FEDERAL COURT OF AUSTRALIA

Comcare v Commonwealth of Australia [2015] FCA 810

THE COURT:

1.    DECLARES that, on or about 20 October 2009 at the Cultana Training Area in South Australia, the respondent, acting through the Chief of the Defence Force as the employing authority in relation to members of the Australian Defence Force, contravened subclause 2(1) of Sch 2 of the Occupational Health and Safety Act 1991 (Cth) (the OHS Act) by reason of it having breached s 16(1) of the OHS Act in that in the course of conducting a Training Exercise it:

(a)    Failed to take all reasonably practicable steps to provide and maintain a working environment (including systems of work) for employees that was safe and without risk to their health (s 16(2)(a)(i)); and

(b)    Failed to take all reasonably practicable steps to provide employees with the supervision necessary to enable them to perform their work in a manner that was safe and without risk to their health (s 16(2)(e)).

2.    ORDERS that the respondent pay to the Commonwealth of Australia a pecuniary penalty in the sum of $220,000 in respect of the contravention of subcl 2(1) of Sch 2 of the OHS Act described in par 1 above.

3.    ORDERS that the respondent pay the applicant’s costs of and incidental to the application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    Comcare, as the appropriate regulator under the Occupational Health and Safety Act 1991 (Cth) (OHS Act), has brought a proceeding against the Commonwealth of Australia (Commonwealth) in which it seeks a declaration that the Commonwealth breached s 16(1), s 16(2)(a)(i) and s 16(2)(e) of the OHS Act in relation to the conduct by the Australian Defence Force (ADF) of certain military training exercises in South Australia in October 2009. As a consequence of the Commonwealth’s contravention, a fine young Special Forces soldier, Lance Corporal Mason Kerrin Edwards, lost his life during the training exercises in question (the relevant exercise). Another soldier was wounded.

2    The Commonwealth has admitted the contravention pleaded against it and has co-operated in the drafting of a Confidential Agreed Statement of Facts dated and filed on 12 September 2014 (SOAF).

3    The full extent of Comcare’s case against the Commonwealth is set out in a Confidential Amended Statement of Claim filed on 12 September 2014 (ASOC), the entire contents of which has been admitted by the Commonwealth in a Confidential Amended Defence filed on the same day.

4    By reason of the admissions made by the Commonwealth, the only matter left for determination by the Court was the appropriate penalty to be imposed upon the Commonwealth for the admitted breach of the OHS Act. There was no dispute that a declaration should be made as sought by Comcare.

The Relevant Legislative Provisions

5    In October 2009, s 16 of the OHS Act was in the following terms:

16    Duties of employers in relation to their employees etc.

(1)    An employer must take all reasonably practicable steps to protect the health and safety at work of the employer’s employees.

Note:    An employer who breaches subsection (1) may be subject to civil action or a criminal prosecution (see Schedule 2).

(2)    Without limiting the generality of subsection (1), an employer breaches that subsection if the employer fails to take all reasonably practicable steps:

(a)    to provide and maintain a working environment (including plant and systems of work):

(i)    that is safe for the employer’s employees and without risk to their health; and

(ii)    that provides adequate facilities for their welfare at work; and

(b)    in relation to any workplace under the employer’s control, to:

(i)    ensure the workplace is safe for the employees and without risk to their health; and

(ii)    provide and maintain a means of access to, and egress from, the workplace that is safe for the employees and without risk to their health; and

(c)    to ensure the safety at work of, and the absence of risks at work to the health of, the employees in connection with the use, handling, storage or transport of plant or of substances; and

(d)    to develop, in consultation with the employees of the employer, written health and safety management arrangements that will:

(i)    enable effective cooperation between the employer and the employees in promoting and developing measures to ensure the employees’ health, safety and welfare at work; and

(ii)    provide adequate mechanisms for informing the employees about the arrangements; and

(iii)    provide adequate mechanisms for reviewing the effectiveness of the arrangements; and

(iv)    provide adequate mechanisms for the variation of the arrangements in consultation with the employees; and

(v)    provide for a dispute resolution mechanism to deal with disputes arising in the course of consultations held under this Act (other than section 24) between the employer and the employees; and

(vi)    in the case of an employer who is required under section 34 to establish a health and safety committee—provide for the manner in which the health and safety committee is to be constituted and to operate; and

Note:    The establishment of health and safety committees is dealt with in section 34.

(e)    to provide to the employees, in appropriate languages, the information, instruction, training and supervision necessary to enable them to perform their work in a manner that is safe and without risk to their health.

(2A)    An instrument setting out health and safety arrangements developed under subsection (1) is not a legislative instrument.

(3)    Without limiting the matters that may be covered by health and safety management arrangements developed by an employer as mentioned in paragraph (2)(d), such arrangements may provide for the following:

(a)    a written occupational health and safety policy in respect of the employer and the employees of the employer;

(b)    arrangements relating to risk management;

(c)    the making of agreements between the employer, the employees of the employer and their employee representatives in relation to:

(i)    continuing consultation, between the employer, the employees of the employer and their employee representatives on occupational health and safety matters; and

(ii)    such other matters (if any) as are agreed between the employer, the employees of the employer and their employee representatives;

(d)    training in relation to occupational health and safety.

(4)    The obligations of an employer in respect of the employer’s employees that are set out in subsections (1) and (2) apply also in respect of persons who are contractors of that employer but only in relation to:

(a)    matters over which the employer has control; or

(b)    matters over which the employer would have had control but for an express provision in an agreement made by the employer with such a contractor to the contrary, being matters over which the employer would, in the circumstances, usually be expected to have had control.

(5)    Without limiting the generality of subsection (1) insofar as that section applies in relation to an employer’s employees, the employer breaches that subsection if the employer fails to take all reasonably practicable steps:

(a)    to take appropriate action to monitor the employees’ health and safety at work, and the conditions of the workplaces under the employer’s control; or

(b)    to maintain appropriate information and records relating to the employees’ health and safety; or

(c)    to provide appropriate medical and first aid services for the employees.

