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Accident Compensation Cases

Department of Labour v APN Print NZ Ltd (DC, 16/01/12)

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APN Print NZ Limited
An industrial waste and recycling company which supplied a hydraulic compactor was fined alongside the printing company which used it after a workplace accident. Transpacific Industries Group (NZ) Ltd was fined $48,000 and ordered to pay reparation of $5000 under s18A(1)(b) of the HSE Act. APN Print NZ Limited was fined $39,000 and ordered to pay reparation of$5000 under s18(1)(a). A worker’s arm was broken when it got caught in a pinch point between the compactor’s hydraulic cylinder and the lifting arm. He had been trying to push overflowing paper back into a bin lifter attached to the compactor. Judge Lindsay Moore said the accident occurred because the bin lifter controls were positioned in such a way that a person operating them was also able to reach through the unguarded pinch point. Transpacific had not completed a risk assessment for the bin prior to providing it to APN, and APN did not carry out an effective pre-operation review of the compactor and associated equipment ( Tauranga DC, 29 March 2011). 
Wood and Paper Product Manufacturing
Machinery (trapped, crushed, cuts)
Penalty Amount:
Reparation Amount:
Appeared in Safeguard issue 133

Judgment Text

L H Moore Judge
This case raises significant issues of principle touching the scope of the Court's ability to make emotional harm reparation orders where there has been personal injury sustained as the result of an offence and the injured person has entitlements under the Accident Compensation Act 2001. Interesting issues also arise as to the significance (if any) for sentencing purposes of the facts that the injured worker was not employed by either defendant and that the machinery which caused the injury was leased by Transpacific Industries to APN Print. 
The surrounding circumstances 
Transpacific Industries is part of a substantial Australasian industrial group and continues the business formerly known as Waste Management NZ which was acquired by takeover in 2006. APN Print is part of another large Australasian industrial group. It carries on printing businesses in various parts of New Zealand including Tauranga. 
APN's print business in Tauranga generates a significant waste paper which can usefully be recycled. To assist in that process, in October 2005, APN Print entered into a lease agreement with Waste Management for the provision of a stationary compactor. In 2009, within the context of that contractual arrangement, Transpacific Industries supplied APN Print with an additional compactor, a Wastepak 25m3 Hookload, which was installed at APN Print's premises in Birch Avenue, Tauranga to provide additional capacity for recycling waste paper from the printing process. It is that compactor which features in this case (“the compactor”). 
Prior to the compactor being provided for APN Print's use at Tauranga it was fitted with a bin lifter consisting of a frame and hydraulic systems which lifted and tilted a bin to empty its contents into the compactor. In the way that that device was designed and constructed, as its bin was raised from the rest position the gap between the hydraulic cylinder and the. frame decreased causing a pinch point. Indeed the photographs placed before the Court by the informant showed, as one would expect with a device of this type, a series of pivoting supporting struts which, in the course of the ordinary operation of the bin lifter, change angles in a way and to an extent that each was an obvious possible source of danger to anyone reaching into the mechanism while it was being used. With this type of machinery there are often practical limitations on the extent to which it can be shielded or guarded. Therefore operator safety generally requires that the controls of such machinery be so located and designed that the person operating controls cannot at the same time reach into the danger areas mentioned and that the machinery can only be in motion when the operator is handling the controls. 
Use of machinery of this general sort inevitably results from time to time in overflow or other spillage. Reaching to clear that is the sort of almost instinctive reaction which virtually no amount of instruction or training will totally suppress. The operator who reaches in to potentially dangerous machinery to clear a spillage, or an item which is not properly feeding in or out, is all too commonly encountered in cases which come before the Court under the Health and Safety in Employment Act 1992; also long before that legislation under its predecessors and, prior to the ACC regime, in common law actions for damages for personal injuries. 
What are the required practicable steps to prevent accidents of that type must necessarily be situation specific but commonly, and certainly here, at least part of what is required to assure operator safety is controls requiring the use of both hands and a system whereby the moment either hand comes off the controls the machinery stops. Alternatively, if there are controls requiring the use only of one hand, they are located sufficiently far from any potential source of danger that the operator, while activating the machinery, is positioned far enough away from it as to be unable to reach into any area of potential danger. 
