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Case Note Cudal Lime Products Pty Ltd first to be convicted for Category 1 offence

01 March 2018
Regulatory Compliance
The first Category 1 conviction was finalised this week, since the introduction of the Work Health and Safety Act.

On 26 February 2018, Judge Scotting convicted and fined Cudal Lime Products Pty Ltd (‘Cudal’) in the first category 1 offence to be finalised since the introduction of the Work Health and Safety Act five years ago, in the case of Stephen James Orr v Cudal Lime Products Pty Ltd; Stephen James Orr v Simon Shannon [2018] NSWDC 27. 

Mr. Simon, separately was charged in his capacity as a worker under section 28 of the Act and entered a plea of guilty with respect to a category 2 offence arising from the same incident.
 
The incident

On 27 August 2014, Ms Judith Liehr lived with her de facto partner and worker at Cudal Lime Quarry  (‘the mine’) Mr. Barry Perceval  in a cottage 200m from the mine. 

At approximately 10:00am Mr. Perceval returned to the cottage for morning tea and found Ms. Liehr collapsed in the shower. It was determined that Ms Liehr’s death was caused by electrocution after coming into contact with the metallic flexible shower hose, whist standing on the metallic waste drain in the shower recess. 

Further, the agreed statement of facts tendered to the court provide that dangerous electrical voltage was present in the metallic fixtures of the cottage as a result of a fault in the low voltage system of the mine. 

The guilty plea and recklessness

Prior to the incident, there was a history of electrical issues at the mine dating back to 2007 and extensive electrical work had been completed over that period of time and was subject to inspections by the local Mine Safety Officer who had also previously recommended improvements. 

Cudal was required to and did have in place a Mine Safety Plan (MSP), which appeared to have been reviewed in 2011, 2013 and April 2014, albeit the latter two versions were unsigned.  Nevertheless, it was a fact each MSP identified the extensive use of electricity at the Mine, that the risks of electrocution were ‘moderate’ and the consequences ‘catastrophic’. The control measures identified to manage the risk included having electrical work undertaken by or under the direct supervision of qualified electrician or electrical engineer and that any work was to be done in accordance with the Standard. Electricity was identified as a ‘significant’ risk.

On Monday 30 December 2013 there was an arc fault in the main switch room that significantly damaged the old switchboard.  A qualified electrician was called and performed work between 30 December 2013 and 8 January 2014 to replace the old switchboard.  

However, between 30 December 2013 and 7 January 2014, Mr Shannon conducted some of the electrical work on the Switchboard as part of its installation in the absence of a qualified electrician or electrical engineer.  

It was noted that, Mr Shannon whom himself was not a qualified electrician or electrical engineer undertook electrical work on the switchboard.  That work was conducted at the direction of Cudal.

While Cudal accepted it acted with reckless disregard to the risk, by its plea of guilty, His Honour found that:-
The direction of an unqualified person to install the switchboard to save costs was an act devoid of social utility, so that the foresight of the possibility of the risk of serious injury or death arising was sufficient to constitute recklessness: Aubrey v R [2017] HCA 18 at [49].
The recklessness of [Cudal] is aggravated by the history of electrical issues at the Mine that were identified as safety risks by the [Mine Safety Officer] and not properly rectified. [Cudal] was on notice through those interactions of the importance to design, install and maintain electrical plant to minimise the potential for electric shock, the need for regular inspection and testing of electrical installations, the importance of retaining qualified electricians to inspect and maintain electrical equipment and the risks associated with inadequately maintained electrical cables.

Sentencing

Judge Scotting commented that, in the circumstances the risk of electrocution was foreseeable and that the Mine Safety Plan (‘MSP’) identified the risk of electrocution and that the control measures identified in the MSP were not implemented. There were also obvious deficiencies in the maintenance of the electrical cabling at the mine. 

Additionally, as to the objective seriousness of the breach by Cudal and Mr Shannon, His Honour made the following observations:- 

  • each of the steps, alleged by the prosecution, to eliminate or minimise so far as was reasonability practicable, the risk to Ms. Liehr and Mr. Perceval were simple and easily implemented. 
  • It is inferred that the direction by Cudal to the unqualified and unsupervised Mr. Shannon to undertake electrical work was motivated to save costs.
  • Mr. Shannon could have simply refused to do the electrical work.
  •  

Ultimately, convictions were recorded for both Cudal and Mr. Shannon and being fined $1.2million and $64,000 respectively which was discounted by 25% each on account of the guilty pleas. 

Key Message

This case highlights the need to ensure that in all circumstances safety management systems are adhered to and the dangers associated with performing work outside areas of expertise and qualifications. 

Further Reading