Worksafe New Zealand v Affco NZ Ltd
[2016] NZHC 2862
•29 November 2016
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CRI 2016-470-15 [2016] NZHC 2862
BETWEEN WORKSAFE NEW ZEALAND
Appellant
AND
AFFCO NZ LTD Respondent
Hearing: 10 November 2016 Counsel:
G C Hollister-Jones and C A Harold for Appellant
M J Hammond for RespondentJudgment:
29 November 2016
JUDGMENT OF HEATH J
This judgment was delivered by me on 29 November 2016 at 4.00pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Hollister-Jones & Lellman TaurangaTompkins Wake, Hamilton
WORKSAFE NEW ZEALAND v AFFCO NZ LTD [2016] NZHC 2862 [29 November 2016]
CONTENTS
The appeal [1] A prosecutor’s appeal [6] The facts [10] Sentencing in the District Court [26] Analysis
(a) The legislation [30]
(b) The statutory framework for sentencing under the Health [31]
and Safety Act
(c) Reparation [32] (d) The fine [40] (e) Totality [49] Result [52]
The appeal
[1] Worksafe New Zealand (Worksafe) charged Affco NZ Ltd (Affco) with failing to take all practical steps to ensure that an employee, Mr Jason Matahiki, was not exposed to a hazard in the workplace. The charge was laid under ss 6 and
50(1)(a) of the Health and Safety in Employment Act 1992 (the Health and Safety
Act).1
[2] Affco pleaded not guilty to the charge. Its defence was based on the proposition that it was not responsible for the injuries caused to Mr Matahiki. Affco contended that his injuries had been caused through his own carelessness.
[3] A defended hearing was conducted before Judge Rollo, in the District Court at Tauranga. In reasons for verdict given on 20 November 2015, the Judge found Affco guilty.2
[4] A sentencing hearing took place on 20 April 2016. Having reviewed counsel’s competing submissions, the evidence and relevant authorities, Judge Rollo entered a conviction and ordered Affco to pay $25,000 in reparation to the victim, a
fine of $30,000 and Court costs of $130.3
1 Set out at para [30] below.
2 Worksafe New Zealand Ltd v Affco New Zealand Ltd [2015] NZDC 22242, at paras [65] and
[66].
3 Worksafe New Zealand Ltd v Affco New Zealand Ltd [2016] NZDC 8242, at paras [63] and [64].
[5] Worksafe appeals against the sentence on the grounds that the total financial penalty was manifestly inadequate.4 The amounts ordered for reparation and a fine are each challenged. The primary issue is whether the sentencing Judge pitched the financial penalties at a level that adequately reflected the seriousness of the offending, and Affco’s culpability.5
A prosecutor’s appeal
[6] The appeal is brought by Worksafe, as prosecutor. Section 250 of the
Criminal Procedure Act 2011 governs the approach to be taken on a first appeal:
250 First appeal court to determine appeal
(1) A first appeal court must determine a first appeal under this subpart in accordance with this section.
(2) The first appeal court must allow the appeal if satisfied that—
(a) for any reason, there is an error in the sentence imposed on conviction; and
(b) a different sentence should be imposed.
(3) The first appeal court must dismiss the appeal in any other case.
[7] The question for the Court is whether the end sentence is manifestly inadequate. An error in methodology will only give rise to a successful appeal if the process can be shown to have led to an incorrect result. Otherwise, it is for the appeal Court to form its own view on whether the sentence imposed was in error and a different sentence ought to be substituted.6
[8] The approach to what was then known as an “informant appeal” was
discussed by Randerson and Panckhurst JJ in Department of Labour v Hanham & Philp Contractors Ltd. They said:7
4 The basis on which a prosecutor’s appeal is considered is discussed at paras [6]–[9] below.
5 A framework for analysis is provided by the judgment of a Full Court of this Court in Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 (HC) at para [80].
6 By way of analogy, see Tutakangahau v R [2014] 3 NZLR 482 (CA) at paras [33]–[36].
7 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 (HC) at para
[81].
