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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Worksafe v Lyttelton Port Company Ltd (DC, 05/08/16)

OSH Tracker

Defendant:
Lyttelton Port Company Ltd
Lyttelton Port Company was fined $75,000 over its failure to have an effective system in place to identify and rectify faults in a cherry picker. The charge was laid after the RMTU raised concerns about the cherry picker the day after a port employee was killed when a scissor lift toppled over. Two weeks later a mechanical fault was identified but the cherry picker was still not taken out of service (Christchurch DC, 5 August 2016). 
Industry:
Transport and Storage
Sub-Industry:
Water Transport
Risk:
Vehicle - mobile plant (eg forklift, platform)
Harm:
None
Penalty Amount:
$75000.00
Reparation Amount:
$0.00
Appeared in Safeguard issue 159

Judgment Text

NOTES OF JUDGE A A COUCH ON SENTENCING 
Judge A A Couch
[1]
The defendant, the Lyttelton Port Company Limited, is for sentence today on one charge under the Health & Safety Employment Act 1992. Specifically the company has pleaded guilty to a breach of its obligations under s 6 of that Act in that it failed to ensure that its employees were not exposed to hazards relating to equipment known as a cherry picker. 
[2]
The circumstances giving rise to the offence and the background to them are set out in detail in the summary of facts. A copy of that summary will be provided on request to any person, including the media. I say that because to traverse that detailed summary today would, I think, be an unnecessary waste of time and effort, it being agreed and in writing. I do say here now though that I have had regard to the whole of that summary for the purposes of sentencing. I note its contents only briefly to put what I then say in context. 
[3]
In 2014 the company was advised by a consultant that its health and safety systems were not up to standard and the company subsequently commenced a review and, indeed, an overhaul of those systems. On 28 August 2014 there was a fatality at the port involving container-handling equipment, including a scissor lift. This led to widespread concern about the safety of scissor lifts generally and also of the company's snorkel lift, commonly known as a “cherry picker”
[4]
In September 2014, more particularly on 11 September 2014, the company became aware that the cherry picker was faulty in that it had excessive slew movement. Other issues were also apparent in relation to training, maintenance and operation of the machine. These issues were reported to Worksafe which conducted an investigation into the issues surrounding the cherry picker as well as those surrounding the equipment which had been involved in the fatality. 
[5]
That investigation revealed that the company had failed to take the following practicable steps to ensure its employees' safety in relation to the cherry picker: 
(a)
Ensuring that daily pre start-up checks of the cherry picker were undertaken. 
(b)
Ensuring that they had in place an effective system for identifying new hazards and machinery faults and ensuring that they were addressed in a timely manner. 
(c)
Ensuring that machinery with identified faults was taken out of service until such time as it had been assessed by an appropriately qualified person, repaired if necessary, and deemed safe for use. 
(d)
Ensuring that they had a systematic approach to ensuring that all machinery and, in particular, the cherry picker was maintained in accordance with applicable operating manuals. 
(e)
Ensuring that identified faults or problems were documented and that the appropriate action was taken, including but not limited to the removal of the machine from service, inspection by a competent person and repair or replacement if required. 
(f)
Ensuring that all personnel were aware of the machinery's faults and whether or not it could be used at any given time. 
[6]
That is clearly a comprehensive list of failings and each of them has been admitted by the company but I note that there is a significant degree of overlap between them. 
[7]
The approach to be taken in sentencing offences such as this was clearly established by the full Court of the High Court in the 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] . Where there is an identifiable victim of the offending the first step is to assess reparation for harm to the victim. In this case there were no victims and this step is not required. And I also add here that the third step involves consideration of any reparation ordered. Again, as there was no victim that third step need not be taken either. What I must do is to assess the amount of any fine to be imposed. 
[8]
In Hanham & Philp the Court discussed how the starting point for a fine ought to be determined in terms of culpability. It set out a scale of starting point amounts according to the level of culpability. It also identified seven factors relevant to the assessment of culpability for this purpose. Counsel have made detailed submissions in relation to those factors. Having regard to those submissions and to the agreed summary of facts I have reached the following conclusions. 
[9]
There is no doubt that, in September 2014, the company was aware of issues concerning the cherry picker. It was aware that there was a mechanical problem with the machine. It was also aware that there was a need for training of staff in the use of the machine. That awareness was heightened by the tragic death of an employee only weeks before involving other equipment also used for working at heights. The company accepts that the steps it failed to take to avoid potential harm were all practicable. That is not to say that health and safety issues in relation to this machine and other equipment at the plant were being ignored. Not at all. The company was engaged in an overall review of its health and safety obligations and was in the process of developing an improved health and safety strategy. That, however, does not absolve the company from its ongoing failure to take the necessary steps to ensure the cherry picker was operated safely. 
[10]
