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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Health and Safety Inspector v Carter Holt Harvey Ltd (DC, 17/02/06)

Sentencing Tracker

Principal Offences:
Failing to take all practicable steps to ensure safety of employees (s 6 and s 50(1)(a) Health & Safety in Employment Act 1992)
Plea:
Guilty
Non-Custodial Sentences:
$30,000 fine
$250 solicitor's fee
$100,000 reparation - $50,000 for emotional damage as result of death, and $50,000 for half financial loss suffered
Aggravating Factors:
Previous convictions
Effect on victim - death caused - and family
Emotional harm
Mitigating Factors:
Guilty plea
Remedial action taken
Co-operation
Reparation ordered
Previous Convictions:
26 convictions involving 16 separate incidents. None relating to site in this case.

OSH Tracker

Defendant:
Carter Holt Harvey
Two judges took differing views about the degree of culpability involved in a pair of fatal roof falls which occurred in different workplaces but remarkably similar circumstances. 
Both companies pleaded guilty to a charge under s6 after an employee carrying out roof-top maintenance was killed when he fell through a dust-covered skylight. The penalties imposed, however, did little to reflect the levels of blame apportioned, with the small local company that was regarded as being less culpable receiving a total penalty of $65,000 – exactly half that imposed on the large multi-national company that was seen as being more to blame. 
In the first case to come for sentencing, Judge JA McMeekan found that South Island Seed Dressing and Storage Company Ltd’s culpability for the August 2005 incident was “not at the high end of the scale” even though its managing director had identified the obscured skylights as a hazard before the job began but had done nothing about it. The company was fined $5000 and ordered to pay $60,000 in reparations to the family of the dead man ( Ashburton DC, February 13, 2006). A sister company with the same director, SPM Ltd, was fined $7500 on a second s6 charge relating to one of its employees who was also on the roof when the fatality occurred. 
Three days later Carter Holt Harvey Ltd was fined $30,000 and ordered to pay reparations of $100,000, with Judge JJ Weir agreeing with Department of Labour submissions that the fatality, in February 2005, had been foreseeable and the degree of culpability in the medium to high range (Tokoroa DC, February 17). No charge was laid in relation to a second employee who was on the roof at the time. 
Industry:
Manufacturing
Sub-Industry:
Wood and Paper Product Manufacturing
Risk:
Fall from height
Harm:
Death
Penalty Amount:
$130000.00
Reparation Amount:
$100000.00
Appeared in Safeguard issue 98