[81] There is no dispute as to the principles to be applied when an informant appeals against sentence. The court is more reluctant to increase than it is to reduce a sentence and will not do so in a borderline case (R v Wihapi [1976] 1 NZLR 422 (CA); R v Muavae [2000] 3 NZLR 483 (CA)). The legitimate scope of an informant’s appeal is confined to cases where there is solid grounding for treating a sentence as manifestly inadequate or inappropriate: R v Cargill [1990] 2 NZLR 138 (CA) at p 140. Where the court finds that a sentence should be increased on the ground of manifest inadequacy, the increase will not be to a level that would have been imposed were the appellate court the original sentencing court. Rather, it is to be increased to the minimum required to remedy the manifest inadequacy (Sipa v R (2006) 22 CRNZ 978 (SCNZ) at para [9]).
[9] There is nothing in the Criminal Procedure Act to suggest that any different approach should be taken to a prosecutor’s appeal.
The facts
[10] Mr Matahiki was employed as a night cleaner at a meat works’ facility operated by Affco at Rangiuru, near Te Puke. Usually, about 13 to 15 staff comprise the night cleaning team. While completing his shift on 19 August 2014, Mr Matahiki suffered a serious accident.
[11] Mr Matahiki was working near the mutton chain when the left side of his head was penetrated by a prong from a suspended spreader hook. The prong entered his head above and behind his left ear, and exited to the left of his left eye. For a short time, Mr Matahiki was carried along the chain. When a fellow worker heard his screams, the emergency button was pressed, the chain stopped, and Mr Matahiki
was taken for emergency medical treatment.8
[12] Mr Matahiki was in his fifth season as a cleaner at the Rangiuru plant. He was an experienced member of the cleaning team, and was familiar with the premises, equipment and work practices carried out at that location.
[13] In prosecuting its case, Worksafe endeavoured to identify hazards that were inherent in the way in which the mutton chain was configured and operated. Given the importance of the contextual evidence around those issues, Judge Rollo took a
view in the course of the hearing. As a result, he was uniquely placed to describe circumstances in which the accident occurred. His Honour said:9
[12] The mutton chain, in its totality, I was told, is in excess of 100 metres long, from the slaughter board (‘up’ the chain), to the end produce carcass (‘down’ the chain). Mr Matahiki’s cleaning responsibilities, on 19
August 2014, were that part of the mutton chain, the surrounding equipment,
walls and floor, situated by a device known as the ‘head off machine’. This machine was not in operation on the mutton chain at this particular time. Its usual function was to assist mechanically with the removal of the sheep or lamb’s head, which then fell on to a large drip tray (the drip tray).
[13] This drip tray is one of several key factors in this case. It is rather like an elongated household shower base, perhaps one and a half metres long, with raised sides and a base sloping from a high point ‘down-chain’ to a low point ‘up-chain’ where there was a large chute hole through which the severed head fell into the by-product area below the mutton floor.
[14] The injury to Mr Matahiki occurred immediately down-chain past the highest point of this drip tray.
[15] The charge refers to the ‘foreleg chain’. In fact, up until that part of the mutton chain, there are parallel chains, perhaps 65 to 75 centimetres apart, looking up-chain, the ‘foreleg chain’ to the left, and the ‘hind leg chain’ to the right. This configuration of the parallel chains enables the slaughtered animal carcass to be suspended from either the hind legs, from the hind leg chain, or between both hind and forelegs from both chains, or only by the forelegs from the foreleg chain.
[16] Immediately past the drip tray both chains rise to a slightly greater height, for perhaps four to five metres length, enabling persons or equipment to pass under the elevated chains there more easily from one side to the other of the mutton floor. The hind leg chain ends perhaps some 10-15 metres past the head off machine.
[14] The Judge considered that the way in which the foreleg chain moved, in close proximity and parallel to the hind leg chain, and the positioning of a stainless steel rectangular box section frame nearby were important factors. The Judge described the “box-section frame”:
[18] … This ‘scanner frame’ was attached to the left side of the foreleg chain guard (looking up-chain), with the lower edge of the scanner frame at approximately the same height as the dual prongs of the foreleg hooks. The dimensions of the frame were not given to me, but during a site view, with counsel, it was held in its former place for counsel and me to view. This was immediately past the drip tray just as the elevation of the foreleg and hind leg chains began. The frame was perhaps 30 cms long by 20 cms high at its outside edges.
