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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Department of Labour v Fletcher Concrete and Infrastructure Ltd t/a Golden Bay Cement (HC, 10/08/07)

Sentencing Tracker

Principal Offences:
Failing to ensure safety of employee (s6 and s 50(1)(a) Health and Safety in Employment Act 1992)
Plea:
Guilty
Non-Custodial Sentences:
$16,000 fine (increased from $4,000 on appeal)
Order for reparation of $6,000
Aggravating Factors:
Previous convictions
Mitigating Factors:
Guilty plea
Previous Convictions:
under Health and Safety in Employment Act 1992:
2002 (fined $6,500)
2001 (fined $7,000)
Notes:
Appeal by Department of Labour

OSH Tracker

Defendant:
Fletcher Concrete and Infrastructure
The High Court has called for tougher HSE Act penalties for large companies, especially those that have previous convictions. 
Quadrupling the fine imposed by the District Court following a quarrying accident in which a worker narrowly escaped with his life, Justice Warwick Gendall compared the original penalty to a licence fee, stating that penalties imposed under the act “must bite” if they are to serve as a deterrent to others. 
Fletcher Concrete and Infrastructure Ltd trading as Golden Bay Cement had previously pleaded guilty to a charge under s6 of the HSE Act and received a $4000 fine and a $6000 order of reparations ( Whangarei DC, December 11, 2006). The Department of Labour appealed this sentence, however, asserting that the fine was manifestly inadequate. Justice Gendall agreed and increased the fine to $16,000, while retaining the original reparations order (High Court Whangarei, August 10). 
The charge followed an incident in which a large six-wheeled truck fell 15m down a quarry face when the edge collapsed as the driver attempted to tip a load of rocks into the quarry. The truck landed upside down, completely crushing the cab, but the driver managed to jump free as it began to fall and escaped with grazes, bruises and lacerations. 
The judge accepted that the fact the company employed a suitably trained quarry manager with responsibility for checking the stability of the quarry edge was a mitigating factor, as was its acceptance that it was liable for the failures of its manager, its early guilty plea, its cooperation with the investigation, and the remedial steps it had taken. 
He noted, however, that the accident was foreseeable and the harm that resulted would have been much worse, had it not been for the driver’s quick response. The company’s two previous HSE Act convictions were also aggravating features, he said, and called for a penalty that would serve as a deterrent, both for the company and for other employers. 
“General deterrence is a very relevant factor in sentencing for offences against this legislation, which is designed specifically to protect the public and employees, and where the obligations on an employer are uncompromising,” he said. 
Sentencing, the judge said, was not a mathematical exercise but an exercise of judgment, requiring “a multiplicity of factors” to be balanced in a rational way. However, he said, the degree of culpability in this case was in the medium range and  the starting point of between $12,000 and $15,000, which the District Court had apparently used when determining the appropriate penalty, had been “inordinately below what was required in light of the increased penalty provision in the 2002 [HSE Act] amendments.” 
The proper starting point, he said, was in the vicinity of $25,000, from which he deducted $8000 in recognition of the early guilty plea, but then added another $5000 to take account of the company’s previous convictions. 
A total sanction of $22,000 was the absolute minimum that was necessary, he said, and the $10,000 penalty imposed in the District Court was 100% below what was required. 
“This was a large employer of substantial means, which pleaded guilty to the offence and had previous convictions. 
“In this area, especially where large companies infringe, penalties must bite, and not be at a ‘licence fee’ level.” 
Industry:
Manufacturing
Sub-Industry:
Non-Metallic Mineral Product Manufacturing
Risk:
Vehicle - road (eg truck, car, bus)
Fall from height
Harm:
Injury
Penalty Amount:
$22000.00
Reparation Amount:
$6000.00
Appeared in Safeguard issue 107

