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OSH Tracker

Worksafe New Zealand v Knight Group NZ Ltd (DC, 06/10/15)

OSH Tracker

Defendant:
Knight Group NZ Ltd
Knight Group NZ Ltd was fined $40,000 after an employee of labour hire company fell 4m from an elevated platform while moving a box from an elevated order picker onto the platform, which broke. He was knocked unconscious and suffered concussion, lacerations and a pelvic fracture. Perimeter fall protection on the platforms and order picker was lacking, as was consultation with the labour hire company. The labour hire company, Devon Staffing Solutions Ltd, was fined $15,000 for failing to ensure the warehouse was a safe working environment and that there were effective edge protection and fall arrest systems. Both companies were ordered to contribute to $10,000 in reparation (New Plymouth DC, 6 October 2015). 
Industry:
Wholesale Trade
Sub-Industry:
Personal and Household Good Wholesaling
Risk:
Fall from height
Harm:
Injury
Penalty Amount:
$40000.00
Reparation Amount:
$0.00
Appeared in Safeguard issue 156
Defendant:
Devon Staffing Solutions Ltd
Knight Group NZ Ltd was fined $40,000 after an employee of labour hire company fell 4m from an elevated platform while moving a box from an elevated order picker onto the platform, which broke. He was knocked unconscious and suffered concussion, lacerations and a pelvic fracture. Perimeter fall protection on the platforms and order picker was lacking, as was consultation with the labour hire company. The labour hire company, Devon Staffing Solutions Ltd, was fined $15,000 for failing to ensure the warehouse was a safe working environment and that there were effective edge protection and fall arrest systems. Both companies were ordered to contribute to $10,000 in reparation (New Plymouth DC, 6 October 2015). 
Industry:
Personal and Other Services
Sub-Industry:
Other Services
Risk:
Fall from height
Harm:
Injury
Penalty Amount:
$15000.00
Reparation Amount:
$0.00
Appeared in Safeguard issue 156

Judgment Text

NOTES OF JUDGE J E MACDONALD ON SENTENCING 
Judge J E MacDonald
Factual Background 
[1]
The defendant, Knight Group NZ Limited (Knight Group), runs a large furniture importing business and owns a warehouse in New Plymouth where imported furniture was stored. Knight Group contracted the defendant, Devon Staffing Solutions Limited (Devon), to supply staff to work in the warehouse. 
[2]
Mr Whiteman, who became the victim in this matter, was one of Devon's employees and on 24 September 2014 he was manually loading stock onto elevated platforms in Knight Group's warehouse. The stock was in boxes that weighed 36 kilograms and were loaded on top of a wooden pallet. Mr Whiteman used an order picker to raise the pallet into position beside a platform four metres above the ground. When he moved a box onto the platform from the order picker a wooden section of the platform broke and Mr Whiteman fell to the concrete floor below. He was not using the lanyard and harness provided by Knight Group. 
[3]
Mr Whiteman was knocked unconscious and suffered a laceration to his scalp, approximately 10 centimetres in length. He also suffered concussion and a broken pelvis. He was off work for approximately seven weeks and when he did return to work it was on reduced hours. He did not return to full time work until 3 December 2014. 
[4]
After the accident Knight Group paid Mr Whiteman $10,000 so that he was not financially disadvantaged. 
Charges 
[5]
As a result of the accident both Knight Group and Devon face a charge under the Health and Safety in Employment Act 1992 (the Act). Knight Group is charged as a principal under ss 18(1)(a) and 50(1)(a) of the Act for failing to take all practicable steps to ensure that an employee of a contractor, being Devon, was not harmed while doing work that Devon was engaged to do. Devon is charged as an employer under ss 6 and 50(1)(a) of the Act for failing to take all practicable steps to ensure its employee, Mr Whiteman, was not exposed to the hazard of a fall from heights while at work. 
[6]
In respect of each charge the maximum penalty is a fine not exceeding $250,000. 
The Hazard 
[7]
It is common ground that the hazard of a fall from height is well recognised and obviously has the potential to cause serious harm. Here the hazard was in the form of the elevated platforms and order picker which had not been adequately isolated to prevent a fall. In particular, there were no edge protection systems, barriers, guardrails, mobile elevated platforms or safety mesh. It is conceded that there was an anchor on the platforms and harnesses and lanyards were there to be used while working on the platforms. However, the use of a harness by Mr Whiteman, either on the order picker and/or the platform, was not enforced by Knight Group on the day of the accident. 
