Company A v Saltmer [2010] ICQ 39

CITATION: Company A AND Juanita Saltmer (C/2010/33) - Decision <http://www.qirc.qld.gov.au> INDUSTRIAL COURT OF QUEENSLAND Workplace Health and Safety Act 1995 - s. 164(3) - appeal against decision of industrial magistrate Company A AND Juanita Saltmer (C/2010/33) PRESIDENT HALL 7 September 2010 DECISION [1] On 15 September 2009, Juanita Saltmer, a Public Officer within the meaning of s. 142A of the Justices Act 1886 and an Inspector duly appointed under the Workplace Health and Safety Act 1995 (the Act), made a complaint before a Justice of the Peace that on 10 August 2009 at Pinkenba, Company A contravened s. 24 of the Act by failing to discharge the obligation at s. 28 of the Act. The particulars supplied were as follows: "Particulars It is alleged that the defendant's workers were exposed to risks to their health and safety arising out of the conduct of its balance or undertaking [s. 28(2)]. Worker: Joel David George Bowden Workplace: 180B Main Beach Road, Pinkenba Business or undertaking: The provisions of specialist building foundation works and associated tasks, including the work process of removing counterweights from a drilling rig. Hazards: The source of the risk is: (a) an inadequately secured counterweight at height on plant, namely a 'Company Plant' BG28 drilling rig; and (b) the system of work for the removal of a counter weight at height from plant, namely 'Company Plant' BG28 drilling rig. The risk is the risk of death or injury to workers, including the risk of crush injuries to Joel David George Bowden.". A circumstance of aggravation was alleged, viz., that the contravention caused the death of Joel David George Bowden. [2] At all material times, a breach of s. 24 of the Act causing a single death carried a maximum monetary penalty of 1000 penalty units. By s. 5 of the Penalties and Sentences Act 1992, the value of a penalty unit was $100. By s. 181B of the same Act, a multiplier of 5 was applicable where, as here, the defendant was a corporation. [3] Company A entered a plea of guilty. There were significant mitigating circumstances, viz., Company A: (a) entered a timely plea of guilty; (b) cooperated with the investigating authorities; (c) provided assistance to the family of the deceased; (d) took remedial action to prevent a recurrence of the breach; (e) demonstrated remorse; (h) had no prior convictions; and (i) was otherwise a good corporate citizen. [4] The Industrial Magistrate who dealt with the matters: (a) convicted Company A; (b) declined to record a conviction; (c) imposed a fine of $200,000; (d) ordered Company A to pay $14,250 for investigation costs, pay $750 for professional costs and to pay $63.40 costs of Court; (e) allowed Company A three months to pay; and (f) made provision for levy and distress in the event of default. [5] On 21 May 2010, Company A appealed to this Court against the quantum of the fine imposed by the Industrial Magistrate. The Appeal was out of time. There was an Application for Extension of Time. By consent of the -- 1 of 8 -- 2 parties on 7 July 2010, the Court granted the extension of time to appeal. Henceforth, I shall refer to Company A as the Appellant. [6] A Statement of Agreed Facts was tendered below (Exhibit 1). Notwithstanding the length of the Exhibit (6¼ pages), given the arguments developed on the Appeal the expeditious course is to reproduce the Statement (formal parts omitted) and to comment about the arguments. The Statement of Agreed Facts was: "The Defendant and Background 1. At the material time Company A (the Defendant) was a corporation under the Corporations Law. 2. The Defendant operated a business providing specialist building foundations works and associated tasks, including the work process of removing counterweights from a piling rig. 3. An employee of the Defendant sustained fatal crush injuries on 10 August 2009. The crush injuries were sustained when a 10.5 tonne weight fell onto the worker. 4. The incident site (commonly referred to as the 'Pinkenba Yard') is located at 180B Main Beach Road, Pinkenba and is leased to the Defendant. 