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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Department of Labour v New Zealand King Salmon Company Ltd (DC, 15/07/09)

OSH Tracker

Defendant:
New Zealand King Salmon Ltd
Excessive speed and the lack of a proper look-out added to the seriousness of a maritime accident where the skipper was distracted by his use of a cellphone, a judge has found. 
New Zealand King Salmon was fined $60,000 under s6 of the HSE Act and ordered to pay reparations of $200,000 following a collision near Picton which killed two men and injured another four. The company was also fined $6000 under s68 of the Maritime Transport Act for lapsed certifications ( Blenheim DC, July 15). 
Maritime NZ had said that the skipper of the company’s six-metre vessel, Shikari, appeared to have been texting prior to the accident. He did not notice a 91 ton former navy inshore patrol boat moored in the bay until it was too late, and was seen twisting the steering wheel just a moment before impact. 
Since the accident in June last year, NZ King Salmon had paid out $20,000 each to the families of the deceased and to the four injured passengers, along with thousands more towards funeral and other expenses. The company had also written letters of apology to those victims. 
In sentencing, Judge Chris Tuohy said he was satisfied the letters were “heartfelt and genuine” and not for the purpose of helping in the court proceedings. The company’s actions had made a difference to the healing, demonstrated in part by the fact that those injured had returned to the company. 
Judge Tuohy said there was a fairly high degree of culpability in the collision. Navigating a vessel within harbour limits in an area like Waikawa Bay presented an obvious risk of collision with other vessels, and the means of avoiding that were to maintain a proper look out and remain within speed limits. There was not a proper look-out maintained and the vessel was travelling at 23 knots in a five knot area. 
It had been submitted that nothing could have been done beforehand to avoid such potential for human failure but Judge Tuohy said that was not entirely true. Adherence to the speed limit would have lessened the consequences of the collision, he said. While the company suggested there was some “normalisation” around exceeding speed limits in the area, the judge said that should possibly have led to heightened surveillance and awareness. 
He did not accept an argument that there should be an extra penalty because the collision happened on sea, as he said the risk at sea was no greater, and possibly less, than on the road. 
Industry:
Agriculture, Forestry and Fishing
Sub-Industry:
Commercial Fishing
Risk:
Other
Harm:
Death
Penalty Amount:
$260000.00
Reparation Amount:
$200000.00
Appeared in Safeguard issue 119

Judgment Text

NOTES OF JUDGE C N TUOHY ON SENTENCING 
Judge C N Tuohy
[1]
New Zealand King Salmon Ltd has pleaded guilty to four charges, one under the Health and Safety in Employment Act and three under the Maritime Transport Act. The charge under the Health and Safety in Employment Act is under ss 6 and 50 in that being an employer it did fail to take all practicable steps to ensure the safety of employees while at work. There is a charge under s 65 of the Maritime Transport Act that the company's employee Anton Perano operated a ship, namely the Shikari, in a manner that caused unnecessary danger or risk to other persons. The third and fourth charges are two charges under s 68 of the Maritime Transport Act that the company operated a ship, namely the Shikari, knowing that a Safe Ship Management Certificate was not held, while also knowing that it was required in order to operate the ship lawfully. The other charge that its employee Anton Perano operated the Shikari without holding a current Local Launch Operator's Certificate. 
[2]
The first two charges carry maximum penalties of fines of $250,000 in the case of the Health and Safety in Employment Act charge and $100,000 in the case of the charge under s 65 of the Maritime Transport Act. The latter two charges under s 68 carry maximum penalties of $100,000 fines as well. The difference between the first two charges on the one hand and the second two on the other hand is that the first two are based directly on the collision that killed two persons and injured another four. The latter two charges do not depend on that event and are not directly relevant to it. 
[3]
Turning to the first two charges, in relation to both the company is liable and has pleaded guilty based upon the same acts or omissions of its employee Mr Perano. In particular the practicable steps that it is alleged the company, through Mr Perano, failed to take to ensure the safety of its employees were keeping a proper lookout and operating the vessel at a speed which exceeded the limit and was excessive for the circumstances. These are in effect exactly the same acts or omissions which are relied upon to found liability for the charge under s 65 of the Maritime Transport Act of operating the ship in a manner which caused unnecessary danger or risk. So although they are different charges under different Acts and phrased in different ways essentially the acts or omissions on which they are both based are the same. In those circumstances I intend to impose the substantive sentence on the charge under the Health and Safety in Employment Act, which carries the heavier penalty and in relation to which there is a clear path for sentencing provided to this Court by decisions of the higher Courts and in particular a recent decision of Department of Labour v Hannam and Philip Contractors Ltd. That is a decision of the Full Court of the High Court given as recently as 18 December 2008 that sets out very helpfully the whole principles and approach to sentencing on charges under s 50 of the Health and Safety in Employment Act. 
