Worksafe New Zealand v Electrix Limited [2017] NZDC 20855 (12 September 2017)

Last Updated: 19 April 2018

EDITORIAL NOTE: CHANGES MADE TO THIS JUDGMENT APPEAR IN [SQUARE BRACKETS].

IN THE DISTRICT COURT AT NORTH SHORE

CRI-2016-044-001155

[2017] NZDC 20855

WORKSAFE NEW ZEALAND

Prosecutor v

ELECTRIX LIMITED Defendant

Hearing:	12 September 2017
Appearances:	L Moffit and A Simpson for the Prosecutor S Shorthall and O Skilton for the Defendant
Judgment:	12 September 2017

NOTES OF JUDGE J C DOWN ON SENTENCING

[1] This is a prosecution by WorkSafe New Zealand against Electrix Limited and the purpose of today’s hearing is sentencing on one charge of failing to take action required by the Electricity Act 1992 knowing that the omission was reasonably likely to cause serious harm to any person and failed to take all practical steps to prevent serious harm.

[2] This charge carries with it a maximum fine of up to $500,000. The difference between this charge and the charge dealt with by the Chief District Court Judge very recently in WorkSafe New Zealand v Northpower Ltd1 (which carried a maximum penalty of $250,000), is that this case requires knowledge on the part of the defendant.

1 WorkSafe New Zealand v Northpower Ltd [2017] NZDC 17527

WORKSAFE NEW ZEALAND v ELECTRIX LIMITED [2017] NZDC 20855 [12 September 2017]

The defendant by that plea accepts knowledge is present. In that sense I am urged by the prosecution to deal with this differently to the way that Chief Judge Doogue dealt with the WorkSafe New Zealand v Northpower Ltd case.

[3] Ms Shorthall for the defendant urges me to assess culpability by reference to the specific acts or failures in this case rather than the label that has been given to it and asks the Court to take a very similar approach to that taken in Northpower Ltd, with a starting point of around $75,000 in fine.

[4] The prosecution takes a very different stance, not only is this a knowledge case but there is evidence, the prosecution say, that Electrix in that knowledge failed to take certain steps that might have avoided this accident occurring. In that sense there is a degree of recklessness and the prosecution propose a start point in the region of

$300,000.

[5] Given that there is such a wide disagreement between the parties, it is important that I deal with the issues where they differ. In the end it really comes down to one matter, and that is the degree of blame that Electrix can place upon their supervisor [the electrian] who was at the site at the time this accident happened; and the degree to which the defendant company can, therefore, rely upon his failures as mitigating their responsibility and the level of their fine.

[6] Prosecution say that given the company has pleaded guilty on the basis of an agreed summary of facts which includes at paragraph 39 practical steps which were not taken by the company, in particular at (a), “Ensuring that employees properly understood how to measure MAD”; there is a fundamental difference between the culpability attributable to this defendant and that arising in the Northpower Ltd case.

[7] The facts of this case are as follows. The defendant company is a very experienced electrical contractor. It has operated in the country for many years, since 1955, has many locations and approximately a thousand staff. One of the functions of the company is to provide field services to Vector. Electrix is contracted to undertake maintenance of substation circuit breakers, amongst other things. This is routine work. It is carried out regularly for every substation approximately every four years.

[8] The defendant company employed [the victim] as a mechanical fitter at the time of the incident and he is the injured party. I acknowledge [the victim] is here in Court and I acknowledge the pain and difficulty that he has struggled with over these many months. I also acknowledge that there are a number of senior representatives of the defendant company and I read from that that the company takes this very seriously. It is a demonstration of their level of commitment to change and remorse.

[9] [The victim] has not spent his whole career in the electrical profession, indeed at the time of this accident only about eight years had he been working in this environment. He had in fact five years’ experience with the defendant company and most, if not all, of those five years was spent in the substation environment. In other words, this was work with which he was very familiar.

[10] At approximately 8.30 am on 16 May [the victim] and three other employees were at the Belmont Substation here on the North Shore. This was a routine maintenance of a 33,000 volt circuit breaker. Work on that circuit breaker involved isolating it from the network so that it was a de-energised area, inspecting part of it for wear and tear, replacing the oil contained within the circuit breaker and then testing performance. [The victim] was the mechanic on site but there was also an electrician present, [the electrician]. Further, [an apprentice] and [a switcher].

[11] It is important to understand, particularly from the defendant’s point of view that [the electrician] was the recipient of the access permit from Vector, which by its very nature placed responsibilities on him under the safety manual for the electricity industry. Thereby the defendant considered that [the electrician] was the one in charge. He was the supervisor. It is perplexing and important to note that he did not consider himself to be acting in that role and only one of the other three men thought that he was the supervisor.