5. The Defendant employed, amongst others: • Mr Joel BOWDEN ('deceased') as a store keeper at the Pinkenba Yard. The deceased was employed by the Defendant since 1 April 2008 and undertook storekeeping duties as well as forklift and dogging work at the Pinkenba Yard; • Mr Herbert HILTNER from May 2008 in Australia as a welder. His main place of work was the Pinkenba Yard; • Mr Holger ZISSER as mechanical superintendent. Mr ZISSER had been employed with related Company A companies for about 18 years and had been employed by the Defendant for about two and half years at the time of this incident. His main place of work was the Pinkenba yard; and • Mr X as general manager. Failures 6. The Defendant was required to manage the following hazards: • an inadequately secured counterweight at height on plant, namely a 'Company Plant' BG 28 piling rig; and • the system of work for removal of counterweight at height from plant, namely 'Company Plant' BG 28 piling rig. 7. The risk that flowed from the hazards was the risk of death or injury to workers, including the risk of fatal crush injuries to the deceased. 8. The Defendant failed to identify the hazards or otherwise manage the risks that may result because of the hazards in accordance with section 27A of the Workplace Health and Safety Act 1995. The Piling Rig 9. The Defendant owned and operated a number of machines on the Airport Link Project (in Brisbane). This included a Company Plant BG 28 piling rig. 10. The piling rig was manufactured in 2008 by Company B, a company related to the Defendant. The Defendant purchased and imported the rig into Australia in March 2009. 11. The piling rig has a cab base on a crawler track system with an extendable mast and three counterweights to the rear of the cab. The two inner counterweights weigh 5 tonne each. These two counterweights were flat and rectangular. The outer (third) counterweight weighs 10.5 tonne and is an irregular 'D' shape. -- 2 of 8 -- 3 12. All three counterweights rested on a supporting frame at the rear of the piling rig. Each of the counterweights was retained on the rear support using two hold down bolts and corresponding large washers with one bolt either side of the counterweight centre line. These bolts were inserted from below the counterweights up through the support shelf into a threaded hole in the base of each counterweight. 13. In addition to the hold down bolts a 'long bolt' measuring 1060mm in length was inserted fore-aft through the centre of the counterweights. At one end it was attached to the base carrier and at the other it sat within a recess on the large counterweight. The incident 14. On Monday, 10 August 2009, HILTNER and the deceased were working by themselves at the Pinkenba yard. 15. HILTNER was approached by the deceased who stated that he had received a telephone call (from a person external to the defendant) requesting that they remove one counterweight from the BG28 Piling Rig to make it lighter for transport to site by low loader. 16. The deceased and HILTNER contacted one of four mechanics employed by the Defendant, who are experienced in and whose duty it is to perform the task of mounting or removing counterweights on the Defendant's piling rig. The mechanic (LUI) contacted by the deceased and HILTNER was at that time engaged in a task of repairing a piling rig at the Defendant's Airport Link project site and advised the deceased and HILTNER that he was unable to immediately attend the Pinkenba yard. The deceased and HILTNER did not contact any other employees of the Defendant regarding the removal of the counterweight. 17. HILTNER operated the rig so that the rear was facing toward the assist crane. 18. HILTNER unscrewed the long bolt on his own, using a 55mm spanner and a length of pipe on the spanner to provide the force necessary to undo it. The long bolt was left in place in the counterweights. 19. Whilst walking to the nearby assist crane HILTNER heard a 'crack' and turned around and saw that the rear counterweight had fallen on the deceased. 20. The deceased had loosened the two retaining bolts on the end counterweight before the assisting crane was attached. 21. The assisting crane was not attached to the end counterweight before the longbolt [sic] was released or at any other time. 22. The end counterweight had tilted backwards, snapping the retaining bolts and falling to the ground immediately below the end of the support frame, crushing the deceased. See attached expert report of Dr Paul Carnavas dated 17 November 2009 at pages 6 and 7. 23. When the counterweight was removed, the deceased was found bent over with his left side parallel to the rear of the rig. He had the length of pipe in his left hand. The large socket and extension bar used with the length of pipe by the deceased to partially undo the retaining bolts were located close to the deceased on the ground underneath the remaining counterweights. Other Relevant Facts 24. The Defendant had adopted the manufacturer's procedure for counterweight removal. The Defendant did not assess this procedure. 