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Safeguard OSH Solutions - Thomson Reuters

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OSH Tracker

Department of Labour v Ancient Kauri Wood Products Ltd (DC, 11/08/11)

OSH Tracker

Defendant:
Ancient Kauri Wood Products Ltd
Ancient Kauri Wood Products Ltd was fined $30,000 and ordered to pay reparation of $20,000 under s6 of the HSE Act after an employee’s left hand was amputated by the rotating blade of a timber saw. The saw did not have a stop limit device and the guards were not fully functional ( Kaitaia DC, November 8, 2011). 
Industry:
Manufacturing
Sub-Industry:
Wood and Paper Product Manufacturing
Risk:
Machinery (trapped, crushed, cuts)
Harm:
Injury
Penalty Amount:
$50000.00
Reparation Amount:
$20000.00
Appeared in Safeguard issue 131

Judgment Text

RESERVED JUDGMENT OF JUDGE G DAVIS 
G Davis Judge
[1]
Ancient Kauri Wood Products Limited (referred to throughout this decision as “AKWP”) has plead guilty to one charge brought pursuant to s 6 and s 50(l)(a) of the Health and Safety in Employment Act 1992 of failing to take all practicable steps to ensure the safety of an employee namely Stephen Ellis while at work. 
[2]
AKWP is liable to a fine not exceeding $250,000.00 in respect of that charge. 
The incident 
[3]
AKWP operates a wood product manufacturing plant in Awanui. Part of the plant machinery includes a Wadkin Radial Arm Saw primarily used for cross-cutting timber into lengths. On 25 August 2010 Stephen Ellis, a mill supervisor suffered amputation of his left hand behind the distal end of the metacarpal knuckle when it came into contact with the rotating saw blade. 
[4]
The radial arm saw is a saw that is mounted on a bench on a radial arm supported by a column at the rear. The saw is pulled forward along the radial arm towards the operator while the timber is held firmly against the backstop or fence of the bench. The blade rotates in either an upward or downward direction to cut through the wood. 
[5]
On 25 August 2010 Mr Ellis had been strapping a packet of timber with another employee, Mr Parker. Mr Parker was having difficulty placing the binding tape underneath the packet of timber. Mr Ellis took a fillet of timber of approximately 35 millimetres wide by 1040 millimetres long and attempted to use the saw to place a small longitudinal cut at the end of the fillet of timber. Mr Ellis placed the fillet of timber on the saw bench and held it with his left hand as he used his light hand to pull the saw towards himself. The saw blade dug in and grabbed the timber and shot towards Mr Ellis severing his fingers from his left hand. 
[6]
Mr Ellis underwent surgery for approximately 20 hours to have his hand reattached and was hospitalised for approximately three weeks. He has lost feeling in his hand and has had ongoing treatment and physiotherapy to try and regain the use of his hand. 
[7]
As at the date of sentence Mr Ellis has been back at work for some 7 weeks but he is working reduced hours as it suits him, He wishes to get back to fulltime work. 
[8]
An investigation into the incident was carried out by the informant as a consequence of that investigation the informant alleges that the defendant failed to; 
(a)
Ensure a limit stop device was fitted to the machine to prevent it from moving beyond the edge of the bench nearest to the operator; and 
(b)
Ensure that the blade of the saw was adequately guarded to prevent access through the use of an adjustable frontal guard and a rear barrier fence; and 
(c)
Ensure the saw blade was adjusted correctly for ripping timber. 
[9]
It is those failures that led the informant to the conclusion that the defendant had failed to take all practicable steps in breach of its duty under s 6 of the Health and Safety in Employment Act 1992. 
The sentencing framework 
[10]
In terms of the approach to sentencing in cases of this nature, that has been well settled given the recent decision of the Department of Labour v Hanhan and Philp Contractors Limited & Ors. (HC Christchurch CRI-2008-409-000002, 18 December 2008, Randerson J and Pankhurst J), All of the parties agree that the case correctly sets the approach to sentencing and that in turn identifies a three stage process as follows; 
(a)
Firstly, to assess the quantum of reparation; 
(b)
Secondly, to assess the quantum of fine; 
(c)
Thirdly, a consideration of totality of the reparation and fine. 
[11]
Hankan discussed in considerable detail the inter-relationship between the Health and Safety in Employment Act and the Sentencing Act In particular the decision discussed the inter-relationship between s 51A of the Health and Safety in Employment Act which provides: 
“51A Sentencing Criteria 
(1)
This section applies when the Court is determining how to sentence or otherwise deal with a person convicted of an offence under this Act 
(2)
The Court must apply the Sentencing Act 2002 and must have particular regard to— 
(a)
ss 7 to 10 of that Act; and 
(b)
the requirements of ss 35 and 40 of that Act relating to the financial capacity of the person to pay any fine or sentence of reparation imposed; and 
(c)
the degree of harm, if any, that has occurred; and 
(d)
the safety record of the person (which includes but is not limited to warnings and notices referred to in section 56C) to the extent that it shows whether any aggravating factor is absent; and 
