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Court of Criminal Appeal 17 October 2016

Attorney General of New South Wales v Tho Services Limited (in liquidation) (ACN 000 263 678)

[2016] NSWCCA 221

Other
WORK HEALTH AND SAFETY ACT WHETHER SENTENCE MANIFESTLY INADEQUATE WHERE RESPONDENT COMPANY IN LIQUIDATION APPLICATION OF RESIDUAL DISCRETION CONTRITION AND REMORSE PUBLIC NEED FOR RETRIBUTION

Citation: Attorney General of New South Wales v Tho Services Limited (in liquidation) (ACN 000 263 678) [2016] NSWCCA 221
Court: Court of Criminal Appeal, New South Wales
Date: 17 October 2016
Judge(s): Hoeben CJ at CL, Harrison J, Campbell J

Background

A 15-year-old work experience student attended the premises of an industrial metal fabrication company in Muswellbrook in March 2013. During the day, he performed welding tasks without lowering the manual visor on his welding helmet, which had to be flipped down manually to protect against ultraviolet flash burns. Unlike the automatic helmets the student had previously used at school, this helmet required a deliberate manual action to engage eye protection. No one on site specifically told him to lower the visor before welding, and the induction and safety documents he was given did not address that requirement. The student suffered permanent bilateral eye damage, leaving him with a 75 percent visual incapacity.

The company pleaded guilty to breaches of ss 19(1) and 32 of the Work Health and Safety Act 2011. The maximum penalty for a corporation under s 32 is $1.5 million. At first instance, the District Court dismissed the charge under s 10 of the Crimes (Sentencing Procedure) Act 1999 and ordered the company to pay prosecution costs of $28,000, without recording a conviction or imposing a fine.

The Attorney General appealed, arguing that the dismissal without conviction was manifestly inadequate and that the sentencing judge had erred in several respects, including his treatment of general deterrence, the student's prior welding experience, and the significance of civil compensation already paid.

  • Whether the District Court erred in dismissing the charge under s 10 of the Crimes (Sentencing Procedure) Act 1999 rather than recording a conviction and imposing a fine
  • Whether extraordinary or exceptional circumstances supported a dismissal without conviction
  • Whether the student's prior welding experience reduced the company's statutory obligations to instruct and supervise him
  • Whether civil compensation paid in related proceedings was a relevant factor capable of reducing or replacing criminal sanctions
  • Whether general deterrence had been wrongly discounted, particularly given the company was in liquidation
  • Whether the sentencing judge had incorrectly found that the company "took all reasonable institutional measures" to comply with the Act
  • Whether the judge had erred in finding that gaps in the induction and instruction process were not causally connected to the risk that materialised

Decision

The Court of Criminal Appeal allowed the appeal, finding that the sentencing judge's approach was erroneous in several significant respects. The judge had incorrectly characterised the conduct as no more than a casual act of negligence by a single employee, when the agreed facts established systemic failures in the company's induction, instruction, and supervision of the work experience student. Neither the visitor induction documents nor the job safety analysis provided to the student mentioned the need to lower the visor, and no person on site gave him that instruction.

The Court rejected the finding that the student's prior welding experience at school diminished the company's obligations. The student had only ever used automatic helmets that darkened without manual adjustment, and he had never encountered a manual flip-down visor before. His limited prior experience made proper instruction more important, not less.

The Court also rejected the sentencing judge's reasoning that civil compensation paid to the student reduced the company's criminal culpability or removed Mr Thomas's "further interest in punishing" the company. The criminal law serves purposes, including retribution and general deterrence, that are independent of civil compensation. The company's liquidation eliminated the need for specific deterrence, but general deterrence remained a significant consideration: the notoriety of the injury and its educative value made this offence a particularly suitable vehicle for sending a clear message to other industrial enterprises about welding safety obligations.

On re-sentencing, the Court recorded a conviction and imposed a fine of $240,000. Harrison J accepted the expressions of remorse from the company's chairman as genuine and acknowledged the company's prior good character in its industry, but concluded that these matters did not displace the need for a meaningful financial penalty to satisfy the public interest in retribution and to reflect community disapprobation of the conduct.

Orders Made

  • Appeal allowed
  • Orders of Curtis DCJ made on 15 February 2016 set aside
  • Respondent convicted
  • Respondent fined $240,000

Key Takeaways

  • A defendant's prior welding experience does not reduce an employer's statutory obligations under the Work Health and Safety Act 2011 to give specific, task-appropriate instruction, particularly where the equipment encountered is materially different from what the person has previously used.
  • Civil compensation paid to an injured person in related proceedings is not a substitute for, and does not substantially diminish, the criminal sanctions appropriate for a workplace safety offence. The criminal law serves distinct purposes, including retribution and general deterrence, that civil settlement cannot address.
  • Where a company is in liquidation, specific deterrence carries no weight, but the Court of Criminal Appeal confirmed that general deterrence remains a live and important consideration in industrial safety prosecutions, and the seriousness of the injury and its educative potential can make an offence a particularly appropriate vehicle for that purpose.
  • Systemic failures in induction, instruction, and supervision of vulnerable persons such as work experience students can elevate a company's culpability beyond what might otherwise be characterised as a minor or isolated act of negligence by an employee.
  • Under s 10 of the Crimes (Sentencing Procedure) Act 1999, dismissing a charge without conviction in a serious workplace safety matter requires proper identification of extraordinary or exceptional circumstances. A finding that the offender "took all reasonable institutional measures" is not available where agreed facts disclose clear gaps in safety systems.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 19(1), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 10, 21A(2)(g), 21A(2)(i)

Cases
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- CMB v The Queen (2015) 89 ALJR 407; [2015] HCA 9
- Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54
- Inspector Christopher Downie v Menzies Property Services [2004] NSWIR Comm 259
- R v McNaughton (2006) NSWLR 566; [2006] NSWCCA 242