Department of Labour v C3 Limited DC Tauranga CRI-2010-070-48 [2011] NZDC 843 (7 June 2011)

Last Updated: 30 September 2016

IN THE DISTRICT COURT AT TAURANGA

_{CRI-2010-070-010048}

DEPARTMENT OF LABOUR

Informant

v

C3 LIMITED ISL LIMITED Defendants

Hearing: 7 June 2011

Appearances: M Whelan for the Informant

N Beadle for C3

R Laltan for ISL Judgment: 7 June 2011

_{NOTES OF JUDGE T R INGRAM ON SENTENCING}

[1] C3 Ltd and Independent Stevedoring Ltd face charges laid under s 50 of the Health and Safety in Employment Act 1992. The allegation that each faces is that they failed to take all practicable steps to ensure that Mr Shannon was not harmed or exposed to the risk of harm at his work place on the Mount Maunganui wharf.

[2] The practicality of the position is harsh and stark. Mr Shannon was killed when he was run over by a forklift, the driving not having seen Mr Shannon. He was wearing reflective clothing and just how effective that reflective clothing was, is not clear. The informant is not able to establish that the reflective clothing was in any

_{way defective on the night.}

DEPARTMENT OF LABOUR V C3 LTD DC TAU CRI-2010-070-010048 7 June 2011

[3] Both defendants have pleaded guilty to the charges. In the case of Independent Stevedoring Ltd, the basis of the plea is that the employer failed to have in place a system for regularly checking the reflective qualities of supplied reflective clothing.

[4] In the case of C3, the guilty plea is on the basis of the forklift not having adequate headlights mounted sufficiently high on the mast to provide the driver of the forklift with a clear view of reflections from reflective clothing, which is worn by people directly in front of the forklift as it is being operated.

[5] In practical terms, the hazard in relation to the forklift was not having enough forward facing light. In connection with Independent Stevedoring Ltd, the failure was one of organisation of a programme to regularly review reflectivity of clothing.

[6] The core issue in this case is the obviousness of the hazard in each case. The informant’s position has been put to me on the basis that in each case these were very obvious hazards. Neither defendant accepts that assessment. The hazardous nature of work on the wharves has long been recognised by everybody involved. The Mount Maunganui wharf is a large operation which can involve several hundred people being exposed to danger on a daily basis.

[7] The need for reflective clothing has long been understood and Independent Stevedoring Ltd have an extensive programme of supplying its employees with reflective clothing with a further programme whereby clothes are regularly laundered. Any noted defects resulting in the item being replaced with the safeguard of the wharf foreman keeping an eye out for inadequately reflective clothing on any employee and requiring such employees as may have inadequately reflective clothing, to go and get sufficient reflective clothing which is provided free of charge.

[8] As far as the lights on the forklift are concerned, the forklift I am told has been in operation for many years. It is supplied by a reputable manufacturer and it has two sets of headlights, one at a low level and one at a medium level which must be obscured by the kind of load that the vehicle was carrying on this day. It also has a revolving flashing light at the rear of the roof of the forklift. A photograph has

been supplied to me. That photograph reveals that there would be a portion of the pavement in front of the forklift being in shadow from that revolving light, but it would only be a relatively short distance in front of the vehicle because the light shines at a relatively acute angle to the ground.

[9] I have been informed by a member of the public present, that something in the order of 10 to 15 metres in front of the vehicle, one would see the light from the revolving light on top of the vehicle.

[10] The Crown submission in respect of the lights was that light would not come off reflective clothing which was generated by the revolving flashing light. I was surprised to hear that submission, I do not accept it as complying with the basic laws of physics. A reflective surface will reflect light from whatever source, whether it be a flashing light or a headlight. Accordingly, I am not prepared to assume for the purposes of my task today, that there was no light which would have shown up the reflective bars on the clothing worn by Mr Shannon.

[11] That seems to me that from a practical point of view, more light in front of the vehicle will always be better. I have to accept that the guilty pleas entered on the basis that additional lights could and should have been fitted to the forklift mast.

[12] I turn to the circumstances of the accident. It is crystal clear, whatever else might be said, from the material that has been put in front of me, the deceased, Mr Shannon, was a careful and thoughtful man with long experience on the wharves and long experience in safety matters. It seems to me to be inconceivable that a man of his experience and careful nature, would have knowingly run a risk which would have caused him to meet the fate that he met on this occasion.