25. The Company Plant BG 28 Instruction Manual steps for removing the counterweights are as follows: (a) Unscrew long bolt; (b) Suspend the outer counterweight to an assist crane; (c) Unbolt the suspend counterweight from the frame and lift off; (d) Repeat the procedure with the next counterweight. -- 3 of 8 -- 4 26. This procedure was defective in that it directed the long bolt to be removed before the counterweight was suspended by the assisting crane. 27. The deceased and HILTNER did not follow the (flawed and uncorrected) manufacturer's procedure to remove the counterweights. 28. The Defendant did not at any time instruct or train the deceased or HILTNER in how to do the task or removing the counterweights. 29. The Defendant employed four mechanics who were experienced in and whose duty it was to perform the task of mounting or removing the counterweights. 30. The Defendant knew that the Company Plant BG 28 piling rig was scheduled to be transported on Tuesday, 11 August 2009 to the Airport Link site at Kedron. Although unlikely, this may have involved the removal of the counterweights before transporting. 31. Company Plant BG 28 piling rigs were transported to the Airport Link site on two occasions prior to the fatality. On both occasions the counterweights remained mounted. 32. In October 2008, counterweights required to be removed from a Company Plant BG 28 piling rig for the purpose of transport. On that occasion the piling rig was to be transported Western Australia and the total weight of the piling rig was too heavy for one of the bridges on route. 33. On another occasion a counterweight was removed prior to transport. This was due to operational reason (at the intended site) that the counterweight was not required. 34. The BG28 piling rig was prepared for transport on 8 August 2009 by an experienced mechanic employed by Company A, and at that stage it was not expected that the counterweights would be required to be removed for transport. 35. One week before the incident Mr ZISSER went on leave. No clear reporting or supervisorial arrangements were made for the period of leave. 36. The Defendant did not provide HILTNER with any instructions in respect of the deceased's work during ZISSER's leave. 37. The deceased had not previously been involved in the counterweight removal process. Previous Incident and Email alerts 38. A similar incident occurred with a related company, Company C, in Malaysia on 13 May 2009 when a counterweight was being removed from another BG28 piling rig. No one was injured at this time. 39. The Workshop Manager of Company C sent out a detailed alert email on 14 May 2009 regarding that incident to the Workshop Manager of the parent company, Company D (the construction arm of the Company A group), in Germany. A copy of that email was forwarded to the Pinkenba Yard manager (ZISSER) and copied to the Defendant's General Manager (X). 40. On 5 June 2009, the Workshop Manager of Company D, in Germany, sent an email to the workshop managers, (including ZISSER), of related companies in various countries. The email provided an amended procedure to the assembly and disassembly of the counterweights and instructed the exchange of the original procedures in the manual for the amended ones. 41. No action was taken by this Defendant to bring its control measures in line with the instructions from the parent company as contained in the email of 5 June 2009 or in accordance with the death hazard identified in the email (from the Workshop Manager of Company C) of 14 May 2009. Post Incident Control Measures 42. Prohibition Notice No. P738827 was issued to Company A on 13 August 2009. 43. The Defendant took the following steps after the incident, to comply with the prohibition notice: • Designed, tested and implemented a new interlocking counterweight securing safety device; -- 4 of 8 -- 5 • Amended the Safe Work Method Statement and Job Safety Analysis; and • Conducted retraining for all persons in the amended safe work method statement and job safety analysis and general and site specific inductions to be delivered to all employees at the yard. 44. Since the incident the Defendant has also: • Issued safety alerts to Australian companies that operate similar models of equipment to the Company Plant BG28 Piling Rig and provided technical advice and support in relation to the procedure for mounting and removal of counterweights; • Assisted Company B with the design of the new interlocking counterweight securing