FEDERAL COURT OF AUSTRALIA

Comcare v Linfox Australia Pty Ltd (ACN 004 718 647) [2010] FCA 793

THE COURT DECLARES THAT:

1.                   Pursuant to subclause 2(1)(a) of Schedule 2, Part 1 of the Occupational Health and Safety Act 1991 (“the OHS Act”), on 19 December 2007, the Respondent breached section 16(1) of the OHS Act in that it failed to take all reasonably practicable steps to protect the health and safety at work of the employee, Bradley Jacobs, by:

1.1               failing to provide and maintain a working environment, including plant and systems of work, that were safe for the employee and without risk to his health; and

1.2               failing to provide the employee with adequate supervision to enable him to operate the Clark Omega 54D Dedicated Container Handler Fork Truck in a manner that was safe and without risk to health.

THE COURT ORDERS THAT

2.                   Pursuant to clause 4 of Schedule 2, Part 1 of the OHS Act, that the Respondent pay to the Commonwealth a pecuniary penalty of $150,000 in respect of the breach of section 16(1) of the OHS Act.

3.                   The Respondent pay the Applicant’s costs of the proceedings, fixed at $25,000.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

INTRODUCTION

1                     As a result of a tragic workplace accident, this proceeding was commenced by the applicant (Comcare) against the respondent (Linfox).  The facts in relation to the events concerned are all agreed as are the orders that were made at the penalty hearing conducted in relation to this proceeding.

2                     For the following reasons, the orders appearing below were made in open court at that hearing. 

BACKGROUND

3                     Comcare is established pursuant to s 68 of the Safety Rehabilitation and Compensation Act 1988 (Cth) (SRC Act).  It is authorised pursuant to s 77 and subcl 5(1) of Sch 2, Pt 1 of the Occupational Health and Safety Act 1991 (Cth) (the OHS Act) to apply for relief in the circumstances affected by this proceeding. 

4                     Linfox is and was an employer within the meaning of s 5 of the OHS Act.  At relevant times it was a body corporate holding a licence under Pt VIII of the SRC Act and a non-commonwealth licensee within the meaning of s 5 of the OHS Act. 

5                     On 31 August 2006, Linfox acquired a container yard located in Welshpool in Western Australia (the Site) as part of its corporate acquisition of FCL Interstate Transport Services Pty Ltd (FCL).  The acquisition of FCL included the Site and employees at the Site amongst other assets and business.

6                     The Site is used for loading, storage and handling of freight containers as part of the Linfox Linehaul operations.  Those operations relevant to the Site involve the transportation and storage of rail and truck freight containers.  In addition, the Site is used as a transfer point for stock that is being moved between rail and road transport.  Freight containers that are moved around the Site are moved with the use of large Dedicated Container Handler (DCH) fork trucks.

THE ACCIDENT

7                     On 19 December 2007, Mr Bradley Jacobs (Mr Jacobs) who was employed by Linfox was operating a Clark Omega 54D DCH fork truck at the Site when the fork truck overturned pinning Mr Jacobs in its cab.  Mr Jacobs sustained very serious and extensive crush injuries to his left arm and both legs (the incident). 

8                     On the same day, he had commenced work on a late shift at 8.11 am.  At about 1.00 pm, Mr Jacobs started operating the fork truck and conducted between 40 and 60 container lifts.  By about 5.00 pm, the only remaining tasks were to tidy the Site yard in preparation for the next day.  Mr Jacobs was operating the fork truck to undertake this task and was aware that there was minimal traffic in the Site yard at the time.  Tidying the Site yard involved clearing the front packing line which required moving loaded containers from the area where containers are loaded. 