Judgment Text

RESERVED JUDGMENT OF JUDGE J J WEIR ON SENTENCING 
Judge J J Weir
[1]
The defendant company appears for sentence, having pleaded guilty to one charge brought pursuant to ss 6 and 50(1)(a) of the Health & Safety in Employment Act 1992 (the Act). Section 6 of the Act places a duty on an employer to take all practicable steps to ensure the safety of employees while at work and s 50(1)(a) of the Act establishes that the defendant is liable to a fine not exceeding $250,000 on the charge. 
[2]
The charge arises in respect of the defendant's obligation to its employee, Alexander Harwood, who on 22 February 2005 suffered fatal injuries when he fell through PVC roofing to a concrete floor approximately 9.6 metres below. The accident happened while the victim was assisting a fellow employee to clear a roof ducting that had become blocked with sawdust. As he walked across the lower roof of the building he fell through PVC sheeting on the roof to the concrete floor below. As a result he suffered multiple chest and head inquiries, including a broken neck, resulting in his death. 
The Sentencing Process 
[3]
The Health and Safety in Employment Amendment Act inserted s 51(a) into the Act which specifically addresses sentencing criteria. Before the amendment, the Court took into account the nine relevant criteria identified by a full bench of the High Court in Department of Labour v De Spa and Co Limited [1994] 1 ERNZ 339Has Cases Citing which are not known to be negative[Green]  in determining what penalty, if any, was appropriate in the circumstances of the case. Section 51(a) of the Act directs that the Court must apply the Sentencing Act 2002 following the criteria identified in De Spa. It follows therefore that there are a number of specific factors to be considered in this case. 
[4]
The degree of harm and effect on the victim. The degree of harm was ultimate, given the tragic loss of Mr Harwood's life. Mr Harwood is survived by his wife, Sharon Harwood, and their three children. The effect on them is recorded in the victim impact statements and updates provided to the Court. There have clearly been serious ongoing effects, both emotional and financial, for the widow particularly, and by extension, the family. 
[5]
Denunciation and deterrence (s 7(1)(e) and (f) Sentencing Act 2002). The informant submits that this is a case where general deterrence is required. It submits that there are a high number of workplace accidents occurring in New Zealand as a result of inadequate safe working environments. Furthermore it submits that working at height is an obvious hazard and falls from height are an area where a great number of workers are seriously injured or killed every year. It submits that there is a need to remind employers that they must be vigilant in seeking out hazards and fulfilling their responsibilities in controlling those hazards. It submits that this is a case where general deterrence is required so that employers and others with responsibilities under the Act must be reminded to take health and safety seriously. The employer must ensure that hazards are identified and controlled, ensuring workers are not exposed to risk, particularly when that risk is obviously easily preventable and, in turn, the Court must actively seek to enforce those responsibilities through a clear denunciation of failings and firm deterrence from these failings. 
Forseeability 
[6]
The informant submits that the accident was foreseeable and the defendant's culpability is in the medium to high range. The basis for this submission is that the accident was foreseeable and, had the defendant company taken all practicable steps, it would not have happened. I agree with that submission and in particular find: 
a)
That the hazard of a fall from height is obviously common, and in this case the hazard was significant. The victim was exposed to the risk of a fall of over nine metres and, in the circumstances, if a worker was to fall from the roof or through the roof of a building it was very likely that serious harm would result. Furthermore, the steps taken to minimise the hazards in this case were not onerous or costly. 
b)
There was a ladder fixed to the building to access the roof, therefore it was easily accessible and foreseeable that employers would access the roof from time to time and, in this case, clearly the blockage in the pipes that had been obstructed required the workers to access the roof. Notwithstanding the submission by the company that the roof had been accessed only very infrequently over the previous three years, it had to be foreseeable that an employee would be required to access the roof. 
c)
Furthermore the upper roof had a guardrail, indicating that it was likely the defendant was aware there was a risk of a fall from height when workers were on the roof. There was no designated walkway on the lower roof, nor a fixed static line onto which a worker could secure a harness. A number of plywood sheets had been placed on the roof and over parts of the PVC roofing. There were no specific procedures on where to walk on the main roof or lower roof leading towards the blocked ducting. 
Mitigation 
[7]
The company recognised that there were practical steps taken to avoid the hazard which is indicated by the extensive steps taken after the incident by an investigation team of the company. The relevant recommendations were annexed to the submissions of counsel for the defendant at that time, Mr JRF Fardel QC, as Annex 1. This remedial action taken by the defendant, along with its guilty plea and its full co-operation with the informant's investigation, are all factors which the defendant company must be given credit for. 
Previous Convictions 
[8]
The defendant submits that this is the first prosecution for this site. Whilst that may be correct, in fact the company has twenty-six convictions dating back to 1993 involving 16 separate incidents. The defendant is a substantial company with sufficient financial resources to pay any appropriate fine or reparation. I accept that because the defendant is a large corporation that a fine should not be increased. 
Comparative Seriousness of the Offence, S 8(b)-(d) Sentencing Act 2002. 
[9]
I have been provided with a number of cases outlining the reparation ordered and fine imposed having regard to the seriousness of the injuries and the extent of the company's failure in each case. I record my gratitude to counsel for their helpful written submissions and various cases referred to, including: 
Case 
Court 
Decision Date 
Paper Reclaim Ltd 
Auckland 
18/11/05 
Areva T & D New Zealand Ltd 
Rotorua H/C 
9/11/05 
NZL Group Ltd (P & O) 
Tauranga D/C 
9/8/05 
Toll Logistics (NZ) Ltd 
Tauranga D/C 
9/8/05 
Power Warehouse Ltd 
Hamilton D/C 
8/7/05 
Sealord Group Ltd 
Nelson D/C 
24/6/05 
P & J Matthews Investments Ltd 
Kaitaia D/C 
22/6/05 
Downer Construction 
North Shore D/C 
13/4/05 
Todd & Pollock Crane Hire 
Auckland D/C 
24/2/05 
Richmond Ltd 
Dannevirke D/C 
29/10/04 
Clutha Chainmesh Products Ltd 
Wellington H/C 
Appeal 4/8/04 
Waimarino Ltd 
Tauranga D/C 
 
