguarded moving parts of the machine while undertaking maintenance and repair tasks on the machine.”

Reasonably Practicable Measures

5. Paragraph 11 of the Amended Summons pleads particulars of the defendant’s failure to comply with the duty under s 19(1) of the WHS Act as follows:

“11.   The defendant failed to ensure so far as was reasonably practicable, the health and safety of its workers, in particular Mr Spann, in that it failed to take any one or more of the following reasonably practicable measures to eliminate the risk to the health and safety of the workers, or, in the alternative, if it was not reasonably practicable to eliminate the risk, to minimise the risk to the health and safety of the workers:’

(a)   Undertaking and implementing a risk assessment in relation to the maintenance of the machine;

(b)   Installing guarding or interlocking on the machine which would have prevented workers accessing underneath the bed conveyor of the machine while the machine was in operation and/or connected to its power supply;

(c)   Installing a separate lockable electrical isolator to the motor of the Pallet Turner of the machine to be used while workers were carrying out maintenance and repair tasks underneath the bed conveyor of the machine;

(d)   Installing control mode switching on the machine in accordance with Australian Standard AS/NZS 4024 Part 1201:2014 to control the operation of hazardous parts of the machine, including the Pallet Turner, while workers were carrying out maintenance and repair tasks underneath the bed conveyor of the machine;

(e)   Developing, implementing and enforcing a safe work procedure or safe work method statement for the performance of maintenance and repairs on the machine which involved:

(i)    Requiring the Pallet Turner of the machine to be isolated and locked out from the electricity supply when undertaking maintenance of the machine, including maintenance underneath the bed conveyor of the machine, while guarding or interlocking was not in place; and/or

(ii)   Implementing a Lock-out/Tag-out system for the machine; and/or

(iii)   Prohibiting maintenance or repair work underneath the bed conveyor of the machine in circumstances where the moving parts of the Pallet Turner have not been electrically isolated;

(f)    Providing workers with instruction, information and training in the safe work procedure or safe work method statement described in (e) for operating and performing maintenance and repair work on the machine.”

Background

6. The parties presented an Agreed Statement of Facts which is summarised below.

7. Enviro was a person carrying on a business or undertaking (PCBU) as a company involved in the manufacture of wooden pallets. Enviro operated a manufacturing factory at St Marys (the premises). Enviro employed approximately six workers at the premises. Enviro engaged Mr Mark Duffin as the Manager of the business.

8. Enviro had employed Mr Spann as a Factory Manager since July 2015. Mr Spann reported directly to Mr Duffin. While Mr Spann had not been formally trained in relation to the work activities his role required at Enviro, he had been working in the pallet industry since 2004 and had been working with a Viking Turbo 505 pallet making machine for a number of years. Mr Spann had been trained by Viking trainers when a similar Viking machine had been installed and commissioned at his previous employer, Afford Packing.

9. Enviro employed Mr Thang Nguyen as a machine operator. Enviro also employed Ms Diane Hili as a factory hand.

The Machine

10. The machine carried out an automated process to nail timber components together to form wooden pallets as follows:

1. The hydraulics of the machine fed the timber along a conveyor into a No. 1 Nailer which nailed together the bottom boards of each individual pallet.

2. The pallet was then fed along an intermediate conveyor into a pallet turner (the pallet turner) which “flips” or rotates each pallet 90 degrees in an anti-clockwise direction.

3. After doing two rotations so that the pallet has been inverted 180 degrees, the pallet is then fed along the bed conveyor and into the No. 2 Nailer.

4. The top boards are then nailed together to complete the pallet.

11. The space under the No. 2 Nailer bed conveyor was 2.1 metres long, 950mm high and 1.8 metres in depth. A photograph showing the unguarded space under the machine is at PX 2, Tab 22, par 100.

12. During the normal operation of the machine, the four metal arms of the Pallet Turner rotated through this space under the bed conveyor. Chains and sprockets were also positioned in this space, which were connected to an electric motor and drove the conveyor to the No. 2 Nailer.

13. There was no guard or interlocking mechanism to prevent a person accessing this space, or from coming into contact with the moving parts within this space while the machine was in operation or energised.

14. Mr Duffin was aware that the machine required ongoing maintenance and fault finding and had given Mr Spann the responsibility for this activity, due to his experience in performing maintenance on the machine.