9                     Mr Jacobs was moving a container, loaded with steel casts from the front packing line to an old trailer at the rear of the yard.  The container weighed approximately 32,000 kilograms and was 12.1 metres long, 2.5 metres wide and 2.6 metres high.  Mr Jacobs was carrying the container at a height of about 8 metres along the south-eastern side of the dry shed which was located on the left side of the fork truck.  The dry shed in turn is 55 metres long, along its south-eastern edge.  A stack of containers was stacked four high on the right hand side of the carriageway.  After passing the rear corner of the dry shed, the bottom, right hand side corner of the container struck the top stationary container of the nearby stack.  The top of the stationary container was 8.2 metres above the ground.  The collision caused the fork truck to flip forward onto its roof, trapping Mr Jacobs inside the cabin.  Mr Jacobs’ left arm sustained severe crush injuries and his right leg was pinned to the floor of the cab of the fort truck by a large steel beam.  He suffered severe crush injuries to both of his legs.  He received initial first aid at the scene of the incident before being transported by ambulance to the Royal Perth Hospital for emergency treatment.  He remained in hospital until approximately April 2008, over four months. 

INTERNAL RISK IDENTIFICATION AND MANAGEMENT

10                  When Linfox acquired FCL, the acquisition included the Site and employees at the Site.  Linfox also inherited the existing work systems at FCL and the practices and methods used by the employees.  The Site was first occupied by FCL for the purpose of rail container freight operations in May 1994.  Linfox took over operations at the Site after acquiring FCL.  The layout of the yard and the day to day operations of the fork trucks remained largely constant throughout the lengthy transition and integration from FCL to Linfox. 

11                  Linfox’s Branch Manager at the Site at the time of the incident was Mr Dean Pine.  Mr Pine was employed by Linfox and commenced as the Branch Manager in November 2007, only a month before the incident.  Mr Pine replaced an ex-FCL employee who had been in the Branch Manager position prior to the Linfox acquisition.  On commencement as Branch Manager, Mr Pine undertook a risk identification process at the Site and had identified risks including:

(a)        a culture of speeding through the Site;

(b)        the age and condition of the small fork lifts; and

(c)        an issue with congestion at the Site in the lead up to Christmas. 

Mr Pine had put in place processes to address these risks. 

12                  In relation to the management of congestion at the Site, Mr Pine and his team were overseeing an extension of the ‘hard pad’ into adjacent land that was not being used.  The expansion was underway in December 2007 but had not been completed when the incident occurred. 

13                  Congestion as a hazard had been recognised at the Site in the past with concerns raised on four occasions prior to the incident.  These occasions were at a safety meeting held in May 2007; a safety meeting held in July 2007; a safety meeting held in August 2007; and in the minutes of a Linfox meeting held in early December 2007, where reference was made to a ‘Site Strategic Action Plan by Department’ which identified a number of issues to be corrected and provided short and long term actions to undertake the correction. 

14                  The minutes of safety committee meetings and toolbox meetings recorded that health and safety arrangements were in place and consultations occurring between Linfox site management and employees in relation to a number of identified safety issues in the yard.  At the time of the incident a formal hazard identification and risk assessment for the specific task Mr Jacobs was undertaking had not been conducted.  As a result, the link between congestion at the Site and the risk of the fork truck tipping had not been identified. 

15                  The Site had a speed limit of 8 kilometres per hour for all vehicles.  The speed limit was indicated through signage around the Site, however, there were no instruments on the fork trucks to indicate the speed of a vehicle to its operator nor was the fork truck installed with any device to mechanically limit or govern its speed. 

16                  Congestion within the Site was created by the placement of container stacks around the dry shed.  In order for Mr Jacobs to be able to remove the containers safely along the carriageway, a safe width clearance of 15.2 metres was required for the carriageway.  The carriageway did not have the required safe width clearance which meant that in order for containers to be able to be moved along the carriageway, they had to be raised higher than the roof of the dry shed which stood at approximately 7 metres from the ground. 