6    For present purposes, it is s 16(2) that is of particular relevance.

The Evidence Tendered at the Hearing

7    In support of its case, Comcare relied upon the ASOC, the Confidential Amended Defence filed by the Commonwealth, the SOAF and the affidavit of Peter Harold Hutchinson sworn on 18 September 2014. Attached to Mr Hutchinson’s affidavit were three statements made by Lance Corporal Edwards’ mother. In those statements, Lance Corporal Edwards’ mother told the Court about Lance Corporal Edwards’ life. He was a fine young man who had served his country in several dangerous overseas deployments. She then gave a heart rending account of the emotional, financial and personal impact his death had had upon her and Lance Corporal Edwards’ three siblings. This account was deeply personal in its content and extremely moving. I was touched by the palpable sincerity of the feelings exposed to the Court by Lance Corporal Edwards’ mother.

8    The Commonwealth read a confidential affidavit sworn by Major General Gilmore who was, at the time he swore the affidavit, the Deputy Chief of Army.

9    It is not necessary to traverse the contents of Major General Gilmore’s affidavit. That affidavit was read in order to support two broad themes: First, it was read in order to publicly convey to Lance Corporal Edwards’ family the deep regret of the Commonwealth for its failure to protect him during the course of the relevant military exercises. Second, it was designed to some extent to place before the Court the evidence of an appropriately qualified expert as to the need for the type of training which was undertaken in the relevant exercise if the military forces of Australia are to discharge their role competently and safely in the future.

The Agreed Facts

10    As I have already noted, the parties agreed the relevant facts in the SOAF.

11    Some of the facts set out in that document must remain confidential because of considerations of national security.

12    In this section of these Reasons, I will endeavour to capture the essence of the material events without travelling into facts, matters and circumstances which should be kept confidential. My summary of the relevant facts follows.

13    On the night of 20 October 2009 at the Cultana Range Training Area in South Australia (Cultana) and during the course of an army training exercise, Special Forces soldier Lance Corporal Mason Kerrin Edwards received a single fatal gunshot wound to the head. A second Special Forces soldier was hit by three rounds with two of those rounds striking the front and top of his helmet but causing no physical damage to him. The third round struck his rifle and deflected into his left forearm.

14    The death of Lance Corporal Edwards and the wounding of his comrade occurred while members of the ADF were conducting a training exercise at Cultana in the period from 8 October 2009 to 31 October 2009. The relevant exercise was designed to provide those soldiers involved in it with mission specific training and mission rehearsal exercises as a prerequisite to deployment to Afghanistan in early 2010. It comprised a number of different training exercises conducted both during the day and at night, including some training exercises in which live ammunition was used and fired (live fire serials) and in which explosive charges were used.

15    There is no dispute in this proceeding that the relevant exercise was conducted by the Chief of the Defence Force on behalf of the Commonwealth at Cultana and that Cultana was a workplace under the Commonwealth’s control. In those circumstances, there is no dispute in the proceeding that the Commonwealth owed to the ADF members who participated in the relevant training exercise the duties imposed upon it by the OHS Act, in particular, the duties imposed by s 16 of that Act.

16    In 2009, the ADF conducted training exercises (including range practices using small arms and other weapons) according to a formal manual (the manual). The manual contained detailed specifications as to the way in which such practices were to be conducted. Unsurprisingly, for such exercises, there was a specific chain of command by which the appointing authority for particular roles and positions was designated in each case. According to the relevant manual, each of the persons appointed to the operational roles had particular responsibilities which were set out in the manual in some detail. The manual required firing to cease immediately in the event of any emergency or unsafe practice at Cultana during the relevant exercise.

17    A single Range Instruction was prepared for the relevant exercise. It was prepared by the Director of Practice and signed by the Officer Commanding Alpha Company on 6 October 2009 and countersigned by the Commanding Officer of the Regiment on 9 October 2009. The Range Instruction included a list of key appointments for the relevant exercise.

18    All ADF members appointed in the Range Instruction to range safety appointments for the relevant exercise were suitably qualified for those appointments.

19    The Range Instruction stated that:

(a)    All range appointments and safety staff were to ensure that duties were discharged in accordance with the manual;

(b)    All Officers-in-Charge Practice were to ensure that all staff possessed the appropriate qualifications; and

(c)    All Officers-in-Charge Practice were obliged to conduct a briefing to start and fire in accordance with the manual prior to the commencement of any practice.

20    At Annexure C of the Range Instruction was a Risk Management Plan for the entire exercise, which stated that the activity OIC [Officer-in-Charge Practice]:

(a)    Was responsible for the safe conduct of all training; and

(b)    Had the authority to cancel or delay training at any time.

21    The Risk Assessment Summary attached to the Risk Management Plan relevantly identified as a potential threat “inadequate time for planning and briefings” and the consequent risk of “safety briefings/procedures [being] misunderstood”. It provided that the control for that threat was “no activity to proceed without a detailed safety brief to all activity participants”.

22    The Risk Assessment Summary also stated that all range appointments and safety staff were to be conversant with and were responsible for applying the risk control measures listed in the Risk Management Plan at Annexure C of the Range Instruction. The Range Instruction (including the Risk Management Plan at Annexure C) for the relevant exercise did not:

(a)    Specify which of the qualified SS (safety supervisors) or Officers-in-Charge Practice listed in the Range Instruction were appointed for each live fire serial conducted during the relevant exercise;

(b)    Include or require the preparation of a Risk Management Plan or a Risk Assessment for each live fire serial proposed to be conducted during the relevant exercise, including those:

(i)    Involving live fire at night;

(ii)    Involving firing at targets placed on penetrable walls; and

(iii)    With differences from any previous live fire serials; or

(c)    Address the potential risks associated with a live fire serial at night, or the use of targets placed on penetrable walls and the possibility of ADF members being external to those targets at the time of firing.

23    The Range Instruction identified certain risks, threats and controls arising out of the use of live fire in the relevant exercise. The manual described procedures for engaging in training exercises involving the use of live fire.

24    The placement of targets within the compound training area for the relevant exercise was:

(a)    Undertaken on 18 October 2009;

(b)    Done in accordance with Ch 20 of the manual; and

(c)    As agreed by the Director of Practice, Chief Safety Officer and the Officer-in-Charge Practice.