[4]
Before turning to the details I wish to extend the Court's sympathy to all family members, friends and colleagues of the deceased people who are here today and to recognise that while the Court process can serve some useful purposes in bringing home accountability for the event and at least some reparation, it is understood that it can in no way truly repair the great losses which everyone has suffered. 
[5]
The principal object of the Health and Safety in Employment Act is to provide for the prevention of harm in the workplace and for that purpose all employers have a duty to take all practicable steps to ensure that employees are not harmed in the workplace and in the case of a company or corporate body obviously it is its employees at all levels who must take those practicable steps, because they are the human agents of the corporate body. 
[6]
There has been a provision added to the Act that sets out the sentencing criteria that the Court must take into account when sentencing. It provides that the Court must apply the Sentencing Act 2002 and in particular ss 7-10 of that Act. That Sentencing Act applies to sentencing of all sorts. The provisions of ss 7 and 8, which I consider important in this case are holding a defendant accountable, providing for the interests of victims by way of reparation and deterrence, which is always very important in relation to prosecutions of this nature, not simply or even primarily deterrence for the particular defendant usually but deterrence generally. In relation to s 8 the gravity of the offending and the degree of culpability is a principle that is important in this case. 
[7]
The High Court decision I referred to indicates that the principal focus in sentencing should be on reparation that is intended to be compensatory. In normal circumstances as well as reparation there should be a fine, which is directed for punitive purposes and in particular to hold offenders accountable and for deterrence. The means of a defendant must be kept in mind in relation to both of those aspects of sentence. But in this case the company has not suggested at any time that it may have any inability or difficulty in paying reparation and fines although, of course, it has submitted through counsel that they should be at a level considerably less than sought by the informant in the submissions filed. 
[8]
The first step is fixing the amount of reparation. I have read the various Victim Impact Statements. Although there have been some financial losses they pale into insignificance really when compared with the emotional harm that has resulted from this event especially, obviously in relation to those who have lost loved ones. It is not disputed that all four persons injured and the wife and partner of the two deceased are victims eligible for reparation for emotional harm. When I say that I am not overlooking the fact that those are not the only people who would have suffered emotional harm as a result of these losses. Parents, relatives, friends and colleagues obviously have also but, as I said earlier, the sentencing process cannot deal with all loss and harm. 
[9]
It has been said by other Judges to the effect that quantifying or putting a money value on the emotional harm resulting from the death of a loved one is not a scientific task and in fact it is an intrinsically thankless task when no amount of money can ever compensate for these sort of losses. Nevertheless the Court simply has to address that task. There is no other way of measuring it for these purposes other than by some award of money. In this regard the Court must take into account reparation and amends made by the company, the defendant, already. The figures have been set out helpfully in the sentencing submissions filed by Mr Gallaway in paragraph 68 showing the amounts of money that one way or another have thus far been paid to those persons who I earlier mentioned as legally victims here. 
[10]
As mentioned during submissions there is included payments of $100,000 to each of the estates of Mr Climo and Mr Perano, coming from a life insurance policy. As I understand it (and it has been confirmed) these policies were taken out as part of the conditions of employment of the two deceased. That is a sign of a good employer but it cannot be counted as reparation made already by the employer. 
[11]
What has been made is that the company has paid figures of $20,000, as I understand it to Mrs Perano, Ms Parnell and the four injured persons. As well there have been various payments, which are not exactly the same in each case, amounting to a few more thousand dollars in most cases for funeral expenses and accommodation expenses. Those, I take into account that they have been made but I am not going to make specific reductions for those. 
[12]
The company has written letters of apology to those victims and I am satisfied they are heartfelt and genuine, not made for the purposes of helping in Court proceedings or protecting the company, but because it was the decent thing to do. The company's actions in making the payments it has and taking the steps it has, reading the Victim Impact Statements, they have made a difference to the healing to some degree of those victims. Perhaps that is indicated by the fact that all of the four injured people started back with the company and three of them remain with them, the other having decided on a change of career. 