The Incident

15. On 11 September 2019, Mr Spann was asked by Mr Nguyen to investigate a problem with a sensor underneath the bed conveyor of the No. 2 Nailer. The problem had caused the machine to stop feeding the pallet along the bed conveyor.

16. Mr Spann had previously gone underneath the machine, including the bed conveyor of the No. 2 Nailer, to fix problems with the machine. Mr Nguyen gave varying recollections to the NSW Police and SafeWork NSW as to the number of times he observed Mr Spann place his body underneath the machine prior to the day of the incident. However, Mr Nguyen clearly recalled one occasion approximately one year prior to the incident when Mr Spann was underneath the machine to check the machine’s sensors. On that occasion the machine was stopped and turned off, but it was not de-energised or locked out from the electrical supply. Another worker who did not operate the machine, Morris Leilei, said he had observed Mr Spann being underneath the machine to fix it on more than one occasion while it was switched on but not running.

17. Initially on 11 September 2019 Mr Spann fixed the problem by going underneath the bed conveyor, however the machine stopped again a short time later.

18. At approximately 5.30am, Mr Spann went back under the bed conveyor. He was lying in the space with his back on the concrete floor, which was covered in sawdust. He was using a spanner to make adjustments to the sensor or the chain.

19. While he was underneath the bed conveyor, Mr Spann asked Mr Nguyen to operate the machine slowly, using a manual ‘jog’ function on the No. 2 Nailer, so he could make adjustments while the machine was in operation. By this stage, Ms Hili had come into the area near to where Mr Spann had gone under the bed conveyor.

20. Mr Nguyen pressed the ‘jog’ button approximately three times, when directed to do so by Mr Spann. As he pressed the ‘jog’ button, the conveyor belt incrementally moved along the conveyor bed and the Pallet Turner rotated.

21. At some point during the ‘jogging’, a metal arm of the pallet turner rotated downward and struck Mr Spann in the head. This caused Mr Spann’s head to be pushed up against the metal frame of the machine.

22. Mr Spann immediately became unresponsive: Ms Hili saw what had happened and yelled out to Mr Nguyen to ‘go back’. Mr Nguyen ‘jogged’ the conveyor belt back which released Mr Spann’s head from the pallet turner arm. The workers then dragged Mr Spann out from under the machine and performed first aid.

Injuries

23. Mr Spann died at the scene as a result of his injuries. Mr Spann was 33 years old.

Systems of Work Before the Incident

24. In June 2017, SafeWork NSW Inspector Crispian Jelley attended the premises to investigate concerns in relation to the machine and other issues.

25. Inspector Jelley issued Improvement Notices requiring a range of improvements to be made at the premises, including Improvement Notices Nos 7-307787 and 7-307791 dated 6 June 2017, which required that Enviro take measures to prevent access to the dangerous parts of the machine and another machine known as the finger joining machine, including installing adequate guarding at areas where guarding was not installed. These Improvement Notices were served on Mr Duffin and copies given to Mr Spann. On 26 July 2017 Mr Jelley re-issued the Improvement Notice 7-307787 as Improvement Notice No 7-310142 and served it on Mr Duffin, giving a copy to Mr Spann.

26. Mr Jelley attended the premises in August 2017 to observe the measures taken in response to the various Improvement Notices.

27. On 11 September 2017 Mr Jelley emailed Inspection Report Number 10-65081 to Mr Duffin at Enviro, informing Enviro that all improvement notices had been marked as “complied”, with the exception of Improvement Notice 7-307791 concerning the finger joining machine. The Report also stated that the following actions were agreed to be undertaken by Enviro:

“Review and implement machine lock out procedures for when maintenance is to be done on the machines.”

28. Mr Jelley’s covering email to Mr Duffin dated 11 September 2017 stated:

“Please find attached the final inspection report. Note all improvement notices have been marked as complied.

I have also included some information to assist you in developing your isolation procedure.”

29. Mr Jelley’s email included information to assist Enviro in developing and implementing isolation procedures for maintenance on the machines at Enviro’s premises, including the pallet making machine. This information was contained in documents titled Checklist - isolating plant published by WorkSafe Victoria, June 2011 and Guidance Note Isolating plant published by WorkSafe Victoria, June 2011.

30. Prior to the incident, Enviro did not undertake a specific risk assessment or an audit of the machine to assess the hazards and risks associated with performing maintenance or repairs on the machine, including the risk of being struck by moving parts of the machine while underneath the bed conveyor of the No. 2 Nailer.