[12] One of them in fact thought that they were all the same level of responsibility. The point made by the defendant is that he was the one in receipt of that permit and thereby, because of his wider and more specialist experience and skills, he was naturally the person supervising the work to be carried out on that substation that day.

[13] All the employees were wearing personal protective clothing and equipment and the ground was gravel but with an earth grid beneath it. The circuit breaker, which was the only piece of equipment in the substation which was to be worked on under that access permit, was connected to an air break switch, hereafter referred to as ABS, and it was connected by three busbars. One side of the ABS was de-energised and this created a zone within which the workers could safely carry out their procedures. It also created markers so that the workers were able to see exactly where the safe zone was. The circuit breaker was within that safe zone but the ABS was not within that de-energised zone because only one side of it had been isolated. That other side remained live.

[14] The work party acknowledge that they understood the extent of the equipment covered by the access permit, the scope of the work and were aware of all hazards in the vicinity of the working area. Electrix provided its employees with significant and detailed training on principles relating to switching MADs (minimum approach distances), isolation, earthing and permits and a stop and think policy. However, the written documents on site did not specifically refer to that policy.

[15] For a 33 kilovolt piece of equipment, the minimum safe approach distance (“MAD”) for competent employees for exposed live parts are set out in ECP 34 and reg 17 Electricity (Safety) Regulations 2010, is 60 centimetres. MAD is applied to any part of the employee’s body or clothing and to anything in contact with the employee; in other words, tools or ladders. This would necessarily mean that any tool held in the hand of an employee with an outstretched arm, the end of that tool or the end of that ladder must be within that 60 centimetre safe zone.

[16] The access permit involved the employees working within the safe zone by climbing a ladder to release the thermal expansion joint at the circuit breaker end of the busbar so that testing could be conducted while the circuit breaker was disconnected from the ABS. If the methodology had been followed, the employees would have remained approximately three to four metres from live components and within the de-energised safe zone.

[17] However, and this is where things start to go wrong, the thermal expansion joints connecting the busbars to the circuit breaker could not be released. While they were not unique, they were unusual by virtue of the fact that they were manufactured in 1961. It is interesting and important to note that in 2010 that substation was also subject to routine maintenance and [the electrician] was also part of that team. A document record states that the circuit breaker was tested with busbars connected to the ABS pedestal and two 33 kilovolt insulators and that is initialled by [the electrician] and another, I do not know who that other person was.

[18] This document signed by [the electrician] should have alerted the defendant to the fact that the maintenance work at this site could not have been carried out in the normal way to the normal extent by removing the busbars. However, when it came to the maintenance visit on 16 May 2015, it appears to me that nothing new had been decided about how to deal with this unusual problem at this particular substation.

[19] Having said that, the defence make the relevant point that [the electrician], having been present on both occasions, should have seen his notes from the 2010 visit and been aware that there was this issue. The work should not have involved removing the busbars at the ABS end while the ABS was still live as this would involve employees moving outside the de-energised safe zone and breaching the MAD.

[20] When the work team could not remove the thermal expansion joints connecting the busbars to the circuit breaker, they should have either cancelled the job or obtained a further permit to allow the additional work or simply call the supervisor. Because they could not release the expansion joints on the circuit breaker end of the busbar[the electrician] and [the victim] considered alternative ways of approaching the task. [The electrician] determined that the busbars should be removed at the ABS end outside the de-energised safe zone.

[21] The access permit did not authorise the employees to work outside the circuit breaker. Accordingly, the employees should not have disconnected the busbars at the ABS end. The employees had a safety discussion and estimated that the bolts were approximately just over a metre from the live components and, therefore, outside the MAD; this shows a misunderstanding of the MAD.

[22] [The victim] was leaning against the ABS when one of the other employees, [the apprentice], reminded him of the busbar, meaning the live part of the ABS. [The victim] commented that the bolts were tight before there was a loud whooshing or roaring noise and [the victim] was observed on the ground. The employees not only heard that but noticed a big blue flash referred to as an “arc flash” and then went to attend to [the victim]. It appears that his clothing set on fire as a result of this shock; the first actions taken by his colleagues was to douse him with water to put out that fire.

