Worksafe New Zealand v McAlpines Rotorua Limited [2016] NZDC 5359 (30 March 2016)

Last Updated: 28 September 2016

_{EDITORIAL NOTE: NO SUPPRESSION APPLIED.}

IN THE DISTRICT COURT AT ROTORUA

CRI-2015-063-003189 [2016] NZDC 5359

WORKSAFE NEW ZEALAND

Prosecutor

v

MCALPINES ROTORUA LIMITED

_{Defendant Company}

Hearing:	30 March 2016
Appearances:	D Brabant for the Prosecutor D Neutze for the Defendant
Judgment:	30 March 2016

_{NOTES OF JUDGE A J S SNELL ON SENTENCING}

[1] The defendant company, McAlpines Rotorua Limited, pleaded guilty to one charge contrary to s 6 and s 50(1)(a) Health and Safety in Employment Act 1992. The charge itself says on or about 30 April 2015, being an employer, failed to take all practicable steps to ensure the safety of its employees while at work in that it failed to take all practicable steps to ensure that its employee, Burt Poi, was not exposed to hazards arising out of the operation of a Newnes auto stacker. The maximum penalty is a fine not exceeding $250,000.

[2] In terms of the facts, the McAlpines Group was established in 1952. It has sawmills in Nelson, Rangiora and Rotorua and it exports timber internationally and employs over 300 staff nationwide. Approximately 65 of those are employed at its

_{Rotorua site. The McAlpines Group also owns Mitre 10 Mega stores.}

WORKSAFE NEW ZEALAND v MCALPINES ROTORUA LIMITED [2016] NZDC 5359 [30 March 2016]

[3] The injured employee is Mr Burt Poi. He was initially engaged by Allied Work Force and was positioned at MRL (which is short for the McAlpines Group) from 2 February 2015 as a dry table hand. Mr Poi was offered a permanent role with the company from 17 March 2015, working as a trainee auto stacker in-feed operator, which is also referred to as a tilt-hoist operator.

[4] The plant involved in this incident is the Newnes auto stacker. This was originally purchased from a sawmill in the United States by a Rotorua engineering company, Lakeland Steel Limited. Lakeland Steel Limited dismantled the machinery in the United States and shipped it to New Zealand. In October 2014, the defendant company purchased the auto stacker from Lakeland Steel Limited. It had been reassembled and had been refurbished. The auto stacker itself was approximately 10 years old and was first put into commission by the defendant company in mid January of 2015.

[5] The function of the auto stacker is to take packets of milled green timber, to then separate the timber into individual pieces and then restack them with wooden fillets between them in preparation for the timber to be kiln dried. A packet of wood, which consists of 100 millimetre by 100 millimetre or 4x4s is lifted onto the feed table by a forklift. The pieces of 4x4 in the packets of timber are flush at one end and are of varied lengths at the other, ranging from 4.8 to six metres in length. Each length of timber weighs about 48 to 60 kilograms. Each packet contains approximately 60 pieces of timber and are held together with PVC straps. It was Mr Poi’s job to cut the PVC straps and to record the number attached by a tag at the end of the packet. The approximate weight of each package is between 2.8 and

3.6 tonnes. Once loaded on the tilt-hoist, the timber is then tipped onto the in-feed change which carries the timber one by one to the filleting machine at the other end. The fillets allow for the circulation of air around the timber which assists with the drying process. It takes approximately 30 seconds for a length of timber to travel from one end of the auto stacker to the other.

