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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Ferg's Rock-N-Kayak Ltd v Department of Labour (HC, 29/06/10)

Sentencing Tracker

Principal Offences:
Failing to take all practical steps to ensure that no hazard arose in indoor rock climbing (ss 16 and 51A Health and Safety in Employment Act 1992)
Plea:
Guilty
Non-Custodial Sentences:
Fine of $45,000 and reparation order of $17,000
Appeal:
Non-Custodial Sentence Reduced
Mitigating Factors:
Plea
Remorse
Mostly co-operated with the authorities in relation to the investigation and prosecution
Had taken remedial action to prevent the event which occurred happening again
Previous Convictions:
No

OSH Tracker

Defendant:
Ferg's Rock-n-Kayak
A rock climbing company has accepted it is not good enough to rely on general instructions to teenagers, but has had its fine cut due to remedial action it took to address its inadequacies. 
Ferg’s Rock-n-Kayak, owned by former Olympic kayaking champion Ian Ferguson, had its fine reduced on appeal after being found guilty of failing to keep a client safe on one of its rockwalls. 
Amelia Peter, who was on a school course in Wellington, suffered a seriously broken ankle and broken pelvis when she fell from the rockwall in 2008. 
The company, in which Ferguson is a shareholder, had pleaded guilty to failing to take all practicable steps to prevent her fall. It was fined $50,000 and ordered to pay Ms Peter reparation of $17,000. 
That fine has now been cut by $5000 to $45,000 after an appeal to the High Court (sitting in Wellington, June 29). The company claimed that a district court judge had failed to give a discount for remedial steps it had taken since the accident, for its remorse and co-operation and because it had arranged insurance for reparation. 
At the appeal hearing, Justice Ron Young was told that Ms Peter expected to be lowered to the ground through a (self-braking)belay device operated by her school friend. "Her friend had not properly understood the safety instructions from the appellant," Justice Young said. 
He said that the company now accepted that it was "simply not good enough" to rely on a general instruction to 12 and 13-year-old boys and girls. 
Justice Young said that the company "had faced its inadequacies" and had taken remedial action. 
It had received a 30 percent reduction for its early guilty plea but was entitled to a further 10 per cent discount. Justice Young said that while the company had responsibly taken out an insurance policy for reparation, it was not a mitigating factor. The reparation award was unaffected. 
Industry:
Cultural and Recreational Services
Sub-Industry:
Sport and Recreation
Risk:
Fall from height
Harm:
Injury
Penalty Amount:
$62000.00
Reparation Amount:
$17000.00
Appeared in Safeguard issue 126