[23] Subsequently, just a few days later, on 22 May 2015 the defendant issued a safety bulletin that only the equipment identified in the access permit is to be worked on. It recorded:

Until further notice when conducting routine maintenance on outdoor 33 kilovolt bulk oil circuit breakers, solid bus-work to adjacent equipment is not to be worked on, disconnected and/or removed. To clarify electrical isolation for maintenance diagnostic testing of the circuit breaker should only be completed at the circuit breaker primary terminals.

[24] Subsequently, to improve resilience in the event of an earthquake, the defendant replaced the solid busbars between the circuit breaker and ABS with flexible conductors and as a consequence the bolts that were at issue were also replaced.

[25] The harm suffered by [the victim] is significant. He sustained an electric shock and serious burns to 22 percent of his body as well as some facial burns. His external injuries were likely caused by ignition of his clothing. The full extent of his injuries took around a week or so to manifest. As well as external injuries he suffered internal damage to muscle which led to an acute kidney injury necessitating dialysis. He also had issues with distended abdomen, an ischemic bowel which was also due to the passage of the current through his body. That resulted in significant surgery. The burns to his skin resulted in some bone being exposed which led him to develop a bone infection.

[26] [The victim] spent over two months in hospital. I accept that he continues to undergo physiotherapy and has limited movement in his hand. I have also read a victim impact statement which gives me significant insight into the effect that this has

had on his life generally and it has been very significant. He has done an awful lot. He has been, in my judgment, very determined and brave in trying to return to work and at times has worked longer hours than he is capable.

[27] One of the things that has become clear from the information provided to the Court is that this powerful electric shock has also had an impact upon various aspects of his cognitive functions. This is reduced his ability to work for long hours, to concentrate, to carry out activities that once were very easy for him. I accept overall that the harm caused to [the victim] has been very substantial.

[28] Turning to the knowledge of the defendant. As an operator in this industry for a considerable period of time, the defendant knew or ought to have known the inherent danger of electricity and the obvious and reasonably likely risk of serious harm should the protection specified in the regulations not be adhered to. Regulation 101 specifies an employer who employs a person to carry out any prescribed electrical work must ensure, so far as is reasonably practicable the safety of the employee while carrying out the work and must, so far as is reasonably practicable, provide safe working procedures for employees to follow.

[29] The work being undertaken at the Belmont Substation was prescribed electrical work. The defendant had site specific knowledge that the circuit breaker had previously been tested in 2010 without removing the busbars and the defendant had not enquired of [the electrician] as to the reasons that the busbars were not removed. The defendant also knew that the employees should not work on the ABS end of the busbar whilst part of the ABS was live and considers the breaches of the access permit to be very serious. It placed [the victim] within the MAD and there was no permit to do this. The defendant acknowledges that flashovers are a foreseeable risk when MADs are encroached.

[30] The breaches can be summarised in the following way:

• (a) The defendant carried out controlled work near an electric line failing to maintain safe distances in accordance with ECP 34.

• (b) Working on the ABS was outside of the safe work zone within the earths.
  
  • (c) The MAD was breached when [the victim] moved outside of the earths and came within 60 centimetres of the live section of the ABS.
    
  • (d) The defendant knew that this omission was reasonably likely to cause serious harm to a person and failed to take all practical steps to prevent serious harm.
    

[31] The defendant could have taken the following practical steps to prevent serious harm:

• (a) Ensure the employees properly understood how to measure MAD.
  
• (b) Ceasing work to re-evaluated that activity in order to prevent employees breaching the MAD as required by reg 17 Electricity (Safety) Regulations.
  
• (c) Carrying out testing of the service equipment with the connecting bar in place under a test permit (as had been the practice in 2010).
  
• (d) Reiterating in the written work place documents that if there was any reason why the condition in the work procedure could not be maintained, the work should stop.
  
• (e) Ensuring that employees plan their moves and take extreme care when moving from one position to another, given the proximity to live parts in accordance with SME 3.705 (industry practice).
  

[32] It is also accepted the defendant has previous convictions in respect of breaches of health and safety, and I will come to those in a short while.

[33] As previously stated there is an area of disagreement between the parties. The Prosecutor argues that, as properly reflected in the knowledge offence to which the

defendant has pleaded guilty, the Court can find that the defendant was in a position of knowing prior to this accident the condition of the equipment at the Belmont Substation having been alerted by a written document, signed by [the electrician] from a work party in 2010.

[34] The prosecution argue that having that knowledge and taking no apparent steps to mitigate that difficulty, in part, justifies the charge under s 163(c) and reg 17 and the higher maximum penalty of up to $500,000. Secondly, the prosecution say that consistent with case law, the actions of [the electrician] are attributable to the defendant, and given the defendant’s acceptance by its plea and the agreed summary of facts, that the company did not ensure the employees properly understood how to measure the MAD. The Court can therefore conclude that the actions of [the electrician] can be attributed to the company and that there is no mitigation available to the company by placing the blame on him.