25    The nominated Officer-In-Charge Practice (Sergeant N) was assigned to the role of Officer-in-Charge Practice for the exercises on 19 and 20 October 2009 at about 1500 hours on 19 October 2009. Sergeant N had been appointed as Officer-in-Charge Practice and as SS SF Urban UWP in relation to the relevant exercise as a whole in the Range Instruction. Sergeant N delivered the standard safety brief to members participating in the training exercise conducted at night (the night exercise) other than one of the designated safety officers (O32) and members of the Incident Response Regiment on 20 October 2009 before the commencement of the training exercise conducted during the day (the day exercise).

26    During the safety brief, Sergeant N informed the members participating of the position of all targets.

27    The plan in respect of the use of explosives for the night exercise was briefed to SS (other than O32) by Sergeant N at about 1830–1900 hours after completion of the day exercise and before the commencement of the night exercise.

28    The placement of targets, the plan for the night exercise and the information in the safety briefings were undertaken to manage the risks to the health and safety of members participating in the day and night exercises, including risks such as the risk of members being behind targets at the time of live firing.

29    On 20 October 2009, a number of ADF members (including Lance Corporal Edwards) took part in live fire training exercises at Cultana. Sergeant N participated as Officer-In-Charge Practice.

30    At all times on 20 October 2009, Sergeant N was the appointed Officer-in-Charge Practice for the training exercises and was required to fulfil the requirements and responsibilities of that role as set out in the manual.

31    The exercises at Cultana were the final collective training exercises for members of Alpha Company prior to their planned deployment to Afghanistan in 2010. They were intended to consolidate and further develop the soldiers’ combat skills, situation awareness, weapons and equipment proficiency and other tactics, techniques and procedures required for deployment.

32    The relevant exercise comprised a number of phases which were structured so as to build towards the practice compound assaults that took place on 19 and 20 October 2009.

33    Both the day exercise and the night exercise involved the assault by members of a particular platoon on two compounds at Cultana (the Northern Compound and the Southern Compound).

34    The Northern and Southern Compounds were square shaped structures separated by an alleyway (alleyway). The Northern and Southern Compounds had external and internal walls comprised of three layer plywood that were:

(a)    Approximately 2.5 to 3 metres in height, so that a person standing at ground level could not see over them;

(b)    Opaque, so that a person could not see through them; and

(c)    Not bullet proof, so that any live rounds fired during the course of the live fire serials could penetrate the walls.

35    As I have already mentioned, on 18 October 2009, targets were placed inside the Northern Compound and the Southern Compound. Those targets were situated in close proximity to the western exterior wall of the Northern Compound. Live rounds fired at those targets would penetrate only the western external walls of the Northern Compound. The participants firing at the targets placed in their team’s respective area of operations could not see if anyone was situated on the exterior side of the western external wall of the Northern Compound.

36    The plans for the day exercise and the night exercise on 20 October 2009 involved each team from the platoon involved assaulting the Northern and Southern Compounds by:

(a)    Approaching the Northern and Southern Compounds;

(b)    Taking a final assault position in proximity to their area of operations;

(c)    Entering the area of operations through their respective point of entry; and

(d)    Firing on the targets in the area of their operations.

37    On 20 October 2009, before the commencement of the day exercise, Sergeant N delivered a safety briefing to the relevant platoon, in which he informed that platoon of the safety procedures for both the day and night exercises and that there would be changes between the day and night exercises. At the time Sergeant N delivered the safety briefing, the plan for the night exercise had not been finally formulated nor had it been communicated to all relevant participants.

38    The safety briefing delivered by Sergeant N at about 1800 hours on 20 October 2009 did not discuss all the changes that would be made between the day and night exercises and did not cover the practical positioning and movements of the four teams for the night exercise. This was the only safety briefing delivered by Sergeant N to the platoon in question before the night exercises were conducted.

39    On 20 October 2009, at about 1830 to 1900 hours, after completion of the day exercise and prior to the commencement of the night exercise, Sergeant N delivered a separate safety briefing about the night exercise to safety staff, in relation to the entry points for the night exercise, which involved changes between the day and night exercise. As was the usual practice, only safety staff were present at the safety brief. Although O32 later became an SS for the night exercise, he was not present at the safety briefing. Nor, consistent with the usual practice, were any members of the Incident Response Regiment.

40    At approximately 2000 hours on 20 October 2009, prior to the night exercise, the platoon commander delivered confirmatory orders to the team leaders. Those orders did not include the final pre-assault positions, which were to be determined tactically by the team leaders and as directed by the SS for each team. The platoon commander expected that, as is the usual practice, the team leaders would pass on all relevant orders to their team.

41    Additionally, at about 1730 hours on 20 October 2009, Sergeant N conducted a walk through of the site.

42    The planned action sequence for the night exercise was developed by two particular individuals but was not documented in any way. The planned action sequence is explained in detail in the SOAF.

43    At the night walk through, Sergeant N orally directed that, before the initiation of the explosion on the southern besser brick wall, teams two and three were to stack tightly together at the preliminary final assault position behind the northern besser brick wall. No alternative preliminary final assault position was discussed or directed by Sergeant N.

44    It was standard practice for an Officer-in-Charge Practice to give such directions orally, rather than in writing, so that the Officer-in-Charge Practice could confirm the understanding of all relevant personnel and so that those personnel were given an opportunity to ask questions and clarify the briefing and instructions for the exercise at the time the directions were given.

45    All team leaders were then told before the night exercise that teams two and three were to be stacked together behind the northern besser brick wall. One team leader understood that team two was to be stacked behind or next to team three behind the northern besser brick wall. Another team leader understood that team two’s preliminary final assault position was behind the northern besser brick wall or, alternatively, on the western wall of the Northern Compound.

46    One private soldier was to be an observer. However, the Officer-in-Charge Practice assumed that that soldier was the SS for team one. The Officer-in-Charge Practice knew that the particular soldier lacked the qualifications to be SS for the night exercise but did not recognise the significance of that soldier’s lack of qualifications at the time of the night walk through, or at any time during the night exercise, and did not, at any time before or during the night exercise, correct his prior assumption that the particular soldier was the SS for team one.

