Australia: Two companies ordered to pay more than $200,000 for a single breach

Last Updated: 22 January 2016
Article by Danella Wilmshurst

Most Read Contributor in Australia, September 2017

Late last year, two companies were prosecuted in the Supreme Court of NSW in relation to a single incident that occurred on 1 November 2012. This case is notable in that it helps to develop Chain of Responsibility laws in relation to the responsibilities of loaders and consignors of goods.

Nolan v Sims Group Australia Holdings Limited; Nolan v Delta Pty Limited (2015) involved proceedings brought against:

  • Sims Group Australia Holdings Ltd (Sims); and
  • Delta Pty Ltd (Delta).

Sims was the consignor of goods in a heavy vehicle that was alleged to have been driven on a road in breach of a dimension requirement in s 53 of the Road Transport (General) Act 2005 (the Act).

Delta was the loader of these goods onto the heavy vehicle that was alleged to have been driven on a road in breach of a dimension requirement, contrary to s 55 of the Act.

Each defendant had pleaded guilty to the offence at the time the proceedings were heard.

The facts of the case

Sims engaged Kreidies Management Group Pty Ltd (Kreidies) to collect a consignment of scrap metal from Delta's premises and bring it back to its own premises. Kreidies used a heavy vehicle combination comprising a prime mover and two trailers.

When the combination arrived at Delta's premises, it was loaded with a consignment of scrap metal by an employee of the company that subcontracted Delta. The driver of the combination visually inspected the load, but did not measure its height prior to leaving Delta's premises. The load was neither secured nor covered.

Upon entering the M5 east tunnel, the load on the combination struck a steel beam approximately 10 metres inside the entrance. This was despite the fact that the driver had passed over-height warning lights and signs on the roads leading to the tunnel. The driver claimed he had not seen any warnings before he reached the tunnel.

The damage to the tunnel infrastructure was significant. It was also necessary to isolate and/or shut off a number of the services for a period of time, including:

  • power;
  • water;
  • fire systems;
  • lighting; and
  • ventilation.

The judge had no trouble finding that the damage to the M5 tunnel was caused by the load on the combination striking an over-height steel beam. He also found the fact that the combination was over height was caused by a failure to properly compact and restrain the scrap metal before the combination departed Delta's premises.

The case against Sims

As the consignor of the load, Sims had operations and loading procedures that required drivers to:

  1. visually inspect their truck and load prior to departing any site to ensure that it was safe to travel on public roads;
  2. secure the loads; and
  3. confirm that the weight of the truck did not exceed any applicable limit.

The agreement that Sims had with its road haulier, Kreidies, included a provision that Kreidies had an obligation to comply with all requirements of any relevant authority.

It was agreed that Sims failed to:

  • have any proper procedures in place relating to the loading of heavy vehicles at sites other than its own premises;
  • provide appropriate instructions, either to Delta or to Kreidies, to adequately compact or restrain the load before the combination carrying it departed Delta's premises; and
  • include conditions in its haulage contracts with other parties providing that where default occurred, the haulier would not be remunerated.

The Case against Delta

Delta's procedures required the scrap to be loaded by its excavator operator, and to be compressed using the excavator bucket so that the load would be contained within the upper limit of the trailer. It was also a requirement that the driver of the combination physically check and cover the load before departure.

There was no compliance gauge at Delta's yard that could be applied to measure the height of heavy vehicles before they departed from the site.

It was submitted that Delta's failure to make sure that the load was properly checked constituted a serious breach of its obligations. The prosecutor submitted that Delta had an obligation to identify risks and actively introduce systems to manage them. In particular, Delta's failure to measure the loaded combination before it left the site "significantly contributed to its culpability".

Orders made against Sims

Sims was ordered to pay penalties totalling nearly $98,000, which were divided as follows:

  • a fine of $3,000 for breaching s 53 of the Act;
  • an order to pay the NSW Roads and Maritime Services (RMS) $54,494.85 for the damage to road infrastructure, pursuant to s 210 of the Act; and
  • an order to pay the prosecutor's costs of $40,000.

Orders made against Delta

Delta was ordered to pay penalties totalling over $115,000, which were divided as follows:

  • a fine of $6,000 for breaching s 55 of the Act;
  • an order to pay RMS $66,593.83 for the damage to road infrastructure, pursuant to s 210 of the Act; and
  • an order to pay the prosecutor's costs of $42,500.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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