17                  As indicated, Mr Jacobs raised the container to a height of 8.2 metres in order to be able to move it through the carriageway.  The height at which he raised the container was above the maximum recommended height under the Australian Standard 4972(Int)-2001.  That Standard recommends that a load be kept as low to the ground as possible while enabling an operator to see beneath the load.  The maximum load height determined for the fork truck was 4.085 metres.  The risk created by the congestion was not adequately identified, assessed or controlled by Linfox.

18                  The fork truck concerned weighs approximately 72.5 tonnes including counterweights, upright and gantry.  There were two fork trucks operating at the Site.  Their maximum capacity is 40,000 kilograms each.  The fork truck was not fitted with any instruments to inform the operator of the mass of load; the height of the load; the speed the fork truck was travelling; or the degree of tilt in the mast.  The operation of the fork truck in relation to these factors was reliant upon the judgement of the operator.  It was fitted with a set of different coloured lights to indicate to the driver if the load exceeded the maximum capacity of the fork truck.  At the time of the incident, the speed of the fork truck and the weight of the  container and the height at which the container was being carried were all contributing factors to the incident occurring.  These factors would have been managed through the installation of controls in the fork truck and/or better training and supervision.  Those steps were all reasonably practicable and could have been implemented. 

EXTERNAL RISK IDENTIFICATION

19                  In relation to management of the risk, the risks associated with the operation of the fork truck, particularly when carrying a raised load, had been identified and documented within the industry prior to the incident.  They are documented in three sets of Australian Standards and in a Complete Operators Manual for the particular fork truck.

20                  Those documents identify that the fork truck should be operated with its load low and tilted backwards.  The load should not be higher than a metre above the seat cushion of the operator or it should be only high enough that the operator can see beneath the load.  The documents identify that operating with a raised load decreases the stability of the fork truck and increases the risk of the fork truck tipping under sudden braking.  Part 9 of the Complete Operators Manual for the Omega D Series DCH advises that operators must be aware of the requirements of the Australian Standard: (AS)2359-1985 Pt 2, Operations and Pt 6, Safety Code and conform to the requirements while operating the fork truck.

21                  The Australian Standard 2359 6-1995, Pt 6: Safety Code provides (at 14.1.4.2 Stability) that some conditions that may affect stability are ground and floor conditions, grade speed, loading, battery weight, dynamic and static forces and the judgement exercised by the operator.  It also provides that load engaging means that the load shall be kept low and where possible, tilted backwards when travelling.  The load shall not be elevated except during stacking.  This does not apply to fork trucks specially designed for travelling with the load elevated.  It also provides that when, while transporting,, the load obstructs visibility,  fork trucks shall be driven with the load trailing.

22                  The conditions listed in the Safety Code as affecting stability and general travel and guidance were not implemented at the Site in respect of the incident and were not considered through a risk management process for the task being undertaken by Mr Jacobs at the time of the incident. 

23                  There is ample material available pointing to the risks involved in operation of fork trucks which are described as being a major cause of workplace injuries and deaths.  FCL had identified various risks at the time of Linfox acquiring the Site and its national Occupational Health and Safety Manager, in a presentation, stressed that fork trucks were a major cause of workplace injuries and death and that since 1988, over 100 people had been killed in fork truck accidents.  The main causes of injury included fork truck operators being crushed by a fork truck or its load due to the fork truck tipping over.  Fork truck operators have a legal and moral obligation to act in a manner that will not endanger themselves or others while at work and to observe and follow loading and other directives calling for lowering of loads for travel.  The presentation also stressed that loads should always be carried as close as possible to the ground as the  higher the mast, the less stable the fork truck will be and the greater the risk of it tipping over.  The instructions provided in that presentation were generally not being enforced at the Site at the time of the incident. 