[15] As the chain moved, two spreader hooks, one facing up the chain and the other down, were attached to the same shank. A single hook, facing down-chain, followed. Each of the hooks have two prongs. They are inclined on an angle slightly upwards from the horizontal. The points of each prong were rounded, to reduce their sharpness.
[16] As part of the cleaning operation, it was necessary for the cleaning staff to hose, scrub, disinfect and wipe down all relevant surfaces of the plant. To comply with all hygiene requirements, they were then obliged to check the cleanliness of the mutton floor work areas, its walls and all equipment; as well as the hind leg and foreleg chains, including the hooks and shanks. The Judge described this process, which is called “detailing”, as a:
[26] … final inspection by the night cleaners of the mutton floor work areas and all equipment located there, to ensure that nothing had been missed during the main cleaning process. Where some missed blood or animal matter was seen during the detailing, it would be removed and the relevant area appropriately cleaned.
[27] At the time of [Mr Matahiki’s] injury, 19 August 2014, detailing occurred with the foreleg and hind leg chains moving, presumably so various night cleaning staff, at different stages of the chain, could review the state of cleanliness of the individual hooks and shanks as they passed by. Any further cleaning arising from that detailing inspection would then happen as the chains continued moving. Additionally, when the chains were moving in unison, certain other machinery, such as the head-off machine, automatically operated as well.
[17] A particular safety hazard existed because of the height at which “the slightly elevated end of a standard prong of a spreader hook on the foreleg chain from the concrete floor” was set.10 During the Judge’s view, that height was measured at
165cm. Standing in his shoes, Mr Matahiki was exactly 165cm tall. That coincidence led to the Judge to conclude “ineluctably” that:
[22] … if Mr Matahiki were standing on the concrete floor immediately under the foreleg chain, any passing hook might ‘part his hair’ but could not enter the side of his head just behind and above his left ear. He is simply too short for that to have occurred. He must have been in an elevated position at the time.
[18] Although the “great majority” of staff working at Affco were seasonal workers, Judge Rollo was satisfied that Affco took appropriate steps to induct them into the workplace and to provide tuition on relevant company policies and procedures involving health and safety. A company manual was provided to each employee as part of that induction process. In addition, the Judge was satisfied that Affco had arranged specific training on particular health and safety hazards. Specifically in relation to the “night cleaning gang”, the Judge said:
[31] … these focussed on the use and storage of cleaning chemicals and substances, but also, relevant to these proceedings, lock-out procedures to disable machinery in a fail-safe way during repairs and maintenance, and during the cleaning processes.
[19] While finding that Affco took its health and safety in employment obligations and responsibilities “very seriously” and “strived to avoid harm in the workplace”,11 the Judge considered that the accident did occur as a result of shortcomings in the procedures adopted by Affco to protect workers from such hazards.
[20] Judge Rollo found that the accident occurred in the following way:
[38] Because of the blunt, rounded end of each prong, penetration of the head would not happen, I find, without some form of restraint on Mr Matahiki’s head to stop it simply being pushed or knocked forward, albeit bluntly, by the passing prong.
[39] I find that what happened is that Mr Matahiki’s head has come into contact with the right-side prong, perhaps because he was distracted or partially lost his footing or because he had been bending and stood upright into the path but to the right of that right-side prong. The prong has pushed his head forward, it seems to me, and the right side of his head must have immediately come into ‘crush’ contact with the scanner frame. This must have been substantially a glancing blow (as he had no real injuries to the right side of his head) but it was sufficient to cause such a degree of resistance to Mr Matahiki’s head that the prong then penetrated into the side of his head, just behind and above his left ear, and continued to pierce right through the left side of his head and out again just beside and to the left of his left eye. I find that this must have required a degree of continued resistance to the forward passage of Mr Matahiki’s head which must have occurred because his head had to pass between the scanner frame and the forward moving right-side spreader hook prong.