Judgment Text

RESERVED JUDGMENT OF GENDALL J 
Gendall J
[1]
This is an appeal by the Department of Labour against a sentence imposed on the respondent in the District Court at Whangarei following upon its pleading guilty to an offence in breach of s 6 of the Health and Safety in Employment Act 1992 in that, as an employer, did fail to take all practical steps to ensure the safety of an employee while at work. When sentence was passed on 11 December 2006 by Judge J P Clapham in the District Court at Whangarei, he imposed a fine of $4,000, Costs $130, Solicitor's Costs $250 and ordered reparation of $6,000 to be paid to the employee. Whilst the appeal is against sentence the essence relates to the quantum of the fine which the Department contends was manifestly inadequate. 
Essential facts 
[2]
The respondent is a substantial company trading as Golden Bay Cement, which operated a quarry at its Portland cement plant. Stockpiling of rock and other material takes place at the quarry. On 23 February 2006 an employee of the respondent was driving a large six-wheel truck to carry limestone to the edge of a face in the quarry over which the material was to be tipped. Fully laden the vehicle load could weigh up to 100 tonnes. The quarry face was approximately 15 metres in height and near vertical in places. When the employee's truck was being reversed to near the edge of the face of the quarry the ground beneath the rear wheels began to sink and give way. This caused the laden truck to tip or fall down the face of the quarry upside down with the driver's cab being crushed under the weight of the laden truck which rested on top of it. Fortuitously the employee driver upon feeling the rear of the truck beginning to sink and tip, he leapt from the driver's cab, falling down the face of the quarry behind the truck and although unconscious and injured, survived. Had he remained in the cab of the truck that would have been unlikely. He suffered some grazing to the limbs, lacerations about the head, pain the ribs and shoulder and was admitted to Whangarei Hospital for one night and was unable to work for three weeks but, later returning to full duties and eventually sustaining no permanent injury. 
[3]
The respondent accepted that the obligations for health and safety management at the quarry rested with it and appointed a person to supervise those aspects, including a quarry manager who by regulation had to hold a Certificate of Competence and a quarry manager's Certificate of Competence. I am told by counsel for the respondent that the quarry manager had checked the stability of the quarry face about one week earlier but on the day in question the face was assessed or checked by the truck driver and not the quarry manager. The appellant contended that the respondent as the employer engaged was required to ensure that the manager required the supervise the health and safety aspects of the operation did so personally on every day on which employee was to work and that guidelines for the safe working at quarries required that an inspection be carried out of a ground edge of the face before tipping operations commenced and other safety measures implemented. He contended that the quarry manager or the supervisor appointed by the respondent, or other person designated to perform the necessary tasks did not inspect the area around where the truck was to tip its load and failed to identify the hazard presented by the unstable or fractured nature of the lime rock formation at that place in the quarry. 
[4]
The respondent accepted that the actions of supervisors were to be attributed to the respondent company and for that reason a guilty plea was entered. It was a mitigating feature that the respondent company done all it could by implementing safe management systems at the quarry and directing that supervision be operated by a certified quarry manager. 
Relevant statutory provision 
[5]
The Health and Safety in Employment Amendment Act 2002 increased the maximum penalty for fine from $50,000 to $250,000. 
[6]
Section 51A of the Act was enacted to provide sentencing criteria which to a large extent codified some of the factors identified (but described as not being intended to be exhaustive) by the Full Court in the Department of Labour v de Spa & Co Ltd [1994] 1 ERNZ 339. Section 51A 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)
sections 7 to 10 of that Act; and 
(b)
the requirements of sections 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. ”
[7]
Sections 7, 8 and 9 of the Sentencing Act 2002 set out the well known principles and purposes of sentencing, including the description of aggravating and mitigating factors. Section 10(1) of the Sentencing Act requires the Court to take into account any offer, agreement, response, or measure to make amends and s 12 enables the Court to impose a sentence of reparation unless that would result in undue hardship to an offender or dependants. 