Judgment Text

JUDGMENT OF RONALD YOUNG J (Appeal against sentence) 
Ronald Young J
Introduction 
[1]
The appellant runs a purpose built indoor rock climbing wall in Wellington. In early December 2009 the victim A.P. was part of a group of 12 and 13 year olds who were climbing the wall. A.P. climbed to the top of the wall. She expected to be lowered to the ground through a belay device operated by her school friend. Her friend had not properly understood the safety instructions from the appellant. As a result the belay device was not used correctly. A.P. then fell 8.8 metres to the floor. She suffered a serious broken ankle and fractured pelvis. 
[2]
The appellant pleaded guilty to a charge pursuant to s 51A of the Health and Safety in Employment Act 1992 that it failed to take all practical steps to ensure no hazard arose in the indoor rock climbing. 
[3]
The appellant was fined $50,000 to together with an order that it make reparation of $17,000. It says the Judge made errors resulting in a manifestly excessive fine. The particular grounds of appeal are: 
a)
the Judge failed to give a discount for mitigating factors other than the guilty plea. This included a failure to recognise the appellant's “responsible approach in securing insurance to cover reparation payments” and a failure to consider co-operation and remedial steps undertaken by the appellant (Health and Safety in Employment Act 1992, s 51A); 
b)
the Judge failed to take into account the appellant's financial capacity; and 
c)
the Judge failed to make an overall assessment of the penalty before imposing the fine. 
Facts 
[4]
Safe climbing on an indoor rock wall involves both the climber and the person whose job it is to prevent a climber from falling. The climber has a harness and a rope attached. The rope runs through a belay device which operates as a self breaking mechanism and prevents the climber from falling. The self breaking function activates when the climbing rope comes under tension in a fall. As the climber climbs the wall the belayer must pull the rope through the belay device so it remains tight. Thus, if the climber falls or when the climber is ready to be lowered to the ground the belayer controls the descent by using the left hand to pull the handle back on the delay device while the right hand holds and controls the slack rope which is passed through the belay device. Thus the belayer can control the speed of the rope as it moves through the belay device and thus control the speed of the climbers' descent. 
[5]
In early December a local school group arrived at the appellant's premises. As well as the 26 students there were two teachers, two parents and three instructors. The children were divided into pairs. In each pair one student fitted a harness and the other was responsible for the rope and the climber's safety. The group were then moved to a learners' wall where they were shown by the appellant's employees how to tie on the harness and how to belay a climber. That briefing took approximately ten minutes. The students were told to ensure the harnesses and the knots tying on the rope were checked by instructors before the first climb. 
[6]
When Ms Peter climbed her partner pulled the rope tight but did not pull it through the belay device. That meant she was not on the belay device and had no protection from a fall. When the she reached the top of the climb and was ready to be lowered she called out instructions to her partner. Ms Peter pushed off the wall expecting to be lowered to the ground. However as the rope had not been pulled tight through the belay device she fell freely to the floor. She suffered a fractured ankle and pelvis. 
The case in the District Court 
[7]
The prosecution was based on allegations, firstly, that the company failed to ensure proper tuition was given to the students. There was no check to ensure that the students had actually understood the lesson they were given about working the belay device nor was there a check before the students were allowed to start climbing. This was especially important given these were inexperienced, relatively young students, being given a task which had some complexity where they were controlling the only safety device to avoid potentially serious injury. 
[8]
The second major allegation of fault was that the appellant should have ensured that each student demonstrated a correct belaying procedure under supervision before being allowed to use the climbing wall without direct supervision. Poor belaying technique is a common problem and a common cause of a number of accidents. The students that day were part of a large group receiving lessons but no one checked whether the complainant and her partner (nor the other individual students) understood the belay system before they were allowed to climb without supervision. 
[9]
The summary of facts recorded that since the accident the appellant had updated its procedures. It now required all clients not to belay without direct supervision and until a staff member was satisfied the person could belay correctly. The company has arranged for a tag system. White tags are clipped onto the harness of all beginners. The tag is only removed when a staff member is satisfied that the person can belay correctly. 
[10]
The victim impact statement records that prior to the accident the complainant was an active and sporty young woman who had played a number of sports and excelled at athletics coming third in the interprovincial 400 metres. Unfortunately Wellington Hospital at first missed the severe break in the complainant's ankle. Some days later x-rays showed she had a significant fracture to her talus on her right ankle. The impact of the fall had pushed her shin bone down onto her ankle bone fracturing off a piece of the neck of the talus. 
[11]
In addition to the ankle injury she had a minor depression of two vertebrae in her spine and a cracked pelvis. It is difficult to know how her fractured ankle and her foot will recover. However she has suffered considerably as a result of the accident. 
[12]