[8]
The prosecution contends that any written health and safety policies the defendants had for working at heights were very limited. 
[9]
Devon had a health and safety manager but he had not received any external training for working at a height or how to use the harnesses. There was also an arrangement between Knight Group and Devon that staff should not carry items heavier than 20 kilograms. 
Practicable Steps 
[10]
In respect of Knight Group the practicable steps that it failed to take were identified as being a failure: 
(a)
To provide appropriate perimeter fall protection on the platforms and order pickers. 
(b)
To have an effective fall arrest system (harnesses and lanyards). 
(c)
To ensure its health and safety policies were adequate. 
(d)
To adequately consult with Devon about identifying risks and ensuring Devon staff received adequate training. 
[11]
In respect of Devon the practicable steps it failed to take were identified as being a failure: 
(a)
To ensure adequate health and safety policies and procedures were in place. 
(b)
To ensure the warehouse was a safe place to work. 
(c)
To ensure staff were adequately trained. 
[12]
While both defendants were responsible for Mr Whiteman's safety it is accepted by the prosecution that Devon was less culpable as it had a lesser degree of control over the warehouse, given that it belonged to Knight Group. 
Remedial Steps 
[13]
The prosecutor accepts that Knight Group took appropriate remedial steps after the accident to improve their health and safety policies and practices. 
[14]
As for Devon it ceased operating in the way it did before and no longer provides employees to work in Knight Group's warehouse. 
[15]
Both defendants fully co-operated with the investigation into the accident. Neither defendant has any prior convictions and both attended a restorative justice conference on 18 August 2015. At that conference representatives from both defendants confirmed the apologies previously made to Mr Whiteman and there was confirmation that the $10,000 payment had been made so that he would not be disadvantaged financially. Mr Whiteman expressed his gratitude for receiving that payment and for their support. 
Approach to Sentencing 
[16]
The approach to sentencing is set out by the High Court in Department of Labour v Hanham & Philp Contractors Ltd.1
| X |Footnote: 1
Department of Labour v Hanham & Philp Contractors Ltd (2009) 9 NZELC 93,095; (2008) 6 NZELR 79 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  
The first step is to fix reparation. The second step is to fix a fine after making an assessment as to culpability. And the third step is to assess the impact of the reparation and fine in combination, ensuring the total sum is proportionate to the offending and the defendants. 
[17]
It is accepted that denunciation, deterrence and accountability for the harm caused to the victim are the main purposes of sentencing under s 50 of the Act. 
Reparation 
[18]
Ms Garrick, counsel for the prosecution, submits a reparation sum of between $8000 and $10,000 is appropriate to recognise the emotional harm suffered by Mr Whiteman. The defendants have no quarrel with that. In fact although a fractured pelvis is a serious injury, and it could have been much worse, there is little direct evidence pointing to any emotional harm suffered at all. If anything what emerges is that Mr Whiteman was extremely grateful for the support provided to him by the defendants and was somewhat embarrassed at receiving the payment of $10,000. 
[19]
The issues that arise in respect of reparation appear to be twofold. First, is there a need for any reparation order at all given the $10,000 payment already made? And, second, was the payment made by Knight Group intended as a payment on behalf of both defendants? 
[20]
In my view if it is accepted that any reparation order should be in the range of $8000 to $10,000 then clearly that sum has already been paid. There is therefore no justification for the making of any reparation order at all, let alone an order of between $3000 and $4000 against Devon, as is sought by the prosecution. 
[21]
The second issue, of whether the $10,000 payment was intended to be a payment on behalf of both defendants, is relevant to the assessment of the appropriate fines to be imposed but I deal with it here. 
[22]
On the one hand the payment was plainly made by Knight Group and that is how it was treated at the restorative justice conference, with no suggestion that it was a payment made on behalf of both defendants. There was also no indication of that in the written sentencing submissions from Knight Group. On the other hand the suggestion of it being a joint payment appeared to come from Ms Hughes QC in her submissions on behalf of Devon. She says that Knight Group consulted with Devon before making the payment, which reflects that it was intended as a payment on behalf of both defendants. At sentencing Mr Cuff appeared to accept that was the case, and, as Ms Garrick fairly conceded that she had no evidence to the contrary, I feel obliged to accept what Ms Hughes says. 
Fine 
[23]
Fixing an appropriate fine involves an assessment of culpability with Hanham & Philp identifying three bands of culpability: 
(a)
Low culpability would attract a fine up to $50,000; 
(b)
Medium culpability would attract a fine of between $50,000 and $100,000; and 
(c)
High culpability would attract a fine of between $100,000 and $175,000. 