[6] In terms of the incident that occurred, at 7.00 am on 30 April 2015, Mr Poi commenced working on the auto stacker with fellow employee, Shaun Tamai. Mr Poi had been operating the auto stacker for a period of six weeks. Mr Tamai was

operating the filleting machine at the out-feed end of the auto stacker which had its own control panel. Mr Anderson was stacking the packets onto the table with a forklift. Mr Poi cut the PV straps as usual and placed a tag on the end of each packet. The first packet was fed through the auto stacker. Mr Anderson then placed two packets onto the in-feed table. It was common practice to place one packet on top of the other to increase productivity and the machine was designed to take on this workload. Mr Poi then fed the packets into the tilt-hoist and cut the bottom straps of the lower packet, but the timber did not separate as it should have. He then climbed onto the horizontal bars on the adjacent in-feed table and cut further straps. As Mr Poi turned away from the table he had previously been working on, the timber from the bottom packet collapsed on top of him. The stacker then activated due to the proximity sensor being triggered by some of the poorly stacked timber and this resulted in Mr Poi being crushed between further packets of timber, as they moved towards the tilt hoist. Mr Poi was found by Mr Anderson in a foetal position under the timber.

[7] Mr Poi’s injuries were that he was in hospital for a total of 19 days, having suffered a broken clavicle, nine broken ribs on his left side and three broken ribs on his right. He also suffered a base of skull fracture extending through the carotid canal and an aneurysm which required stenting. Subsequently, as a result of his injuries, Mr Poi suffered a stroke which required a further 15 days hospitalisation and ongoing therapy.

[8] In terms of the breach, it is said that the defendant company failed in respect of its employees and ultimately Mr Poi to take all practicable steps to ensure their safety. WorkSafe considers that the following practicable steps were available to the defendant company and that they should have:

(a) Ensured that packets of timber did not extend over the back of the tilt hoist;

(b) Ensured that each packet of timber was inspected for stability and if unstable, ensured that this was remedied prior to being placed on the in-feed table;

(c) Modified the control switch to ensure that its only functions were either manual or automatic as opposed to the forward switch doubling as an automatic switch;

(d) Installed safety fencing and light beams in order to prevent the operator from accessing and being able to climb onto the in-feed table; and

(e) Finally, ensured that operators had access to the straps used to hold down packets without the need to climb onto the in-feed table in order to access them.

[9] The defendant company comes before this Court today with no previous convictions at all. There are no warnings that I have been made aware of.

[10] I have had the benefit of three victim impact statements. The first was from Mr Poi himself. The second was from his partner and I want to thank Mrs Poi for reading her statement today to the Court. The final victim impact statement was from Mr Poi’s adult children. I have read each of these in their entirety and they disclose the injuries, the very real and ongoing difficulties that Mr Poi has as a direct consequence of the injuries and the accident, and they go through significantly the changes to Mr Poi and the ongoing effects on him of his injuries and his rehabilitation.

[11] In terms of victim impact statements, I should say that I thought that Mr Poi’s statement was very fair and I think that that statement by him was commendable. He has been left feeling useless. He cannot drive a car, he cannot dress himself, he cannot dry himself after a shower, he has a feeling that he cannot do very much at all and has to rely on his wife for virtually everything that he does in his day-to-day life. He has difficulty sleeping. One of the fractures that he received has set incorrectly and causes him great pain. His wife’s victim impact statement really adds to his own, because that discloses that Mrs Poi has had to give up her work to take care of her husband. It is without doubt the most difficult time that she has faced and that they have faced in their relationship. They have been together for 35 years as a

couple and 25 years married. She discloses the difficulties with dealing with Mr Poi and probably provides insights that Mr Poi, in the very frank way that he dealt with his injuries, did not deal with in his own statement. In terms of the third statement, that is from the children of Mr Poi. They are adult children and they simply disclose the way that they have seen Mr Poi’s confidence disappear and the difficulties that everybody is facing, including Mr Poi himself in dealing with the ongoing effects of the accident.

[12] I have received submissions from both counsel and I acknowledge those submissions and thank them for them and for the effort that they have gone to. Their submissions have both been very helpful. I have further heard in Court today from both counsel at length. For the prosecutor, Ms Brabant relies on her written submissions, but she also has made further oral submissions. She acknowledges the

$6912 paid by the company in terms of the 20 percent top up to Mr Poi over and above his ACC payments. She confirms that the stroke is a direct consequence of the accident and has been accepted as part of the accident as arising out of the accident. In fairness to the defendant company, they take no issue with that at all. So that matter is not in dispute. She felt compelled to respond to the submission in writing that potentially Mr Poi had not done as he was trained to do or as he had been told to do and rebutted that argument and, in particular, emphasised that it is no answer to say that it is the employee’s fault when there were issues here that should have been remedied at the outset and regardless of the employee’s behaviour, the machinery should have had the safeguards that have now been added to it.