(e)
whether the person has— 
(i)
pleaded guilty: 
(ii)
shown remorse for the offence and any harm caused by the offence: 
(iii)
co-operated with the authorities in relation to the investigation and prosecution of the offence: 
(iv)
taken remedial action to prevent circumstances of the kind that led to the commission of the offence occurring in the future. 
(3)
This section does not limit the Sentencing Act 2002. ”
[12]
Hanhan discussed the relationship between ss 7 and 8 of the Sentencing Act. The relevant purposes for this sentencing exercise include: 
(a)
To hold the defendants accountable for the harm done to the victim by the offending (s 7(1)(a)); 
(b)
To promote in the defendants a sense of responsibility for, and acknowledgement of harm (s 7(1)(b)); 
(c)
To provide for the interests of the victims of the offence (s 7(1)(c)); 
(d)
To provide for reparation for harm done by the offending (s 7(l)(d)); 
(e)
To denounce the conduct in which the defendants were involved (s 7(l)(e)); 
(f)
To deter the defendants or other persons committing a similar offence (s 7(1)(f)). 
[13]
Similarly the principles of sentencing that appear to be relevant are: 
(a)
Taking into account the gravity of the offending in the particular case including the degree of culpability of the defendants (s 8(a)); 
(b)
To take into account the seriousness of the type of offence in comparison to other types of offences (s 8(b)); 
(c)
To take into account the general desirability of consistency with appropriate sentencing levels and other means of dealing with the defendants (s 8(e)); 
(d)
To take into account any information provided to the Court concerning the effect of the offending on the victims (s 8(f)); 
(e)
The particular circumstances of the defendants. 
[14]
Section 9 sets out a range of aggravating and mitigating features which I am also required to consider. Importantly s 10 requires the Court to take into account any offer of amends, any agreement to make amends or any other measures taken to remedy a loss or harm caused. 
[15]
An offer of $20,000.00 reparation has been made by the defendant that is in addition to the sum of $2,280.00 that has been paid by way of ex gratia payments to Mr Ellis. The informant says that reparation of between $20,000.00 and $25,000.00 is appropriate. In my view a further payment of $20,000.00 is appropriate in this instance and that is to be in addition to the ex gratia payments that have been paid by the defendant to Mr Ellis already. I direct that reparation is to be paid by way of weekly instalments of $500.00. 
The fine 
[16]
In assessing the quantum of fine, it is to be acknowledged that a fine is punitive in its nature, The first step in establishing a fine is to assess the starting point for any fine. The Court described the assessment of culpability in Hanhan as being concerned with the degree of blameworthiness for the offending. The Court assessed culpability as in including: 
(a)
The identification of the operative acts or omissions at issue. This will usually involve a clear identification of the “practical steps” which the Court finds that it was reasonable for the defendant to have taken; 
(b)
An assessment of the nature and seriousness of the risk of harm occurring as well as the realised risk; 
(c)
The degree of departure from standards prevailing in the relevant industry; 
(d)
The obviousness of the hazard; 
(e)
The availability costs and effectiveness of the means necessary to avoid the hazard; 
(f)
The current state of knowledge of the risks and the nature and severity of the harm which could result; 
(g)
The current state of knowledge of the means available to avoid the hazard or mitigate the risk of this occurrence. 
[17]
The Court noted that the exercise involved a broad assessment and was not merely a mathematical exercise and the starting point should generally be fixed according to the following scale: 
(a)
Low culpability - a fine up to $50,000; 
(b)
Medium culpability - a fine of between $50,000 to $100,000; 
(c)
High culpability - a fine of between $100,000 and $175,000. 
[18]
The informant assesses AKWP's culpability as being high and invites the Court to adopt a starting point of a $100,000.00 fine, In contrast the defendant's counsel invites the Court to adopt a starting point of a fine of $60,000,00 having assessed the culpability as being at a medium level. 
[19]
It is accepted by the parties that AKWP had identified the hazards presented by the radial arm saw because it had placed a notice on the wall above the machine that said “Designated Operator Only”, “Danger Exposed Blade” and “Operate with extreme care”. The informant submits that the accident and subsequent injuries suffered by Mr Ellis could have been avoided if the following steps had been taken, namely: 
(i)
Ensure a stop limit device was fitted to the saw to prevent it from moving beyond the edge of the bench nearest to the operator; 
(ii)
Ensure that the dangerous parts of the saw were adequately guarded to prevent inadvertent access with the moving parts of the saw, in particular ensuring that the saw blade was adequately guarded by an adjustable front guard; 
(iii)
Ensuring that the rear of the saw blade was not accessible to the operator; 
(iv)
Ensuring that the saw blade was correctly adjusted. 
[20]