[13] In assessing the obviousness of the hazards, it seems to me that I should have some regard to what I know of the operation of the port. Accidents occur there from time to time. Every time that accidents do occur, the Labour Department are involved and the inspectors carefully assess the causes of the accident. Some cases are prosecuted and some are not. Invariably when a prosecution comes forward, the suggestion is put forward that the hazards are obvious. Whilst I accept that there

may be a degree of obviousness about some aspects of these cases, it is surprising indeed to me, that I am being told here, that it is obvious that forward facing headlights are required on the mast of a forklift carrying a load, those lights require to be put in a position which allows the maximum possible light to be cast forward so the operator can see where he is going.

[14] If that was obvious, it was not obvious to the manufacturer of the forklift. It has not been obvious to an operator with an excellent safety record on the wharf with many years experience and many hundreds of employees.

[15] Accordingly, I am not prepared to say that I accept the prosecution’s fundamental proposition which is that it was obvious that these lights were required. The port is well lit, it is visible at night for a long way as indeed are the forklifts of the nature of the one which was involved in this accident.

[16] The obviousness of the hazard is also accessible by reference to any industry document which specifies requirements for operation of machinery. Nothing has been put forward to me to suggest that there is in place any regulatory requirement, any code of practice which specifies exactly that. If it was so obvious, one would have expected to see such a requirement contained in one of the industry codes of practice which would apply to the operation of this wharf.

[17] As far as the obviousness of the clothing reflectivity is concerned, it is sufficiently obvious for the industry to have a standard which suggests that clothing should be reviewed every three to six months to consider reflectivity. It is accepted on the part of the company that a specific schedule would be an improvement in its existing programme. That is the basis upon which the plea has been entered.

[18] It is tempting to assess the culpability of Independent Stevedoring Ltd by reference to the death of Mr Shannon, but on the evidence available to me, it would be wrong in principle for me to assume that there was something inadequate about the clothing worn by Mr Shannon on the day in question. The evidence does not establish that. The plea has been put forward on the basis that the defect is a defect

only in a checking system, which cannot be shown to have been causative of Mr

Shannon’s death.

[19] As far as obviousness is concerned, I fundamentally accept the proposition advanced by the defence to the effect that they had a programme, the programme had been perfectly adequate up to this point. Now that it has been pointed out that a specific rotation would be an improvement, they accept that advice and plead guilty accordingly. That is a very long way from saying that the company, Independent Stevedoring Ltd, have been at fault in a way which caused the death of Mr Shannon on this occasion.

[20] As far as C3 are concerned, it is not quite the position because it is accepted by all that better forward facing lights would almost certainly have improved visibility to the point where whether wearing adequately reflective clothing or not, there is a good chance that if better lighting had been provided, Mr Shannon would not have been killed on the night in question.

[21] The legal requirements are straight forward and not an issue. The three step process was mandated in a case called Department of Labour v Hanham & Philp Contractors Limited & Others, (HC Christchurch CRI-2008-409-000002,

18 December 2008).

[22] The first step involves fixing of a level of reparation. In this case, I am not required to fix reparation because the prosecution have accepted quite properly, that both companies have taken adequate steps to address the need for reparation.

[23] In the case of Independent Stevedoring Ltd, more than $110,000 has been provided in one way or another for the family of Mr Shannon. In the case of C3, some $30,000 has been provided. The Department accept that in the circumstances that we have, no further amount of reparation is required to compensate for the loss of Mr Shannon to his family.

[24] Whilst it is commonly thought that the sum of reparation is the price of a life, that is a false notation. The Court can do no more than assess according to the

established principles, what reparation would be appropriate. In a case of this kind, I am satisfied that if no reparation had been paid, no more than $100,000 in reparation would have been assessed against either or both defendants.

[25] In these circumstances, considerably more than that has already been paid and there is accordingly, no reason for me in law to make an assessment of reparation against either defendant.

[26] The next question is the amount of the fine. The position there is that three bands are recognised, one of low culpability which generally will involve fines up to the vicinity of $50,000, medium culpability, fines of between $50,000 and $100,000 and high culpability which would go between $100,000 and $175,000. For repeat offenders and very high culpability, levels up to $250,000 have been recognised.

[27] The practicable steps which were open to these two defendants, I have already explained. Both defendants accept that more could have been done. Accordingly, I do not need to make any evaluation under that head. The nature and seriousness of the risk of harm is accepted by all as being death or serious injury. Accordingly, there is a high risk in this particular case and in this particular workplace.