TRAINING AND SUPERVISION

24                  Mr Jacobs commenced employment with FCL in 2006 operating smaller fork trucks in the FCL yard.  He had performed duties as a fork truck operator with four other employers since 1989 prior to commencement at the Site with FCL.  He held a Certificate of Competency in the Operation of Forklifts in category NOHSC7019 issued in 2004 and operated the fork trucks at the Site for 12 months before commencing training for the fork truck involved in the incident.  During those 12 months, Mr Jacobs observed the operation of the fork truck concerned at the Site.  He received training on it pursuant to the Operators Handbook which provides that operators moving from the smaller forklifts onto the large forklift must complete a logbook each time the trainee operator takes control of a unit under the supervision of a senior operator.  The trainee and the supervisor must sign off the logbook at the end of each shift indicating the lesson has been completed to the satisfaction of the supervisor.  The Operators Handbook provides in its list of ‘dos’ for safe operation that the operator should ‘Keep the load as low as possible and never travel with a load at vertical or forward tilt’. 

25                  From 15 January 2007 to 31 January 2007, Mr Jacobs was provided with 95.5 hours of on the job training of the fort truck, 84.5 hours of the training was under the supervision of a Mr Jerri Toopi.  Mr Toopi had been operating the fork truck at the Site fulltime for three years at the time he provided the training to Mr Jacobs.  Mr Toopi had also engaged in the practise of raising loads to a height where they may be moved above obstacles including the dry shed.  After the on the job training, Mr Jacobs was independently competency assessed by WA Fork Trucks who issued a ‘Statement of Attainment’ in February 2007 certifying that he was able to safely operate the fork truck.  WA Fork Trucks is a Registered Training Organisation registered in accordance with the Australian Quality Training Framework Standards to provide specific vocational education and training and/or assessment services. 

26                  The Statement of Attainment is issued once the assessor is satisfied that a level of suitable training was granted to the trainee; the trainee has achieved the basic training competencies; and the trainee is capable to operate the plant at a satisfactory level without the requirement of a direct supervisor. 

27                  On 19 December 2007 when the incident occurred, Mr Jacobs was being supervised by the Rail and Equipment Manager for Linfox who commenced work at the FCL site in a clerical role in 1994.  Over 12 and half years with FCL he progressed to the position of Operations Manager.  Following the acquisition by Linfox, his position changed to Rail and Equipment Manager and he was provided with a position description for this role in March 2007.  That description described the primary purpose of his position as being to ‘manage the safe, efficient and effective transfer of containers…’  A central focus of the  ‘Accountabilities and Key Result Areas’ for the position description was safety.  He was duly certified to hold the relevant position, although he had limited knowledge in the area of occupational health and safety and did not receive further training. 

Consequences for Mr Jacobs

28                  The severity of the consequences of the incident are evident from an affidavit sworn by Mr Jacobs.  He explained that his right leg suffered the most damage and he was told by his doctor that the bone was protruding from the side of his leg.  He has had a metal rod fitted to the bone in his lower right leg.  Until recently he had been told that he could still lose his right leg because the bone was not healing very well but it appears to be ‘healing a bit now but the process is very slow’.  He has been informed that the rod could break at any time and would stick out of his leg just below his knee.  His left leg had halo frames fitted to them with pins going through to hold the bones in place while they healed.  Those frames were on for about 6 months and a lot of infections were experienced in his left leg during that time and after the removal of the frames.  In total he has had 33 operations on his legs in the past two years.  The last operation being in April 2009 when the rod in the right leg was replaced.