[35] In contrast, the defence is that [the electrician] was an experienced qualified electrician. He was the recipient of the permit. It was his responsibility directly to ensure the work was restricted to that approved in the permit only. He was also knowledgeable of what had happened in 2010 and the failure which caused this accident is largely attributable to [the electrician’s] actions.

[36] There is authority for the proposition that where the error made by the working party is more serious than what might be characterised as foolish or careless, that the responsibility can fall on the shoulders of [the electrician] who has now left the company and be a mitigating feature on which the company can rely.

[37] In the end, to reach a conclusion of where the appropriate start point is in this case, I have to take into account the arguments on both sides and make a decision as to the appropriate culpability of the defendant company. I accept part of what both counsel argue in fact. I accept that [the electrician] should have done more, should have known better and that there is some mitigation available to the defendant as a result of that, in particular because it was to [the electrician] that the permit was granted and handed.

[38] But there is (consistent with the defendant’s guilty plea to the more serious “knowledge” offence and the existence of the document explaining the problem that arose in 2010) ample evidence of knowledge on the part of the defendant company. Steps could have been taken to mitigate that difficulty caused by old equipment rather than simply leaving it to the ingenuity of [the electrician] on the day.

[39] I have been referred to numerous cases to support both the $300,000 start point the prosecution advocate, and to support the $75,000 start point advocated by the defendant. I have concluded that this is properly charged as a knowledge offence, in contrast to the case dealt with by the Chief Judge in WorkSafe New Zealand v Northpower Ltd. There is a degree of carelessness on the part of the defendant in not dealing with the problem that arose in 2010 or finding a different method for carrying out maintenance on that old equipment, prior to the fateful day on 16 May 2015. I conclude that the start point suggested by the prosecution is too high, but by the same reasoning I also conclude that the defendant is far too low in advocating a starting point of only $75,000.

[40] One of the cases that I have been referred to is a case that I dealt with called WorkSafe New Zealand v Britton2. In that case, a house mover in moving a house along a particular rural road failed to take proper care and brought down a power line. He then placed one of his workers in an incredibly dangerous position by requiring him to move the power line off the top of the house. In doing so, it was moved into a ditch, a water laden ditch at the side of the road by a farmer’s property. The most shocking aspect of the case was that Britton did not call the authorities. He simply got on with his job and moved the house leaving no warning for members of the public who would clearly be endangered.

[41] The upshot was that a farmer came by and a number of his sheep and dogs were electrocuted and killed as they went near that ditch. Indeed the life of the farmer was put at great risk, had it not been for a colleague pulling him back in seeing the danger he may have been severely injured or killed. There were reckless aspects to that offending which in my judgment justified a start point of $150,000.

2 WorkSafe New Zealand v Britton [2015] NZDC 2101

[42] This case does not fall into the same category, in the sense there has not been recklessness present, but the aggravating feature for this defendant is that this is their core business. In Britton, he was making it up as he went long. He did something reckless and foolish and put other people’s lives at risk, but here this is core business for Electrix. The level of knowledge is much higher and the level of carelessness and, therefore, failure in this case is in my judgement very high. I accept only in part the mitigation put forward on the defendant’s behalf that some of this is down to the failure of [the electrician], but I do not conclude that it is so heavily attributable to his actions to justify a start point as low as advocated.

[43] I have come to the conclusion that in fact the appropriate start point here is

$150,000. A three part process arises in the case law as to how to approach these sentences. The first step is to assess the reparation justified. The second, to assess the appropriate starting point to properly reflect the gravity of the offending and then after applying appropriate discounts, to stand back and consider overall the total penalty faced by the defendant and whether it is proportionate and appropriate.

[44] Having assessed an appropriate start point for fine at $150,000, I turn my mind now to the appropriate order for reparation. I note that [the victim] has been reasonably consistent, particularly through a restorative justice conference, he requests something in the region of $50,000. I think the defendant is correct in saying that the prosecutor is in error in suggesting that [the victim] has suffered financial hardship. It is quite clear from the documents, that the defendant has been very supportive of [the victim] throughout and has met all of his financial needs, all the additional costs, his full salary and so on. The defendant’s actions in dealing with this dreadful incident and in trying to mitigate the harm to [the victim], and support their employee, is unimpeachable. It has been very attentive and scrupulously fair.