47    After the night walk through and prior to the commencement of the night exercise, one of the NCO’s occupying an Officer-in-Charge Practice position recognised that the private soldier to whom I have referred at [46] above was not qualified to be the SS for team one. Accordingly, he then allocated himself to the position of SS for team one for the night exercise and allocated another soldier to the position of SS for team two for the night exercise. He told this latter soldier to get a briefing but did not specify from whom he should get the briefing. The NCO who made that decision was not authorised to appoint or allocate himself as SS for team one nor was he authorised to appoint or allocate the soldier whom he allocated as SS for team two because he was not an Officer-in-Charge Practice for that night exercise. It was the role of Sergeant N to appoint SSs for the night exercise and to ensure that they were all qualified.

48    Sergeant N was not informed of the changes arranged by the NCO who made the changes to which I referred at [47] above.

49    Prior to the night exercise, the new SS for team two sought and received a briefing from another soldier involved in the planning. He ought to have sought, but did not seek or receive, any briefing from Sergeant N. This soldier did not participate in any walk through with Sergeant N, including a walk through using night firing equipment at night and was not aware of the oral direction given by Sergeant N that teams two and three were to stack together at the preliminary final assault position behind the northern besser brick wall before the charge on the southern besser brick wall was detonated.

50    The night exercise then proceeded.

51    When team one commenced firing on its designated targets, Lance Corporal Edwards and the other soldier who was wounded that night were both behind team one’s targets. They should not have been there. The bullets fired by team one at its targets penetrated the western external wall of the northern compound, killed Lance Corporal Edwards and injured his comrade.

52    The corporal who positioned Lance Corporal Edwards and his comrade believed that he had a choice of two options of where to stage, behind the besser brick wall or where he went. When the live firing commenced, Lance Corporal Edwards and his comrade were directly behind the targets at which the other group of participants were shooting. Those targets were behind a penetrable wall although those firing could not see that they were firing at their comrades.

53    The parties agreed that the Commonwealth knew of the very significant risk to the health and safety of its employees posed by live firing.

54    The Commonwealth had documented a range of procedures, instructions and training to address the known risks to the health and safety of its soldiers posed by live firing, including the manual, the range standing orders and in its training of ADF members in the application of the technical information contained in the manual appropriate to their employment category and range safety appointment.

55    The potential for the risks to health and safety to materialise was increased during the night exercise because it was to be conducted in darkness (mitigated by the use of night firing equipment), because of the differences between the plan for the night exercise and the day exercise and because of the differences in personnel participating in the night exercise from the day exercise. In addition, the Commonwealth knew of the dangers that might arise from differences between the plan for the night exercise and the actual conduct of the night exercise, such as the risk that a team would not position itself at its planned final assault position, or the risk that the use of practice grenades could delay the movement of a team.

56    The night firing equipment has limitations.

57    The Commonwealth knew of the increased potential for the risks to health and safety to materialise as a result of the matters set out at [46]–[56] above.

58    Comcare and the Commonwealth agreed that the systems, procedures and policies that the Commonwealth had in place were not sufficient to protect the health and safety at work of its employees in the present case since:

(a)    The manual did not include any or any adequate procedures or mechanisms to check, monitor, audit or ensure that the Commonwealth’s policies were being implemented and that those responsible according to the manual for carrying out tasks to obviate the risks associated with live firing carried out those tasks accordingly;

(b)    There was no system in place to evaluate the effectiveness of the Commonwealth’s policies;

(c)    The manual did not require that a risk management plan or risk assessment to be prepared for each separate training exercise; and

(d)    The manual did not provide that if a breach of safety or dangerous occurrence (by an act or by omission) was observed, it was the responsibility of the person observing the breach of safety to give the order “STOP STOP” in a loud clear voice or if necessary by radio or the like as appropriate.

59    It was agreed by the parties that the preparation of only one risk management plan or risk assessment purportedly to cover the entire relevant exercise, including each of the training exercises to be undertaken during that exercise, was inadequate. It was deficient because it did not require a risk management plan or risk assessment to be undertaken and prepared for each training exercise, particularly for each live fire serial.

60    It was agreed that a number of the individuals concerned failed to meet the necessary standards expected of Commonwealth personnel employed in the ADF. Those failures mainly concerned the miscommunications caused by the last minute briefings and the failure to ensure that appropriately qualified persons were appointed to the relevant tasks involved in the exercises and had been fully and adequately briefed by other appropriately qualified persons.

61    The parties agreed that the Commonwealth:

(a)    Failed to take all reasonably practicable steps to provide and maintain a working environment (including systems of work) for employees that was safe and without risk to their health (s 16(2)(a)(i) of the OHS Act); and

(b)    Failed to take all reasonably practicable steps to provide employees with the supervision necessary to enable them to perform their work in a manner that was safe and without risk to their health (s 16(2)(e) of the OHS Act).

62    In the SOAF, the details of those admitted breaches are set out at par 98 and par 99.

63    After the tragic incident which occurred on 20 October 2009, Comcare conducted an investigation. The Commonwealth fully co-operated with Comcare both in that investigation and subsequently. In particular, after extensive negotiations, Comcare filed an Amended Confidential Statement of Claim and the Commonwealth filed an Admitting Amended Confidential Defence in which it admitted all of the allegations made against it. In addition, the Commonwealth negotiated, and joined, with Comcare in the SOAF. The Commonwealth’s responsibility for the incident was the subject of detailed and appropriate admissions.

64    The Commonwealth has implemented substantial remedial measures to remedy the deficiencies which gave rise to this tragic incident. Comcare is satisfied that appropriate measures have now been taken to avoid a repeat of the incident. For this reason, Comcare does not seek any order for additional remedial action.

Consideration

The Applicable Principles

65    A contravention by an employer of s 16 of the OHS Act attracts a maximum penalty of $242,000. This is a “relatively low limit” (see Comcare v Commonwealth of Australia (2007) 163 FCR 207 (Trooper Lawrence) at 208 [1] per Madgwick J).

66    The OHS Act does not explicitly list factors that the Court should take into account in determining an appropriate pecuniary penalty. Comcare submitted, however, that guidance is provided by a number of cases in this Court.