[24]
The factors relevant to the assessment of culpability are identified in Hanham & Philp at para [54] and counsel have directed their submissions to those factors which are: 
(a)
An assessment as to the nature and seriousness of the risk of harm occurring as well as the realised risk; 
(b)
The degree of departure from standards prevailing in the relevant industry; 
(c)
The obviousness of the hazard; 
(d)
The current state of knowledge of the risks and of the nature and severity of the harm which could result; and 
(e)
The current state of knowledge of the means available to avoid the hazard and mitigate the risk of its occurrence. 
Knight Group's culpability 
[25]
Ms Garrick submits that the steps that could and should have been taken were well known and obvious. She further submits that the health and safety policies and measures in place departed considerably from industry guidelines. As to the availability, cost and effectiveness of the means necessary to avoid the hazard, she submits it would not be unreasonably onerous. 
[26]
As to comparable cases Ms Garrick relied on two in particular which involved falls.2
| X |Footnote: 2
Ministry of Business, Innovation and Employment v KLS Roofing Ltd [2014] NZDC 9 and Worksafe New Zealand v Livefirm Construction Ltd DC North Shore CRI-2014-44-645, 25 May 2014 
Both cases adopted a starting point of $100,000 and Ms Garrick submits that is the appropriate starting point for Knight Group. 
[27]
For Knight Group Mr Cuff accepts that culpability falls within the medium range but having regard to the circumstances and other comparable cases, he submits that an appropriate starting point is $65,000. 
[28]
Mr Cuff submits that the two cases relied upon by the prosecutor are not comparable at all. The victims in those cases suffered far more serious injuries and, unlike Knight Group, the defendants had no safety systems in place. 
[29]
While Mr Cuff accepts the omissions identified by the prosecution he submits that they must be kept in context. Knight Group is a furniture retailer and manufacturer. It is not an expert at working at heights. Nonetheless it did have in place health and safety policies and procedures that had been provided to and approved by WorkSafe in February 2014. Furthermore, it had identified the hazard and had taken steps to minimise it by providing lanyards and harnesses to its staff. It also had an induction and training programme for staff, in which Mr Whiteman had participated, and staff were aware of the need to wear safety harnesses. The hazard of Mr Whiteman failing to put on a harness was not obvious to Knight Group as it was not present on the day of the accident. It was also not a situation where Knight Group was aware of and allowed its staff to work at height without harnesses. Mr Cuff further submits that this is not a case of a flagrant disregard for health and safety. He also made the point that there are no industry specific guidelines for the furniture or warehousing industries. 
[30]
In terms of comparable cases Mr Cuff referred to five which he submits provides a better comparison but as Ms Garrick pointed out they were obviously dissimilar because they did not involve falls from height. 
[31]
I have considered other cases which assist me in fixing an appropriate starting point. 
[32]
Department of Labour v Carter Holt Harvey3
| X |Footnote: 3
Department of Labour v Carter Holt Harvey DC Auckland CRI-2007-004-504501, 31 March 2008 
involved an employee of a sawmilling and timber processing plant who fell 2.04 metres from a platform. The victim had climbed a fixed ladder to reach the platform, in order to free a length of timber which had become caught in a conveyor belt. The timber had come loose and swung towards the victim. He sustained two fractures to his skull, a concussion, and bruising to his left shoulder. He was off work for some weeks and made a full recovery. The practicable steps which ought to have been taken by the employer included installation of edge protection, as well as correct training of employees, including ways to correct blockages on the conveyor belt. The defendant explained that the platform was not designed for employee access, and employees were expressly told not to use it when clearing blockages. Further, employees were supposed to turn the conveyor belt off when clearing blockages; as it transpired, however, the victim had been incorrectly trained to clear blockages while the conveyor belt was still running. The Judge accepted that falls from height are an obvious risk, which would have been mitigated by edge protection and better training.4
| X |Footnote: 4
Also relevant was the need to close the point on the conveyor where the wood had jammed, and installing a guard at the in-feed to keep the timber straight, which would thereby minimise blockages. 
The culpability was assessed as low-medium, and a starting point of $50,000 was adopted. 
