|
|
Home
| Databases
| WorldLII
| Search
| Feedback
District Court of New Zealand |
Last Updated: 12 March 2022
EDITORIAL NOTE: CHANGES MADE TO THIS JUDGMENT APPEAR IN [SQUARE BRACKETS]
|
ORDER PROHIBITING PUBLICATION OF NAME(S), ADDRESS(ES),
OCCUPATION(S) OR IDENTIFYING PARTICULARS OF
WITNESS/VICTIM/CONNECTED PERSON(S) PURSUANT TO S 202
CRIMINAL PROCEDURE ACT 2011. SEE
|
|
IN THE DISTRICT COURT AT MANUKAU
I TE KŌTI-Ā-ROHE KI MANUKAU
|
|
CRI-2020-092-009289
[2021] NZDC 11737 |
|
WORKSAFE NEW ZEALAND
Prosecutor
|
|
v
|
|
SLEEPWELL (NZ) LIMITED
Defendant
|
|
Hearing:
|
17 June 2021
|
|
Appearances:
|
J Kirtlan for the Prosecutor
M Hutcheson for the Defendant
|
|
Judgment:
|
21 June 2021
|
RESERVED DECISION OF JUDGE S D OTENE
[1] [Name deleted – the victim] worked in the framing department of the defendant company, Sleepwell NZ Limited (Sleepwell), [occupation details deleted]. He was injured at work on 23 September 2019 as he walked from his workstation to retrieve a partially constructed bedframe for further assembling. To do so he had to pass the workstation of his colleague [name deleted – the co-worker] by reason of the way in which the workspace was configured and where, as a practice, the frames were stacked. Workers in the framing department fix the frames using pneumatic nail guns
connected by coiled hoses to an air supply line in the roof. The guns were configured to enable continuous depression of the trigger by the operator but to fire only when the gun plate is put in contact with the wood where the nail was to be driven. It was common for the coiled hose to get in the way of workers as they moved around their stations. [The co-worker ] while engaged in his work, communicating with other co- workers and wearing earmuffs, did not know that [the victim] was standing behind him intending to pass to collect the bedframe. In order to manoeuvre the coil hose to a better position [the co-worker ] stretched it by extending his arm behind him with the gun in hand and the trigger depressed. As he did so he felt the gun recoil and he turned to see [the victim] standing with a nail in his chest extending out a few millimetres.
[2] [The victim] remained conscious. Upon admission to hospital [medical details deleted]. He was due to return to work at Sleepwell on 23 December 2019 but resigned because he did not feel safe to work there.
[3] In consequence Sleepwell has pleaded guilty to one charge of contravening sections 36(1)(a) and 48(1) and (2)(c) of the Health and Safety at Work Act 2015 (HWSWA) which carries a maximum penalty of a fine of $1,500,000. The charge is particularised as follows:
Being a PCBU having a duty to ensure, so far as reasonably practicable, the health and safety of workers who worked for the PCBU, including [the victim], while the workers were at work in the business or undertaking, namely the task of constructing bed bases using a nail gun, did fail to comply with that duty, and that failure exposed workers to a risk of death or serious injury.
It was reasonably practicable for Sleepwell (NZ) Limited to have:
The sentencing framework
[4] The HASWA purposes typically to the fore in sentencing matters such as this are protection of workers against harm from work hazards and risks, noting such protection should be given at the highest level1 and securing compliance though appropriate enforcement measures.2 Aligned with that are the Sentencing Act 2002 purposes speaking to offender accountability,3 promoting the offender’s sense of responsibility,4 victim interests,5 denunciation6 and deterrence, specific and general7 all of which, if met, can contribute to safe work places. The Sentencing Act principles most generally relevant are those that go to offence gravity and offender culpability,8 seriousness of the type offence type,9 victim impact10 and restorative justice and other amends.11
[5] The sentencing exercise engages the following four step process as outlined in
Stumpmaster v Worksafe New Zealand:12
(a) Assessment of the reparation amount.
(b) Fixing the amount of the fine by reference first to the guideline bands13 and then with regard to the aggravating and mitigating factors.