Again (and it is so much easier with modern electronic devices than with mechanisms available when, as a law student/clerk at the end of the 1950s, I started doing the footwork in industrial accident cases) in a wide range of situations proper design requires that if the operator releases a control the machinery stops moving. Often much else is required for proper workplace safety in particular situations, but preventing people endangering themselves by the exercise of that almost instinctive tendency to keep things tidy, or remove blockages, or facilitate a steady flow of product or process, is absolutely basic and long has been. 
The accident 
On 16 June 2010 Mr Bato was working as a general labourer in APN Print's Tauranga printery. He was not an employee of APN Print but of Steelcraft Engineering Limited which had hired his services to APN. Mr Bato was employed on a part-time basis and was under training by way of a buddy system. Another employee of Steelcraft was present when Mr Bato emptied the first of two bins of wastepaper into the compactor but Mr Bato was working alone when emptying the second of those two bins which was when the accident occurred. At the time Mr Bato had been working at the APN Print premises for about two months. He activated the bin lifter by holding the hold to run lever. As the bin was being lifted he noticed that paper was spilling out of it. He reached with his left hand between the hydraulic cylinder and the base frame of the bin lifter to push that paper back in. With his right hand he continued to activate the hold to run lever so that the bin continued lifting. His left arm was caught in the pinch point created between the hydraulic cylinder and the lifting arm with the result that his left ulna was fractured. 
In essence the accident occurred because the bin lifter controls were positioned, and the bin lifter attached to the compactor, in such a way that a person operating the bin lifter was at the same time able to reach through the unguarded pinch point. 
Investigation into the circumstances of the accident by the Department of Labour revealed that this piece of machinery came within the scope of the New Zealand Guidelines for Refuse Collection, Processing and Disposal Equipment (Stationary Compactors: Safety Requirements) 1999. This was a piece of machinery which was patently intended to be used in a place of work, and indeed had been so installed, so both Transpacific Industries as the lessor of the equipment and APN Print as the principal and in control of the place of work where it was being used were obliged by s 18A(1) and s 18(1)(a) respectively in the case of Transpacific Industries to take all practicable steps to ensure that the equipment was designed and made so that it was safe for its intended use and, in the case of APN Print, to take all practicable steps to ensure that the person operating the machinery was not harmed whilst doing that work. 
The applicable guidelines required a risk assessment for the bin lifter. That had never been done. If competently done such an assessment would have identified the hazard of the pinch point in which Mr Bato's arm was fractured. Indeed the photographs before the Court point to the likely existence of other sources of potential danger as the mechanism moved through its working range. 
The informant's case, which is not disputed, is that it was practicable, and in the circumstances required by law, to take the following steps to ensure the safety of the person operating the bin lifter: 
Either to locate the bin lifter's controls safely outside the bin lifter's range of movement or providing a two-handed control set up so that the operator could not both operate the bin lifter and simultaneously access the unguarded pinch point; or 
Guarding the pinch point; 
Providing operating instructions establishing guidelines for the use of the compactor; 
Attaching signage to the compactor warning of the hazards created by it; 
Labelling the compactor's controls. 
While the last three should have been attended to but never had been, they would not in all the circumstances, either individually or in combination, have been sufficient to ensure safe use. That is because instructions, training, signage and labelling are never, of themselves, adequate to prevent the exercise of the almost instinctive tendency to tidy up spillage or clear away impediments whilst machinery is functioning. Although (3), (4) and (5) ought to have been attended to, the key to this case lies in the failure to implement either (1) or (2). The sense that comes across from the photographs is that (1) was far and away the best option because the pinch point featuring in this accident may not have been the only place where a person reaching into the machinery to clear spillage could sustain injury. 
The consequences for Mr Bato 
At the time of the accident Mr Bato was 38 years of age. He and his wife had become parents about two months before. She (a registered nurse) was on maternity leave. She had to extend that because Mr Bato was unable, because of the accident injury, for some months to perform two handed lifting tasks. So the couple had to rearrange their plans to adjust their work patterns to cope with the responsibilities of the child. That may lay behind the otherwise puzzling situation that ACC stopped paying Mr Bato from when he started physiotherapy on 11 August 2010. While Mr Bato was in receipt of ACC, APN, although under no legal obligation to do so, paid him $1081.20 to make up the difference between his wages and the 80% ACC was obliged to pay. In addition APN paid Mr Bato $200 to cover parking and petrol costs in the context of receiving treatment. 