[13] She spoke in detail about the training and questioned whether that was adequate. She talked about the lock out and the best practice. She also talked about the packet sizes and stacking of packets and the guarding. She also made submissions in terms of the operating procedures and she said that even if the company had been transitioning from cards to the padlock lock system, that probably made it even worse that there was not a clear cut system in place. She discussed the fencing and indicated that that should have been in place.

[14] She referred me to the industry standards and commented really in rebuttal that the company should not and could not rely simply on seeking the advice of other

companies as to their obligations in safeguarding this machinery. She spoke and directed me to the operating procedure that was in place and the three different versions dated 30 January 2015, 20 February 2015 and 1 May 2015 and the fact that each was quite different and the conclusion and inference being that really it was unknown what was the correct operating procedure that should have been in place. She acknowledged the company’s remedial action and the company’s co-operation with the investigation and the company’s remorse and its contribution to the victim. She submitted that reparation should be awarded against the company in the amount of $40,000 to $50,000 and a fine in the vicinity of $80,000 to $90,000 as a starting point.

[15] Mr Neutze, for the defendant company, firstly acknowledged the very significant effect that this incident has had on Mr Poi. He spoke of the company’s deep regret that this occurred at all and emphasised that he was in no way, and the company was in no way blaming Mr Poi for what happened. He stressed that at the commencement of his submissions because there has been some interpretation of the written submissions as indicating a contribution of blame towards Mr Poi. He next went on to expand upon the difference between the potential contribution to the incident and the non-blaming approach and also to emphasise the distinctions between some of the remedial aspects which were non-causative of the actual incident that occurred. So what he was really emphasising was that while there were a number of aspects that had been remedied and have been improved, not all of these were contributory to the accident or incident occurring on this occasion.

[16] In his written submissions, he talked about Mr Poi’s training and the fact that he had been given six days of intensive training and he had quite considerable industry experience. He emphasised the company was in a period of transition in terms of the lock out procedure and said that not only did they have a card system, but they also had the padlock system. I am acutely aware that this is a matter of dispute between the two parties. I do not see it as determinative of this sentencing and on that basis, I proceed with two opposing submissions with the agreed summary of facts seeming to indicate that the padlock was not in place. However, Mr Neutze, for the company, does not resile from that. Either way, neither was used in this instance. There was a dispute about the amount of timber that fell onto

Mr Poi. That has now been resolved and it is accepted by the prosecutor that there were only six pieces, as Mr Neutze had described in his written submissions and there was a subsequent crushing injury that followed.

[17] The crux of Mr Neutze’s submissions, in some ways, is that while accepting that there were severe injuries and accepting that the company could have taken steps to prevent the accident, it is really with the benefit of hindsight. He refers to the fact that there was a first investigation which recommended that there be no prosecution, because there had been no breach of the Act and he says this is relevant to the gravity because really the breaches here are not the most obvious. The company had taken steps to identify the hazards and the risks and they had got two independent businesses to be involved in that process and taken all of the recommended steps that were identified. The point of that submission is both that it is not the most obvious of breaches, but also that the company did not have in any way a cavalier or careless type of attitude to safety. I do not think that there is any dispute about that, that this company is not a cavalier company, it does not take health and safety lightly and I think that that is emphasised by the fact that this is their first prosecution despite the size of the company and length of time in operation that the company has had.