(c) Determining whether further orders under ss 152 – 158 of HASWA are required.
(d) Overall assessment of the proportionality and appropriateness of combined sanctions imposed upon exercise of the first three steps
1 HSWA, s 3(1)(a) and (2).
2 Section 3(1)(e),
3 Sentencing Act 2002, s 7(1)(a).
4 Section 7(1)(b).
5 Section 7(1)(c).
6 Section 7(1)(e).
7 Section 7(1)(f).
8 Section 8(a).
9 Section 8(b).
10 Section 8(f).
11 Section 8(j).
12 Stumpmaster v Worksafe New Zealand [2018] NZHC 2020.
13 Being: low culpability – up to $250,000; medium culpability – $250,000 to $600,000; high culpability
$600,000 to $1,000,000; very high culpability - $1,000,000 plus; at [53].
including consideration of the defendant’s financial capacity to pay as it affects ability to pay or as it needs to be reflected by an increased fine.
[6] Relevant too are the following principles drawn from Stumpmaster:
- (a) The HASWA expressly requires the application of the Sentencing Act 2002. Its applicability is not negated by the aggravating features emphasised in s 151 of the HASWA as needing particular consideration (in distinction to the predecessor of that provision that highlighted considerations both aggravating and mitigating).
- (b) Because the Sentencing Act applies, and hence all its provisions that go to ability or inability to pay,14 the mandatory regard required by the HASWA to a defendant’s capacity to pay an increased fine does not preclude consideration of an inability to pay.
- (c) The factors by which to assess culpability identified in Department of Labour v Hanham and Philip Contractors Ltd15 encompass all of the features in the subsequently enacted s 151 to which the court must have regard. The Hanham factors remain relevant for sentencing purposes.
Reparation
[7] The discretion to order reparation arises under s 32 of the Sentencing Act by virtue of [the victim] having suffered emotional harm and loss consequential to emotional and physical harm. In determining the amount of reparation account must be taken of any offer of amends made by the defendant.16 Quantifying emotional harm
14 Sentencing Act 2002, section 8(h) (requiring account to be taken of the circumstances of an offender that might mean an otherwise appropriate sentence would be disproportionately severe); s 14(1) (providing discretion not to impose a fine, otherwise appropriate, that an offender cannot pay); s 40(1) (directing regard to be had to the financial capacity of a defendant when imposing a fine); s 41 (empowering requirement for a defendant to provide a financial capacity declaration).
15 Department of Labour v Hanham and Philip Contractors Ltd [2008] NZHC 2076; (2008) 6 NZELR 79 (HC).
16 Sentencing Act 2002, ss 32(6) and 10.
reparation is an intuitive exercise with the objective being to impose an amount just in all the circumstances.17
[8] [The victim] received accident compensation payments for the three month period from when he was injured until he was medically cleared to resume work. The prosecution and defence agree that the shortfall between the accident compensation payments and [the victim]’s his pre-injury earnings is $651.67. The evidence of the prosecutor’s accountant establishes that amount and I am satisfied it is a consequential loss that should be ordered in reparation.
[9] Evaluation of other physical, emotional and financial harm suffered by [the victim] is assisted by reference to his victim impact statement. I highlight the following aspects:
- (a) At the time of the offending [the victim] was aged [under 20] years and he had worked at Sleepwell for [less than one year], it being his first job after leaving school.
- (b) Beyond the immediate physical injury and post-operative recovery already described, [the victim] at the time of his statement18 continued to experience [medical details deleted] As a result, he no longer plays [sport] with his friends.
- (c) [The victim] contributed to the financial support of his mother and younger siblings. His ability to do so has been compromised first by the shortfall between accident compensation payments and his earnings prior to the injury and then his inability to secure permanent employment after he elected not to return to Sleepwell because of his fear for his safety. Though he obtained his forklift licence and temporary employment it did not sustain and his income source at the time of the statement was an unemployment benefit of approximately
$370 a week less than his pay at Sleepwell.