safety device by providing advice and recommendations for improvement, which recommendations were incorporated into the device finally implemented; • Executed a test of the new safety device on 30 September 2009 to ensure the system was safe for implementation in all Company D companies and Company B clients in Australia; • Engaged Jonson Business Consulting Services Pty Ltd to implement a 'Zero Tolerance Behavioural Safety Excellence Program', the purpose of which was to implement a cultural change with respect to safety throughout the Defendant's operations. All of the Defendant's employees worked through an interactive training manual which sought employees' feedback on current safety culture, reasons for unsafe behaviour and non-compliance, consequences of unsafe behaviour and the safety culture desired by employees. As a result of the program the Defendant's employees formulated 37 'Ground Rules' covering attitudes to safety and practical safety rules which are not being implemented by the Defendant. • Employed an experience Health, Safety, Environment and Quality Manager who has undertaken a comprehensive review of Company A's existing integrated management system to ensure compliance with Australian Standards and legislation, including the Workplace Health & Safety Act 1995 (Qld) and to incorporate the 'Ground Rules' formulated by employees. This included review and implementation of documentation, safety procedures and training. It is expected the Defendant's Safety Management System will receive accreditation from Lloyd's Register of Quality Assurance Limited by the third quarter of 2010. • Employed an experienced Workshop Manager responsible for supervision and implementation of the Defendant's safety system in the Pinkenba Yard, who, in conjunction with the Health, Safety, Environment and Quality Manager, has reviewed safety procedures in the Yard to ensure current procedures comply with Australian Standards and legislation, including the Workplace Health & Safety Act 1995 (Qld) and incorporation of the 'Ground Rules' formulated by employees. • Between August 2009 and February 2010 the Defendant has spent approximately $511,000 in improving its safety system, including implementation of the new counterweight safety device, engagement of a business consultant, review of safety procedures, additional training, audit and safety accreditation and its parent company, Company D has spent approximately EUR 556,000 in the design and implementation of the new interlocking counterweight securing safety device. The Defendant and its parent company anticipate additional costs associated with ongoing safety improvements over the next two years in the order of approximately $300,000 (for the Defendant) and EUR 550,000 (for its parent company), a total of approximately $2.4 million AUD. Other 45. The Defendant has: (a) no previous convictions under this Act; (b) entered an early plea of guilty; and (c) co-operated with the investigating agency.". [7] Quantification of a fine under the Act involves the exercise of a judicial discretion. The discretion is vested in the Industrial Magistrate. Whilst this Court has jurisdiction to revise an Industrial Magistrate's exercise of discretion, it is not sufficient that this Court form a view about the appropriate quantum of the fine which differs -- 5 of 8 -- 6 from the view of the Industrial Magistrate; compare Harris v The Queen1 at 655 per Dixon CJ, Fullagar, Kitto and Taylor JJ. An appellant seeking to revise a fine must demonstrate an inappropriate exercise of discretion in the sense explained in House v The King2 at 504 per Dixon, Evatt, McTiernan JJ: "… The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance …". Against that background, I move to the arguments. [8] I accept that on one occasion the Industrial Magistrate's reasons for decision refer to "a fatal accident in Malaysia" and on another occasion to "a recent death in Malaysia". Each reference is a manifest error. Fortunately, the Malaysian incident involved neither death nor injury. It was a near-miss incident. However, I am not satisfied that the error was anything more than a mere slip in what was essentially an ex tempore judgement. The Industrial Magistrate had adjourned to read the relevant email and had read it into His Honour's reasons. The essential point was that the Malaysian incident had revealed a hazard creating a risk of death. The Industrial Magistrate was seized of that point. There is nothing to suggest that the Industrial Magistrate so accumulated the activities of the