29                  In addition, his left forearm from his elbow to his wrist was severely lacerated and the effect is that the tendons and nerves that make the four fingers on his left hand work were all badly damaged or lost.  As a result he has no mobility or strength in those four fingers and can only use his left thumb.  He has also had multiple operations on his left arm.  He has done extensive physiotherapy but no improvement is being shown.  A section of flesh was transferred from his abdomen to his left arm.  As a result, Mr Jacobs states that the muscles in his stomach are off-centre and his stomach is numb around the scar on the abdomen.  That numbness continues down his left leg to his knee.  Muscle was also taken out of the left side of his back to repair his arm and his leg and now when he tries to lift his left arm over his head, he can feel it pulling on his back.  He cannot raise his left arm above his head and feels pain on any occasion of lifting his arm.  He cannot wash his back in the shower and cannot stand in the shower due to fear of slipping.  After the accident he was in an induced coma at Royal Perth Hospital for about three weeks and spent three months in hospital before being sent to Shenton Park Rehabilitation Hospital where he spent about two months in a wheelchair.  His quality of life has been severely affected.  He used to enjoy kicking the football with his grandchildren.  There is no way he can do that now.  He has a bad limp and it hurts below his right knee whenever he puts weight on the joint.  He cannot walk around, for example, at a shopping centre.  He suffers from dizziness and apart from trips to the shopping centre where he sits on a bench, is required to fairly much to stay at home, socialising only being possible when friends visit him at his house.  Other activities such as working on cars which he used to enjoy are no longer possible.

30                  He has, however, been able to return to work at the Site where he is able to work three days a week, Monday, Wednesday and Friday for three or four hours at a time, driving a vehicle to deliver mail to other businesses in the locality.  He is required to take painkillers.  Conjugal relations have ceased since the accident.  He has experienced considerable disfigurement from skin grafts necessary as a result of the accident.  He had been severally depressed as a result of believing that the accident was purely his fault and has been relieved to learn that Linfox has also taken responsibility for the accident as a result of the proceedings brought by Comcare. 

31                  Linfox has accepted that it has breached s 16(1) of the OHS Act in relation to the incident.  It has accepted that it is appropriate for the Court to make the declaration sought by Comcare in the proceedings; it is appropriate for the Court to impose a pecuniary penalty under cl 4 of Sch 2 to the OHS Act in relation to the incident; and it is appropriate for the Court to make a costs order in favour of Comcare fixed at $25,000.

32                  The parties have agreed that an appropriate pecuniary penalty in the matter would be $150,000.

33                  Pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth), cl 2(1) of Sch 2 of the OHS Act makes it mandatory for the Court to make a declaration where it considers that s 16(1) has been breached but confers a discretion as to the imposition of a pecuniary penalty. 

RELIEF

34                  Clause 2 of the Sch 2 to the OHS Act provides:

2          Declarations of contravention

(1)        If a court considers that a person has breached one of the following provisions, or was involved in such a breach, it must make a declaration that the person has contravened this subclause:

(a)        subsection 16(1) (duties of employers in relation to their employees etc.);

…

35                  The parties have submitted that it is appropriate for the Court to inform itself of the facts necessary for the granting of declaratory relief by reference to the statement of agreed facts, the agreed statement of claim and the consent of the parties to the granting of the declaratory relief (see Comcare v Post Logistics Australasia Pty Ltd (2008) 107 ALD 578 (at [24]). 

36                  Where a declaration is made under subcl 2(1), the Court may also order the person to pay to the Commonwealth a pecuniary penalty which must not exceed the amount stated in the table to the maximum penalty to be the maximum penalty in relation to the provisions concerned. 

37                  The maximum penalty prescribed for a contravention of s 16(1) (in cl 2) is 2,200 penalty units.  At the relevant time, a penalty unit was defined by s 4AA of the Crimes Act 1914 (Cth) as being $110.  It follows that the maximum penalty for a breach of s 16(1) of the OHS Act is $242,000. 

38                  The view taken by Gyles J in Comcare v National Gallery of Australia (2007) 98 ALD 67 was that the approach to be taken for the Court when parties have reached agreement as to the quantum of a pecuniary penalty was not so much a matter of the Court deciding what figure should be proposed.  His Honour said (at [8]) ‘a commonsense approach is to take the agreed figure and give consideration to whether it is within the range of appropriate figures …’  But the role of the Court is, by no means, one of mere rubber stamping. 