17 Big Tuff Pallets v Department of Labour [2009] NZHC 60; [2009] 7 NZELR 322 at [19].
18 Dated 31 October 2021 but presumably a typographic error and given on 31 October 2020.
(d) [The victim]’s immediate emotional response to the injury was fear, distress and anger about his physical condition and the uncertainty of his future. Beyond that he carries worry about what his former work colleagues may think of him and he bears a sense of shame. [The victim]’s family and the defendant’s directors are members of the same church community. [The victim] is troubled that his mother has been placed under pressure by the pastor’s wife to forgive the director. He now chooses not to attend that church because he feels shame within that environment. Finally, because [the victim] no longer plays sport with his friends his social contact has reduced.
[10] Whilst [the victim] does not experience long term physical impacts, I am persuaded that the emotional impact of the incident has been significant. In this regard I observe first that he has had to deal with a major adverse life event with youthful personal resource in his first permanent employed position. In any case it can be readily appreciated that it could be deeply distressing for any person, youthful or mature, to experience a potential lethal injury, noting that [the victim] remained conscious until taken into surgery and so with some cognisance of his peril. That distress might be not only in the moment and immediate aftermath and but could understandably resound into the future. Secondly, [the victim]’s financial stability and so his ability to discharge his responsibilities to his wider family was diminished. I accept that would likely be experienced as a personal diminishment. So too I accept that because of the incident [the victim]’s self-confidence and opportunity of social interaction within his community and with his peers is impeded.
[11] The prosecution contends that $30,000 emotional harm reparation is appropriate. The defence contends $12,500 taking into account a $1,500 employee advance to [the victim] that was forgiven.
[12] I take into account that Sleepwell has been prepared throughout to engage in restorative justice. [The victim] was originally reluctant to do so but changed his position. A conference between David and Lielani Hurrell for Sleepwell’s part with [the victim] and [his mother], took placed earlier this month. The report of the
conference satisfies me that apology was genuinely given, and remorse felt deeply by Mr and Mrs Hurrell and that the apology was genuinely accepted on those terms.
[13] I also take into account that Sleepwell wanted [the victim] to resume his position and had taken action so that [the victim] could have confidence that the working environment was appropriately safe. That [the victim] did not trust that he would be safe if he returned was understandable in light of the seriousness of the incident, nevertheless I am satisfied that Sleepwell desired and acted to support [the victim]’s continued employment. I do not however place significant weight on a company representative accompanying [the victim] to hospital after the incident; that does not seem remarkable in the circumstances.
[14] I have not been particularly assisted by the cases Department of Labour v Mainzeal Property and Construction Limited19 and Worksafe v GTT Mechanical20 to which the prosecution has referred. In Mainzeal the sentencing method was to first establish a unitary financial penalty ($20,000) then attribute the greater amount to reparation ($16,000) and the balance ($4,000) to a fine on the basis that emphasis upon compensation rather than penalty was most appropriate in the circumstances. This method sits uncomfortably with the requirement now to assess reparation for the actual loss or damage suffered first and independently of matters of culpability. In GTT Mechanical although the victim who was awarded $50,000 reparation was youthful like [the victim], his physical injury was more severe, his hospital admission significantly longer and his rehabilitation treatment intensive. The judge’s reference to the victim’s emotional suffering and the fundamental impact on the victim’s life suggests a very high degree of emotional harm proportionate with the severity of the injury and burden of rehabilitation. Those features have not been as prominent for [the victim].
[15] More helpful is the case Worksafe New Zealand v VIP Frames and Trusses in which the equivalent of $15,000 reparation was ordered.21 [The victim] and the victim
19 Department of Labour v Mainzeal Property and Construction Limited. DC Upper Hutt, CRI-2005- 076-2040, 27 April 2006.
20 Worksafe v GTT Mechanical [2020] NZDC 4351.
21 Worksafe New Zealand v VIP Frames and Trusses [2015] NZDC 12612. The reparation sum ordered was $9,000 on the basis that $15,000 would have been appropriate but allowing for $6,000 already ordered by the Employment Relations Authority for hurt, humiliation and loss of enjoyment.