[40] As I have said, particularly from the site view and also from the photographs, although it was not precisely measured, I find the gap, between the right-side prong passing by the previous position of the scanner frame, to
be essentially consistent with the width of Mr Matahiki’s head. I am also satisfied that, although Mr Matahiki’s head was restrained to some degree by the presence of the scanner frame, it was, as I have commented, a glancing blow, with his head squeezing through the gap substantially unscathed on the right side (consistent with the accepted medical evidence of no real injuries to the right side of his head).
[21] On the basis of those findings, Judge Rollo was satisfied that Mr Matahiki’s injury was caused by a combination of factors, without any one of which the accident would not have occurred. They were:12
(a) Mr Matahiki’s location on the drip tray during the process of detailing, in the confined space between the two moving foreleg and hind leg chains;
(b)The right side prong of the foreleg spreader hook coming into contact with the left side of his head; and
(c) The presence of the scanner frame, which caused some “crush”
resistance to Mr Matahiki’s head.
[22] Although Mr Matahiki appeared to admit, in cross-examination, that he knew that he should not have been on the drip tray, the Judge took the view that he was mistaken. Judge Rollo was mindful that Mr Matahiki had said that “he had no real recollection of the incident”. That is not unusual in a traumatising event.13 The Judge found that there was no “actual proscription against being on the drip tray”.14
[23] After considering expert evidence about the lack of industry standards for procedures for cleaning operations in meat plants, the Judge found that the identified hazard “should have been obvious to Affco at a much earlier stage”. He pointed out that Affco’s “own safety protocols unequivocally provided for the lock-out of machinery during cleaning”.15 While acknowledging that there were inherent dangers in anyone working in a “close, often wet and potentially slippery conditions
on” a “mutton chain”, the Judge returned to what he described as “the focus” of the
12 Ibid, at para [42].
13 Ibid, at para [49].
14 Ibid, at para [46].
Health and Safety Act; the identification, elimination, isolation or minimising of significant hazards”,16 and the need for the employer to take “all practicable steps” to mitigate the hazard.17
[24] In holding that Worksafe had proved a breach of s 6 of the Health and Safety
Act,18 Judge Rollo found:
(a) Notwithstanding the “purported training” and other safety measures taken by Affco, “the night cleaning gang did not fully follow [Affco’s] training, as apparently taught” and “specified in its workplace instructions.19
(b)Those circumstances illustrated the continuing “need for any employer to ensure not just a training process” and associated documents drawing attention to hazards and safety procedures, but also “scheduled and … random monitoring to ensure full and on- going understanding, and necessary compliance by relevant employees with all health and safety expectations, obligations and
requirements when in the workplace”.20
(c) One of the objects of the Health and Safety Act is to promote “excellence in health and safety management” through “the systematic management of health and safety”.21 The night cleaning team was not “systematically managed” in an “adequate way that ensured the standards of the Act were being met”.22
(d)The practice of “detailing” with the chains moving was “unsafe, and contrary to [Affco’s] clear instructions to the contrary”. The machine
was “potentially very dangerous” to a person in Mr Matahiki’s
16 Health and Safety in Employment Act 1992, s 6–10.
17 Ibid, s 2A(1) and (2).
18 Set out at para [30] below.
19 Worksafe New Zealand v Affco New Zealand Ltd [2015] NZDC 22242, at para [60](c).
20 Ibid, at para [60](d).
21 Health and Safety in Employment Act 1992, s 5(a).
22 Worksafe New Zealand v Affco New Zealand Ltd [2015] NZDC 22242, at para [60](e).
standing position and the “moving foreleg chain” was “exceptionally
unforgiving and unrelenting”.23
[25] Judge Rollo concluded:24
[63] The foreleg chain, and its associated machines, should have been appropriately locked-out, as Affco’s then health and safety protocols dictated. The company should have ensured, by on-going training and, most importantly, on-going monitoring, that its health and safety protocols were being adequately adhered to by its relevant staff.
[64] These were critical company failures. Proper procedures properly followed, the company’s responsibility under the Act, would have prevented this serious injury to Mr Matahiki. These were obvious, practicable steps that Affco failed adequately to appreciate and act upon at that time. I note that policies and procedures seem to have changed positively and promptly since 19 August 2014, to the company’s credit.