39                  As French J said in Australian Competition and Consumer Commission v Real Estate Institute (WA) (1999) 95 FCR 114 (at [37]-[39]:

[37]      As I observed in the reasons for judgment in Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 there is a general principle of judicial restraint in the scrutiny of proposed settlements which was enunciated early in the history of the Trade Practices Act. It is not the function of the Court to impede settlements between parties legally represented and able to understand and evaluate the desirability of agreeing to a settlement nor to refuse to give effect to terms of settlement by refusing to make orders or accept undertakings where they are within the Court's jurisdiction and are otherwise unobjectionable. The Court will not substitute its own view of the orders or undertakings which it would have made if those proffered fall within the range of an appropriate disposition in the case.

[38]      Nevertheless, in the making of consent orders and the acceptance of undertakings the Court must not exceed its power. The limitations affecting jurisdiction or power to grant the relief sought must be observed. The Court cannot put itself in the position of enforcing conduct which it has no capacity to command or compel. Parties cannot by consent confer power on the Court to make orders which the Court lacks power to make. Moreover the power of the Court to make orders is an exercise of power defined and conferred by public law. The Court, in exercising that power, does not merely give effect to the wishes of the parties. It exercises a public function and must have regard to the public interest in doing so. In consideration of the public interest, however, it must also weigh the desirability of non-litigious resolution of enforcement proceedings.

[39]      I respectfully accept, as I did previously, the observations of Merkel J in Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 202; 148 ALR 339 at 343 that there must be a nexus between the conduct alleged or found to constitute the relevant contraventions and the injunctions granted. See also Australian Competition and Consumer Commission v Office Link (Aust) Pty Ltd (1997) 19 ATPR 41-598. Whether there is a sufficient nexus between the orders sought and the contravention alleged involves an evaluative judgment.

40                  In Comcare v Commonwealth of Australia (2007) 163 FCR 207, Madgwick J considered (at [123]) that the following matters ‘provided useful and logical general guidance as to the approach to be taken in consideration of penalties under the OHS Act:

(i)         the penalty must be such as to compel attention to occupational health and safety generally, to ensure that workers whilst at work will not be exposed to risks to their health and safety;

(ii)        it is a significant aggravating factor that the risk of injury was foreseeable even if the precise cause or circumstances of exposure to the risk were not foreseeable;

(iii)       the offence may be further aggravated if the risk of injury is not only foreseeable but actually foreseen and an adequate response to that risk is not taken by the employer;

(iv)       the gravity of the consequences of an accident does not of itself dictate the seriousness of the offence or the amount of penalty. However the occurrence of death or serious injury may manifest the degree of the seriousness of the relevant detriment to safety;

(v)        a systemic failure by an employer to appropriately address a known or foreseeable risk is likely to be viewed more seriously than a risk to which an employee was exposed because of a combination of inadvertence on the part of an employee and a momentary lapse of supervision;

(vi)       general deterrence and specific deterrence are particularly relevant factors in light of the objects and terms of the Act;

(vii)      employers are required to take all practicable precautions to ensure safety in the workplace. This implies constant vigilance. Employers must adopt an approach to safety which is proactive and not merely reactive. In view of the scope of those obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the employer in the future. This is particularly so where the employer conducts a large enterprise which involves inherent risks to safety;

(viii)     regard should be had to the levels of maximum penalty set by the legislature as indicative of the seriousness of the breach under consideration;

(xi)       the neglect of simple, well-known precautions to deal with an evident and great risk of injury, take a matter towards the worst case category;

(x)        the objective seriousness of the offence, without more may call for the imposition of a very substantial penalty to vindicate the social and industrial policies of the legislation and its regime of penalties.

41                  The view taken by Madgwick J in that case (at [125]) was that the maximum penalty would be appropriate where there had been a ‘conscious decision to flout the law’.  That approach was followed by North J in Comcare v Commonwealth (2009) 184 IR 441 (at [69]-[71]).