The District Court Judge, after reciting the background facts and victim impact, assessed the appellant's culpability in the mid range of the medium band where that band had a starting point fine of between $50,000 and $100,000 (Department of Labour v Hanham and Philp Contractors (2000) 6 NZELR (HC). The Judge identified the fact that there had been a history of accidents or near misses at the premises. Some, if not all, seemed to involve mistakes or errors with respect to the belay device. He considered that the proper starting point was $75,000. He reduced that by one third for the plea of guilty to $50,000. As to reparation he considered the proper amount was $17,000. In fixing the amount of reparation he took into account the fact that the appellant had reparation insurance. 
Grounds of appeal 
[13]
To return therefore to the grounds of appeal. The company was charged on 14 July and first appeared in Court on that date. The appellant's guilty plea was on 22 September. The Judge accepted that the guilty plea was at the first reasonable opportunity. A full one third discount therefore could be properly given. 
[14]
The appellant says it was entitled to a discount for the remedial steps it took after the accident, for its remorse and co-operation, and because it had arranged insurance for the reparation. It says the Judge gave no discount for these factors. 
[15]
Section 51A of the Health and Safety in Employment Act 1992 provides as follows: 
“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. ”
[16]
Referring to the s 51A(2)(e) matters there is no doubt that the company is remorseful for the offence and the harm caused. It is also clear that they mostly co-operated with the authorities in relation to the investigation and prosecution and that they have taken remedial action to prevent the event which occurred happening again. Section 51A provides (ss (2)) that the Court must have regard to these factors. Mostly “having regard” will mean reducing the penalty when these factors are in mitigation. The policy behind s 51A(2)(e) is to encourage (amongst other factors) openness about the causes of the accident and remedial attention. Both are designed to support public safety. Ordinarily therefore co-operation in the investigation and preparedness to fix the cause of the accident will bring a reduction in the quantum of the fine. 
[17]
The District Court Judge's starting point was a fine of $75,000. While it could have been slightly higher for the purpose of this appeal I accept it was appropriate a fine. This accident did have some truly serious features regarding the appellant's failures. What must be kept in mind is that wall climbing is an inherently dangerous activity. A mistake is inevitably going to cause injury and perhaps worse. The fall of a 13 year old girl from 8.8 metres is very serious. As the company now accept it is simply not good enough for them to rely upon a general instruction to 12 and 13 year old boys and girls. The company was not entitled to expect them to understand what to do and to assume they would be able to safely belay a rock climber. 
[18]
The discount for the early guilty plea sufficiently reflects the company's remorse. There was nothing in this case which identified the remorse as special or compelling. However co-operation in the investigation and remedial action are significant features as I have said. The statute is concerned not just to punish but to ensure there are no repeat accidents. The company has faced its inadequacies and provided what seems to be a sensible remedy. In my view it was entitled to a 10% discount from the starting fine of $75,000 to reflect these factors. 
[19]
There is no direct attack on the level of the reparation. It is the total financial penalty and that impact on the company that will be important. In this case the company has responsibly taken out an insurance policy for reparation. The company therefore cannot say it has to pay this reparation but it has an ongoing cost of meeting the insurance premiums. The fact of an insurance policy is not in my view a mitigatory factor. It was responsible of the company to take out the policy, but irrespective of insurance the company would have to pay the reparation ordered. When assessing the overall level of the financial penalty and the company's ability to pay it is proper to keep in mind the company has had to meet insurance premiums and the insurance excess. 
[20]
Without any financial constraints I would reduce the fine by 10% for the discrete mitigating factors mentioned in [17]. This level of reduction for this mitigation seems to me to accord with the Court of Appeal's approach in R v Hessell (2009) 24 CRNZ 612 (CA)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] . This reduces the fine to $67,500. From that I apply the 33% discount to reduce the fine to $45,000. 
[21]
The proper course then is to consider the company's financial circumstances. It is not always easy from a simple set of accounts to understand the financial strength or otherwise of a company. In 2008 and 2009 the company had surpluses respectively of $53,000 and $33,000. This was after the payment of shareholders salaries in 2008, $66,000 and in 2009, $40,000. It has some considerable assets but significant liabilities about one half being the shareholders current account. Without further information I do not consider that there is a basis to reduce the fine based on the company's ability to pay. 
[22]
The Crown accepted that the Judge's methodology in the District Court was in error, however, it submitted that despite this error the fine was well within the range available to the Judge and could not therefore be said to be manifestly excessive. 
[23]
I accept it could be said that by reducing the fine from $50,000 to $45,000 that I am fiddling with the District Court Judge's decision. However I consider that were, as here, the Judge overlooked relevant mitigation the proper course is to do what the judge should have done. The appellant is entitled to this reduction in the fine and to refuse to do so on the basis that overall the fine is within an acceptable range is I think unfair in these particular circumstances. 
[24]
The other relevant factor is the need to assess the overall financial penalty. Before consideration of this factor the overall penalty is $62,000 (fine $45,000, reparation $17,000). I am satisfied this overall penalty is within the range reflecting the culpability of the appellant and the mitigation available. 
[25]
The appeal is therefore allowed to the extent of reducing the fine from $50,000 to $45,000. The reparation order remains unaffected. 

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