Judicial approach to assessing penalty 
[8]
Both counsel for the appellant and respondent accepted the usual approach when sentencing for offences under the Act is that identified in the Department of Labour v Ferrier Woolscours (Canterbury) Ltd [2005] DCR 356, namely: 
(1)
The Judge must fix the amount of reparation on a stand alone basis solely by reference to the amount that is properly payable out of the offender's means; 
(2)
The Judge then must determine whether any additional penalty by way of a fine should be imposed, the amount of reparation sentence then being taken into account in assessing the quantum of any fine. 
[9]
That approach was accepted by Priestley J in this case in Department of Labour v Areva T & D New Zealand Ltd (High Court, Rotorua, CRI-2005-463-000042, 9 November 2005 where, at [36] His Honour said: 
“ … There is obvious sense in the two-step approach outlined in Department of Labour v Ferrier Woolscours (Canterbury) Limited. If, having regard to the relevant criteria, the court imposes a reparation sentence, then obviously, as a next step, whether or not to impose a fine and if so the quantum of the fine, must be considered in the light of all Sentencing Act criteria and in particular the totality principle and the overall appropriateness of sentences and orders imposed. ”
[10]
The parties accepted that is the proper approach but differ in their submissions as to how Judge Clapham reached his sentences. The appellant says although on the face of it the Judge did engage the two-step process the Court had to, nevertheless, ensure that the total sentence imposed reflected overall culpability of the offending and the nature of the breach with the fine being additional to and not something solely to any sentence of reparation. Conversely, counsel for the respondent contended that the Judge understood and applied the relevant principles correctly, the result was not manifestly inadequate given discounts that were required to be applied in the sentencing process for the respondent's co-operation and early guilty plea. 
Discussion 
[11]
The appellant has to satisfy the Court that the fine imposed was manifestly inadequate in the circumstances of this case. It could not be said that the Judge erred in the manner in which he fixed the amount of reparation on a stand alone basis and the issue is whether in determining any additional penalty by way of fine he erred in assessment of its quantum in light of all the relevant criteria whether under the Sentencing Act 2002 and s 51A. There were mitigating features, including the guilty plea, regret expressed and co-operation with authorities and the taking of steps to prevent reoccurrence. On the other hand, there were aggravating features such as the respondent's previous convictions for offences under the Health and Safety in Employment Act 1992, namely on 4 May 2001 (fined $7,000) and on 15 April 2002 (fined $6,500). 
[12]
The respondent contended that the company's practice did not allow for drivers to work at the cliff face without it having been inspected and indeed it had a responsible employee, the quarry manager, engaged to undertake that task. He contended the action arose therefore out of the inadvertent actions, or oversight, of the duties of the employee and instructions given to it. Nevertheless, the respondent pleaded guilty to the charge of failing to take all practicable steps to ensure the safety of an employee. That guilty plea has to be seen as an acknowledgement that there was a failure on the part of the respondent to do all that could be done or was feasible to ensure the employee's safety. 
[13]
In cases involving breaches of the onerous requirements imposed under the Act the ultimate penalty is influenced by a number of factors, including those that are set out in the statutory criteria. They will include previous convictions of an offender, the need to protect employees and the public, and the two-fold aspect of deterrence, specific as it relates to the offender, and general as it relates to all other employers in New Zealand. Sentencing is never a mathematical exercise but requires a process of the exercise of judgment endeavouring to balance in a rational way a multiplicity of factors. 
[14]
The degree of culpability has to be assessed by appraising the circumstances. In the Court's view they fall into the medium range of culpability and could certainly not be described as a minor breach. 
[15]
The degree of harm caused in this case was thankfully not as serious as it could have eventuated but nevertheless an employee was injured and but for his prompt actions could have lost his life. 
[16]