[18] The final areas that were discussed in terms of matters were that the appropriate changes were made, including some innovative changes which were directly as a consequence of this incident and they are outlined in terms of the written submissions and include fencing the machine, installing the light beams across the front of the in-feed fencing which automatically shuts down the in-feed if somebody enters that area, and they have installed a light to alert employees of the machine being in auto mode and changed the switches, amongst other things. He emphasises that the company has fully co-operated with the investigation and again that is not in dispute, that the company has assisted Mr Poi and his family appropriately and in his oral submissions, he again re-emphasised that a number of the breaches highlighted in the agreed summary of facts, whilst accepted as breaches, were not in fact necessarily causative of the incident on this occasion.

[19] Under s 50(1)(a) of the Act, it provides some guidance as to sentencing and it says that the Court must apply the Sentencing Act 2002 and it must have regard to ss 7 to 10 of that Act and the requirements of s 35 and s 40 of that Act relating to the financial capacity of the person to pay any fine or sentence of reparation imposed, and the degree of harm that has occurred, the safety record that exists for the person charged or company charged here and then must have regard to whether there has been a plea of guilty, whether there has been remorse, whether there has been co-operation and whether remedial action has been taken.

[20] I turn to the degree of harm and it is acknowledged that the harm is significant. In my view, it is high. On the information that I have available to me today, it is long term and the road to recovery will be difficult. In terms of the safety record of the company, I accept that they have a very good safety record and in fact in terms of prosecutions, they have an unblemished history. I accept that there has been an early plea of guilty. I accept that the remorse from the company is genuine, that there has been genuine co-operation with the authorities investigating and I also accept that the company has been prompt, efficient and proactive with its remedial measures. Those remedial measures are accepted and the prosecutor takes no issue with that.

[21] In terms of the sentencing exercise, I follow the guidelines that have been provided in Department of Labour v Hanham & Philp Contractors Limited (2009) 9

NZELC 93,095. The sentencing process involves three primary steps: (a) The assessing of the amount of reparation;

(b) The fixing of the amount of the fine; and

(c) Making an overall assessment of the proportionality and appropriateness of the total imposition of reparation and the fine.

[22] In terms of reparation, I need to comment that that is a compensatory amount and its nature is designed to recompense Mr Poi and his family for the loss, harm and damage resulting from the offending. The fine, on the other hand, is a punitive

action taken by the Court. It is a financial penalty imposed effectively by the State and intended to serve the statutory purposes of denunciation, deterrence and accountability.

[23] In proceeding with sentencing, I take into account s 7 Sentencing Act 2002 primarily to hold the defendant company accountable for their actions, to promote in them a sense of responsibility, to provide for the interests of the victim of this offending, including reparation, to denounce the behaviour and offending and to provide deterrence for others. In terms of the s 8 considerations, I need to make sure that my sentence is consistent with other sentences that have gone before for similar offending. I need to have consideration for the effects on the victim and I also need to take into account the restorative justice matters and even though that process did not proceed to the fullest extent, I do take that matter into account.

[24] In terms of assessing all three primary steps, assessing the reparation, fixing the fine and having an overview of the proportionality, they all have a separate consideration as to the financial capacity of the company. To its absolute credit, the company has said that they have the financial capacity and there is no issue with that in relation to any of these matters. So I simply start by saying that that matter has been taken into account. I consider the reparation issue and in terms of s 10 of the Act, in terms of offers of amends, I am required by law to take those into account. The company offered to attend restorative justice and initially Mr Poi was willing to attend that himself, but for good reasons of his own related to his recovery, he pulled out of that so that process could not be finalised. There is no criticism of Mr Poi at all for that, because that is related to his recovery, but I do acknowledge the company’s willingness to meet with him face to face and participate within that process. I note that the company has already paid $6912 in terms of the 20 percent top up that ACC does not cover in terms of the payments to Mr Poi. They have provided some other limited financial assistance and some administrative assistance with ACC.