in VIP Frames and Trusses suffered similar and comparable injuries. Beyond the emotional harm for both that flowed from experiencing physical injury and financial stress, there were some differing contributing features to emotional harm experienced by each. For [the victim] there is his youthful disposition and his assumption of shame and loss of confidence in interacting in his community. For the victim in VIP Frames and Trusses there was negative effect by the unreasonable actions of his employer and former colleagues. Sleepwell’s comparatively responsible behaviour has likely prevented greater emotional harm to [the victim]. But given my finding that the emotional harm to [the victim] has been significant and the intuitive nature of the assessment I do not consider it necessary to make adjustments as between the amount awarded in VIP Frames and Trustees and what is proper to award [the victim] on the basis of discrete variations in their respective circumstances. Standing back and engaging an overall assessment I consider reparation to [the victim] in the sum of
$15,000 for emotional harm is appropriate. I make no adjustment for the $1,500 employee advance to him that was forgiven. Even if that is considered to nominally increase reparation to $16,500 I do not consider that disproportionate to the harm suffered and note also the six year lapse of time since the $15,000 award was made in VIP Frames and Trusses.
[16] The total reparation order for consequential loss and emotional harm is
$15,651.67.
Fine - quantum
[17] The prosecution and defence agree that the offending falls at the high end of the medium culpability band identified in Stumpmaster with a corresponding range for fines from $250,000 to $600,000. There is divergence about the appropriate starting point of the fine – the prosecution contending it should be $550,000 and the defence contending $450,000.
[18] Bearing in mind the Hanham factors and the s 151 matters to which regard must be had, I consider the following relevant to the level of Sleepwell’s culpability:
obligations by issue of a directive letter in June 2015 and an improvement notice in February 2016.
(d) In terms of the obviousness of the hazard, there was a spring missing from the nail gun which may have contributed to the nail gun firing. The tool expert engaged by the prosecution opined that the absence of the spring would have been noticed if daily inspections were in place, though I balance that with the absence in the operator manual of refence to the spring as part of recommended pre-start checks or an action for maintenance. Even so, the operation of a nail gun is inherently hazardous as demonstrated by [the victim] previously shooting himself in the hand with a gun. The broader shortcomings of the workplace environment and processes rendered the hazard obvious even absent the defect in the gun.
(e) The cost of eliminating or minimising the risk by undertaking the identified practical steps is negligible. I accept that Sleepwell failed to take those steps not for reasons of cost minimisation but rather because it had not appreciated the necessity for those steps.
(f) There was and is ample guidance available (as noted at paragraph (c)) to assess and mitigate the risk associated with nail guns.
Starting point
[19] The prosecution has referred to several cases for assistance in determining the level of culpability. Because I have assessed that the existence of risk arises from broad shortcomings which coalesced to cause the harm to [the victim], those cases where the failing was more discrete and had been specifically drawn to the defendants’ attention are less helpful.22 I am better assisted by Worksafe New Zealand v VIP Frames and Trusses.23 As noted above it involved a similar undertaking and injury.
22 Department of Labour v Hanham & Philip re Cookie Time Appeal [2008] NZHC 2076; (2008) 6 NZELR 79; Stumpmaster v Worksafe New Zealand re Niagara Sawmilling Companuy Appeal, above n 12; Worksafe New Zealand v Carter Holt Harvey Limited [2018] NZDC 22605.
23 Above n 21.
Like that case I have similarly determined that the departure from industry standards was significant, albeit for different reasons. I assess similarly that Sleepwell’s culpability falls at the high end of the medium culpability band as the prosecution and defence both agree. Given that the culpability of VIP Frames and Trussess was quantified at $85,000 under the former statutory scheme, I accept the defence assessment that $480,000 is a fair approximation in light of the now increased penalties and adopt that as starting point.
[20] For completeness, I have considered the two additional cases which the defence has provided for assistance24 each adopting starting points for fines of
$400,000 and which the defence says involved lesser culpability. Noting the distinguishing features of those decisions including for both the less likelihood of death and for one the less obvious that risk than here, I am not moved to adjust the starting point from $480,000.