[28] The prevailing industry standards are not nearly so easy to assess. As far as the lighting on the forklift is concerned, it is surprising to me that there is no industry standard which has been able to be put before me. It would seem to me that it would be desirable for such a standard to be developed and adopted by the industry as a whole. As far as the reflectivity of clothing is concerned, the industry has recognised that reflectivity assessment is necessary. There is a recognition that that should be done every three to six months. It seems to me that everybody interests would be well served by rather more specificity there. The industry as a whole should consider developing a standard which specifies exactly how often clothing should be assessed.

[29] As far as obviousness is concerned, fundamentally I accept the defence position in each case that these hazards are far more obvious with the benefit of

hindsight than they were in advance. This is not a case of inexperienced operators or small time operators who simply have not thought about the situation. Both companies have long experience at the wharves. Both of them have comprehensive ongoing safety programmes, both of them have done their level best to ensure that their employees are exposed to the bare minimum necessary risks in the course of the operations that they undertake in the port.

[30] In each case, I accept that the appropriate band for sentencing is the low level of culpability. As far as aggravating factors are concerned, the first aspect of things is the death of Mr Shannon, a more serious outcome simply is not possible. Neither company have any prior convictions. Both have participated for a long time in safety review processes and in the case of C3, it recently won an award for its involvement in a safety review process.

[31] I accept too that in each case there is a great deal of mitigation that can be said. Firstly, both companies have been solicitous of the family of the deceased and made a substantial payment without waiting for a Court to direct any payment. They have pleaded guilty at the earliest available opportunity. I accept to the extent a limited liability has any remorse, both of these companies are remorseful. In practical terms, that means that the officer’s of the company are remorseful of the failing which has been identified in each case. I accept that that is so here.

[32] Both companies have taken a substantial amount of remedial action to address the concerns that have been identified following the death of Mr Shannon. In all the circumstances, it seems to me that different considerations apply in the case of C3, than apply in the case of Independent Stevedoring Ltd. I consider that Independent Stevedoring Ltd case is one which falls towards the bottom end of the lower band of categories.

[33] I take a starting point there of $30,000. The company is entitled to credit of

25 percent for its guilty plea, as recently recognised by the Supreme Court in Hessell v R [2010] NZSC 135. It is also for me to take into account in its favour, the sum figure in respect of the financial contribution that it has already made. I am entitled to take into account also its good record.

[34] Doing the best I can on the material available to me, it seems to me that a further 25 percent is justified as a discount to reflect those additional mitigating factors beyond the guilty plea. Taking a starting point of $30,000, I allow 25 percent for guilty plea, a further 25 percent for the substantial sums of money which have been paid, over its good record and what I accept is remorse on the part of those in the company who are involved, that totals 50 percent which is half of $30,000.

[35] Accordingly, the company will be convicted and fined the sum of $15,000. There will be no order for reparation.

[36] Turning to C3 Ltd, it seems to me that an appropriate starting point there would be $60,000. I select that figure because I consider the obviousness in the case of the lights to be in order of magnitude, greater than it is in the case of a programme for review of reflectivity of garments. It seems to me again that the company is entitled to substantial discounts, 25 percent for its plea. It has paid over $30,000, a sum that would otherwise be ordered in relation to reparation. However, it seems to me that somewhat less than the credit which has been advanced to Independent Stevedoring Ltd is appropriate in this case, firstly because Independent Stevedoring Ltd have paid a great deal of money to the family of Mr Shannon. Secondly, it seems to me that the company’s assessment of risk has been rather more deficient than that of Independent Stevedoring Ltd. It seems to me that a more comprehensive review of the operation of its vehicles, would likely have produced a recommendation that lighting be improved for the operation of this particular vehicle with this particular type of load.

[37] I want to emphasise that this is a specialist piece of equipment developed and used for a particular specialist load. It seems to me that the operating environment being a port, is one which whilst the manufacturer may well have considered that operating environment, they may not necessarily have considered night operations at a port when designing the equipment. If they had, it is difficult to see why they would not have mounted lights on the mast.

[38] Accordingly, I have come to the view that a somewhat reduced figure should be allowed as a deduction. I have come to the view that a further 8 percent

deduction should be allowed to cover the company’s good record and its payment of reparation. That will produce a figure of 33 percent. I start at $60,000. I take off 33 percent which is $20,000.

[39] Accordingly, C3 Ltd will be convicted and fined the sum of $40,000.

[40] Before I part from the matter, I wish to extend my condolences to the family of Mr Shannon and indeed his workmates, many of whom are here today.

T R Ingram

District Court Judge