[45] The defendant in the course of that restorative conference offered $30,000 by way of emotional harm reparation, but in the course of this sentence hearing and by a memorandum filed with the Court before the hearing, the defendant accepts that reparation of $50,000 is justified. Ms Shorthall has provided me with a number of documents which set out start points and reparation awarded in similar cases. She has

focused not only upon the cases relied upon by the defendant but also those relied on by the prosecutor. That has been very helpful.

[46] In the case that I have referred to where the Chief District Court Judge awarded reparation and imposed fines recently is WorkSafe New Zealand v Northpower Ltd and Wellington Electricity Lines Ltd, the victim suffered serious injuries as a result of an arc flash similar to this case and the injury occurred in a substation as in this case. The victim there suffered deep burns to the back of his right thigh, superficial burns to his face, buttocks and upper legs; some required skin grafts, significant pain during recovery, considerable emotional harm including frequent panic attacks. Reparation was ordered in the sum of $30,000.

[47] The prosecutor in this case submits that although the victim and the defendant seem to agree on an appropriate figure of $50,000, on the case law they propose a reparation figure of $75,000. Counsel particularly draws my attention to Department of Labour v Avo Plus Ltd3 which is a 2012 decision, again in the District Court. There an overhead power line was involved during avocado picking. The victim suffered severe burns to 50 to 60 percent of his body, was in hospital for eight months, blind in his left eye, severe pain ongoing, sore joints, stiff sore muscles, skin grafts from legs to upper body. He was a 25 year old male unlikely to be able to work again and the reparation figure in that case was $75,000.

[48] In the end, the fixing of a figure for reparation is an intuitive exercise carried out by the Judge at sentencing and although it might be assisted by reparation orders made in similar cases, it should be remembered that all of those cases were in the District Court.

[49] [The victim’s] suffering is very significant. I accept to some extent that it is a little less than that in the Department of Labour v Avo Plus Ltd case in the sense that a smaller proportion of his body was burned but he did suffer significant internal injuries and he has suffered what appears might be ongoing, unresolveable cognition deficits.

3 Department of Labour v Avo Plus Ltd District Court Tauranga, CRN12070501231, 27 August 2012

[50] So, in the circumstances, I come to the conclusion that the appropriate figure for reparation is in fact $60,000.

[51] I then return to the start point of $150,000 for the fine. Both parties agree that there are aggravating features relating to the previous convictions of the defendant. There are four relevant previous convictions including at least one of a similar nature to this. Previously the company has been fined large amounts of money and it is agreed that there needs to be an uplift to deter the defendant from further offences of this type and, in part, to act as general deterrence. Ten percent is agreed to be appropriate. That is a figure of $15,000 bringing the start point to $165,000 overall.

[52] I am then urged to allow discounts under four heads. Co-operation: there is no doubt that the company has been co-operative and helpful throughout, not only with the prosecuting authority but with [the victim]. The second head: the defendant offered to pay substantial reparation of at least $50,000 and have provided very comprehensive financial support to the victim throughout. The third head: remedial actions that have been taken by the defendant. Those remedial actions are significant and I accept that by doing so they have significantly reduced the risk of a similar incident occurring in the future. And a further head of mitigation, remorse.

[53] I am prepared to grant the discounts that are requested by the defendant, five percent for co-operation and five percent for remorse, and 10 percent each for reparation and remedial actions, giving you a total of 30 percent discount for mitigating factors. Although the guilty plea was entered well before any trial was set down, it was not at the first opportunity. Counsel accepts that the appropriate discount for guilty plea is 20 percent. From $165,000, 30 percent for those mitigating features amounts to $49,500 and brings the fine down to $115,500. A further 20 percent for guilty pleas amounts to $23,100 which reduces the final fine down to one of $92,400.

[54] I then must look at the overall burden or penalty that I am placing upon the defendant company, Electrix. Together with reparation the total penalty is $152,400. I ask myself whether that is proportionate. I also take into account the ability to pay. On the one hand, no submissions have been made by defence counsel as to an inability to pay. On the other hand, the prosecutor urges the Court to uplift the fine to reflect

the fact that this is a large company which is very easily able to pay such penalties and that it is appropriate to uplift to ensure that the defendant feels the pinch; that the punishment is real. Well, I have come to the conclusion that there is in this case no need to do that, but nor do I conclude that the total penalty of $152,400 is disproportionate. Those are the penalties that I impose.

[55] Electrix Limited is convicted and fined $92,400 and ordered to pay reparation to [the victim] of $60,000.

J C Down

District Court Judge