Sentencing in the District Court
[26] In sentencing Affco, Judge Rollo followed the approach mandated by Department of Labour v Hanham & Philp Contractors Ltd.25 In that decision, this Court set out the methodology by which a District Court should sentence for offences under the Health and Safety Act. The first consideration is reparation. The second is the quantum of any fine. The third concerns the totality principle.
[27] As to reparation, Judge Rollo found “that the emotional and psychological effects of this workplace accident for Mr Matahiki, and no doubt for his family [had] been profound”. He concluded, from a medical report and victim impact statement that Mr Matahiki’s situation is unlikely to dramatically improve in the foreseeable
future”.26 That observation was made on 20 April 2016.
[28] Judge Rollo determined that an award of reparation of $25,000 was appropriate. He said:
[21] I take into account the financial losses that have occurred for Mr Matahiki some $11,380.36, being the difference between ACC payments and wages previously earned, between 6 December 2014 and 2 January 2016. I
23 Ibid, at para [62].
24 Ibid, at paras [63] and [64].
25 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 (HC).
26 Worksafe New Zealand Ltd v Affco New Zealand Ltd [2016] NZDC 8242, at para [20].
also take into account the extent of injury and harm to Mr Matahiki, particularly the trauma involved in the accident, the on-going emotional and psychological trauma, the adverse effects on his physical health, which I am satisfied have their origins in substantial part in the workplace accident. I then assess a fair reparation sum at $25,000 and I award that sum accordingly.
[29] In determining that a fine of $30,000 should be ordered, the Judge said:
[59] Taking all of these factors into account, I assess the culpability of the company, looking at it in the round, as at the lower end of the middle band, or the higher end of the low band. I am satisfied that an appropriate starting point for a fine in this case is the sum of $40,000. That is slightly less than half the starting point for the fine in the Hanham & Philp case, where there was wilful and deliberate failure to by the company to prevent a known hazard. That is not the case in this instance. It is to be distinguished from those facts and, therefore, justifies a lower assessment of culpability.
[60] As to any uplift for the previous record of health and safety in employment offences by AFFCO, I am not satisfied that this necessary in the circumstances of this case. They are a different category. Those charges were dealt with at their respective times, in some cases some time ago, on their particular facts and I do not think they justify an uplift in this case.
[61] I give a discount of $10,000 for mitigating factors. That is 25 percent which takes into account the positive steps the company has taken after the event to immediately remedy the problem at the workplace, its acceptance of immediate responsibility, its co-operation with Worksafe with the investigation into the circumstances of the offending, the positive support for Mr Matahiki at that time and during the intervening period of time, including appropriate assistance to enable him to return to his place of work and companionship with others that no doubt has and will continue to assist with his sense of, and actual, recovery.
[62] Finally, when I stand back and look at the financial penalties which I have assessed in this case, I am satisfied that no adjustment otherwise is necessary. So I deal with this matter on the following basis.
Analysis
(a) The legislation
[30] Sections 6 and 50(1)(a) of the Health and Safety Act provide:
6 Employers to ensure safety of employees
Every employer shall take all practicable steps to ensure the safety of employees while at work; and in particular shall take all practicable steps to—
(a) provide and maintain for employees a safe working environment;
and
(b) provide and maintain for employees while they are at work facilities for their safety and health; and
(c) ensure that plant used by any employee at work is so arranged, designed, made, and maintained that it is safe for the employee to use; and
(d) ensure that while at work employees are not exposed to hazards arising out of the arrangement, disposal, manipulation, organisation, processing, storage, transport, working, or use of things—
(i) in their place of work; or
(ii) near their place of work and under the employer’s control;
and
(e) develop procedures for dealing with emergencies that may arise while employees are at work.
50 Other offences
(1) Every person commits an offence, and is liable on conviction to a fine not exceeding $250,000, who fails to comply with the requirements of—
(a) a provision of Part 2 other than section 16(3); or
….
