Industrial Relations Commission New South Wales Medium Neutral Citation: Diona Pty Ltd v SafeWork NSW [2024] NSWIRComm 1068 Hearing dates: 17 October 2023, 24 November 2023, 3 April 2024 Date of orders: 19 November 2024 Decision date: 19 November 2024 Jurisdiction: Industrial Relations Commission Before: Commissioner Muir Decision: Orders that: (1) The external review is upheld. (2) The internal review decision made by the SafeWork reviewer on 19 October 2022 is revoked. (3) The decision to issue Improvement Notice No. 7-427418 on 4 October 2022 is revoked. Catchwords: WORK HEALTH AND SAFETY – Improvement Notice issued by inspector – application for external review of decision made on internal review – whether there were facts which could found a reasonable belief that a contravention has occurred – whether reasonable inquiries made – external review upheld Legislation Cited: Work Health and Safety Act 2011, ss 3, 13-19, 191, 192, 223-227, 229 Work Health and Safety Regulation 2017, rr 289, 291, 293, 299-302 Cases Cited: George v Rockett (1990) 170 CLR 104 Growthbuilt Pty Ltd v SafeWork NSW [2018) NSWIRComm 1002 SafeWork NSW v Lipman Pty Ltd [2023] NSWIRCOMM 1034 Somerville v Chief Executive of Office of Environment and Heritage [2020] NSWCA 93 Category: Principal judgment Parties: Diona Pty Ltd (Applicant) SafeWork NSW (Respondent) Representation: Counsel: Mr C Magee (Applicant) Mr M Moir (Respondent) Solicitors: Macpherson Kelley (Applicant) File Number(s): 2022/00327587 Publication restriction: Nil decision 1. Diona Pty Ltd (Diona) has applied to the Industrial Relations Commission (Commission) for external review of an improvement notice issued by an inspector employed by SafeWork NSW. The application for external review follows rejection by SafeWork of an internal review application against the improvement notice. 2. Diona was the principal contractor engaged by Hunter Water Corporation for a construction project, part of which involved installing underground pipes. Certain aspects of the project were subcontracted by Diona to E&M Cahill Pty Ltd (Cahill), and Cahill in turn subcontracted some tasks to Country to Coast Services Pty Ltd (Country to Coast). 3. On 12 August 2022, an employee of Country to Coast was injured by the pipe being laid. The employee was in a zone from which all workers were excluded when he was struck by the pipe. 4. There is a dispute between Diona and SafeWork as to whether there were adequate controls and processes in place having regard to the risks of the activity being undertaken. There is also a dispute as to the extent Diona, as the principal contractor, should be accountable for monitoring and enforcing compliance of the sub-contractor's obligations. 5. Given the explicitly overlapping obligations for ensuring workplace safety, it will often be the case that there is no easily identified line between circumstances where the principal is responsible, and circumstances where a subcontractor is responsible. The more so in cases such as this, where there are sub-subcontractors. 6. For reasons set out in more detail below, the overlapping obligations, and the inability to define responsibility explicitly through contractual terms, may have the perverse outcome that a more diligent principal will take upon themselves more legal obligation than a less diligent principal. Issuing and Reviewing Improvement Notices The legislation 1. Parts 10 and 12 of the Work Health and Safety Act 2011 (WHS Act) set out the powers of an inspector to issue an improvement notice, and the processes for review of an improvement notice. "Part 10 Enforcement measures Division 1 Improvement notices 191 Issue of improvement notices (1) This section applies if an inspector reasonably believes that a person— (a) is contravening a provision of this Act, or (b) has contravened a provision in circumstances that make it likely that the contravention will continue or be repeated. (2) The inspector may issue an improvement notice requiring the person to— (a) remedy the contravention, or (b) prevent a likely contravention from occurring, or (c) remedy the things or operations causing the contravention or likely contravention. 192 Contents of improvement notices (1) An improvement notice must state— (a) that the inspector believes the person— (i) is contravening a provision of this Act, or (ii) has contravened a provision in circumstances that make it likely that the contravention will continue or be repeated, and (b) the provision the inspector believes is being, or has been, contravened, and (c) briefly, how the provision is being, or has been, contravened, and (d) the day by which the person is required to remedy the contravention or likely contravention. (2) An improvement notice may include directions concerning the measures to be taken to remedy the contravention or prevent the likely contravention, or the matters or activities causing the contravention or likely contravention, to which the notice relates. (3) The day stated for compliance with the improvement notice must be reasonable in all the circumstances. … Part 12 Review of decisions