The defendant says that the saw did have a stop limit device although it is conceded that it did not stop the saw from moving beyond the bench nearest the operator. In contrast the defendant says that the saw did have a guard but although it was damaged it was still functional. The defendant agrees that there were no guards for the back of the machine or underneath but they say that the incident giving rise to the injuries to Mr Ellis were not caused by there being no guards for the back of the machine or underneath. As for the point that the blade was set up to rotate in a downwards motion in relation to the operator the defendant says across the bench at the front of the saw is a rail against which a length of wood being cross cut would be held by the operator. The rail had a gap allowing the blade of the saw to pass through and to cut the piece of wood. Such an arrangement is standard for cross-cutting with a radial saw, however the difficulty was that Mr Ellis did not use the saw as a cross-cut saw but as a ridge saw cutting along the length of the wood, The defendant says this was not a use of the saw that was permitted by the defendant. The defendant says that had it been aware that the saw was being used in what it describes as an inherently dangerous fashion it would have prevented Mr Ellis from using the saw in that manner. 
[21]
In my view the use of a saw to cut large pieces of timber in the manner that have been described is an inherently dangerous process. Because it is inherently dangerous in my view there is a higher duty on an employer to ensure that the appropriate risks are mitigated by all of those who are likely to come in contact with the machinery whether they are machine operators or otherwise, In assessing the fine one of the factors that has weighed on my mind is what appears to be a minimal cost required to eliminate the hazards. The installation of a stop limit device that was fully operative and guards that were also fully functional does not in my view appear to be overly technical or involve any significant amount of expense or time on the part of the defendant. The hazard was, as I have indicated, obvious, I am also mindful that industry standards require the appropriate guards to be placed around the saw and this simply does not appear to have occurred in this place, I understand the appropriate guards and the stop limit device have now been fitted. 
[22]
Taking all of these factors into account I assess the defendant's culpability as being in the upper range of the mid-point and assess the starting fine of $80,000.00. The next step is to adjust the fine for aggravating and mitigating features. The informant accepts that there are no aggravating features and that the defendant is entitled to a reduction in the starting point to reflect the following mitigating features: 
(i)
Co-operation and remedial action; 
(ii)
Remorse; 
(iii)
Safety record; 
(iv)
Payment of reparation offered to make amends. 
[23]
The defendant is entitled to a reduction of 20 percent on the starting point of $80,000.00, namely $16,000.00. 
[24]
The defendant has entered a guilty plea at the earliest opportunity and it is entitled to maximum credit for that, namely 25 percent in accordance with the decision in Hessell v R1
| X |Footnote: 1
(2010) 24 CRNZ 966 
that discount amounts to a further 25 percent, namely a further $16,000.00. 
[25]
The final assessment is to take into account the financial capacity of the defendant to pay a fine. The defendant has filed detailed financial statements in accordance with the provisions of s 42 of the Sentencing Act 2002. The general tenor of those submissions is that the defendant is in a precarious financial position such that there is no cash available to pay a fine or reparation, nor are there borrowing facilities in order to make immediate payment of a fine or reparation. I have reviewed the accounts and note that across the group of companies for which the accounts relate there is a number of inter-party loans and liabilities in respect of the defendant company. I note there is a loan to the AP Family Trust of $220,000.00 but equally there are intercompany liabilities of $560,159,00. 
[26]
I am satisfied that the company is in a precarious financial position such that any fine that is imposed may render the company insolvent if that fine is beyond the company's financial means to pay. The company says it is able to pay a fine of $20,000.00. That is likely to be understated in my view and accordingly I will reduce the fine by a further $18,000.00 such that I direct the company pay a fine of $30,000.00. 
[27]
Stepping back from these matters this means that the overall culpability of the company will be $50,000.00 in addition to the modest ex gratia payments that have been already made to the defendant. The company is not insured and that will mean therefore that these funds will need to be paid by the company from its own means. 
[28]
I have been told by the director for the company that the payments can be paid at a rate of $500.00 and I have already directed the reparation in the amount of $500.00 per week be paid. I also direct that once the additional reparation of $20,000.00 has been paid to the victim the fine of $30,000.00 shall also be paid by weekly instalments of $500,00. 


(2010) 24 CRNZ 966 

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