Some days after initial treatment by way of a plaster cast a plate was screwed to the bone to help the healing and merging of the fracture. His left arm from wrist to elbow was in a cast for a total of two months. The cast had to be removed and replaced in the context of x-rays during that period. Mr Bato was given physiotherapy and undertook home exercises to help regain the normal strength of his left arm. He returned to work part time on 6 September. On 22 September his doctor cleared him as fit for normal duties. 
Mr Bato's inability, because of the accident, to pick up and help with his baby caused him to feel inadequate and stressed. There was the added stress occasioned by the need to alter arrangements touching his wife's employment and the wider distribution of household responsibilities. This was all at a special but inevitably stressful time for the couple in adjusting their lives and relationship following the arrival of their child. The inability to participate in a favourite sport, and later only in a somewhat restricted way, inevitably added to the overall emotional harm to Mr Bato consequent on the accident. 
In January 2011 Mr Bato commenced work at a mussel processing plant. Whether that was as an employee of Steelcraft is unclear. This work involved using both hands and he reportedly coped well. He has returned to participation in his favourite sport, basketball, though taking considerable care to avoid contact with his left arm. 
What practicable steps were omitted? 
In a case such as this the fact of an injury accident has led to a Departmental investigation and subsequent prosecution, but the scope of the prosecution and of the Court's consideration is not limited to the particular circumstances which gave rise to the accident which occurred. Rather, as the submissions for the informant make plain in some detail, the focus has to be on the totality (“all practicable steps”) of absent safety precautions. But what should have been done to ensure that (in this case) the plant involved was designed and made so that it was safe for its intended use and that all practicable steps were taken to ensure that the person operating that plant was not harmed whilst doing that work? 
Among the industry groups recorded as having been consulted in formulating the applicable guidelines was Waste Management NZ Limited whose contribution included providing illustrations which were used as the basis for some of the guidelines' diagrams of equipment. Those guidelines covered stationary compactors, including those with bin lifters of the type involved here. They emphasise, in Part 5, the obligations in designers, manufacturers and suppliers of plant to take all practicable steps to ensure when the plant they design, manufacture or supply is installed, adjusted, cleaned, maintained, repaired and dismantled in accordance with the designer's instructions there is no likelihood that the plant will be a source of harm to any person, or that the likelihood that the plant will be a source of harm is minimised as far as possible. In that context the guidelines specify that owners of compactors should develop a written training scheme for operators who load refuse into compactors. Various aspects of such a training scheme are specified, including safe operation of the plant. 
There is a requirement to develop and provide operating instructions, including precautionary notices associated with the operation of the unit. Then too the guidelines specify that the manufacturer should develop and provide a minimum program for maintenance including periodic and regular inspection of all stationary compactors. Clearly one of the purposes of that is to ensure that best practice is kept up to date, 
As to operational requirements the guidelines note that managing safety is a continuous process and that “no one expects parties to have skills outside their field, but they must know their limits and when to seek the skill of someone whose skills are different”. Operational requirements of the guideline read as assuming a traditional employer/employee relationship but are clearly also directed at operational situations generally. In relation to the hazards posed by bin lifter equipment it is noted that those should be minimised by: 
Limiting use to trained operators; and 
Separating as far is as practicable the operator and lifting equipment. 
As to onsite container lift (6.3) the required safeguards include: 
All controls shall be sustained pressure controls so that if the control is released the lifter ceases movement immediately, except if the container lifter is fully enclosed and interlocked. 
The controls shall be located so that the operator is safely outside the range of movement of the bin. In a two-handed control set up, this distance is at least 850 mm (safe reach distance for an outstretched arm) in a line from the nearest control. ”
As to controls the guidelines require (7.5): 
Each control shall be conspicuously labelled as to its function. 
Operating controls shall be designed and located to prevent unintentional activation. 
Start button shall be designed to prevent unintentional activation. 