Division 1 Reviewable decisions 223 Which decisions are reviewable (1) The following table sets out— (a) decisions made under this Act that are reviewable in accordance with this Part (reviewable decisions), and (b) who is eligible to apply for review of a reviewable decision (the eligible person). … Section 191 (issue of improvement notice) (1) The person to whom the notice was issued. … Division 2 Internal review 224 Application for internal review (1) An eligible person in relation to a reviewable decision … may apply to the regulator for review (an internal review) of the decision … … 225 Internal reviewer (1) The regulator may appoint a person or body to review decisions on applications under this Division. (2) The person who made the decision cannot be an internal reviewer in relation to that decision. 226 Decision of internal reviewer (1) The internal reviewer must review the reviewable decision … (2) The decision may be— (a) to confirm or vary the reviewable decision, or (b) to set aside the reviewable decision and substitute another decision that the internal reviewer considers appropriate. … 227 Decision on internal review As soon as practicable after reviewing the decision, the internal reviewer must give the applicant in writing— (a) the decision on the internal review, and (b) the reasons for the decision. … Division 3 External review 229 Application for external review (1) An eligible person may apply to the Industrial Relations Commission for review (an external review) of— (a) a reviewable decision made by the regulator … … (4) The Industrial Relations Commission may, on an external review, confirm, vary or revoke the decision concerned." The improvement notice 1. The improvement notice, on SafeWork's pro forma template, was issued on 4 October 2022, and set out: "Details of contravention: Site location: 96 Wyee Rd Wyee in response to a notified incident, whilst on site I met with, WYEE, NSW, 2259 I, Trevor Savage reasonably believe on 27/09/2022 at 5:00:00PM that you are contravening a provision of the Work Health and Safety Act 2011, section 19 and Work Health and Safety Regulation 2017, clause 300. Brief description of how the provision is being or has been contravened: There are no arrangements in place to ensure the high-risk work task, working in and around mobile powered plant at the workplace is being carried out in accordance with the safe work method statement prepared for E&M Cahill SWMS 001 PE Rising main installation. e.g. Chris Bourke was in the POZ area and was injured during a Pipe string pull where the following failed to occur * The Spotter failed to take action when a person was in the POZ * It was unclear who was in control of the task - thus no action was taken when a person was in the POZ. *There was a failure to maintain control of the pipe string during this procedure usually achieved by securing the 'string' at either end. Directions as to the measures to be taken to remedy or prevent the contravention or likely contravention: (it is mandatory to comply with these directions) 1. You must ensure that arrangements are in place to ensure compliance with the safe work method statement prepared for E&M Cahill SWMS 001 PE Rising main installation. 2. If high risk construction work is not carried out in accordance with the safe work method statement prepared for E&M Cahill SWMS 001 PE Rising main installation you must ensure that the work is stopped immediately or as soon as it is safe to do so and resumed only in accordance with the safe work method statement. Recommendations (if any): (It is not an offence not to comply with these recommendations) In complying with the direction refer to: SafeWork NSW Code of Practice 'Construction work'." 1. Accompanying the improvement notice was an email which set out: "Hi Paul, Thank you for your assistance with this matter where I provide the following observations, 1. There was a SWMS in place at the time of the incident (EM Cahill) 2. All workers involved in the incident were experienced. 3. Workers were inducted to the site and specific task. 4. Your system of work requires a POZ in place during the task being undertaken - Pipe string pull. 5. The IP was in the POZ at the time of the incident but no one took action to 'stop the task' or remove the IP from the POZ. 6. You state that the IP was in charge of the installation, however the excavator operator was also being given instruction from the dogman/spotter. 