Reparation 
[10]
Sections 32, 33, 34, 35, 36, 37 and 38 deal with the practicalities of a sentence of reparation. Section 33(1)(c) beginning with the ordering of a report states that: 
“ … the court may order a probation officer, or any other person designated by the court for the purpose, to prepare a reparation report for the court in accordance with section 34 on all or any of the following matters: 
(a)
in the case of loss of or damage to property, the value of that loss or damage and any consequential loss or damage: 
(b)
in the case of emotional harm, the nature of that harm and [the value of] any consequential loss or damage: 
(c)
in the case of any loss or damage consequential on physical harm,— 
(i)
the nature [and value] of the loss or damage; and 
(ii)
the extent to which the person who suffered the loss or damage is likely to be covered by entitlements under the Injury Prevention, Rehabilitation, and Compensation Act 2001: 
(d)
the financial capacity of the offender: 
(e)
the maximum amount that the offender is likely to be able to pay under a sentence of reparation: 
(f)
the frequency and magnitude of any payments that should be required under a sentence of reparation, if provision for payment by instalments is thought desirable. ”
[11]
Subsection (2) states: 
“The court may decline to seek a report under subsection (1) and impose a sentence of reparation without further inquiry if— 
(a)
the court is satisfied as to the amount of reparation that the offender should pay; or 
(b)
the type of information referred to in a reparation report is available through other means (including, without limitation, a declaration made following a direction under section 41); or 
(c)
in all the circumstances the court considers that a report is unnecessary. ”
[12]
Whilst no specific reparation report has been prepared, there is attached to the submissions of the informant, a very detailed victim impact statement which, as I understand, is accepted by the defendant. It establishes that prior to death, income which the household received as a result of the deceased's employment was $700 after tax, whereas now the current household income is $455 after tax through ACC, a shortfall of $245 per week or $12,740 per annum. Unfortunately, there is no specific information on the age of the deceased, but based on the age of the deceased's wife at the time of death, namely 47, plus additional information attached to the victim impact report, it is not unreasonable to assume that the deceased was of a similar age, or certainly no more than 50 years of age. Having regard to that factor and assuming a retirement age of about 65 years, there is a loss of income to the household of approximately $191,000. 
[13]
I have been referred to a schedule of payments to the family of the deceased made by the defendant. Those payments total approximately $90,000 made up of an ex-gratia payment of immediate financial assistance for family purposes of $10,000 plus $7,000.00 funeral services along with payment to Mrs Harwood of approximately $72,000 through the deceased's membership of the Carter Holt Harvey Employee Benefit Plan. In broad terms therefore, the approximate financial loss based on the assumptions above is $100,000. 
[14]
The only information that is not currently available therefore is any further information with regard to emotional harm. Calculation of a figure for emotional harm as a result of the death of a loved one is fraught with difficulties and cannot be treated with anything approaching scientific precision. In considering this figure, I have asked myself the question “Is the type of emotional harm suffered by a victim and her family as a result of a death, greater or lesser than the emotional harm suffered by an employee who is unjustifiably dismissed?” I recognise immediately that there is a separate jurisdiction in relation to awards for emotional harm and suffering as a result of successful personal grievances by employees against employers, but it cannot be regarded as totally irrelevant that in both scenarios the emotional damage flows from the employer/employee relationship where the employer is found to be at fault. 
[15]
For that reason, I have set a figure of $50,000 as representing a figure which reflects, in my view, the clearly greater emotional damage which must occur as a result of the fatality in the workforce. I have decided further that a figure of $50,000 by way of reparation is an appropriate figure to award which represents effectively half of the direct financial loss suffered by the victim in pure financial terms, assuming retirement age of 65. These two sums are in addition to the compensation already received from the employer and from ACC. They are also in addition to any pay-outs that were received from any private insurance policies. 
[16]
Having fixed the figure of reparation, it is now necessary to determine whether any additional penalty by way of fine should be imposed, with the quantum of the reparation sentence being taken into account in assessing the quantum of the fine (see Department of Labour v Ferrier Woolscours (Canterbury Limited) [2005] DCR 356Has Cases Citing which are not known to be negative[Green] . See also Areva T v D New Zealand Ltd CRI 2005-463-000042, Rotorua High Court, per Priestley J at paragraph 39 where he said: 
“In my judgment, given the clear purpose of the Act is to promote and enforce workplace safety, and given the fairly recent parliamentary increase of the maximum penalty from $50,000 to $250,000, it would be a rare case indeed for a conviction not to be met by the imposition of a fine. ”
[17]
In the Areva case, which involved human error and no specific assessment of culpability, the Court accepted that a starting point of $75,000 was an appropriate starting point for a fine, taking into account the fact that the maximum fine is $250,000. The defendant had paid reparation of $138,000 comprised of the proceeds of a policy on the employee's life for $100,000 and additional payments of $38,000. Taking account of all of those factors, a fine of $35,000 was imposed. 
[18]
In this case, having regard to the nature of the accident and my finding that culpability was medium to high, a starting point of $100,000 would seem to be appropriate. 
[19]
I accept the submission by counsel that all four criteria under s 51(a) to (e) have been met, namely that the company has pleaded guilty; that it has shown remorse for the offence; that it has co-operated with authorities in relation to the investigation and prosecution of the offence and that it has taken significant remedial action to prevent circumstances of the kind that led to the commission of the offence. Whilst I accept that the safety record on that site is good, nevertheless the company does have 26 previous convictions as a result of 16 separate incidents and it is also noteworthy that the remedial steps that have been taken on this site have extended to other sites. 
[20]
Taking account of those factors, a discount of 35% in my view would be appropriate and there should be a further additional discount of 35% to take account of the reparation ordered, plus the amount paid by the company. It follows therefore that in this case I have considered that a reduction of 70% of the fine is an appropriate deduction and set the fine at $30,000. In addition, there is a solicitor's fee of $250 awarded. 

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