Stop (including emergency stop) buttons shall be red, distinguishable from all other controls by size and colour, and not be recessed. ”
As to guarding (7.8) the requirement is “Moving components of the stationary compactor frame and ram shall be enclosed, guarded, or both”. There are requirements for safety signs. 
It is clear that Transpacific did not complete a risk assessment for the bin lifter prior to providing the compactor to APN and that APN did not carry out an effective pre-operation hazard review of the compactor and associated equipment. Those failures meant that the pinch point in which Mr Bato's arm was broken was not identified as a hazard, nor indeed was the wider range of risks where an operator was able (as Mr Bato was) to reach into moving equipment in which gaps were opening, closing, and changing shape. Clearly this accident could not have occurred if any one of three practicable steps had been taken: 
Locating the bin lifter's controls (which appear to have incorporated a cut off which took effect if the operator removed his hand from the control) a safe distance from the bin lifter so that the operator could not reach into the mechanism whilst simultaneously operating it; or 
Providing a two handed control set up so designed that the bin lifter could only operate when the operator had both hands on the controls; or 
Guarding the pinch point involved in this particular accident. 
Any one of those three precautions would have prevented the injury to Mr Bato, but protecting the operator by having properly designed and located controls would not protect a “helpful” co-worker from the consequences of trying to tidy up or prevent a spillage whilst the bin lifter was operating. So it does not follow that overall workplace safety requirements would have been satisfied merely by taking one of the three practicable steps described. 
Prior to the accident none of the buttons on the controls were labelled and the only sign on the compactor was one warning of high voltage. Transpacific had not provided written, let alone a full set of, safe operating procedures before the compactor was put into use by APN and at the time of the accident it had provided no training instructions or anything in writing by way of safe operating procedures. At that time APN had been leasing compactors from Transpacific for approximately five and a half years. The written material, signage and labelling which should have featured in Mr Bato's training in the use of the bin lifter were non-existent. 
The scope and quantum of emotional harm reparation 
In Department of Labour v Hanham & Philp Contractors Limited & Ors (High Court Christchurch, CRI-2008-409-000002; judgment 18 December 2008) a Full Court of the High Court set out the methodology to be followed on sentencing in a case of this type: 
“Fixing the amount of reparation taking into account any offer of amends and the financial capacity of the defendant. 
Fixing the amount of the fine by establishing the starting point according to bands of seriousness, then adjusting for aggravating and mitigating circumstances of the offender. 
An overall assessment of the proportionality and appropriateness of the total imposition of reparation and fine. ”
In Davies v Police [2009] NZSC 47Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  (judgment 25 May 2009) the Supreme Court considered s 32(5) Sentencing Act 2002: 
“ … , the court must not order the making of reparation in respect of any consequential loss or damage described in subsection (1)(c) for which the court believes that a person has entitlements under the Accident Compensation Act 2001. ”
By s 32(1) Sentencing Act 2002: 
“32 Sentence of reparation 
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- 
loss of or damage to property; or 
emotional harm; or 
loss or damage consequential on any emotional or physical harm or loss of, or damage to, property. ”
It is to be noted that subsection (5) is directed only to subsection 1(c). It has no application to subsection (1)(b). So emotional harm caused through or by means of an offence may be the subject of an award of reparation even though the person suffering because of the offence has loss of earnings entitlements (as Mr Bato had) under the Accident Compensation Act. In Davies the Supreme Court held that s 32(5) prevented reparation being ordered to make good the shortfall between the payments made to the victim in respect of her lost earnings under the ACC Act and the full loss of earnings that she had suffered through her injuries. At paragraph [22] of the leading judgment delivered by Elias CJ the majority of the Court (with whom Tipping J agreed - see para [38]) held: 
In interpreting s 32(5), the High Court and Court of Appeal focussed on the meaning of the word ‘entitlements’, which they interpreted by reference to the definitions contained in the Injury Prevention, Rehabilitation, and Compensation Act set out in paras [16] and [17] above. The emphasis on the word and its definition in another stature may mislead. The word in s 32(5) of the Sentencing Act appears in a phrase. The court must not order reparation ‘in respect of any consequential loss or damage described in subsection (1)(c) for which the court believes that a person has entitlements under the Injury Prevention, Rehabilitation, and Compensation Act 2001’. ‘Entitlements’ as used in this phrase relates to the type of loss, as the use of the relative ‘for which’ makes clear. The consequential loss in issue here is loss of earnings as a result of physical injury. In respect of that loss, the victim has entitlements to weekly compensation. The fact that the victim has such entitlements can be identified without calculation of what is ‘payable’ under the Injury Prevention, Rehabilitation, and Compensation Act. Indeed, the language of ‘belief’ by the sentencing court in s 32(5) does not suggest an inquiry into what is actually payable. The phrase read as a whole carries the meaning that if consequential loss or damage is believed to give rise to entitlements under the Injury Prevention, Rehabilitation, and Compensation Act, no reparation order may be made in respect of that loss. We think this to be the natural meaning of s 32(5) because of its language and structure which, as already indicated, links entitlements to ‘consequential loss or damage’ and which is inconsistent with inquiry into what is ‘payable’. But this textual reading is supported by the wider context to be found in the Sentencing Act. ”
It is noteworthy that in Davies the Supreme Court upheld the $7000 emotional harm component of the reparation ordered by Judge M J Green in the District Court. 