31. There was a pictogram in the operator’s manual for the machine supplied by the manufacturer and kept by Enviro at the premises, as well as on the side of the pallet turner, indicating that it presented a crushing hazard.

32. The risk was also identified in the SafeWork NSW Code of Practice Managing the risks of plant in the workplace, August 2019 (the Code) and Australian/New Zealand Standard AS/NZS 4024.1201:2014 Safety of Machinery, especially Part 1201: General principles of design - Risk assessment and risk reduction (the Standard).

33. There was guarding installed around the area above the bed conveyor of the No. 2 Nailer, however there was no guarding to prevent access to the rotating arms of the pallet turner below the bed conveyor.

34. Inspector Peter Beacham conducted an inspection and drafted a report in relation to the machine following the incident. Inspector Beacham’s report contained conclusions as follows:

“25:The manufacturer of the plant has identified two maintenance items (see appendix 2) that would require a person to go under the No. 2 Nailing machine bed conveyor (into the danger zone), these items are: replacing the proximity sensor Prox 28 conveyor reset sensor (Photograph 13) or tightening idler sprockets (Photograph 12). Working on these maintenance items without isolating energy sources would expose a person to the crush hazard of the Pallet Turner if the plant operates. Photograph 14 shows what the same type of sensor as the Prox 28 conveyor reset sensor on another part of the plant. The plant manufacturer's part number for the Prox 28 sensor is 950-40-117.

32:    No.2 Nailing machine Motor Control Cabinet (MCC) including the Pallet Turner. In the photograph the isolator has been padlocked into the off position by the author. The isolator cannot be turned on when padlocked. The Pallet Turner and bed conveyor cannot operate as there is no electric power going to the No.2 Nailing machine MCC which feeds power to the Pallet Turner motor and bed conveyor. Testing by Safe Work NSW inspectors confirmed that the Pallet Turner would not rotate when the isolator switch is pad locked.

63:    The rotation of the Pallet Turner which created the crush hazard can occur normally with the No.2 Nailing machine bed conveyor switch in the 'on' position as part of the normal production cycle.

64:    Rotation of the Pallet Turner creating a crush hazard can also occur with the bed conveyor switch in the 'off position and then manually forward jogging the No.2 Nailing machine bed conveyor via the momentary switch on the control panel. This has been confirmed in testing by Safe Work NSW inspectors on the 13th of September 2019 and from answers to questions put to the manufacturer by Safe Work NSW.

65:    The danger zone could only be accessed safely by disconnecting the electrical supply to No.2 Nailing machine MCC which prevei1ts the Pallet Turner rotating and the bed conveyor from moving.

66:    The manufacturer provided a lockable electrical isolator switch to enable the disconnecting of the electrical supply to No. 2 Nailing machine MCC including to the Pallet Turner.

67:    The injured person during a maintenance activity appeared to have had a need to have the bed conveyor jogged, possibility (sic) to troubleshoot the Prox 28 reset sensor whilst the injured person was in the danger zone. The points to note about this situation are:

…

The manufacturer of the plant has stated a separate lockable electrical isolator could be fitted to the Pallet Turner motor …

68:    The designer and manufacturer of the plant did not use guarding to control the risks associated with crushing in the danger zone in accordance with clause 203 of the WHS Regulation 2017

69:    The designer and manufacturer had provided a means of isolating power to the danger zone for maintenance or cleaning when there was no need to operate the plant by incorporating a lockable electrical isolation switch to the No. 2 Nailing machine MCC

70:    The designer and manufacturer did not provide information regarding the hazard of the Pallet Turner operating unexpectedly during the jogging of the No.2 Nailing machine conveyor bed, or a means to control the associated risks in accordance with clause 210 (2)(c) of the WHS Regulation e.g. a separate electrical isolation for the Pallet Turner, control mode switching.

71:    At the time of the incident and given the operational controls in place the only safe way to enter the danger zone would be to lock off the isolator on the No.2 Nailing machine MCC.”

35. The machine was fitted by the manufacturer with a lockable electrical isolator switch to enable the disconnecting of the electrical supply to the No. 2 Nailer, including the pallet turner.

36. The manufacturer has confirmed that a separate lockable electrical isolator could have been fitted to the motor of the pallet turner, for example if there was a need to have the bed conveyor jogged during a maintenance activity.