[33]
Department of Labour v Wilson5
| X |Footnote: 5
Department of Labour v Wilson DC Wellington CRI-2011-085-002281, 7 October 2011 
involved an employee who was installing a Sky dish on a roof. He fell approximately six metres, and sustained serious injuries. These included a fractured skull, two fractured vertebrae in his neck, a fractured jaw and eye socket, blood haemorrhaging, and severe bruising to his back and the right side of his body. He spent 11 months away from work, and the injuries caused a strain on his relationship. The defendant claimed that there was a cherry picker or roof ladder available to employees who deemed their use necessary. The Judge found that the hazard of working at height was obvious, it had not been adequately identified, and training should have been provided as to when alternative methods of minimising such hazards should be used. Further, she concluded that the employer ought to have provided specialist equipment such as safety harnesses or cherry pickers (contrary to the employer's position, she was not satisfied that cherry pickers were, in fact, available for employee use). The Judge did not accept the defendant's argument that the industry standards contained in The Guidelines for the Prevention of Falls were of minimal relevance outside of the construction industry, and held that an organisation which is conscientious about meeting the requirements of the HSEA ought to have regard to the guidelines.6
| X |Footnote: 6
At para [28] 
Culpability was assessed as being at the low end of the middle band, and a starting point of $60,000 was adopted. 
[34]
In Department of Labour v NZ Built Ltd7
| X |Footnote: 7
Department of Labour v NZ Built Ltd DC Auckland CRI-2007-004-026939, 11 April 2008 
an employee of a construction company fell 3.15 metres from a deck. He suffered a compressed fracture on his spine, a fractured shoulder blade, a punctured lung, and a bone deep laceration on his forehead. He was in hospital for four days, in significant pain for two weeks, and experienced ongoing muscular pain. The deck had been identified as a “fall from height area”, and the project manager had stated he would organise scaffolding. From that date the project manager visited the work site on two further occasions, and no fall protection was in place. Thus, while the hazard had been identified, no means to prevent a fall from the height had been put in place, and work had not been suspended to allow this to occur. Culpability was assessed as being moderately high and a starting point of $80,000 was adopted. 
[35]
In Maritime NZ v Sealord8
| X |Footnote: 8
Maritime NZ v Sealord DC Nelson CRI-2012-042-001019, 7 November 2012 
the victim fell five metres after leaning, unsecured, into a hatch to remove items. He suffered a fractured rib, sprained thumb, gash, internal bleeding, and a ruptured spleen. He had to have surgery and contracted pneumonia, and spent seven days in hospital. The practicable steps that should have been taken were to have guardrails available for use when opening the hatch, and to ensure safe operating procedures were in place when working around hatches. Culpability was held to be at the bottom end of the high band of culpability, and a starting point of $105,000 was adopted. 
[36]
In my view Knight Group's level of culpability falls firmly within the medium band between Wilson and NZ Built, above. However, I consider that it is not as high as KLS Roofing and Livefirm Construction, the two cases relied upon by the prosecution, where the injuries sustained were far more serious and there was a lack of safety systems. It seems to me that the nature of the injuries suffered is something that can be taken into account when assessing culpability. In that regard I rely on the factors listed in para [54] of Hanham & Philp where there is a reference not only to the risk of harm but to the “realised risk”
[37]
In respect of Knight Group I adopt a starting point of $75,000. 
Mitigating Factors 
[38]
As far as mitigating factors are concerned Ms Garrick submits that a 10 percent deduction for mitigating factors, which includes the remedial work undertaken by Knight Group, is appropriate. There should be a further 15 percent deduction for the reparation payment made and finally a 25 percent deduction for the guilty plea. 
[39]
Mr Cuff takes a slightly different view in that he submits that an additional credit of five percent should be given for co-operation. In response I understood Ms Garrick to rely on the fact that although Knight Group had no previous convictions two improvement notices and one prohibition notice had been issued to it in relation to an earlier incident. 
[40]
Having considered the submissions I think the earlier improvement and prohibition notices issued to Knight Group cannot be totally ignored but I allow an additional three percent deduction. For mitigating factors then, which of course includes a deduction of 15 percent for reparation, I allow an overall deduction of 28 percent. 
[41]
Deducting 28 percent from $75,000 means a figure of $54,000. Then allowing a deduction of 25 percent for the guilty plea I arrive at $40,500. I will round it down to $40,000 which is the fine I impose. 
Devon's culpability 
[42]
In respect of the fine Ms Garrick submits that the starting point should be a fine of between $65,000 and $75,000. 
[43]
Ms Hughes submits that is too high and submits that the maximum starting point should not exceed $50,000. However, that becomes rather academic as she submits that Devon only has the financial capacity to meet a modest fine, which she suggests would be in the order of $5000. 