42                  Similarly in Comcare v John Holland Rail Pty Ltd (2009) 188 IR 415, Barker J said (at [135]-[136]) speaking of the OHS Act:

[135]    Object (g) anticipates that where obligations are not met, effective remedies may be imposed through both the use of civil remedies and, in serious cases, criminal sanctions. To put the matter directly, the inclusion of Sch 2 in the OHS Act emphasises a legislative intention that contravention of the occupational, health and safety principles and duties created by the Act should be sanctioned, in appropriate cases, by civil or criminal orders.

[136]    In the present case, the purpose of a civil pecuniary penalty, if imposed, is to deter the particular offender from offending again, as well as having the effect of generally deterring other employers from acting in a similar way. The imposition of a pecuniary penalty may be considered to have the advantage of reminding a particular employer of the importance of complying with the duties imposed on them by the OHS Act, as well as reminding other employers of the potential consequences should they fail to comply with the requirements of the Act. The imposition of an appropriate penalty is also calculated to give the community, and in particular relevant employees, confidence that the OHS Act is taken seriously.

43                  His Honour continued on the topic of assessing the quantity of a pecuniary penalty (at [137] and [141]-[143]) to say:

[137]    When it comes to assessing what level of pecuniary penalty should be imposed, the courts have over a number of years, in a number of different regulatory settings, developed criteria that are considered relevant to the formulation of the quantum of a civil pecuniary penalty. Accordingly, in Comcare v Commonwealth (2007) 163 FCR 207, 162 IR 407, Madgwick J at [116] emphasised that the overriding principle in assessing penalty is that the amount of the penalty should reflect the Court's view of the seriousness of the offending conduct in all the relevant circumstances.

…

[141]    With respect, like North J, I agree with the observations of Magdwick J and consider these are all relevant criteria to the assessment of a civil pecuniary penalty under the OHS Act.

[142]    However, I also concur with North J, in his emphasis of the overriding caution expressed by Flick J in Comcare v Post Logistics Australasia Pty Ltd (2008) 178 IR 200, where His Honour said that care must be taken to ensure that any listing of potentially relevant considerations do not themselves become an impermissible substitute for considering the terms of the legislation in issue or an unnecessary constraint upon a discretion conferred in otherwise unconfined terms.

[143]    I should also add that I consider it is relevant to the assessment of a pecuniary penalty to acknowledge, where it is the case, an admission of contravention and particularly an early admission by a respondent of its liability to the imposition of a remedy under the OHS Act. Where, for example, a respondent in a proceeding such as these early on acknowledges fault and willingness to accept a declaration of contravention, then the respondent will ordinarily be entitled to additional consideration in the assessment of the penalty. In some contexts this process is termed giving credit or "discount" on penalty. There is no statutory entitlements to such credit or a discount but it serves public policy in that it encourages a respondent to act responsibly, and may achieve a reduction in the public resources that would otherwise be required to prosecute the proceedings against the respondent.

44                  Finally, it is to be noted (as Barker J did) that Flick J observed in Post Logistics Australasia Pty Ltd (at [39]) that penalties are not imposed by reference to penalties in other cases being considered a benchmark.  His Honour said:

[39]      A final matter of principle should also be noted. It is inappropriate to fix a penalty simply by reference to the quantum of a penalty imposed in another case. It was thus understood to be common ground between the parties to the present proceeding that it was not appropriate to regard (in particular) the penalty of $198,000 in Comcare v Commonwealth as itself fixing a "benchmark" against which other penalties are to be determined in cases involving death. In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285, Burchett and Kiefel JJ observed (at 295):

A hallmark of justice is equality before the law, and, other things being equal, corporations guilty of similar contraventions should incur similar penalties: Trade Practices Commission v Axive Pty Ltd [(1994) ATPR 41-368] (at 42,795). There should not be such an inequality as would suggest that the treatment meted out has not been even-handed: cf the criminal law case Lowe v The Queen (1984) 154 CLR 606. However, other things are rarely equal where contraventions of the Trade Practices Act are concerned. In the present case, differing circumstances, size, market power and responsibility for the contraventions, as well as other factors, complicate any attempt to compare the penalties imposed on the appellant with those imposed on the other corporations.