67    Both parties agreed that the leading authority in respect of the imposition of pecuniary penalties for breaches of the OHS Act is the Full Court’s decision in Comcare v Post Logistics Australasia Pty Ltd (2012) 207 FCR 178 (Post Logistics 2012).

68    In Trooper Lawrence, Madgwick J had listed a number of factors which he regarded as important in assessing penalties under the OHS Act. At 228–229 [119]–[123], his Honour said:

119    The applicant contends that guidance may be had from decisions relating to penalty under State occupational health and safety laws which import like obligations on employers.

120    Decisions under the cognate New South Wales Act refer to the following considerations among others:

(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.

121    The applicant contends that the above approach is particularly relevant in the context of the subject OHS Act. The evident purpose of making the Commonwealth liable to a penalty for a breach of s 16(1) of the OHS Act is to mark the seriousness of the conduct and act as a deterrent to the Commonwealth, Commonwealth agencies and other persons who may be subject to the OHS Act.

122    The respondent submitted:

Care must be taken in the use of criminal cases arising under occupational health and safety legislation in the various State jurisdictions. Unlike subsection 16(1) of the OHS Act, the New South Wales equivalent imposes an absolute obligation on an employer to secure the health and safety of its employees, a circumstance that has guided the New South Wales courts in their approach to penalties in criminal proceedings under the NSW legislation. Subsection 11(2) of the OHS Act very deliberately excludes the Commonwealth and Commonwealth authorities (other than Government business enterprises) from liability for prosecution for an offence under the Act. The reasons for this exclusion must go beyond simply easing the procedural and evidentiary burdens faced by Comcare and its investigators in making the Commonwealth accountable for occupational health and safety breaches. As Giles JA observed in Adler v ASIC [2003] NSWCA 131; (2003) 46 ACSR 504, [658]: ‘Civil penalties can be regarded as punitive, with a resemblance to fines imposed on criminal offenders, but the resemblance is not identity’.

123    I nevertheless consider that, despite the differences between the New South Wales and the Commonwealth legislation, and bearing in mind that these are civil and not criminal proceedings, the considerations enumerated above, mainly enunciated in decisions of the New South Wales Industrial Commission, provide useful, analogical, general guidance as to the approach to be taken in consideration of penalties under the Commonwealth Act.

69    In Post Logistics 2012, the Full Court warned of the danger of using the factors listed by Madgwick J in Trooper Lawrence in an inflexible way. The Full Court said that paramount consideration must be given to the terms of the legislation itself. At 201–202 [68]–[69], the Full Court said:

68    We agree with the reservations expressed by Flick and Barker JJ concerning the Madgwick factors. If a court applied the Madgwick factors dogmatically or inflexibly, there is a significant chance an error would be committed in the reasoning process. As Mahoney JA stated in Kable v Director of Public Prosecutions (1995) 36 NSWLR 374 at 394, “If justice is not individual, it is nothing”. The various factors for consideration in assessing a penalty for breach of the OH&S Act may have greater or lesser importance in any given case, depending on the various objective and subjective elements of the breach. The penalty assessment process cannot be reduced to an inflexible set of criteria.

69    That being said, we consider that the Madgwick factors provide a useful foundation or starting point for an assessment of a civil pecuniary penalty. They are consistent with the body of authority from this Court and other courts. Furthermore, they are consistent with the theoretical principles concerning the role of deterrence considered above. In our view they properly recognise that deterrence is a relevant matter to be taken into account in assessing a civil pecuniary penalty under the OH&S Act. Although a court is not required to specifically refer to these factors, in most cases it would be prudent to do so. Having regard to the fact that, since 1 January 2012, the OH&S Act has been replaced by the Work Health and Safety Act 2011 (Cth) (subject to the Transitional and Consequential Provisions Act), the Court sees little or no advantage in reformulating either the Madgwick factors or any of the other factors which have been identified in the caselaw as having a potential relevance to the determination of a pecuniary penalty under the OH&S Act. The position may need to be revisited if and when an appropriate occasion arises in respect of the new legislation.

70    Again, at 202–203 [73], the Full Court said:

In our view, general deterrence is an important consideration in fixing an appropriate pecuniary penalty for a contravention of the OH&S Act if that remedy is to be effective and if other relevant statutory objects are to be served. The Act encourages positive steps to be taken to achieve these objectives by, inter alia, providing for civil and criminal penalties to be imposed in cases where these positive obligations are not observed. The OH&S Act reinforces the positive obligations contained in s 16 and elsewhere by emphasising the obligation not to commit the civil wrongs that are stated in the Act. The two concepts are inextricably linked. Moreover, as noted above, we consider that the fixing of an amount of pecuniary penalty serves a valuable purpose in raising awareness on the part of both the particular contravenor and others who are bound by the OH&S Act of the need for compliance with statutory occupational health and safety standards.

71    At 183–184 [12], the Full Court referred to the objects of the OHS Act, those objects being reflected not only in the express terms of the long title to that Act but also in s 3. At 195 [43]–[44], the Full Court said:

43    In our opinion the primary judge erred in his consideration of the role of the deterrence in fixing a civil pecuniary penalty under the OH&S Act. Deterrence, both general and specific, is a fundamental purpose of the role of civil pecuniary penalties. First, the object in s 3(g) of the OH&S Act evinced a legislative intention to provide for effective remedies where the obligations imposed by s 16 on an employer, such as the respondent, were not met. The remedy of a civil pecuniary penalty was the only form of penalty available to punish a Commonwealth authority such as the respondent in the circumstances. Thus, it was the only way in which a court could mark the seriousness of a contravention of the Act of the kind here for all employers bound by it, whether or not any particular employer was also amenable to criminal sanctions.

44    Secondly, the breach of s 16(1) found by the primary judge was of a kind that employers should realise will attract substantive punishment by way of a civil pecuniary penalty. That will assist in encouraging a general approach in the community that employers must meet the obligations imposed on them by s 16(1), and hence aid the achievement of the objects in s 3(a)-(f) of the OH&S Act.