Here both defendants accept that Mr Bato should be awarded reparation for emotional harm, but they argue that such reparation can only be for the emotional harm as the direct result of being subject to the accident, not as a result of his ongoing injuries, because any emotional harm from his injuries was covered under the Accident Compensation Act s 26(l)(c). The Court is unable to accept that submission. Section 26(1)(c) of the Accident Compensation Act includes in the definition of personal injury “mental injury suffered by a person because of physical injuries suffered by the person”. By s 27 of that Act“mental injury” means “a clinically significant behavioural, cognitive, or psychological dysfunction”
Emotional harm is not defined in either statute. In Sargeant v Police (1997) 15 CRNZ 454Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  Hammond J said at page 458: 
“The Act is silent as to what is meant by ‘emotional harm’. The term could obviously span a range of phenomena. At the lowest end of the scale, it could mean simply ‘mental anguish’ occasioned to a victim by a crime; at the other end of the scale, the particular harm might be manifested in identifiable, long term, clinical conditions such as traumatic stress disorders, or even psychotic conditions. 
The term ‘emotional harm’ is at large in the Act … The real difficulty of the inclusion of the term ‘emotional harm’ in the statute is not the reach of the concept, but the practical mechanics of assessing the loss, and in attempting to quantify it, moreover in a criminal law context. ”
The essence of the argument for the defendants is that the expressions “emotional harm” and “mental injury” mean the same thing. They do not. Emotional harm is a far wider concept and, in a case such as this where there is no suggestion of anything falling within the concept of “mental injury”, there is clearly no comfort to be found for the defendants in s 32(5) because there is plainly no entitlement under the Accident Compensation Act in respect of mental injury as there defined. 
In assessing the quantum of emotional harm reparation there are the obvious difficulties to which Hammond J referred. Comparable cases provide assistance in achieving both fairness and consistency. The informant refers to Department of Labour v Altra Foods Limited where the victim suffered two fractures to her forearm after it became trapped in an auger machine. A skin graft was required. Judge Gibson awarded $10,000 for emotional harm (District Court Manukau, CRN 10092500298, 19 May 2010). In Department of Labour v Bernard Matthews Limited the victim suffered crushing injuries to her forearm including bone fractures, skin damage requiring grafts and muscle and nerve damage. Judge Adeane awarded $15,000 emotional harm reparation (District Court Gisborne, CRN 09016500501, 15 January 2010). In Development of Labour v Mohan Waterproofing Limited the victim fell from a height and suffered a fractured arm and fractured hand. Judge Wilson QC assessed emotional harm reparation at $10,000 (District Court North Shore, CRN 5044500700/01, 9 August 2005). 
In this case Mr Bato had to undergo the insertion of a metal plate with the inevitable consequential worry as to whether or not he would regain the full use of his left arm. Other aspects of the emotional harm he suffered have already been mentioned. The emotional impact of the accident inhibiting the extent of normal fatherly handling of a new baby at the initial stages of bonding are a particular feature of this case. So, although the physical injuries may not have been quite as extensive, the Court is satisfied Mr Bato's emotional harm is fairly comparable with that in the Altra Foods and Mohan Waterproofing cases. Therefore the informant's suggestion of a $10,000 total award to Mr Bato is appropriate. It is common ground among the parties that any emotional harm reparation should be borne in equal shares by each defendant. 