[25] The defendant company referred to Justice Harrison’s observation in Big Tuff Pallets Ltd v Department of Labour [2009] NZHC 60; (2009) 7 NZELR 322 case where he said:

“Also irrelevant is the nature and extent of Mr Kwan's actual injury unless it is related directly to the element of emotional harm. Furthermore, the quantum of the reparation itself is inconsistent with other sentences imposed in the District Court; awards for emotional harm in excess of $40,000 are rare, and are normally reserved for cases of death or severe physical injury.”

[26] In that, the defendants were seeking to persuade me that an emotional harm level of around $30,000 was appropriate and they stated their range as being between

$30,000 and $40,000 in terms of the case law that was before me. That contrasts with the prosecutors who were submitting $40,000 to $50,000.

[27] I consider that the injuries to Mr Poi were severe injuries of the exact type that Justice Harrison was referring to when he talked about an award of $40,000 or more. While that is a very high level of injury and Mr Poi is at the very low end of that high level, he still makes that level of injury. In terms of emotional harm, quite clearly the feeling, as he describes it, of feeling useless because he cannot drive, he cannot dress himself, he has difficulties with all of the day-to-day things, even just getting into a car to be driven. He has the loss of ability to do things, his loss of confidence, his fear of the future with the physical limitations that he has, the loss of relationships in terms of his children and grandchildren and the lifestyle that he used to have. There is no doubt that he has suffered a considerable and significant emotional harm and continues to do so. There is no clear end in sight. The emotional harm will continue for the foreseeable future.

[28] In terms of fixing an amount for reparation, there is another passage in the same Big Tuff Pallets Ltd v Department of Labour case where Harrison J said:

“Fixing an award for emotional harm is an intuitive exercise; its quantification defies finite calculation. The judicial objective is to strike a figure which is just in all the circumstances, and which in this context compensates for actual harm arising from the offence in the form of anguish, distress and mental suffering. The nature of the injury is or may be relevant to the extent that it causes physical or mental suffering or incapacity, whether short-term or long- term.”

[29] I think that that is a very helpful passage. Here I assess, having reviewed the numerous cases that counsel have both appropriately referred me to, that the reparation should be set at a figure of $40,000.

[30] I turn now to determine the amount of the fine in this case. I need to set a starting point for the offending itself and then from there consider the aggravating or mitigating factors of the defendant company and then finally provide a discrete discount for the guilty plea.

[31] In terms of assessing the culpability for the starting point, again the authority of Hanham & Philp has helpfully set out a number of matters to be considered and both counsel have taken me through their assessments of those matters. It is important, in my view, to emphasise that each case turns on its own merits and in my view, when I consider each of the factors that have arisen in this sentencing exercise, I am persuaded particularly by the concessions that have been made by the defendant company in terms of where they were in fact in breach and why they pleaded guilty to the offence that they have been charged with.

[32] In terms of the operative acts or omissions, the agreed summary of facts details the failures by the defendant company in respect of its employees and that was ultimately Mr Poi. They are the five bullet points at paragraph 27 which I have referred to already in terms of the breach:

(a) Ensured that packets of timber did not extend over the back of the tilt hoist;

(b) Ensured that each packet of timber was inspected for stability and if unstable, ensured that this was remedied prior to being placed on the in-feed table;

(c) Modified the control switch to ensure that its only functions were either manual or automatic as opposed to the forward switch doubling as an automatic switch;

(d) Installed safety fencing and light beams in order to prevent the operator from accessing and being able to climb onto the in-feed table; and

(e) Finally, ensured that operators had access to the straps used to hold down packets without the need to climb onto the in-feed table in order to access them.

[33] In terms of the nature of the seriousness of the risk of harm occurring as well as the realised risk, it is common ground that unsafe use of machinery can result in significant injuries and death and here the risk of harm was significant, the injuries and harm suffered by Mr Poi were significant and it is perhaps simply a matter of luck in this case that there was not a death. I think that it is said well by the prosecutor in this matter that the realised risk was serious and simply referred to the victim impact statement as to the injuries and the ongoing difficulties.