37. There was no system of work in place which required workers, in particular Mr Spann, to ensure that the pallet turner was locked out and disconnected from its power supply before starting any maintenance or repair tasks on the machine. Prior to and at the time of the incident, Enviro did not have in place any procedure for the isolation of the machine when maintenance and repair work was done on the machine.

38. Mr Spann was responsible for carrying out maintenance and repairs on the machine and had previously accessed the underside of the bed conveyor of the No. 2 Nailer.

Required Controls and Guidance Material

39. Enviro did not follow the available guidance material in relation to the operation, maintenance and repair of the machine at the premises.

40. Prior to the incident, guidance material was available to Enviro in relation to controlling the risk of death or serious injury associated with being struck by moving parts of the machine while performing maintenance or repairs on the machine.

SafeWork NSW Code of Practice Managing the Risks of Plant in the Workplace

41. Section 4.5 of the Code - Isolating energy sources - specifies the procedures and methods to be used by PCBUs involving isolating potentially hazardous energy so that the plant does not move or start accidentally while performing tasks, for example maintenance, repair, installation and cleaning tasks.

42. Section 4.1 of the Code - Guarding plant describes a guard as a physical or other barrier that can perform several functions including preventing contact with moving parts or controlling access to dangerous areas of plant. It provides examples of various ways of safeguarding, such as fixed guards, interlocking guards and presence-sensing systems.

41. Page 35 of the Code points out that isolation procedures may be necessary where there is a danger of a machine activating while a person is inside the guard or barrier.

Australian Standard AS 4024 Safety of Machinery

44. This Standard is a comprehensive Standard with guidance on risks and controls for safe operation of all phases of the machine life cycle, for example when operating, cleaning, inspecting and maintaining the machine.

45. Section 6.3.2.4 of the Standard deals with circumstances where access to the hazard zone is required for machine setting, teaching, process changeover, fault finding, cleaning or maintenance. A note to this Section states:

“Isolation and energy dissipation for machine shutdown (see clause 6.3.5.4 and also ISO 14118:2000, 4.1 and clause 5) ensure the highest level of safety when carrying out tasks (especially maintenance and repair tasks) that do not require the machine to remain connected to its power supply.”

46. Section 6.3.5.4 of the Standard concerns maintenance and repair. It specifies that machines shall be equipped with the technical means to achieve isolation from power supplies and dissipation of stored energy, including the locking of isolators, and verifying by means of safe working procedures that power has been disconnected and energy dissipated.

47. Section 6.2.11.9 of the Standard points out where for setting, teaching, process changeover, fault finding, cleaning or maintenance, a guard has to be displaced or removed and/or a protective device has to be disabled, and where it is necessary for the purpose of these operations for the machinery or part of the machinery to be put into operation, the safety of the operator shall be achieved using a specific control mode which simultaneously:

1. Disables all other control modes;

2. Permits operation of hazardous elements only by a two-handed control device or a hold-to-run device;

3. Permits operation of hazardous elements at reduced risk, for example reduced speed;

4. Prevents any operation of hazardous functions by voluntary or involuntary action on the machine’s sensors.

48. At the time of the incident, the machine was not fitted with control mode switching in accordance with section 6.2.11.9 of the Standard to be used during maintenance or fault finding on the machine.

Manufacturer’s Instructions

49. The operator’s manual (PX 1, Tab 8) supplied by the manufacturer (Viking, USA) was available at the Enviro premises. It is approximately 120 pp and provides guidance on safety, instructions on use, components, adjustments, maintenance and pallet quality criteria.

50. The manual dedicates three pages to safety guidance (pp 7-9).

51. Relevant to the incident which concerns the isolation of energy sources before doing maintenance on the machine, the manual has the following directions on p 7:

1. Must understand the sequence and operation of the system;

2. Read and obey warning labels;

3. Make adjustments only when the plant is turned off;

4. Understand and use the service disconnects and lockouts;

5. All safety guards must be in place. The conveyor chains, Pallet Turner, board shuttle mechanism, nail chucks and pallet stacker mechanisms start automatically.

52. On p 8 of the manual there is a diagram and information on electrical and air supply lockout locations. The manual does not specifically mention that the pallet turner will operate when the No. 2 Nailer machine bed conveyor switch is ‘off’ and the bed conveyor is being jogged.

53. On p 13 of the manual, there is information on powering up the machine after it has been disconnected from energy sources.