[44]
In respect of culpability, Ms Garrick submits that Devon should have ensured that staff, including Mr Whiteman, were adequately trained. They had the opportunity to review policies and visit the warehouse to assess the approach as to health and safety. The prosecution submits that culpability falls into the middle of the medium culpability range, especially in light of the obviousness of the hazard, the well known risk of harm and the degree of departure from industry standards 
[45]
One contentious issue raised by Ms Hughes was that prior to Mr Whiteman's accident WorkSafe had visited the site and had assessed the health and safety policies and procedures that were in place. At that time Devon had indicated a willingness to revise, update or amend these policies and procedures, in the event that WorkSafe considered that necessary. Ms Hughes makes the point that nothing further was heard from WorkSafe until after the accident. 
[46]
Ms Garrick's response was to point out that an invitation to WorkSafe to review Devon's policies does not provide a complete answer if in fact the policies and procedures later prove to be inadequate. The reality is that WorkSafe does not have the capacity to review every policy and Devon cannot assume that its policies are adequate unless they are told otherwise by WorkSafe. 
[47]
I have not found any cases that are overly comparable with Devon's position. In the end having regard to the obviousness of the hazard, the practicable steps that it failed to take, and the prosecution's acceptance that culpability is less for Devon I adopt a starting point of $50,000. I have tried to adopt a figure that in relative terms bears a reasonable relationship to the starting point adopted in respect of Knight Group. 
[48]
As to the discounts to apply the only debate concerns the issue of reparation. Having accepted that the $10,000 payment was intended to be on behalf of both defendants, but acknowledging that Knight Group bore responsibility for most of it, I allow a deduction of 10 percent. 
[49]
As for other mitigating factors including co-operation and a previously favourable safety record the prosecution submits that 15 percent is appropriate. Ms Hughes does not quarrel with that or with the deduction of 25 percent for the guilty plea. 
[50]
Deducting 25 percent from $50,000 brings a total of $37,500. By deducting a further 25 percent for the guilty plea I arrive at $28,125. 
[51]
In respect of the financial capacity of Devon I have considered the declaration from the company director Mr Sutherland and the set of financial accounts attached to it. The concern Ms Hughes expresses is that if a fine was imposed at the level advocated by the prosecution then the only option would be for the company to go into liquidation. She submits that would be unjust. 
[52]
In response Ms Garrick expressed reservations as to whether there is sufficient information to conclude that Devon could not meet a fine in the usual way and wondered whether the full picture had been disclosed. 
[53]
Devon is a relatively small and limited purpose company and I acknowledge that it no longer operates as it did at the time of the accident. That decision has plainly affected its financial capacity to meet a fine but there is no suggestion that this was a deliberate ploy to avoid that. Of course in determining the amount of any fine I am obliged to consider the financial capacity of Devon in accordance with s 40 of the Sentencing Act. 
[54]
In his declaration Mr Sutherland says that Devon is currently carrying losses of $21,932 and the value of its liabilities exceeds its assets by that amount. In the latest year I noted a cash surplus of $46,765 and that it was only the depreciation that accounted for any trading loss. There are assets but after depreciation they are not substantial. On any view it is not in a strong financial position. 
[55]
As already indicated I consider the offending should attract a fine of about $28,000. However, having regard to the financial information provided I have decided to fine at a more modest level, namely $15,000. 
Result 
[56]
Knight Group is fined $40,000 with court costs of $130. Devon is fined $15,000 with Court costs of $130. I make no orders for reparation. 


Department of Labour v Hanham & Philp Contractors Ltd (2009) 9 NZELC 93,095; (2008) 6 NZELR 79 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  
Ministry of Business, Innovation and Employment v KLS Roofing Ltd [2014] NZDC 9 and Worksafe New Zealand v Livefirm Construction Ltd DC North Shore CRI-2014-44-645, 25 May 2014 
Department of Labour v Carter Holt Harvey DC Auckland CRI-2007-004-504501, 31 March 2008 
Also relevant was the need to close the point on the conveyor where the wood had jammed, and installing a guard at the in-feed to keep the timber straight, which would thereby minimise blockages. 
Department of Labour v Wilson DC Wellington CRI-2011-085-002281, 7 October 2011 
At para [28] 
Department of Labour v NZ Built Ltd DC Auckland CRI-2007-004-026939, 11 April 2008 
Maritime NZ v Sealord DC Nelson CRI-2012-042-001019, 7 November 2012 

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