Appellant and its related companies that His Honour erroneously treated the death of Mr Bowden as a second death. [9] I accept that the Industrial Magistrate referred to the first ("alert") email as being sent to the Manager of the Appellant's Pinkenba yard (Mr Zisser) and to the Appellant's General Manager (Mr X). In fact, the email was sent to Mr Zisser and was copied to Mr X. Again, I consider the error to be a slip. (The transcript shows that the solicitor who appeared for the Appellant at first instance made the same slip.) Two other issues relating to the email are of greater significance. Mr X was absent from work when the email was copied to him. He noticed the email on his return to work, but because it was sent from a private, not a business address, he did not read the email. Mr Zisser did receive the email, but took no action upon it. When he received the second ("revised procedure") email, Mr Zisser did no more than make preparations to amend the Instruction Manual. In fairness to Mr Zisser, one should record that his inaction was attributable, not to sloth, but to an informed opinion that removal of a counterweight was not expected in the foreseeable future. However, all of that my be, the Appellant's General Manager had the first email and the Appellant's Yard Manager had both emails, yet no modifications were made to the BG 28 Piling Rig and no information was made available to the workforce. [10] Neither Mr Hiltner nor Mr Bowden had been trained to remove counterweights. It was not Mr Hiltner's job to remove or replace counterweights. He was employed as a welder. It was not Mr Bowden's job to remove or replace counterweights. He was employed as a storeman. Four fitter/mechanics who had been trained in mounting and removing counterweights and who had experience in performing those tasks, were employed to remove and replace counterweights. I accept that the mechanic contacted by Mr Hiltner would have been available to adjust the relevant piling rig before it needed to leave the yard. However, in the absence of any evidence of the steps taken by the Appellant to prohibit Messrs Hiltner and Bowden from attempting to remove counterweights, I do not accept that the Industrial Magistrate should have diminished blame on the ground that Messrs Hiltner and Bowden stepped outside their area of responsibility. It is noteworthy that on the fateful day, Mr Zisser was absent and there was no evidence that an alternative chain of command was in place. Doubtless, Mr Zisser was satisfied that the piling rig was already prepared for transportation. The further assumption that everything would go according to plan was just that. [11] I do not accept that the failure to amend the Instruction Manual was irrelevant. Certainly, Messrs Hiltner and Bowden did not read the Instruction Manual. However, this was a case in which s. 28 of the Act was a breach before Messrs Hiltner and Bowden chose to intervene (though there was not then a circumstance of aggravation). If, indeed, the fitter/mechanic telephoned by Mr Hiltner had returned to attempt the task, he would have been at risk. Following the Instruction Manual and suspending the outer counterweight to the assist crane before loosening the vertical bolts (which Messrs Hiltner and Bowden did not do) would have left the fitter/mechanic exposed to risk. The whole point of the Malaysian incident is that it showed that no bolts should be removed before the assist crane had been brought into play. Attaching no weight to the admission of the Complainant's 1 Harris v The Queen (1954) 90 CLR 652 2 House v The King (1936) 55 CLR 499 -- 6 of 8 -- 7 pleadings which is involved in the plea and taking a broad-brush approach to the sentencing process, the shortcomings of Messrs Hiltner and Bowden do not diminish the blame attributable to the Appellant. [12] The Industrial Magistrate chose not to adopt the language of Counsel for the Complainant who described the Appellant's conduct as "cavalier" and "callous". His Honour was wise to do so. Denunciation is to be found in the penalty imposed, not in the use of pejorative adjectives in pre-sentence reasoning or remarks. Further, although the offence was a serious breach, involving amongst other things opportunities not taken and inadequate supervision, the offence was fundamentally attributable to human error. Given the Appellant's reputation and post-incident behaviour, use of the adjectives "cavalier" and "callous" (or the adjective "repugnant" used on the Appeal to this Court) is not warranted. [13] Mr Murdoch SC