As already noted APN Print paid some $1200 to Mr Bato to bridge the gap between what he received from ACC and his actual loss of earnings as well as for some expenses not covered by ACC. Given the provisions of s 32(5) Sentencing Act it would be illogical to bring that factor into consideration on the assessment or apportionment of emotional harm reparation, but it can properly be taken into account in the later steps in the sentencing process. 
Both defendants are parts of very substantial businesses with the means to satisfy any reparation orders and fines which the Court could impose. In those circumstances it is unnecessary to temper appropriate penalties because of the means of a defendant, so that aspect of sentencing requires no further consideration. 
Assessment of appropriate fine and overall penalty - Transpacific 
In Department of Labour v de Spa & Co Limited [1994] 1 ERNZ 339Has Cases Citing which are not known to be negative[Green]  a Full Court of the High Court laid down a non-exhaustive but very helpful list of relevant factors. In Hanham & Philp para [54]-[63] there was further refinement, particularly as to the assessment of culpability. It needs remembering that de Spa was long prior to the enactment of the Sentencing Act 2002 and the consequent methodology laid down by the Court of Appeal in R v Taueki [2005] 3 NZLR 372Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] . Because of developments in both statute and case law since de Spa, which was an historically important judgment, it is appropriate to follow the pattern laid down in Hanham & Philp where those developments are fully discussed and analysed. There the Court said at paragraph [54]: 
“The assessment of culpability is concerned with the degree of blameworthiness for the offending. We see the assessment of culpability as including: 
The identification of the operative acts or omissions at issue. This will usually involve the clear identification of the ‘practicable steps’ which the Court finds it was reasonable for the offender to have taken in terms of s 2A HSE Act. 
An assessment of the nature and seriousness of the risk of harm occurring as well as the realised risk. 
The degree of departure from standards prevailing in the relevant industry. 
The obviousness of the hazard. 
The availability, cost and effectiveness of the means necessary to avoid the hazard. 
The current state of knowledge of the risks and of the nature and severity of the harm which could result. 
The current state of knowledge of the means available to avoid the hazard or mitigate the risk of its occurrence. ”
For Transpacific it is submitted that the practical step it should have taken was to ensure that the compactor was safe before it was supplied, but that step has to be considered in the context of Transpacific having acquired the compactor together with other assets when it acquired the Waste Management entity. 
That approach notably understates the situation. Transpacific was the ongoing owner of the compactor. Obligations in respect of its safety did not cease when it was placed in APN's premises. That is clear both from the guidelines earlier discussed and as a matter of law. The initial shortcomings related not only to the hazard which actually gave rise to Mr Bato's accident and injuries which was, as this defendant concedes, relatively obvious, but there were the comprehensive shortcomings already discussed in relation to the labelling and positioning of controls, as to signage, and as to training and instruction written materials. The Court cannot accept that the limits of risk to which those using the bin lifter were exposed was a broken arm. Where there is the potential for a limb to be crushed and trapped the potential adverse consequences can go far beyond fracture, particularly where someone is working in the type of area depicted in the photographs before the Court, ie: a place visited from time to time rather than one in which people were continuously at work. 
It is accepted on behalf of Transpacific (20.6 of counsel's submissions) that it was aware of the steps available to prevent the accident but local staff did not follow company procedures that would have prevented what occurred. Given the size of the company and its good history the Court has no hesitation in accepting that submission which highlights the importance of close and continuing attention to workplace safety issues at all levels. 
Although the risks posed by the pinch point, and the other shortcomings this accident brought to light, cannot cumulatively be seen as falling within the low culpability category, neither, looked at in a broad prospective in terms of workplace safety, can they be placed in the high culpability category. There are numerous other types of equipment and systems which pose far more extensive and obvious risks of causing severe and fatal injuries. Cutting equipment of many sorts and high voltage electrical situations are obvious but far from the only examples. 

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