Another form of comparison is not appropriate. The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case. The point was well made by Spender J in Trade Practices Commission v Annand and Thompson Pty Ltd [(1987) ATPR 40-772] (at 48,394) when he said:

Each case must, of course, be viewed on its own facts and facts may be infinite in their variety.

It follows, as his Honour also said, that "[t]he quantum of penalties imposed in other cases can seldom be of very much direct assistance".

A comparison of the facts in Comcare v Commonwealth and the facts in the present proceeding only serves to underline the point there being made by Burchett and Kiefell JJ (and by Spender J) -- namely that the facts and circumstances of individual cases are infinitely diverse. The quantum of any penalty to be imposed must necessarily be fixed by reference to the peculiar facts arising in each case as and when they arise.

APPROPRIATENESS OF THE PENALTY

45                  I accept the joint submission of the parties that the agreed penalty of $150,000:

1.                  would compel attention to occupational health and safety generally, and will provide general deterrence as well as specific deterrence;

2.                  appropriately balances the aggravating factors in this case, including

2.1       the fact that, at the time of the incident, a formal hazard identification and risk assessment specific to the task that Mr Jacobs was undertaking had not been conducted;

2.2       the risk of injury associated with operating a fork truck with a raised load was foreseeable and generally known.  The risks associated with the operation of a fork truck, particularly when carrying a raised load, had been identified and were well documented within the industry prior to the incident;

2.3       the fact that the risk of injury due to congestion in the container yard was identified but an adequate response was not taken to the risk by Linfox until after the incident.  It is agreed that the risk created by the congestion was not adequately identified, assessed or controlled by Linfox prior to the incident;

2.4       the fact that there were reasonably practicable steps that Linfox could have taken which, if taken, would have enabled the maintenance of a safe working environment, including plant and systems of work, that were safe for its employees and without risk to their health;

2.5       the lack of adequate supervision, including the absence of appropriately skilled and qualified supervisors; and

2.6       the lack of a pro-active approach to risk identification and assessment at the yard prior to the incident, particularly given the generally know risks associated with operating fork trucks contributed to the seriousness of the incident;

with mitigating circumstances, including:

2.7       the early acceptance by Linfox of its liability in this matter, and their preparedness to agree to the relief sought by Comcare;

2.8       the steps taken by Linfox since the incident to address the inadequacy at the Site of the incident to ensure the health and safety of its employees;

3.                  reflects the objective seriousness of the incident; and

4.                  is consistent with the objects of the OHS Act. 

46                  Finally, the parties have agreed that the figure of $25,000 represents a fair assessment of Comcare’s party and party costs of the proceedings including disbursements and I see no reason to disagree with this assessment. 

47                  The following orders will be made:

THE COURT DECLARES THAT:

1.                   Pursuant to subclause 2(1)(a) of Schedule 2, Part 1 of the Occupational Health and Safety Act 1991 (“the OHS Act”), on 19 December 2007, the Respondent breached section 16(1) of the OHS Act in that it failed to take all reasonably practicable steps to protect the health and safety at work of the employee, Bradley Jacobs, by:

1.1               failing to provide and maintain a working environment, including plant and systems of work, that were safe for the employee and without risk to his health; and

1.2               failing to provide the employee with adequate supervision to enable him to operate the Clark Omega 54D Dedicated Container Handler Fork Truck in a manner that was safe and without risk to health.

THE COURT ORDERS THAT

2.                   Pursuant to clause 4 of Schedule 2, Part 1 of the OHS Act, that the Respondent pay to the Commonwealth a pecuniary penalty of $150,000 in respect of the breach of section 16(1) of the OHS Act.

3.                   The Respondent pay the Applicant’s costs of the proceedings, fixed at $25,000.

Associate: 

Dated:         27 July 2010