Worksafe New Zealand v Niagara Sawmilling Company Ltd [2018] NZDC 3667

Published 30 November 2018

Sentencing — workplace injury — Health and Safety at Work Act 2015 — Department of Labour v Hanham & Philp Contractors Limited — WorkSafe NZ v PG & SM Callaghan Ltd. The defendant company pleaded guilty to breaching the duty under Health and Safety at Work Act s 36(1)(a), which imposes a requirement on all persons conducting a business or undertaking (a PCBU) to ensure the health and safety of their workers so far as reasonably practicable. The maximum penalty for a corporate entity, such as this defendant, is a fine of $1.5 million. The defendant company operates a timber processing plant, where the victim worked as a machine operator. He operated a grader/trimmer line. On the day of the incident, the defendant attended the sawmill pre-start meeting, then went to his work station. There were some problems with the timber snagging and so the victim's supervisor stopped one of the feed chains, allowing the victim to clear the backlog of timber which meant there was less product flow and resolved the issue. Shortly after, the victim noticed a small piece of timber alongside the spiral roller, he reached his hand in to dislodge it but his glove was drawn into the gap between the metal roller and the metal checker plate decking. He pulled his hand out and a colleague turned off the machine when he saw the ripped glove. The incident resulted in the victim's right index and middle fingers being partially amputated, and he also suffered a shoulder injury. The Judge considered the approach to sentencing under the Health and Safety at Work Act. Specifically, the three step approach in Department of Labour v Hanham & Philp Contractors Limited, which were: (a) Assessing the amount of reparation; (b) Fixing the amount of the fine; (c) Making an overall assessment of the proportionality and appropriateness of the total imposition of reparation and the fine. However, that approach was established under the old legislation, and the Act provides the Court the ability to make a variety of additional orders outlined in Part 4, Subpart 8, providing a fourth step between step two and three of the traditional sentencing framework. In assessing the amount of reparations, the Judge considered several cases, but settled on WorkSafe NZ v PG & SM Callaghan Ltd [2017] NZDC 27814 being the most factually similar. The Judge took into account the $5000 already paid (and the 20% ACC top-up) to the defendant and found a fair award as $27,000. In assessing the fine, the Judge considered the varying views of offending bands discussed in several District Court decisions. The prosecution argued for a starting point of $600,000, based on the various culpability factors they identified, including recommendations by a health and safety advisor that were not followed. The defendant submitted that they did not follow the recommendations because they would have in fact been hazardous to workers. The defendant also argued while they didn't meet the required level of guarding on their machine, there was some guarding and, prior to the incident, the defendant had undertaken a full site risk assessment and already made changes. The defendant submitted an appropriate starting point at $350,000. The Judge settled on a starting point of $500,000 based on similar cases, and then applied a 15% uplift for the defendant company's prior convictions. A 25% deduction was allowed for the steps the company had made in mitigation and voluntary reparations, and a 25% discount for a guilty plea made the total fine $323,437. The Judge considered costs, as part of ancillary orders under the Act, and directed the defendant to pay $278 for external counsel. Finally, the Judge considered the fourth step, the overall assessment. The Judge viewed the total reparation and fine as proportionate and that the defendant's financial capacity was not a concern. Accordingly the final sentence was: (a) An order for reparation payable to the victim of $27,000.00; (b) An order for consequential loss payable to the victim of $160.00; (c) A fine of $323,437.00; (d) Costs in the amount of $278.00 payable by the defence to the prosecution; (e) The amounts ordered to be paid in (a) to (d) above are payable within 28 days of the date of the judgment. Judgment Date: 28 February 2018.