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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

WorkSafe New Zealand v Blackham Boote Real Estate Ltd (DC, 19/03/15)

OSH Tracker

Defendant:
Blackham Boote Real Estate Ltd
Blackham Boote Real Estate, trading as Harcourts Timaru, was fined $55,000 and ordered to pay reparation of $12,500 for breaching the Gas Act 1992 and the Plumbers, Gasfitters and Drainlayers Act 2006. Larry Warner was ordered to perform 200 hours of community work and pay $2000 in reparation. Harcourts engaged Warner to remove a gas heater from a house it managed. He was not qualified to carry out the work, and an estimated 35kg of gas leaked into the house (Timaru DC, 19 March 2015). 
Industry:
Property and Business Services
Sub-Industry:
Property Services
Risk:
Hazardous substance exposure
Harm:
Injury
Penalty Amount:
$67500.00
Reparation Amount:
$15200.00
Appeared in Safeguard issue 151

Judgment Text

NOTES OF JUDGE J E MAZE ON SENTENCING 
Judge J E Maze
[1]
This is a sentencing following prosecutions by WorkSafe New Zealand for failure to meet obligations in relation to gasfitting in a domestic dwelling. Blackham Boote Real Estate is prosecuted for employing a non-qualified gasfitter (carrying a maximum fine of $25,000), negligently permitting gasfitting when what was done was dangerous to life (carrying a maximum of $250,000) and failing to ensure the appliance was safe (carrying a maximum of $500,000 or two years' imprisonment). 
[2]
The defendant Blackham Boote Real Estate is of course a limited liability company. They engaged Larry Stewart Warner as a handyman to remove an old gas heater in rental premises managed by Blackham Boote. Mr Warner has also been charged and I will come to his position in a moment. He undertook the work as directed and left an open-ended pipe or pipes protruding into the interior of the dwelling. 
[3]
Mr Mitchell was the new tenant. He understood that heating in the property was gas powered and so he arranged for new cylinders to be made operational. Gas was turned on and a significant amount escaped through the open-ended pipes into the house. Fortunately, although Mr Miller was subjected to the gas, there was no fatality. It is well understood that a fatality could occur, and in a range of ways, so the risks of that were high. 
[4]
The company attended restorative justice with Mr Mitchell. The company has paid him $7500 cash in emotional harm reparation. He has also received as I understand it, some credits for rent and an apology which I understand from the restorative justice conference he has accepted. The individual employees of the defendant company were deeply remorseful and sought to attend the conference themselves. So the company was represented at the restorative justice conference in part through the very people who felt the keenest sense of responsibility for what had gone wrong. 
[5]
The defendant company has pleaded guilty to all three charges very promptly and has no previous convictions of any kind. 
[6]
Mr Mitchell has read his victim impact statement today and it is plain that he continues to suffer physical and psychological consequences from his exposure to both the gas and the risk. The entire situation has been extremely stressful for him. 
[7]
The defence submissions confirm the steps taken by the defendant company to avoid a repetition and I accept they are a thorough and responsible response. 
[8]
It is submitted that what occurred was done in ignorance of the law, but of course that is neither an excuse nor is it a mitigating factor. Indeed if one were to give any weight or recognition to that matter, even if true, it would only serve to defeat the very point which the prosecution seeks, and correctly seeks, to emphasise. That is that the public must clearly understand these obligations, and the risks of failing to meet them and that the consequences of such failures include a significant penalty. That in the interests of general deterrence. 
[9]
I accept that although there is little case law to assist me in this situation and almost nothing directly on point, the Hanham and Philp approach to occupational health and safety prosecutions does lend itself to being adapted to apply here. 
[10]
Mr Jackson submits that culpability is in the low to medium range for the defendant company and he suggests the starting point should be a fine of up to $100,000. He submits that in accordance with the Ballard v Department of Labour (2010) 7 NZELR 301Has Litigation History which is not known to be negative[Blue]  decision the company should be given discrete allowances for offers to make amends and reparation which in his submission should be at 15 percent, co-operation in the investigation and prosecution which he submits should be at 10 percent, remorse for the offence and the harm caused which he submits should be at five percent and remedial action taken to prevent the recurrence of the circumstances which he submits should be at five percent and a favourable safety record which he submits should be at 10 percent. It is his submission that these allowances should precede the allowance for a guilty plea at 25 percent. Mr Jackson reminds me that the Court should not adopt a purely mathematical approach to the sentencing exercise but should assess the culpability of the company by reference to what happened in this case. It is conceded that this was an entirely avoidable matter, the company accepts responsibility for it but the overall submission is that the starting point identified by the informant is too high. 