(Emphasis added; s 6 is contained in Part 2 of the Health and Safety Act)
(b) The statutory framework for sentencing under the Health and Safety Act
[31] In setting out the approach to sentencing for health and safety cases, in
Hanham & Philp Contractors Ltd,27 Randerson and Panckhurst JJ said:
Summary of sentencing approach
[80] Before considering the merits of the individual appeals we summarise the approach to sentencing for offending under s 50 [Health and Safety in Employment Act]
(1) Both s 51A [Health and Safety in Employment] Act and the
Sentencing Act are relevant to the sentencing process …
(2) the sentencing process involves three main steps:
· Assessing the amount of reparation.
· Fixing the amount of the fine.
27 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 (HC) at para
[80].
· Making an overall assessment of the proportionality and appropriateness of the total imposition of reparation and the fine.
(3) Reparation and fines serve discrete statutory purposes and both should ordinarily be imposed. But where lack of financial capacity does not permit both the payment of appropriate reparation and a fine, the former is to receive priority …
(4) The first main step is to fix reparation. It involves a consideration of the statutory framework …, taking into account any offer of amends and the financial capacity of the offender …
(5) The second main step is to fix the amount of the fine. This should follow the methodology established by the Court of Appeal in Taueki, namely fixing a starting point on the basis of the culpability for the offending and then adjusting the starting point upwards or downwards for aggravating or mitigating circumstances relating to the offender …
(6) The assessment of a starting point for the fine involves an assessment of the culpability for the offending … Starting points should generally be fixed according to the following scale:
Low culpability: a fine of up to $50,000
Medium culpability: a fine of between $50,000 and
$100,000
High culpability: a fine of between $100,000 and
$175,000
(7) The starting point for the fine is then to be adjusted for any relevant
aggravating and mitigating factors relating to the offender …
(8) Reparation is then to be taken into account in fixing the fine …
(9) Financial capacity to pay a fine is also to be considered in fixing the
fine …
(10) The third main step is to assess whether overall burden of the
reparation and fine is proportionate and appropriate …
(c) Reparation
[32] The first step is to assess the appropriate amount payable for reparation to the victim of the offending. Relevantly, s 32 of the Sentencing Act 2002 provides:
32 Sentence of reparation
(1) A court may impose a sentence of reparation if an offender has, through or by means of an offence of which the offender is convicted, caused a person to suffer—
(a) loss of or damage to property; or
(b) emotional harm; or
(c) loss or damage consequential on any emotional or physical harm or loss of, or damage to, property.
(2) Despite subsection (1), a court must not impose a sentence of reparation in respect of emotional harm, or loss or damage consequential on emotional harm, unless the person who suffered the emotional harm is a person described in paragraph (a) of the definition of victim in section 4.
(3) In determining whether a sentence of reparation is appropriate or the amount of reparation to be made for any consequential loss or damage described in subsection (1)(c), the court must take into account whether there is or may be, under the provisions of any enactment or rule of law, a right available to the person who suffered the loss or damage to bring proceedings or to make any application in relation to that loss or damage.
(4) Subsection (3) applies whether or not the right to bring proceedings or make the application has been exercised in the particular case, and whether or not any time prescribed for the exercise of that right has expired.
….
[33] Judge Rollo identified the actual financial loss suffered by Mr Matahiki, after taking into account accident compensation payments, as $11,380.36.28 He took into account trauma suffered as a result of the accident, as well as continuing emotional harm and its adverse effects on Mr Matahiki’s physical health.29 As a result, reparation of $25,000 was ordered.
[34] The question on appeal is whether the reparation award adequately reflected the very serious emotional and psychological harm suffered by Mr Matahiki.30
Ms Harold contended that the award did not reflect the Judge’s own description of
the effect of the accident on the victim.
[35] In his sentencing remarks, Judge Rollo referred to three specific aspects of emotional harm caused by the workplace accident:
28 Worksafe New Zealand Ltd v Affco New Zealand Ltd [2016] NZDC 8242, at para [21], set out at para [28] above.
29 Ibid.
30 Deliberately, I have not used the term “manifestly inadequate” as that must be applied to the
total financial penalty ordered.
(a) From being “a confident, easy-going and reasonably active man” who enjoyed “family and social life”, Mr Matahiki had lost confidence, felt reserved and was reluctant to leave his home.31
(b)Mr Matahiki continued to suffer nightmares and interrupted sleep, which had impacted on his mental health.