7. The pipe string was not secured on both ends and therefore would always need to be considered a 'live load' I have issued your company an Improvement notice to ensure the following > There is a system of work to ensure that SWMS are implemented and followed - how is this achieved? > That it is clear who is in control of the activity and how that control is exercised - Where should they be positioned - How do they communicate considering the length of the strings - What is the spotters role in relation to the person in charge/plant operators - how do they communicate. - What action should be taken if there is a breach of the POZ - who can instigate this action. Please ensure you read the content of the notice(s) as it outlines information on the basis for inspector's belief/description of how the provision is being or has been contravened and direction on the measures to be taken to remedy the risk and time allowed to comply with the notice. Penalties will apply for failure to comply with the notice(s). Please note the important information contained on page 2 of the notice in relation to rights of appeal. I acknowledge that Diona has been proactive in investigating the incident and reviewing systems of work including the SWMS, and some of the changes being made will assist you in compliance with the Improvement notice. Please provide evidence of compliance with this Improvement notice prior to the compliance date." Power of Inspectors to Issue Improvement Notices 1. In its Closing Submissions, Diona submitted that: "Power to issue the Notice 41. Section 191(1) of the WHS Act provides that an improvement notice can only be issued if an Inspector reasonably believed that a person: (i) is contravening a provision of the WHS Act; or (ii) has contravened a provision in circumstances that make it likely that the contravention will continue or be repeated. 42. Section 191(2) of the WHS Act provides that an Inspector may issue an improvement Notice requiring the person to: (i) remedy the contravention, or (ii) prevent a likely contravention from occurring, or (iii) remedy the things or operations causing the contravention or likely contravention. 43. Therefore, in order for the discretion to be exercised for an improvement Notice to be issued, it requires the existence of facts that would lead a reasonable person to form the belief. 44. Therefore, there must be an objective basis for the Inspector to form a reasonable belief, that the person to whom the Notice is issued has contravened a provision in circumstances that make it likely that the contravention will continue or be repeated. Evidence of 'reasonable belief' 45. In considering the evidence relied upon by the Inspector as to the formation of his 'reasonable belief', regard should only be had to circumstances that existed at the time when the Notice was issued. 46. The Lipman decision considered the test of 'reasonable belief' and confirmed that it is an objective test, which involves consideration of: (i) what the Inspector claims to have had regard to; and (ii) other relevant matters that arise from the evidence that a reasonable person in the position of the Inspector may have regard to. Obligations of the Inspector 47. The obligations of the Inspector when considering whether an Inspector's belief was a 'reasonable belief' are relevant to the application of Diona. 48. The Lipman decision confirms that the Inspector: (i) was not required to conduct a full investigation; (ii) was not required to satisfy themselves to the level of proof of a breach of the Act; (iii) was required to balance the objective information available to them; and (iv) was required to make reasonable inquiries. Temporal element 49. The use of the phrase 'is contravening' in s 191(1)(a) of the WHS Act, and the text of s 191(1)(b) in using the words 'has contravened' and 'contravention will continue' imports a temporal element that must be satisfied in order for a reasonable belief to be formed. 50. For the purposes of s 191(1)(a) of the WHS Act (which is relied upon by the Respondent) this requires that there must be a demonstrable 'contravention' of the WHS Act or WHS Reg at the time at which an Improvement Notice is issued. … 51. The anterior question to be determined by the Inspector, in order to enliven the power to issue an improvement notice, was whether or not the relevant provision of the WHS Act or WHS Reg had been contravened. The Inspector must have formed a reasonable belief that the relevant provision had been contravened in order to issue an improvement notice." [Emphasis in original.] 1. Earlier, in submissions addressing only the decision of the Commission Full Bench in Lipman, Diona submitted: "9. The Lipman decision considers with approval the decision in Growthbuilt Pty Ltd v SafeWork NSW and cites that decision as authority for the proposition that there are two elements that need to be satisfied to form a 'reasonable belief': (a) The first element is that the inspector must reasonably believe that Diona has contravened s. 19 of the WHS Act and clause 300 of the WHS Regulation. (b) the second element is that the inspector must reasonably believe that the contravention occurred in circumstances that make it likely that the contravention will continue or be repeated. '7. in the Decision, the Commissioner (at (24)-[26]) discussed the observations of Chief Commissioner Kite in Growthbuilt Pty Ltd v SafeWork NSW [2018) NSWIRComm 1002 ("Growthbuilt" as to the test of "reasonable belief" (albeit in the context of s 195 of the WHS Act). Having done so, Commissioner Murphy observed: '27. I accept that the test of reasonable belief' is an objective test. Mr Croke in the Improvement Notice stated, I, Jason Groke reasonably believe on 18/03/2021 that