[11]
The informant's submissions identify a starting point at $130,000 fine. Correctly the informant reminds me that the defendant company holds itself out as a specialist in property management. It is a large commercial operation and in the submission of the informant it is egregious behaviour to fail to know legal obligations in engaging someone to remove and modify a gas-powered appliance in those circumstances. The informant also submits that there is a breach of a specific and high duty of care to tenants. In a sense that is linked to the submission the defendant company holds itself out as a specialist in property management but I accept that there is a separate duty of care to a tenant, which, in a case such as this with a company such as this, is higher where the company holds itself out as a specialist. 
[12]
The informant questions whether the efforts to ensure that this does not happen again are adequate and questions whether the level of credit that is suggested or submitted by Mr Jackson is justifiable on that score. In short the prosecutor submits that what is now in place is a far from robust enough approach which would be required in a modern world where health and safety concerns are high and injury and fatality records relatively poor both in the workplace and the home. The informant's submission is that this is a medium level of culpability meriting an approach of 20 to 40 percent of the available maximum and applying the approach around the middle of band 2 in Hanham and Philp
[13]
I accept that this was a serious breach of duties on the part of the defendant company with the potential for a fatality, but a potential only. More than 30 kilograms of gas was released into the home. I observe and note the actual harm to the victim both physical and emotional. I also note the defendant company does hold itself out as a specialist at a time when it had seriously inadequate internal guidelines to prevent this type of offence occurring. I accept that the offending is at a medium level of culpability and on that basis I accept the informant's submission that the starting point for the fine should be at $130,000. That is then the starting point based upon which the calculation approach adopted in Hanham and Philp should be applied. There are no personal aggravating factors. 
[14]
It is difficult for me to assess the extent to which the prosecution attack upon the remedial steps is justified. I have accepted that the defendant company has taken significant steps both to meet with the victim and make amends and also to meet its obligations. The prosecution does not really address my obligations under s 12 Sentencing Act 2002 to make proper allowance for the making of amends. There is some suggestion of extraordinary remorse and co-operation. However it is appropriate to approach this is on the basis that a 15 percent discount is appropriate for previous good character and co-operation with the informant (and of course previous good character includes a favourable safety record). I consider that there should also be a full one quarter discount for plea. There needs to be an allowance made for making amends and that includes meeting with the victim and payments made to date; however I am not at this stage satisfied that the level of amends is sufficient and I intend to order a further payment of reparation at $5000. 
[15]
I recognise the point that Mr Jackson has made under Ballards. With a starting point of $130,000, a 15 percent discount for good character and co-operation is $20,000. That brings me to $110,000. The further discount for making amends I put at $22,000 bringing me down to $88,000. The one quarter discount for plea is a further $22,000 which brings me to $66,000. That is the strict mathematical approach, but this process is not mathematical. I must consider financial capability but nothing has been presented to me which would suggest that the defendant company is not capable of payment. If I then have regard to the sum of $7500 which has already been paid and an additional $5000 payment in reparation I consider that a fair and appropriate fine is $55,000. Because the defendant company has three charges and because all of them are in a sense reflected in a concurrent sentence I impose the penalties on CRN152 which is the most serious of the three charges. 
[16]
On the other two the defendant company is convicted and discharged. On CRN152 the defendant company is convicted, fined $55,000 and ordered to pay a further $5000 in reparation to be paid in full within 28 days. 

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