for the Appellant does not seek to deny that the offence was sufficiently serious to warrant imposition of a fine of some magnitude. The contention is that, in the result, the quantum which found favour with the Industrial Magistrate was clearly excessive. As an aspect of that submission, reliance is placed upon a submission put to the Industrial Magistrate that the appropriate range was $80,000 to $130,000. It is useful to reproduce the written submission put to the Industrial Magistrate: "6.3 In the last 10 years the penalty in cases involving a single fatality appears to have ranged from $14,000 to $100,000. In that time the maximum penalty has increased from $300,000 to $375,000 (due to amendment to the amount of penalty units for an offence under the Workplace Health & Safety Act 1995 (Qld) from 75 to 100) and from $375,000 to $500,00 (due to amendment to the value of a penalty unit applicable to all offences under the Penalties and Sentences Act 1992 (Qld)). 6.4 A review of all cases involving a single fatality when the maximum penalty was $375,000 in respect of which details are published (either by the Industrial Court or by the Division of Workplace Health & Safety), a total about 36 cases, reveals a range of penalty between $60,000 and $80,000 (between 16% and 22% of the maximum penalty). The average penalty is about $66,000 (18% of the maximum penalty). 6.5 There are no cases involving a single fatality in which a fine has been imposed since the increase in maximum penalty to $500,000. However, an extrapolation of the range of penalty established by previous cases, in relation to an increased maximum penalty, indicates a range of between $80,000 and $110,000 (16% and 22% of the new maximum penalty). 6.6 Taking into account the range clearly established by previous cases, some of which, when all of the circumstances are considered are not entirely dissimilar from the present case (as discussed at paragraphs 4.1 - 4.12 above) and, as far as they relate to obvious and easily manageable risks, concern broader failures of safety systems, the Defendant submits the appropriate range of penalty is $80,000 to $130,000 (16% to 26% of the maximum penalty). 6.7 The public case notes published by the Division of Workplace Health & Safety in relation to the two cases which currently represent the current highest penalty ($100,000) for a single fatality (CEK Enterprises Pty Ltd and Wendar Pty Ltd, unreported) indicate that those penalties were imposed in the absence of any significant mitigating factors (both companies were in liquidation, no appearances were made and convictions were recorded in both cases).". If the submission pressed at first instance was that the tariff sentence lay within the range of $80,000 to $130,000, I disagree with the submission. To seek to distil a tariff from a meagre 36 cases, with singular facts and post-mitigation penalties, is to embark upon an exercise in futility. If the submission is that the range suggested at first instance for the Complainant, viz., $200,000 to $250,000 was in excess of all previous penalties, I agree with the submission. Materially, I also accept that the quantum of the fine imposed significantly exceeded all previous penalties. [14] It follows from the discussion at [8] to [13] that I consider that another Industrial Magistrate might quite reasonably have opted to impose a more moderate fine. However, cases such as this involve judgement as well as reason and reasonable people properly instructed as to law and as to the facts may legitimately differ as to the outcome. In my view the quantum of the fine adopted by the industrial Magistrate was reasonably open to His Honour. As explained at [7], that is not the test. There has been no material mistake of fact. No extraneous or irrelevant matters have been taken into account. There has been no error of principle. The quantum of the fine is not so large as to suggest an inarticulated error or principle. The quantum of the fine might have been favoured by a reasonable Industrial Magistrate. To interfere would be to substitute one opinion for another. [15] The Order of the Court is that the Appeal be dismissed. I reserve all questions as to costs. -- 7 of 8 -- 8 Dated 7 September 2010. D.R. HALL, President. Released: 7 September 2010 Appearances: Mr J.E. Murdoch SC, instructed by Freehills, Solicitors for the Appellant. Mr D. Saunders of Legal and Prosecution Services, Department of Justice and Attorney-General, instructed by Workplace Health and Safety Queensland, for the Respondent. -- 8 of 8 --