you have contravened a provision in circumstances that make it likely that the contravention will continue or be repeated of the Work Health and Safety Act 2011, section 19 and Work Health and Safety Regulation 2017, clause 38. There are two elements that need to be satisfied in order to form the basis of a reasonable belief. The first element is that the inspector must reasonably believe that Lipman has contravened s 19 of the WHS Act and c/ 38 of the WHS Regulation. The second element is that the inspector must reasonably believe that the contravention occurred in circumstances that make it likely that the contravention will continue or be repeated.' … 17. The Lipman decision confirms that the Inspector: (a) was not required to conduct a full investigation; (b) was not required to satisfy themselves to the level of proof of a breach of the Act; (c) was required to balance the objective information available to them; and (d) was required to make reasonable inquiries. 33. In Growthbuilt the Chief Commissioner further observed: '94. ... The Inspector was not required to satisfy himself to the level of proof of a breach of the Act... 95. An inspector is however required to balance the objective information available to him and is obliged to make reasonable inquiries... (Emphasis [added in submission])" [Emphasis in submission of Diona] 1. In its Closing Submissions SafeWork submitted that: "Reasonable belief: authorities 27. In Growthbuilt, Chief Commissioner Kite at [94] held the inspector was "[not] required to conduct a full investigation" and was "not required to satisfy himself to the level of proof of a breach of the Act". 28. Section 191(1) forms part of a nationally harmonised legislative framework, as set out in the objects of the WHS Act in s 3(1)(h). It is appropriate therefore for the Commission to have regard to relevant decisions in other harmonised jurisdictions as well as NSW, In that respect, the Queensland IRC in Watpac has observed: INs are tools for the short-term management and elimination of risk. They can be withdrawn or appealed where e.g. evidence subsequently becomes available or is later presented that negates the preliminary conclusions of an inspector. INs are not a final determination of the existence of a contravention of the WHS Act and as such, the evidence required to issue them ought not to be of the same standard necessary to secure a conviction in a prosecution for contravention. In a similar legislative context, the Court of Criminal Appeal in Somerville v Chief Executive of Office of Environment and Heritage considered the level of evidence required to believe on reasonable grounds that a contravention had occurred. The Court referred to the following statement of the High Court in George v Rockett: The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture. (emphasis added) 30. The Court in Somerville held that an investigator could have a reasonable ground to believe that a contravention had occurred (sufficient to obtain a search warrant), without yet having evidence to establish that an offence has been committed. Adamson J observed: There is a significant gap between having reasonable grounds to believe that an offence has been committed... and having evidence of the commission of an offence come to one's attention ... (emphasis added) 31. The Court referred to the distinction between the concepts of belief and proof in George v Rockett as already quoted above. The Court concluded: In light of the distinction recognised in George v Rockett, it does not follow from the fact that [the investigating officer] had reasonable grounds to believe that the offences had been committed, that evidence of the offences had come to his attention for the purposes of [the relevant provision]. 32. The test applied by the Queensland IRC in Watpac is to determine whether there was 'some factual basis or material with probative value which would create in the mind of a reasonable person a suspicion' that the duty holder had committed a contravention, while also leaving room for 'surmise or conjecture'. 33. Applying those authorities, the Commission would conclude that (contrary to the AOS's reliance on authorities applying in a criminal prosecution) the power to issue an improvement notice is not subject to the same strictures as a prosecution for contravention; rather it is sufficient that the Inspector was aware of objective facts that would incline a reasonable person to consider or surmise that a contravention is occurring. 34. That level of satisfaction could be reached even if the Inspector had not yet gathered all available evidence and did not yet have evidence that established beyond reasonable doubt, or even on the balance of probabilities, that a contravention was occurring or had occurred. 