Adjustments
[21] There are no aggravating factors warranting an uplift and none is sought by the prosecution.25
[22] The prosecution and defence are agreed that the following discounts are
|
available:
|
|
|
|
(a)
|
Cooperation with the investigation:
|
5%
|
|
(b)
|
Reparation:
|
5%
|
|
(c)
|
Early guilty plea:
|
25%.
|
24 Worksafe New Zealand v Taranaki Sawmills Limited [2020] NZDC 18014 and Worksafe New Zealand Limited v Addiction Foods Limited [2020] NZDC 13929.
25 On the basis that degree of departure from prevailing standards being a factor identified in s 151 to which regard must be had being factored into the starting point.
[23] In respect of remorse and restorative justice the prosecution suggests that 5% is appropriate and the defence contends 10%. I consider 10% appropriate, holding the following material to that determination:
- (a) Sleepwell’s willing and positive engagement restorative justice as I have described.
- (b) Sleepwell were committed to assisting [the victim] to return to work and took swift remedial steps to ensure an environment in which he would feel safe.
- (c) That Mr Hurrell on behalf of Sleepwell felt particular shame and distress for the incident is plausible given that he and his brother established the business form humble beginnings sharing similar values and associations in the wider Pasifika community with many of the Sleepwell employees. I accept that the harm caused to [the victim] as a member of that wider community likely resonated deeply with Mr Hurrell and Sleepwell management.
[24] In terms of remedial steps taken, I am satisfied that they have been comprehensive and diligently exercised. However, when balanced with the level of failing and prior health and safety defaults I am not persuaded to apply a discount for remedial action as the defence seeks in the order of 5%.
[25] The result is that a 45% allowance equivalent to $216,000 is made for mitigating factors such that the provisional end point of the fine is $264,000.
Regulator’s costs
[26] The court is empowered to award the regulator just and reasonable costs toward the prosecution. The internal legal costs of $5,742.84 are reasonable, and accepted as such by the Sleepwell. So too the costs incurred in instructing an expert to inspect the nail gun and provide an opinion, being $295.00.
[27] I do not award costs incurred by the engagement of an external accountant to analyse Sleepwell’s financial position. The issue is not uncommon in these types of prosecutions and Sleepwell’s accounts were not particularly complex. If, as it seems here, the complexity was beyond the current capacity of Worksafe’s internal accountants for reason of experience or availability I do not think it reasonable for Sleepwell to bear the consequence of that limitation.
[28] Total costs awarded to Worksafe will therefore be $6,037.84.
Proportionality and instalment payments – financial capacity
[29] Sleepwell seeks an adjustment of the fine based upon financial incapacity to pay.
[30] Mr Chaplin, Sleepwell’s accountant and Mr Boyd have provided various financial records on Sleepwell’s behalf. The information has been reviewed by Mr Shaw, a chartered accountant engaged by Worksafe and he has direct discussions with Mr Shaw and Mr Boyd. In summary they are agreed that Sleepwell is not in a positon to pay a lump sum fine upon sentence and that payment should be made by way of instalments. Informed by the expert opinion and in the absence of contention, I accept that position.
[31] There are however two points of contention: first as to the amount of instalments paid over a three year period, though not the aggregate; secondly, whether there should be an additional sum of $50,000 paid in instalments in years four and five.
[32] Dealing with the first issue, the position is that Sleepwell can pay a total fine of $150,000 over three years by way of scaled instalments that equate to 50% of estimated annual cash profits. The prosecution position is that payment of the sum of
$150,000 over that period is reasonable but should by way of consistent monthly instalments of $4,166.67 which reflects 75% of forecast cash profits in 2022. I accept the defence submission that it is preferable to order a payment regime less likely to give rise to default and that relatively minor decreases in the anticipated profits would
imperil Sleepwell’s ability to pay the instalments. I will therefore order the payment of $150,000 in the scale the defence invites.
[33] Turning to the second issue, the prosecution submits that an additional $50,000 per annum in years four and five of an instalment plan is available and should be ordered. The defence takes the position that it no further fine should be imposed because it has no significant assets via which to fund a greater fine, that its financial position beyond three years is uncertain and even then its ability to pay is dependent upon realising estimated profits.