Systems of Work After the Incident

54. In compliance with Notices issued by SafeWork NSW following the incident, Enviro completed the following actions:

1. A risk assessment of the machine was undertaken and prepared by a third party engaged by Enviro, Leuze Electronics (Leuze Safety Audit) (PX 2, Tab 20).

2. Additional guarding and interlocking was installed on the machine including physical barriers, light curtains and interlocked gates which shut off power to the electrical motors of the machine, including the pallet turner, if opened. These prevent workers accessing the area underneath the bed of the conveyor of the machine while the machine is in operation or connected to its power supply.

3. Safe Operating Procedures for the machine, including maintenance and repairs, were prepared by a third party engaged by Enviro, Safety Group Australia, which prohibit maintenance being performed on the machine while the machine is energised (PX 2, Tab 15).

4. A Lock-out Tag-out system was initiated for the machine, prepared by Safety Australia Group. (PX 2, Tab 16).

5. Additional on-site training was provided to workers at the premises by Safety Group Australia.

6. Safety surveillance cameras were installed at the premises by a third party engaged by Enviro, Powerage Electrics.

55. The defendant cooperated with the SafeWork investigation.

Evidence for the Defendant

56. Mr Mark Raymond Duffin, the manager of Enviro, swore an affidavit on 16 February 2024 (DX 1). Mr Duffin was cross examined about parts of his affidavit, as compared to what he had said in 2019 in a Police Record of Interview and a SafeWork Record of Interview. There were no marked inconsistencies. I regard Mr Duffin as a careful and conscientious witness of truth.

57. Mr Duffin has worked in the pallet making industry for over 20 years, after starting Enviro Pallets (NSW) Pty Ltd (Enviro NSW). Approximately 12 years ago Mr Duffin’s wife, Faith Duffin, passed away. At the time of Mrs Duffin’s passing, Mr Duffin and his wife had custody of their grandchildren. Following Mrs Duffin’s passing, Mr Duffin struggled to prioritise the business and gave his son-in-law virtual control of Enviro NSW. During that time the business became run down and accrued significant debts. Enviro NSW was put into voluntary administration in 2012. To ensure creditors were paid Mr Duffin sold his home. Once the creditors were paid Mr Duffin started Enviro on 19 March 2013.

58. Mr Duffin’s role at Enviro was limited to general managerial duties. Mr Duffin did not operate or perform maintenance on machinery. Mr Duffin spent most of his time in the office above the factory floor.

59. When Mr Spann oversaw production, Mr Duffin would usually start work around 6.00am and finish around 2.00pm to 3.00pm. Subsequently, Mr Duffin began work at around 3.30am each day.

60. Mr Duffin is now 71 years of age.

Enviro’s Current Position

61. Enviro is no longer operational as a pallet manufacturing business. Enviro became unviable after the incident due to competitors tarnishing Enviro’s reputation and insurance fees increasing. Enviro has been retained as a company to pay legal fees and any impending fine.

Mr Spann

62. Mr Spann was highly regarded and was a well-liked and respected member of Enviro. Mr Duffin knew Mr Spann for eight years before Mr Spann began working at Enviro. Mr Duffin knew Mr Spann from Mr Spann working for Afford Packaging, a competitor of Enviro.

63. Prior to Mr Spann’s employment at Enviro, Mr Duffin called Mr Spann for assistance when there were issues with the machine, as Mr Spann had received training from the machine’s manufacturer and was always willing to help.

64. Mr Duffin did not hesitate to offer Mr Spann a job at Enviro when Mr Spann ceased work for Afford Packaging. Mr Duffin regarded Mr Spann as very competent in machine operation and maintenance, appointing Mr Spann to be the only person allowed to perform maintenance on the machine. Mr Duffin always found Mr Spann to be a very safety conscious worker who took great care of his own safety and the safety of his colleagues. Mr Duffin and Mr Spann had daily conversations about work and ways to improve production, machinery, and systems. Mr Duffin became close friends with Mr Spann and they would have lunch together every day. Mr Duffin thinks of Mr Spann daily since the incident.

Systems of Work at the Time of the Incident

65. As Mr Duffin was not a machine operator, mechanic or engineer, Mr Duffin always relied on others to operate and maintain the machinery in his business.

66. The machine’s processes were largely automated but required a person to feed pallets through the machine and to perform any maintenance when necessary.