(c) Mr Matahiki had suffered occasional suicidal ideations and depression. There have been two occasions on which Mr Matahiki has been hospitalised as a result of mental health concerns.32
[36] Ms Harold suggested that the level of reparation ordered was inconsistent with like cases, referring in particular to Worksafe New Zealand v Meycov Foods Ltd.33 In that case, an employee was seriously harmed when her arm became trapped in a biscuit baking machine; it took 40 minutes to free her arm, which was trapped between a conveyor belt and a fixed part of the machine, and the estimated temperature of the machine would, at times, have been as high as 85 degrees Celsius.34 In the District Court, Judge Davidson had ordered reparation in the sum of $45,000. On an appeal based on manifest inadequacy, Simon France J took the view that “other cases proffered [to the Court] made it difficult to sustain a challenge to a figure of $45,000”.35
[37] Judge Rollo had found that Mr Matahiki suffered relevant financial loss of
$11,380.36.36 When one looks at the sum of $25,000 awarded in favour of Mr Matahiki, only $13,620 was allocated to emotional harm. That compares with the sum of $45,000 ordered in Meycov.
[38] It is difficult to make a precise comparison between the harm suffered by the employee in Meycov Foods Ltd and Mr Matahiki. It appears that the amount ordered
31 Worksafe New Zealand Ltd v Affco New Zealand Ltd [2016] NZDC 8242, at para [6].
32 Ibid, at paras [6] and [7].
33 Worksafe New Zealand v Meycov Foods Ltd [2015] NZHC 1180.
34 Ibid, at para [2].
35 Ibid, at para [13], citing Worksafe New Zealand v BR and SL Porter DC Tauranga CRI-2014-
070-1606, 5 August 2015.
36 Worksafe New Zealand v Affco New Zealand Ltd [2016] NZDC 8242, at para [21], set out at para
[28] above.
(whether or not inclusive of financial losses) was discounted to reflect the financial circumstances of the employer.37 But, in my view, the amount of reparation ordered for emotional harm suffered by Mr Matahiki should have been more closely aligned to the award of $45,000 in Meycov.
[39] Given the nature of the emotional harm that has been suffered by Mr Matahiki, I have no doubt that the reparation ordered was inadequate. As a discrete sentence, it ought to have been higher. I take the view that the reparation ordered should have been no less than $40,000. That is the amount of reparation that I propose to substitute.
(d) The fine
[40] The next question is whether the fine of $30,000 was within the available range. Judge Rollo took a starting point of $40,000, deducting a credit of 25 percent to reflect positive steps taken by the company to remedy the problem after the accident occurred. A starting point of $40,000 for a fine reflected what Hanham & Philp Contractors Ltd described as offending of “low culpability”. The starting
point for that range is an amount below $50,000.38
[41] Whether that categorisation was appropriate must be assessed by reference to the conclusions that the Judge reached in his reasons for verdict.39 Notwithstanding findings that Affco took a responsible approach to its health and safety obligations, the Judge found that the “foreleg chain, and its associated machines should have been appropriately locked-out” in accordance with Affco’s own health and safety protocols. Further, the company failed to monitor appropriately compliance with
safety procedures. That is the context in which Affco’s level of culpability should
have been determined.40
[42] In my view, the Judge erred in assessing Affco’s conduct within the category of “low culpability”. I consider that it should have been assessed as at the lower end
37 Worksafe New Zealand v Meycov Foods Ltd [2015] NZHC 1180, at para [10].
38 Ibid, at para [80](6), set out at para [31] above.
39 See para [25] above.
40 Worksafe New Zealand v Affco New Zealand Ltd [2015] NZDC 22242, at para [63], set out at para [25] above.
of “medium culpability”, dictating a starting point for a fine of not less than
$50,000.41 I use a substituted starting point of $60,000. I consider that a starting point above the minimum of $50,000 is required. A starting point of $60,000 is still at the lower end of the medium culpability scale; the top of that range is fixed at
$100,000.
[43] Affco has had previous convictions for health and safety in employment offences. Ms Harold suggested the District Court Judge should have provided an uplift for these. In the District Court, Worksafe suggested an uplift of $15,000 on the fine. Ms Harold took the same position on appeal. Mr Hammond, for Affco, contended that no uplift was justified.