72    The persistent focus of judges of this Court upon deterrence as the primary factor to be considered when imposing a pecuniary penalty under the OHS Act is consistent with the approach of State courts under similar legislation.

73    The Commonwealth generally agreed with Comcare’s submissions as to the relevant principles. However, in its submissions, the Commonwealth reminded the Court that the present case is not a criminal case but rather is a case in which the appropriate regulator is seeking a pecuniary penalty for a civil contravention. The Commonwealth accepted, however, that the objective seriousness of the contravention is also a legitimate factor to be taken into account.

This Case

74    Comcare submitted that the Commonwealth’s failure to follow its existing controls in its systems, procedures and supervision in order to address the known risk to the health and safety of its employees (Australian soldiers in the ADF) posed by live firing, an inherently risky activity, made the contravention a very serious one. Comcare reinforced this submission by emphasising that the incident occurred because of systemic failures at a number of levels, all of which went undetected. Comcare advocated a penalty which reflected the very serious nature of the contravention.

75    Comcare submitted that the failure on the part of the Commonwealth to ensure that those involved in the night exercise were appropriately briefed and qualified to perform the tasks being asked of them led to a state of affairs where live ammunition was fired through a penetrable barrier behind which a number of young soldiers had been positioned. Comcare submitted that the serious risk to the health and safety of the soldiers in question was not only foreseeable but actually foreseen. The Commonwealth had taken certain steps to minimise risk but those steps were inadequate. In particular, non-penetrable barriers should have been erected in order to ensure that, if, as happened, soldiers were positioned in the wrong place, no serious consequences would have followed. Next, the manual was deficient because it did not require that a risk management plan or risk assessment be developed and acted upon in relation to each separate training exercise. Comcare went on to submit that, notwithstanding that the Commonwealth should be assumed to be a responsible employer, there was a need for specific and general deterrence in the present case.

76    Comcare acknowledged that the Commonwealth has behaved impeccably in dealing with the matter, both during the investigation phase and subsequently in the litigation phase. As a matter of principle, those circumstances must count in favour of the Commonwealth. In addition, the Commonwealth has taken appropriate remedial measures since this incident and should be given credit for that circumstance as well.

77    Nonetheless, Comcare submitted that the Court should impose the maximum penalty.

78    The Commonwealth endeavoured to persuade the Court not to impose the maximum penalty. It accepted that the Court should impose a substantial penalty but it made detailed submissions in support of the proposition that the present case was not in the worst category. In those submissions, the Commonwealth argued:

(a)    Training soldiers to fight effectively and safely is an inherently dangerous activity. The mere fact that live ammunition is used is not, of itself, a matter for criticism.

(b)    The ADF took a number of reasonable steps to minimise the risk to its soldiers but, as matters transpired, they were inadequate.

(c)    The relevant manual was not hopelessly deficient but rather inadequate in some respects. In addition, in some respects, the manual was not followed.

(d)    Insufficient account is being taken by Comcare of the co-operation and contrition shown by the Commonwealth.

79    The Commonwealth addressed Comcare’s submission that, given the number of past incidents involving the ADF soldiers, it should have been doubly vigilant. The Commonwealth submitted that this submission failed to allow for the scale and diversity of activities undertaken by the ADF and that little weight should be placed upon prior contraventions which, after all, were very few.

80    Both parties made detailed submissions as to the appropriate penalty.

81    The present case was heard before the Full Court handed down its decision in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331 (Inspectorate v CFMEU). Had the present case been heard after that decision had been handed down, it would have been inappropriate for either party to have nominated a specific penalty.

82    In Tax Practitioners Board v HP Kolya Pty Ltd [2015] FCA 472 (Kolya), I considered the impact of Barbaro v The Queen (2014) 305 ALR 323 (Barbaro) and Inspectorate v CFMEU upon the civil penalty regime under consideration in that case. At [89]–[105], I said:

89    In Barbaro, the appellants, Messrs Barbaro and Zirilli, pleaded guilty to serious drug offences in the Supreme Court of Victoria. Before they pleaded guilty, there were discussions between the lawyers on both sides as to the range of sentences to which the offenders might be sentenced. The offenders were then sentenced. At the sentencing hearing, the trial judge refused to accept any submission from the prosecution or the defence as to the range of sentences that could be imposed upon the appellants. Leave to appeal was refused to Mr Barbaro. Mr Zirilli’s appeal was dismissed. In the High Court, the appellants argued that the sentencing hearing before the trial judge was procedurally unfair because she had failed to take into account a relevant consideration, namely, the views of the parties as to the appropriate sentence.

90    In the High Court, the majority (French CJ, Hayne, Kiefel and Bell JJ) held that the appellants’ arguments depended upon two flawed premises. The first was that the prosecution is permitted (or required) to submit to a sentencing judge its view of what are the bounds of the range of sentences which may be imposed on an offender. The second was that that premise is a submission of law (see the remarks of the majority at 325 [6]).

91    At 325 [7]–[8], the majority said:

7.    The prosecution's statement of what are the bounds of the available range of sentences is a statement of opinion. Its expression advances no proposition of law or fact which a sentencing judge may properly take into account in finding the relevant facts, deciding the applicable principles of law or applying those principles to the facts to yield the sentence to be imposed. That being so, the prosecution is not required, and should not be permitted, to make such a statement of bounds to a sentencing judge.

8    Because the premises for the applicants’ arguments are wrong, the appeals must fail. Before examining the premises further, however, it is necessary to say something about the facts.

92    At 327–328 [20]–[23], the majority explained that, in Victoria, in criminal matters, as a result of the decision in R v MacNeil-Brown (2008) 20 VR 677 (MacNeil-Brown), a practice had developed in that State of a sentencing judge asking Counsel for the prosecution to make a submission as to the “available range” of sentences. The majority in the High Court considered this practice to be wrong in principle. They held that MacNeil-Brown should be overruled. The majority specifically held that that practice should cease.

93    At 328–332 [24]–[43], the majority gave their reasons for the conclusions to which they had come. In those paragraphs, the majority explained that the use of the expression “an available range” in respect of a sentence for a criminal offence is apt to mislead. At 329 [28] in particular, the Court said that a conclusion that an error has (or has not) been made in a sentence neither permits nor requires setting the bounds of the range of sentences within which the sentence should (or could) have fallen. The correct principle is that a sentence may be set aside if it is manifestly excessive or manifestly inadequate. In that event, the discretion to sentence must be re-exercised.