67. Mr Duffin knew the machine could be jogged. Mr Duffin understood that when the machine was jogged, the metal arm of the pallet turner would only move a small amount. Mr Duffin was unaware that the pallet turner could make a full movement though being jogged. Mr Duffin believed the purpose of jogging the machine was to prevent full movements of any part of the machine. Mr Duffin did not think anyone was exposed to risk while performing maintenance on or around the pallet turner. Mr Spann had the most knowledge about the machine.

2017 SafeWork Improvement Notice

68. On 25 June 2017, SafeWork NSW Inspector Jelley attended the premises and issued Improvement Notices. The Improvement Notices included taking measures to prevent access to the dangerous parts of the machine. Enviro took steps to improve the guarding on the machine.

69. All work required of Enviro by SafeWork was completed and approved by Inspector Jelley.

70. Mr Duffin believed at the time that all of the Improvement Notices had been complied with but subsequently learned that Improvement Notice 7-307791 was marked as “Non-Complied”. However, Mr Duffin believes this was an administrative oversight.

71. On 23 October 2017 Inspector Jelley sought Mr Duffin’s consent to publish an article about Enviro’s Improvement Notices and subsequent actions, noting Enviro’s massive clean-up of the workplace that included fitting improved guarding on machinery. Mr Duffin got the impression that Inspector Jelley was commending him for the improvements.

72. In or around August 2019 Inspector Jelley asked Mr Duffin if he would provide assistance and guidance to other businesses in relation to machine guarding, given the work Enviro had done.

73. From Mr Duffin’s interactions with Inspector Jelley, Mr Duffin genuinely believed that the machine’s dangerous moving parts were guarded to prevent contact by workers during operation and maintenance activities.

Changes to Systems of Work Post-Incident

74. Following the incident, Enviro undertook a comprehensive review of its WHS systems and implemented changes.

75. On 17 September 2019 Enviro appointed Mr John Del Popolo as the WHS Officer. Previously Mr Spann was the WHS Officer.

76. After the incident SafeWork NSW served Enviro with an Improvement Notice regarding the machine. Mr Duffin notes that at the time of the incident, all of the guards and safety light curtains that were approved by Inspector Jelley for installation during the improvements were working.

77. On 24 October 2019 Leuze Electronic conducted a safety audit of the machine and developed a risk assessment dated 28 October 2019 (Risk Assessment). Enviro implemented all corrective measures recommended in the Risk Assessment.

78. In October 2019 Enviro engaged SGA which developed a Safe Operating Procedure (SOP) for the machine. The SOP was finalised in or around November 2019.

79. Between 10 and 16 October 2019, eight safety surveillance cameras were installed to help Enviro monitor safety on site.

80. Enviro engaged KustomKraft Fabrication to completely enclose the pallet turner. This included the installation of additional guarding on the machine to prevent access underneath the machine. This addition was not identified by the Leuze Safety Audit, but Mr Duffin recognised that the area underneath the machine could still be accessed.

81. The initial guarding completed by KustomKraft Fabrication consists of physical barriers and electric light curtains which isolated power to the machine when the beam was broken. The physical guarding is also interlocked so that if someone opened the guarding without the machine’s power being isolated, it automatically shut down power to the machine.

82. On 9 April 2020, Enviro engaged Venus Automation to test the machine and validate its safety functions in accordance with the Standard and the WHS Act and Regulations.

83. The improvements cost a total of approximately $180,000.00.

Cooperation

84. Enviro cooperated with SafeWork’s investigation and notified SafeWork of the incident as soon as possible when it occurred.

85. Mr Duffin fully cooperated with SafeWork and performed all tasks required in a timely manner.

Apology

86. Enviro acknowledges that it failed to comply with its duty under the WHS Act and that consequently Mr Spann suffered fatal injuries.

87. On behalf of Enviro and himself, Mr Duffin expressed sorrow that the incident occurred and that Mr Spann suffered fatal injuries. Mr Duffin is devastated by Mr Spann’s death.

88. To support Mr Spann’s family, Mr Duffin arranged for Enviro to provide Mr Spann’s partner, Leah Cameron, with $900 per week, payment of her rent in the amount of $620 per week and the use of a motor vehicle until the worker’s compensation claim was resolved in April 2020. Mr Duffin also arranged for Enviro to cover the cost of Mr Spann’s funeral, in the sum of $38,394.78 ($16,000 of which was refunded by iCare) and $1,200 for the wake.