[44] In sentencing submissions in the District Court, Mr Hammond emphasised the nature and extent of Affco’s business activities. It operates meat works across 13 sites within New Zealand. At peak times, it employs about 4000 workers, many of whom face similar risks to those that confronted Mr Matahiki.
[45] As Mr Hammond pointed out in the District Court, the meat industry is one “which is inherently dangerous with use of knives and mechanical equipment”. He identified the total cost of accident compensation claims over the entire meat industry in the preceding three years as $44.37 million, of which less than $3.8 million represented claims involving Affco employees. Affco’s accident compensation claim costs have halved since 2010 through what Mr Hammond described as “tight management and proactive workplace safety”. As a result, Mr Hammond submitted that the number of past convictions were not suggestive of a poor health and safety record.
[46] Affco has been convicted on eight separate occasions of breaches of the
Health and Safety Act. The last two were in 2008 and 2012:
(a) In 2008, Affco was fined $50,000 and ordered to pay reparation of
$15,000. The fine was upheld on an appeal brought by Affco.42
41 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 at [80](6), set out at para [31] above.
42 Affco New Zealand Ltd v Muir (Department of Labour) HC Wellington CRI-2008-483-12, 17
Warwick Gendall J adopted what had been said in an earlier case by McGechan J: “The Court should not shrink from substantial fines, commercially meaningful”.43 The incident involved the loss of a finger when an employee’s hand was caught between the edge of a conveyor belt roller and a frame.
(b) The 2012 conviction involved imposition of a fine of $56,250 and
$8,000 in reparation. I am not aware of the particular facts on which that sentence was imposed. But, the level of the fine suggests it fell within the range of medium culpability.
Ms Harold told me that the 2008 conviction was inadvertently omitted from the list of previous convictions that was available to the District Court Judge.
[47] In my view, despite the nature and extent of Affco’s business, an uplift was justified to reflect the prior convictions. I consider that an uplift of 10 percent is the minimum appropriate, in the circumstances. That equates to $6,000, based on a starting point of $60,000. That leaves the adjusted starting point for sentence at
$66,000.
[48] The District Court Judge applied a credit of 25 percent to reflect mitigating factors. The prosecutor does not challenge that allowance. Ms Harold accepted that it reflected appropriately Affco’s co-operation with the investigation, the support offered to the victim and the improvements to its safety procedures. No issues involving financial capacity arose. Applying that credit to the adjusted starting point for a fine leaves an amount of $49,500. I round the level of fine to $49,000.
(e) Totality
[49] The final step is to determine whether the overall revised financial penalty is a proportionate response to the gravity of the offending. I refer to the approach taken
in Hanham & Philp Contractors, in which the Full Court indicated the need “to
September 2008.
43 Ibid, at para [35], applying Fugle v Cowie [1998] 1 NZLR 104 (HC) at 114, in the context of offences under the Resource Management Act.
assess whether [the] overall burden of the reparation and fine is proportionate and
appropriate”.44
[50] On the basis of my conclusions, a total sum of at least $89,000 ought to have been paid by way of financial penalty, consisting of $40,000 for reparation and
$49,000 as a fine. That contrasts with the total sum of $55,000 ordered by the Judge. Adopting the approach taken to a prosecutor’s appeal articulated in Hanham & Philp Contractors Ltd,45 the appellate court’s task is to increase the amount payable “to the minimum required to remedy the manifest inadequacy”.
[51] In my view, the difference between the two amounts is sufficient to characterise the sentence as manifestly inadequate. Further, I consider that the total sum of $89,000 is a proportionate response to the offending.
Result
[52] For those reasons, the appeal is allowed. The amounts awarded for reparation and imposed by way of fine in the District Court are set aside. In substitution, reparation in the sum of $40,000 is awarded, together with a fine of $49,000. That fixes the total financial penalty at $89,000. The order that Court costs of $130 be paid remains intact.
[53] I thank counsel for their assistance.
P R Heath J
Delivered at 4.00pm on 29 November 2016
44 Ibid, at para [80](10), set out at para [31] above.
45 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 at para [81], set out at para [8] above.
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