94    At 329 [29], the majority said:

The practice countenanced by MacNeil-Brown assumes that the prosecution's proffering a statement of the bounds of the available range of sentences will assist the sentencing judge to come to a fair and proper result. That assumption depends upon the prosecution determining the supposed range dispassionately. It depends upon the prosecution acting not only fairly (as it must) but in the role which Buchanan JA rightly described (MacNeil-Brown at [128]) as that of “a surrogate judge”. That is not the role of the prosecution.

95    The majority went on to emphasise the need for sentences to be imposed dispassionately. They emphasised that the role of the prosecution and the role of the judge in the sentencing process is not the same. At 330 [33], the majority said:

… If a judge sentences within the range which has been suggested by the prosecution, the statement of that range may well be seen as suggesting that the sentencing judge has been swayed by the prosecution's view of what punishment should be imposed. By contrast, if the sentencing judge fixes a sentence outside the suggested range, appeal against sentence seems well nigh inevitable.

96    The focus of the majority judgment at 330–331 [34]–[40] was on the actual sentence itself. In my view, the majority held that it was permissible for the parties to address the Court on the relevant sentencing principles and on comparable sentences. The prohibition articulated by the majority is confined to the prosecution’s suggesting a particular sentence. In particular, at 331 [38] and [40], the majority said:

38.    If a sentencing judge is properly informed about the parties' submissions about what facts should be found, the relevant sentencing principles and comparable sentences, the judge will have all the information which is necessary to decide what sentence should be passed without any need for the prosecution to proffer its view about available range. If the judge is not sufficiently informed about what facts may or should be found, about the relevant principles or about comparable sentences, the prosecution's proffering a range may help the sentencing judge avoid imposing a sentence which the prosecution can later say was manifestly inadequate. But it will not do anything to help the judge avoid specific error; it will not necessarily help the judge avoid imposing a sentence which the offender will later allege to be manifestly excessive. Most importantly, it will not assist the judge in carrying out the sentencing task in accordance with proper principle (cf Wong (2001) 207 CLR 584 at 611 [75]; Markarian v The Queen (2005) 228 CLR 357 at 373 375 [37]; [2005] HCA 25; Muldrock v The Queen (2011) 244 CLR 120 at 128 [18]; [2011] HCA 39; Munda v Western Australia (2013) 87 ALJR 1035 at 1046 [59]; 302 ALR 207 at 219; [2013] HCA 38).

…

40    The setting of bounds to the available range of sentences in a particular case must, however, be distinguished from the proper and ordinary use of sentencing statistics and other material indicating what sentences have been imposed in other (more or less) comparable cases. Consistency of sentencing is important. But the consistency that is sought is consistency in the application of relevant legal principles, not numerical equivalence (Hili (2010) 242 CLR 520 at 535 [48] [49]).

97    At 332 [42]–[43], the majority held that the proffering of a sentencing range by the prosecution was a statement of opinion not a submission of law.

98    At 332–333 [44]–[49], the majority held that there was no want of procedural fairness and no other unfairness in the sentencing judge’s refusal to receive submissions as to the range of appropriate sentences.

99    Justice Gageler joined in the orders which the majority held should be made. However, his Honour took a different view as to the status of a submission proffered by the prosecution in relation to sentence. His Honour held that such a submission is a submission of law and not merely a statement of opinion. His Honour went on to hold that the prosecution had a duty to assist the Court to avoid appealable error by making a submission as to the range of appropriate sentences if the sentencing court requests such assistance or if the prosecution thinks that there is a significant risk that the Court will impose an appealable sentence in the absence of such a submission. His Honour also held that the Court is not obliged to accept the submission and is required to give effect to its own conclusion as to the appropriate sentence.

100    In Inspectorate v CFMEU, the ratio of the Full Court was that the reasoning in Barbaro applies to proceedings for the imposition of a civil pecuniary penalty where the parties have agreed upon the penalties and, pursuant to that agreement, where the parties make joint submissions to the Court as to the appropriate penalties or range of possible penalties.

101    However, in Inspectorate v CFMEU, the Full Court went further and expressed the view that the reasoning of the majority of the High Court in Barbaro inevitably leads to the conclusion that it is not permissible for the regulatory authority in civil pecuniary penalty cases to make a submission to the Court identifying a range of penalties, nominating specific penalties or urging the adoption of agreed penalties. At [239]–[243], the Full Court said:

239    We accept that in the short term, there may be inconvenience and perhaps increased expense to regulators and respondents in cases where agreed penalties, or agreed ranges have already been identified. We do not expect that such additional cost will be significant. We have already said much about why we consider that the decision in Barbaro should inform our approach to the agreed statement. Primarily, we consider that the sentencing process, and that in which a pecuniary penalty is imposed are very similar in nature. In particular, both address punishment by the State, and both require an assessment of a wide range of considerations which interact in complex ways. Hence each involves the instinctive synthesis to which we have referred. We consider that the concerns identified in Barbaro are relevant to the pecuniary penalty process. The impermissible expression of an opinion as to the amount of the penalty reflects a well-established limitation upon the ambit of a party’s right to make submissions. Further, the difficulty in understanding the method by which any such opinion is formed is as real in pecuniary penalty cases as it is in criminal sentencing, as is the risk that such opinions may compromise the sentencing process and/or create a public perception of such compromise.

240    Insofar as concerns submissions as to the range within which the penalty should fall, it is equally as inappropriate in pecuniary penalty cases as in criminal sentencing. The High Court has made it clear that statutory discretions are not to be limited other than by reference to the relevant statute. It is difficult to identify any other statutory discretion conferred upon a court which has been limited in the way in which the decisions in NW Frozen Foods and Mobil have limited the discretion to fix a pecuniary penalty. When examined, the historical basis for that limitation is not grounded in principle.