89. To support its employees, Enviro provided paid leave and arranged for Associated Counsellors & Psychologists to attend the premises on 12 September 2019 to provide counselling for all employees affected by Mr Spann’s death.

Consideration

90. I have had regard to the objects in s 3 of the WHS Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) (CSP Act).

Objective Seriousness of the Offence

91. 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 The Queen (No. 2) [1988] HCA 14; (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] NSWCCA 242; (2006) 66 NSWLR 566 at [15].

92. 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] HCA 67; (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].

93. In Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27] the High Court said:

“The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending.”

94. 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].

95. The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.

96. The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock. This approach to sentencing, known as the “instinctive synthesis” approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.

97. The Court of Criminal Appeal has examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96. Justice Basten at [34], under the heading “Assessment of Risk” said:

“The sentencing judge commenced his consideration with the proposition that ‘greater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely’. However the truth of that proposition depends upon other considerations including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk, and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors.”

98. Further at [42] his Honour continued:

“The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step‑by‑step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the [event] which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs.”

99. At [53] his Honour dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying:

“It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken.”

100. My findings about the defendant’s level of culpability are based upon the following:

1. The risk was not foreseen by Enviro. It was certainly foreseeable. There was guidance material, including documents attached to Inspector Jelley’s Improvement Notice, which drew attention to the risk. I do take into account that Inspector Jelley in 2017 did not draw attention to the risk, even though his visit was concerned with machine lock out procedures during the maintenance of machines (DX 1, Annexure A).

2. The likelihood of the risk occurring was significant, particularly given the jogging of the moving parts of the machine while Mr Spann was underneath it.

3. The potential consequences of the risk were obviously death or serious injury.

4. Steps were available to eliminate or minimise the risk. Such steps were taken straight after the incident.

5. There was a significant financial burden of $180,000 to implement these steps. However, the cost was not what stopped these steps being taken before the incident.

6. The death of Mr Spann was caused by Enviro’s failure to ensure safety.

7. The maximum penalty for the offence is a fine of $1,500,000, which reflects the legislature’s view of the seriousness of the offence.

8. While Mr Duffin was the manager of the PCBU, he did depend on Mr Spann as the person skilled in dealing with the machine. On the evidence, Mr Spann had training and experience in its operation.

101. I find that the level of culpability of Enviro is in the mid range.

Deterrence

102. The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the WHS Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180].

102. The penalty must reflect the need for specific deterrence, but this is a very minor factor in this case. Enviro is no longer conducting the pallet making business.

Aggravating Factors

104. The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) CSP Act.

Mitigating Factors

105. Enviro has no previous convictions: s 21A(3)(e) CSP Act.

106. Enviro is otherwise of good character: s 21A(3)(f) CSP Act. The steps which it took after the incident demonstrate this. Enviro commenced in business in 2013. Further, the financial support given to Mr Spann’s partner demonstrates good corporate character.

107. Enviro is unlikely to re-offend: s 21A(3)(g) CSP Act.

108. Enviro has shown remorse for the offence: s 21A(3)(i) CSP. It has provided evidence that it has accepted responsibility for its actions and has acknowledged that the injury to Mr Spann was caused by its actions.

109. Enviro entered a plea of guilty: s 21A(3)(k) CSP Act. The court must take into account the fact that the offender has pleaded guilty, when the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) CSP Act. It is appropriate to give Enviro a 25% discount for an early plea.

110. Enviro gave assistance to law enforcement authorities: s 21A(3)(m) CSP Act. It cooperated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to Pay a Fine

111. I am required to have regard to s 6 of the Fines Act 1996 (NSW) 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: Mahdi Jahandideh v The Queen [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.

112. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said:

“First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to ‘the means’ of the defendant, pursuant to s 6 of the Fines Act 1996.”

113. There was no submission about capacity to pay. I do take into account that Enviro was a small business.

Costs

114. The parties have agreed to an order that the defendant is to pay the prosecutor’s costs.

Penalty

115. My orders are:

1. Enviro Pallets Pty Ltd is convicted.

2. The appropriate fine is $400,000 but that will be reduced by 25% to reflect the early plea of guilty.

3. Order Enviro Pallets Pty Ltd to pay a fine of $300,000.

4. Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

5. Order Enviro Pallets Pty Ltd to pay the prosecutor’s costs.

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Amendments

25 March 2024 - Amended to delete inaccurate references to the evidence.

Decision last updated: 25 March 2024