[34] Mr Chaplin has not forecasted Sleepwell’s ability to pay a fine over a longer period taking the view it is not prudent to forecast so far into the future. Mr Shaw acknowledges the challenge of forecasting in the future.
[35] The Court in Stumpmaster cautioned against extending liability too far into the future indicating that a higher payment over a shorter time is preferable.26 However higher payments over a shorter period are not viable here. So, the focus again is on whether Sleepwell’s claim for reduction of the fine is made out. It is for Sleepwell to provide clear supporting evidence for the reduction. Given that I have no forecast for years three and four, and I do acknowledge the difficulties of that task, I am left in the position of having to stand back and make an assessment on the evidence before me. I consider the following to be material:
- (a) Sleepwell has had positive trading results in the 2019, 2020 and 2021 trading years.
- (b) It forecasts positive results in the next three trading years.
- (c) Mr Shaw’s expert opinion is that given Sleepwell forecast cash profits of $159,600 for the third year ahead of which a fine of $50,000 per annum represents 31%, the forecast is sufficient to allow for the vagaries of forecasting further out.
26 Stumpmaster v Worksafe New Zealand re Niagara Sawmilling Companuy Appeal, above n 12 at [105].
[36] I am satisfied that Sleepwell can be reasonably expected to pay by instalments an additional $50,000 in years four and five and that to discount the fine beyond the sum of $250,000 that will be ordered would be inadequate to meet the principles of deterrence and denunciation.
Suppression
[37] The prosecution seeks suppression of [the victim]’s name27 and victim impact statement28 and the medical information in regard to him.29 The defence seeks additionally suppression of the name of two workers named in the summary of facts ([the co-worker] and [the team leader]. As described, the emotional effect on [the victim] has been significant. [The co-worker] and [the team leader] have been part of a very difficult circumstance for which they bear no responsibility. For those reasons I am satisfied that publication of names and details of all three would cause undue hardship. There is no public interest in their names being published and suppression will be granted.
[38] The defence also seeks suppression of evidence, submissions and aspects of the judgment that identify exact financial figures of Sleepwell’s undertaking on the basis of the commercial sensitivity of the information. There is no opposition by the prosecution. Whilst I understand that it might be practice to make such orders, neither counsel were able to point to the statutory jurisdiction to do so. Mr Hutcheson invites exercise of the court’s inherent powers in order to do so. The application of those powers is generally limited to preventing abuse of the courts’ processes and protecting the fair trial rights of an accused. The inherent powers of a court do not, however, extend to furthering the general public interest beyond that concerned with the due administration of justice.30 I do not consider that the court’s inherent powers are available to suppress financial information and I decline to so order.
27 Pursuant to s 202(1)(b) and 2(a) of the Criminal Procedure Act 2011.
28 Pursuant to s 21(1) and 2(f) of the Victims’ Rights Act 2002.
29 Pursuant to s 205(1) and (2)9a) of the Criminal Procedure Act 2011.
30 At [114].
Sentence
[39] In summary Sleepwell is convicted and sentenced by imposition of the following orders:
- (a) A fine of $250,000 payable by monthly instalments over five years from the day of this decision as follows:
- (i) $2,800 for the first 12 months following sentencing (year 1).
- (ii) $3,000 for the following 12 months (year 2).
- (iii) $6,700 for the following 12 months (year 3).
- (iv) $4,166.66 for the following 23 months and $4,166.82 for the final month (years 4 and 5).
- (b) Reparation to [the victim] for consequential loss and emotional harm of $15,651.67.
- (c) Costs to Worksafe of $6,037.84.
[40] I further order suppression of [the victim]’s name and victim impact statement and the medical information with regard to him and the names of [the co-worker] and [the team leader]. I invite counsel for Worksafe and for Sleepwell to submit an agreed amended summary of facts taking into account the suppression orders.
[41] Counsel are thanked for their helpful submissions.
Judge SD Otene
District Court Judge
Date of authentication: 21/06/2021
In an electronic form, authenticated pursuant to Rule 2.2(2)(b) Criminal Procedure Rules 2012.
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZDC/2021/11737.html