35. Further, it is not necessary that the Inspector's belief was correct; all that is necessary is to show that the belief was reasonable; i.e. one that a reasonable person with the Inspector's qualifications and experience could reach on the objective facts known to him at that time." [Emphasis in original. Footnotes omitted.] The Task of the Commission on external review 1. The applicant submitted that: "34. The principles applicable to Commission's decision are set out in the Full Bench's decision in SafeWork NSW v Lipman Pty Ltd [2023] NSWIRCOMM 1034. … 35. It is uncontroversial that an external review application involves the Commission conducting a merits review' and that the Commissioner 'stands in the shoes/position of the decision maker. 36. An external review application does not involve the Commission needing to find any error in the internal review decision or the original improvement notice in order to exercise its powers pursuant to s 229 of the WHS Act. It is not open for the Commission to proceed on the basis that the original Notice is presumptively correct. 37.The Commissioner must determine the 'correct and preferrable decision'. 38. The Commission's determination goes to whether the original decision maker (Inspector Savage) could have formed a reasonable belief is based on evidence: (i) that was viewed and/or considered by the Inspector at the time the Inspector issued the Notice; (ii) which is relevant to the issues in the matter and is not evidence based on opinion or hearsay; (iii) that was available to the Inspector at the time if the Inspector had made reasonable inquiries to establish or clarify facts. 39. The question is not whether this Commission - as the external reviewer - would have formed that belief. Similarly, the question is not whether the Inspector held a belief, but whether that belief was reasonable in the circumstances as they existed at the time of the issuing of the Notice. 40. Thus, what is relevant is the circumstances known to the Inspector and what a reasonable person in the circumstances of the Inspector ought to have known at the time he issued the Notice." 1. The respondent more economically submitted that: "13. Lipman confirms that the Commission does not approach this matter on the basis that a Commissioner himself or herself needs to form a reasonable belief that a contravention was occurring rather than being satisfied that, on an objective basis, Inspector Savage could have formed that belief (Lipman at [43]-[48])." Approach the Commission should adopt 1. The submissions of the parties are orthodox and accepted by the Commission insofar as they extend. That said, the task of the Commission is only partly set out in the submissions of the parties. 2. It is correct that the first task of the Commission on external review is to determine whether there were objective facts which could have allowed the inspector to have formed a reasonable belief that Diona was contravening the relevant obligations. 3. SafeWork left their express submissions at this point, presumably on the basis that they anticipated the Commission finding that there were objective facts which could lead to such a reasonable belief, and that such facts would also be a proper basis for retention of the improvement notice in its existing form. 4. Diona referred to the Commission's task, being that of merits review, requiring the Commission to determine the correct and preferable outcome based on the objective facts before the Commission. That said, Diona placed this task as a part of the process of the Commission determining whether the objective facts could have allowed the inspector to form a reasonable belief. 5. It is clear from Lipman that the first task of the Commission on external review, and in particular where the issue is in dispute, is to determine whether there were objective facts which could have led an inspector having the relevant reasonable belief. 6. Other key considerations as to reasonable belief, on which the parties fundamentally agreed, are: 1. There must be objective facts known to an inspector which are capable of leading a reasonable person to the belief. This includes balancing the objective facts, for and against, known by an inspector; 2. The inspector needs to make reasonable inquiries, but without the need for a full investigation; and 3. Reasonable belief is a lesser standard than proof on the balance of probabilities and may properly be formed based on more slender evidence than required for the balance of probabilities. Reasonable belief may properly be formed prior to the collection of all evidence. 1. Where the Commission determines that there were not objective facts which could have led an inspector to form a reasonable belief, the Commission does not need to consider the correct and preferable outcome. This is because the foundational requirements for the exercise of the inspector's powers, and the Commission's on external review, do not exist. 2. In such a case, the Commission should properly vary the internal review decision to instead revoke the original improvement notice. 3. Should the Commission determine that there were objective facts which could have led the inspector to form a reasonable belief, the Commission is then required to consider on merits review whether the improvement notice should be upheld, varied or revoked. Safety Obligations Imposed by the WHS Act and Regulations 1. Relevant to the obligations set out in the improvement notice, suspected by the inspector as being breached, are various sections of the WHS Act and the Work Health and Safety Regulation 2017 (WHS Regulation). 