[34] In terms of the degree of departure from industry standards and the current state of knowledge of the means available to avoid the hazard or mitigate the risk of its occurrence, again in relation to this matter, there has been extensive traversing of each side’s position and while I accept some of the submissions on behalf of the defendant company that some of the risks identified and to which they have pleaded guilty were not operating causes of the incident on this occasion, they were risks that should have been identified.

[35] In terms of the detail of the various risks and hazards identified, in my view while there is some dispute about best practices and identification of these hazards, the reality is that the company has taken the steps to eliminate these as best they can or reduce the risk of them in terms of isolation in the steps that have been identified and are accepted by both parties.

[36] In terms of the obviousness of the hazard and the current state of knowledge about the nature and severity of harm which could result, the hazards associated with the unsafe use of machinery are well known. They are obvious and the likelihood of injury or serious harm even death is one that is well known, particularly within this industry. In terms of assessing the availability of cost and effectiveness of the means necessary to avoid the hazard, again in my view the defendant company had within its means the ability to have isolated or eliminated these risks and hazards. They have now done that and it would seem that the steps that they have taken have not

been overly onerous in terms of financial cost. That leads into the availability and cost effectiveness and in my view, the steps required of the company were not onerous and should have been taken.

[37] In terms of finally the state of knowledge of the risks, the nature and severity of the harm, the means available to avoid the hazard or mitigate the risk of its occurrence, I think that that is well canvassed by the acknowledgments that the defendant company has made and the steps that they have taken to remedy the risks. I think that the point that the defendant company simply cannot rely on assessments by another company is one that is well made. Equally however, I do accept that this was not the most obvious of risks, although it is one that clearly should have been able to be identified prior to the machinery commencing into operation.

[38] In Department of Labour v Hanham & Philp Contractors Ltd, they identified three bands. Both parties here agree that this offending in terms of the fine falls within the medium culpability band, which is a fine between $50,000 and $100,000 as the starting point. While there is no dispute that it is medium culpability in all of the circumstances, there is significant dispute taken as to where within band 2 this offending falls. The defendant company suggests a starting point of around $50,000 and the prosecutor suggests a starting point at a high level within the band of

$80,000 to $90,000.

[39] Having considered all of the factors and both counsels’ submissions, I assess a starting point in terms of the fine of $70,000. In particular, in assessing the starting point, I note that I accept the defendant company’s submissions that these hazards were not as obvious as the prosecutor suggests that they were. However, I do not agree with that submission to the extent that it is put in the written submissions and I assess that matter, taking into account of all of the circumstances and the criteria that I have mentioned after having read both counsels’ submissions fully and their competing submissions in relation to each of the criteria that I listed.

[40] I consider that I am able to discount that figure by 15 percent because of the level of reparation that I awarded to Mr Poi. Also, I am entitled to take into account the fact that this is a first offence by the defendant company and their good previous

record over a long period of time. They will be given five percent credit for that, five percent credit for their co-operation and remorse and five percent for their immediate remedial action for the machinery. That equates to a total discount in terms of mitigation from the starting point of 30 percent. That discount is not disputed by the prosecutor. There are no aggravating features that would increase the starting point. Again, that is a matter that is not in dispute. So a 30 percent discount from the $70,000 starting point discounts the fine by $21,000. That leaves a fine of $49,000. The defendant company is entitled to a full 25 percent discount for their early guilty plea. That equates to a further $12,250, leaving a fine of

$36,750.

[41] I then turn to my overall assessment and I step back from both the reparation and the fine and I give consideration to the total imposition on the defendant company of the reparation and fine. I look to see whether this is proportionate to the circumstances of the offending and the offender taking into account obviously the size of the company and its ability and means to pay. The combined total is one of

$76,750 made up of $40,000 in reparation to Mr Poi and a fine of $36,750 which had a starting point of $70,000.

[42] Having regard to all matters, I find that that is proportionate and that is what is imposed today. That is the sentence that is imposed on the defendant company today, reparation of $40,000 and a fine of $36,750.

A J S Snell

District Court Judge