The nature of the risk imposed by use of the cherry picker was obvious. Its very purpose was to enable employees to work at height above the ground. Any departure from safe operation, therefore, carried the risk of falling which could cause death or injury. As a machine involving relatively heavy motorised parts it also carried the risk of crushing injuries. The company's lack of proper procedures for operating the cherry picker was clearly a departure from industry standards. So was the failure of the company to take the machine out of service when a mechanical fault was identified on 11 September 2014. That was aggravated by the initial direction to employees to use the machine on 16 September 2014. Several of the company's departures from safe practice were also contrary to the specific instructions provided in the operating manual for the cherry picker. 
[11]
In his submissions Mr Gallaway identified steps which were taken by the company and procedures which were followed in practice, albeit informally. Those factors mitigate the company's conduct to an extent but do not excuse the fundamental failure to take all practicable steps to minimise harm. The means of avoiding the hazards associated with the cherry picker were readily available to the company and affordable. Had the appropriate steps been taken the hazards would have been effectively minimised. There was nothing novel or unusual about the hazards associated with the cherry picker. They were similar to those associated with other machinery operated by the company and ought to have been well known to the company, particularly in light of the then recent fatal accident. 
[12]
In their submissions as to the starting point both counsel have referred me to decided cases involving breaches of the same statutory obligation. While they are helpful in principle, the appropriate level of fine must be determined on the particular facts of this case. 
[13]
Having regard to all the circumstances I assess the defendant's culpability as being at the boundary of the medium and high bands identified in Hanham & Philp. I take a starting point for a fine of $100,000. 
[14]
The only statutory aggravating feature is the defendant company's previous conviction for similar offending which occurred in August 2014, that is the case involving the unfortunate death. As Mr Gallaway points out, and Ms Brabant acknowledges, however, the conviction was not entered until well after the events in question in this case. I do not accept Ms Brabant's submission that an uplift of 10 percent ought to be applied. As Mr Gallaway submits, this is not a case of an employer which has failed to learn from its previous conviction, rather the events occurred very closely in time. 
[15]
Having said that, I do regard this as a case where the company failed to learn quickly enough from the events which gave rise to the earlier conviction. I, therefore, apply an uplift but one of only five percent. 
[16]
I turn then to the mitigating factors. As the prosecutor acknowledges, the company was fully co-operative with Worksafe's investigation. I also accept that, since the events recorded in the summary of facts, the company has undertaken a comprehensive review and revision of its health and safety practices. That has included taking all practicable steps to minimise the risk of harm to employees in relation to the cherry picker and other equipment. 
[17]
Counsel have made differing submissions about the extent to which the fine ought to be reduced to reflect these factors. In my view, the appropriate reduction in this case is 15 percent. 
[18]
The other major mitigating factor is the company's guilty plea. Had this been entered promptly I would have reduced the fine by a further 25 percent. In fact, it was entered only after an initial not guilty plea, a pre-trial issue being raised and the matter being set down for a Judge-alone trial in June this year. The guilty plea was only entered on 21 April this year, just over a year after the first appearance. 
[19]
In terms of the guidelines provided in Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  a reduction of no more than 15 percent would normally be available in such circumstances. Mr Gallaway submits that the delay and progress towards a defended hearing was justified in this case and that a greater reduction ought to be made. In support of that submission he refers to three points. 
[20]
The first point he makes is that there were ongoing negotiations between the parties about whether the prosecution was justified in the public interest. Having seen the now agreed summary of facts I have no doubt that the prosecution was justified and, the company having accepted that, it seems to me there was no merit in arguing otherwise. 
[21]
The second point Mr Gallaway makes is that there were negotiations around the admissibility of evidence. What evidence might be legally admissible is, of course, a factor relevant to the conduct of a trial but it should not affect the company's assessment of its own culpability. 
[22]
The third point raised is the time taken to make amendments to the summary of facts once the evidential issues had been resolved. That does not justify maintaining the matter on a path to a defended hearing. The answer to both the second and third points made by Mr Gallaway is that it was open to the defendant to enter a guilty plea at an early stage and then, if necessary, proceed to a disputed facts hearing. 
[23]
Having regard to all the circumstances I reduce the fine by a further 15 percent on account of the guilty plea. 
[24]
In summary then I take a starting point of $100,000 and increase that by five percent for the aggravating factor of the conduct giving rise to the previous offence and conviction. That makes $105,000. I reduce that by 15 percent to take account of the general mitigating factors and by a further 15 percent to reflect the company's guilty plea. 
[25]
Arithmetically that leads to figure of $75,862.50 but I round that down to $75,000. The defendant company will be fined $75,000 and ordered to pay solicitors costs of $500. 

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