It was foreseeable that, without inspection of the quarry face regularly, occasions could arise where the face was unstable, so as to place truck drivers in grave jeopardy. The safety record of the employer is of course highly relevant. The fact that the respondent had two previous convictions for breaches of the Act, since 2001, is aggravating. Previous offending may bring about the need for a specific deterrent penalty. 
[17]
But most importantly, there is a need to generally deter other employers, whether those with suspect safety records or not, so as to ensure the purposes of the Act, namely providing safe places of work, are as far as possible achieved. General deterrence is a very relevant factor in sentencing for offences against this legislation which is designed specifically to protect the public and employees, and where the obligations on an employer are uncompromising. In the early stages of the Health and Safety in Employment Act 1992 fines tended to be on the low side but by 1996 had risen to recognise the purpose of the Act, see Fairfax Industries Ltd v Department of Labour [1996] 2 ERNZ 551
[18]
Some of the penalties imposed in the before 2002 included (by way of example) A E Sadd v Department of Labour High Court, Blenheim, AP2/97, 14 February 1997, Doogue J fined $15,000; Department of Labour v de Spa & Co Ltd (supra) fined $15,000; Department of Labour v Otago Power Ltd (High Court, Dunedin, AP24/94, 17 May 1994, Fraser J) fine increased on Crown appeal to $10,000; Fairfax Industries Ltd v Department of Labour (supra) fined $20,000; Tranz Rail Ltd v Department of Labour [1997] ERNZ 316 fined $15,000; MacFarlane Laboratories NZ Ltd v Department of Labour (supra) fined $10,000). Of course, every case involves different facts and consideration but those are some examples of early fines, being imposed. The maximum penalty has been increased five-fold and courts are required to give effect to the legislative intent reflected in the increased maximum penalty. 
[19]
After the Judge fixed the order of reparation of $6,000 he imposed a fine of $4,000, so as to provide a total financial sanction of $10,000. The appellant says this resulted in the inordinately lenient result, being manifestly inadequate. The Judge did not identify a starting point for a fine, or overall penalty. On a busy list Court day, a District Court judge is under extreme pressures and cannot be expected to give a lengthy dissertation as to his sentencing reasons. In the end it is the “finishing point” rather than the starting point which matters, but where a sentence is challenged as manifestly inadequate, an appellate court must try to ascertain how the sentencing Judge reached his/her final conclusion. Here, it may have been in two ways: 
a)
By deciding that $6,000 reparation was required, and because the total sanction was to be $10,000, the fine had to be $4,000. 
b)
By taking a starting point at (say) either: 
i)
$15,000, allowing one third for the plea of guilty (ignoring the aggravating previous convictions) so as to reach the nominal $10,000deal); or 
ii)
$12,000, allowing one third for the guilty plea and adding back say $2,000 for the aggravating convictions to reach $10,000. 
[20]
But whatever may have been the approach, starting points at $15,000 or $12,000 were inordinately below what was required in light of the increased penalty provision in the 2002 amendment. 
[21]
Viewed against the purposes of the Act and the need for general deterrence, a proper starting point had to be within the vicinity of $25,000 and allowing $8,000 (a little under one third) for the guilty plea would give a figure of $17,000. But the respondent could not avoid the effects of its previous convictions as being significantly aggravating. An uplift of at least $5,000 or more would have been required. On that basis, a total sanction, including reparations of $22,000, as an absolute minimum was necessary. Viewed in that light a total penalty of $6,000 reparation and $4,000 fine was manifestly inadequate. It was over 100% below what was required. A fine of no less that $16,000 was necessary. 
[22]
Accordingly, the appellant has satisfied the Court that the end result reached by the Judge led to a manifestly inadequate fine which failed to reflect the principles required for sentencing under this Act. This was a large employer of substantial means, which pleaded guilty to the offence, and had previous convictions. In this area, especially where large companies infringe, penalties must bite, and not be at a “licence fee” level. 
[23]
It follows that the appeal is allowed and the fine imposed is quashed. In its place the respondent is fined the sum of $16,000. The order for reparation of $6,000, and Court and solicitor's costs remain. 
[24]
This being an informant's appeal against sentence, I do not regard it as appropriate to make any order for costs. 

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