[13]
The submissions of the informant have suggested particular amounts of reparation accepting in relation to the injured people that the amounts of $20,000 are sufficient. The submissions filed on behalf of the defendant accept that there should be reparation payments and probably understandably leave it to the Court to fix. It has been said that the fixing of reparation for emotional harm is an intuitive exercise defying finite calculation and that is true and I trust that everyone understands that. The only touchstone that the Court really has is the figures imposed in other cases where the exercise was just as intuitive as it must be here. 
[14]
I propose to make different reparation orders in relation to the two deceased persons as opposed to the four injured persons for obvious reasons, the degree of emotional harm is obviously much worse in relation to the loved ones of those who have died. In relation to those who have died I am conscious of the point, which was made sensitively, that Mr Climo's partner has actually been living with him for 18 months, although the relationship was much longer, and the children of the family were not his, as opposed to Mrs Perano having three young children of the deceased. I think however, it is both invidious and impractical to try to draw distinctions when dealing with emotional loss of this sort and I do not propose to do so. As I say I also am conscious that it is not just those persons, the partner and wife who have suffered as a result of the loss of those people. 
[15]
While saying that I consider that they should be dealt with in terms of a reparation order on the same footing (as relates to the two deceased people), I do understand the company's thinking in terms of the proceeds of the management policy or potential proceeds of the management policy over Mr Perano's life if that comes to fruition. I do not take the possibility of that payment being made into account in fixing the amount of reparation, although I do consider that that is one of several indicators of the company's genuine remorse and concern and decent attitude over this event. 
[16]
I fix the amount of reparation for Mrs Perano and Ms Parnell at $60,000 each, that sum taking into account the $20,000 already paid. In respect of the four injured people they, as well, have different degrees of injury as between themselves. But it is the emotional harm that is being compensated here and again, I consider that it is impractical and somewhat invidious to try to distinguish between one and another. There will be an order for $20,000 each in reparation that to the company's credit has, as I have mentioned already, been paid. 
[17]
I turn to the next step in the sentencing process, which is the question of a fine. It has been argued on behalf of the company that reparation is sufficient in the circumstances and no fine should be imposed. Although the orders for reparation in total are substantial, I do not accept that. As I have mentioned there is no question of financial inability to pay that is sometimes the case. It is clear that both fine and reparation should ordinarily be imposed in sentencing in cases under s 50 because they serve separate statutory purposes. In particular a fine is necessary to promote accountability, as a mark of denunciation and as general deterrence. All those purposes are necessary in this case as in any other. They are not fully served by the reparation orders made. 
[18]
The first step is to assess the level of culpability. In this regard as the case law establishes the acts or omissions of the employee, Mr Perano, are the actions and omissions of the company. It is obvious that on this occasion there was a fairly high degree of culpability in the actual collision. Navigating a vessel within harbour limits in an area like Waikawa Bay presents obvious risks of collision with other vessels moored or moving. The means of avoiding that risk were to maintain a proper lookout and to remain within speed limits. There was not a proper lookout maintained although there would have been no practical difficulty in that, given that it was daylight with a flat enough sea and good weather. The speed limit was 5 knots. The vessel was travelling at a speed of 23 knots that is in the circumstances very fast. On the other hand as Mr Gallaway says this was a case of a skilled, experienced and normally careful person, failing to exercise proper care on an isolated occasion with catastrophic tragic consequences. There is no suggestion of any contribution from wider systemic attitudes or practices within the company, which is a factor one sometimes sees. One does not see that here. Indeed the company prided itself on its attitude to safety. 
[19]
It has been submitted that nothing could have been done beforehand to avoid the potential for this sort of human failure. With the inevitable benefit of hindsight I think that is largely, but possibly not entirely true. Even adherence to the speed limit, even with the loss of concentration in looking out may have avoided this collision and certainly would have substantially lessened its consequences. I noted from the submissions on behalf of the defendant that an independent report obtained by the company suggested that there might have been some general normalisation of exceeding speed limits in the Sounds. It may be that heightened surveillance and consciousness of this issue might have been possible. Of course that is hindsight and in this area of the law and human behaviour one is faced all the time with hindsight. 