241    As to an agreed penalty, we have previously indicated that any admission of liability may be a relevant consideration in sentencing or imposing a pecuniary penalty. Willingness to submit to the imposition of a substantial penalty may also be relevant in that way. However, even if the offender nominates a substantial figure as the penalty to which it will submit, the Court must still fix the appropriate penalty, taking into account such contrition as well as all other relevant considerations. As we have said, any such agreement is no more than an expression of a shared opinion, and therefore inadmissible. As we have also said, the amount of the agreed penalty may simply reflect the point at which each party considers that it is in its interest to agree. In either case, the agreed amount offers no assistance in fixing the amount of the appropriate penalty.

242    Finally, we do not dismiss the concerns of the regulators as to the importance of negotiations and agreements in the enforcement of the various statutes pursuant to which pecuniary penalties may be imposed. However we do not accept that the problem is as great as the regulators suggest. The adversarial system depends upon the capacity of professional advocates to explain the most complicated of legal and factual situations by reference to the evidence and the law. The issues to be ventilated in pecuniary penalty cases may be complex, but they are not amongst the most complex matters which this Court regularly considers. We expect that regulators and offenders will continue to seek to reach agreement as to factual matters and as to the application of the law. As to uncertainty of outcome, we consider it to be the inevitable consequence of entrusting the pecuniary penalty process to the judiciary. NW Frozen Foods and Mobil establish that it is for the Court to fix the penalty. That proposition has been constantly repeated in subsequent cases. In these proceedings, no party has suggested otherwise. Once that proposition is accepted, the only remaining question is as to the relevance, to the Court’s consideration, of submissions as to ultimate penalty or range of penalties, or the fact of any agreement as to penalty. In Barbaro, the High Court held that statements as to ultimate outcome or range were merely expressions of opinion and therefore could not properly be advanced in submissions. There can be no justification for taking a different view in pecuniary penalty proceedings.

243    We appreciate that the views which we have expressed are inconsistent with the long established, although perhaps imprecise practice described in NW Frozen Foods and Mobil. We depart from that practice only because the decision in Barbaro, in our view, requires that we do so.

102    In Inspectorate v CFMEU, the Full Court sat in the original jurisdiction of the Court pursuant to a direction made by the Chief Justice under s 20(1A) of the Federal Court of Australia Act 1976 (Cth).

103    It may be thought that the Full Court’s decision in Inspectorate v CFMEU is not binding upon single judges of this Court because the Full Court was exercising the original jurisdiction of the Court and not the appellate jurisdiction of the Court. I do not agree with that notion. I do not think that the status of the decision as a precedent is diminished or put into question at all by the circumstance that the Full Court was exercising the original jurisdiction of the Court. Quite clearly, the Full Court was appropriately constituted as a Full Court pursuant to s 20(1A) of the Federal Court Act and proceeded to deal with the matter accordingly. I see no reason why the decision should not be regarded as binding upon single judges of the Court.

104    That said, it is well to remember that, in Barbaro, the majority did not hold that parties were not permitted to make submissions directed to what facts should be found, to the relevant sentencing principles or to comparable sentences. The only matter which is subject to the prohibition articulated by the majority in Barbaro is the nomination of a specific penalty or sentence.

105    In the present case, as I have already indicated, I have read and considered the submissions made by both parties in respect of the relevant principles to be applied in respect of the imposition of the civil penalties called for in the present case as well as taken into account the material facts proven in evidence and the subject of submissions. I have also received submissions as to the appropriate penalties to be imposed. I wish to make it very clear that, in relation to all of these matters, I have made up my own mind and come to my own conclusions. In particular, in imposing the penalties which I have decided to impose, I have weighed the various relevant factors to which I have referred for myself. I have not been constrained in any way by the specific penalties nominated by the Board or the responsive submissions to the Board’s nomination made by the respondents.

83    As was the case in Kolya, I wish to record that I have read and considered the Written Submissions made by both parties in respect of the relevant principles to be applied in respect of the imposition of the civil penalty called for in the present case as well as taken into account the material facts proven in evidence and the subject of submissions before me. I have also taken into account and thought carefully about the oral submissions made on behalf of both parties. As was the case in Kolya, I wish to make it very clear that, in relation to all of these matters, I have made up my own mind and come to my own conclusions. In particular, in imposing the penalty which I have decided to impose, I have weighed for myself the various relevant factors which were the subject of submissions from the parties. I have certainly not been constrained in any way by the specific penalties nominated by Comcare or by the Commonwealth.

Decision on Penalty

84    I am concerned that the upper limit of the penalty that might be imposed for the admitted contravention in the present case does not give to the Court sufficient scope to impose a penalty at the level which I consider is required.

85    On the one hand, the consequences of the Commonwealth’s contravention have been extremely serious. The contravention led directly to the death of a fine young man who was conducting himself impeccably in the service of his country and who had already gone into harm’s way on more than one occasion in the service of his country. In addition, the death of Lance Corporal Edwards has wreaked havoc amongst his family and friends. The pain and anguish caused by his death will never leave his mother or his siblings—I am sure it would be very difficult for each of them not to turn their mind to their lost loved one every single day of their lives.

86    On the other hand, the Commonwealth has taken serious and considered steps over time to minimise the risk to its ADF soldiers. Although there were difficulties in the effectiveness of the protocols and processes documented in the manual, possibly the most serious shortcoming in the present case occurred in the execution of those protocols and processes. Briefings were not carried out as they should have been. The wrong people were put in charge of the wrong components of the exercise.

87    I have carefully weighed all of the relevant factors.

88    I have come to the view that I must recognise that the present case is not in the very worst category of cases that might come before the Court for consideration. I must also recognise that the Commonwealth has behaved impeccably since the incident.

89    However, I cannot ignore the catastrophic consequences of the Commonwealth’s neglect. Nor can I ignore the fact that the contravention was nonetheless serious.

90    Having thought about the matter deeply for a long time, I have come to the view that I should impose a penalty of $220,000 upon the Commonwealth for the admitted contravention in the present case. This amount is slightly over 90% of the upper limit available to the Court.

91    I propose to make the agreed declaration.

92    The Commonwealth must pay Comcare’s costs.

93    There will be orders accordingly.

Associate:

Dated:    7 August 2015