[20]
Weighing all matters and taking into account the figures set out for the guidance of this Court in the High Court decision earlier referred to I fix a starting point of $120,000 as a fine. I decline any uplift as requested for the fact of the charge under s 65 of the Maritime Transport Act. As I said earlier I consider it is based essentially on the same acts or omissions. I do not accept the argument that there should be an extra amount because this happened on the sea. While in many respects the sea has its special dangers this was a collision and the risk of collision is as far as I can see no greater and possibly less on the sea than it can be on the road. As Mr Gallaway has said this can be in some ways equated to a work van taking a group of workers home on the road, because that was what was happening in this case, but on the sea. 
[21]
There are some very strong mitigating factors. There was a very early essentially immediate guilty plea, full co-operation with authorities, great remorse matched with practical efforts to help, which I have mentioned. I accept, as I have said that this was the genuine and natural reaction of the management who themselves of course have lost colleagues and work mates and must be themselves devastated on a personal level. It is not simply motivated by protection of the company. Everything afterwards has been done that is feasible to ensure that this sort of thing will not happen again and the company has a very good safety record. I understand one previous conviction about ten years ago for an entirely different matter in the context of a company with several hundred employees. I consider it is entitled to the full 35% discount, which is recognised for these factors. It is also recognised that there should be a deduction of 10-15% further to recognise reparation made. The fact that the company is insured for this purpose is no reason to reduce that. Indeed it is a reason to give it full recognition because unlike those without such insurance the company has paid the premiums and by doing so has ensured that it is in a position to make reparation. This leaves an end figure in relation to a fine of $60,000. 
[22]
I look at the total fines and reparations and they amount to $260,000 and I look at that to see whether in totality that is appropriate. There is no suggestion the company is unable to pay. This was an event where there was a fairly high degree of culpability with extremely serious consequences, the deaths of two men in or about the prime of their lives and serious or very serious injuries for another four persons. I do not consider that in totality that figure is excessive. 
[23]
I turn to the other two charges under the Maritime Transport Act. As I mentioned they are causally unrelated to the collision. They are a situation in which maritime documents, which should have been renewed, had expired but not by long periods. These are compliance issues which came to light as a result of the accident, but did not in any way cause it. The maximum penalty for an individual is $10,000 or imprisonment of up to 12 months, which means for an individual the Court would also be able to sentence to home detention, community detention or community work. For a company there is only one penalty and that is a fine in the case of a company up to $100,000. In my view that increase is because the nature of a company is such that to fine is the only penalty that can be imposed on it. It is not because of some simplistic notion that a company might be wealthier than an individual. In many cases the reverse is the case. A corporate body might in fact have nothing or very little and an individual might have much. So it is not a question of looking at fines imposed on individuals and applying some sort of multiple; not that that was suggested. 
[24]
There is no tariff case that the Court can look at to get a handle on what the appropriate penalty is. I am grateful for the cases that counsel have referred to me but they are not that helpful because there are all sorts of different circumstances in every one. Here the relevant issues are the maximum penalty, $100,000, but of course that is for the worst case, one which might justify an individual going to prison for 12 months. The company has no previous convictions of this sort and in both cases the documents had only expired a short time before and as far as can be ascertained in both cases the vessel and the skipper held the necessary qualities for renewal. On the other hand these are important issues of compliance and the fact is that businesses in respect of compliance respond to financial incentives and disincentives. That is well proven by experience. There will be a fine on each of those of $3,000 and the company of course will now have that record of conviction. 
[25]
Finally, application is made for costs, solicitor's costs of the informant. I consider that this is a case where s 13(3) of the Costs in Criminal Cases Act is applicable and that there is a basis for awarding costs in excess of the derisory scale. There will be costs to the informant of $2,500. 
[26]
So the formal sentence is as follows, to summarise. On the charge under s 50 of the Health and Safety in Employment Act, there will be a fine of $60,000. There will be reparation of $60,000 to Mrs Perano inclusive of the $20,000 that has been paid. There will be reparation of $60,000 to Ms Parnell inclusive of the $20,000 paid and there will be reparation to each of the four survivors of $20,000 including that amount having already been paid to each of them. On the charge under s 65 of the Maritime Transport Act the company will be convicted and discharged. On the charges under s 68 of the Maritime Transport Act there will be fines of $3,000 and Court costs of $130 on each. There will be solicitor's costs, which will be on the Health and Safety in Employment Act charge of $2,500. 

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