2. From the WHS Act, relevant sections are: "Division 2 Object 3 Object (1) The main object of this Act is to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces by— (a) protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work or from specified types of substances or plant, and … (e) securing compliance with this Act through effective and appropriate compliance and enforcement measures, and (f) ensuring appropriate scrutiny and review of actions taken by persons exercising powers and performing functions under this Act, and (g) providing a framework for continuous improvement and progressively higher standards of work health and safety, and … (2) In furthering subsection (1) (a), regard must be had to the principle that workers and other persons should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work or from specified types of substances or plant as is reasonably practicable. … Part 2 Health and safety duties Division 1 Introductory Subdivision 1 Principles that apply to duties 13 Principles that apply to duties This Subdivision sets out the principles that apply to all duties that persons have under this Act. Note— The principles will apply to duties under this Part and other Parts of this Act such as duties relating to incident notification and consultation. 14 Duties not transferrable A duty cannot be transferred to another person. 15 Person may have more than one duty A person can have more than one duty by virtue of being in more than one class of duty holder. 16 More than one person can have a duty (1) More than one person can concurrently have the same duty. (2) Each duty holder must comply with that duty to the standard required by this Act even if another duty holder has the same duty. (3) If more than one person has a duty for the same matter, each person— (a) retains responsibility for the person's duty in relation to the matter, and (b) must discharge the person's duty to the extent to which the person has the capacity to influence and control the matter or would have had that capacity but for an agreement or arrangement purporting to limit or remove that capacity. 17 Management of risks A duty imposed on a person to ensure health and safety requires the person— (a) to eliminate risks to health and safety, so far as is reasonably practicable, and (b) if it is not reasonably practicable to eliminate risks to health and safety, to minimise those risks so far as is reasonably practicable. Subdivision 2 What is reasonably practicable 18 What is "reasonably practicable" in ensuring health and safety In this Act, reasonably practicable, in relation to a duty to ensure health and safety, means that which is, or was at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters including— (a) the likelihood of the hazard or the risk concerned occurring, and (b) the degree of harm that might result from the hazard or the risk, and (c) what the person concerned knows, or ought reasonably to know, about— (i) the hazard or the risk, and (ii) ways of eliminating or minimising the risk, and (d) the availability and suitability of ways to eliminate or minimise the risk, and (e) after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk. Division 2 Primary duty of care 19 Primary duty of care (1) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of— (a) workers engaged, or caused to be engaged by the person, and (b) workers whose activities in carrying out work are influenced or directed by the person, while the workers are at work in the business or undertaking. (2) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking. (3) Without limiting subsections (1) and (2), a person conducting a business or undertaking must ensure, so far as is reasonably practicable— (a) the provision and maintenance of a work environment without risks to health and safety, and (b) the provision and maintenance of safe plant and structures, and (c) the provision and maintenance of safe systems of work, and (d) the safe use, handling, and storage of plant, structures and substances, and … (f) the provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the conduct of the business or undertaking, and (g) that the health of workers and the conditions at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business or undertaking. … (5) A self-employed person must ensure, so far as is reasonably practicable, his or her own health and safety while at work." 1. From the WHS Regulation are: "Chapter 6 Construction work Part 6.1 Preliminary 289 Meaning of 'construction work' (1) In this Chapter, construction work means any work carried out in connection with the construction, alteration, conversion, fitting-out, commissioning, renovation, repair, maintenance, refurbishment, demolition, decommissioning or dismantling of a structure. (2) Without limiting subclause (1), construction work includes the following— (a) any installation or testing carried out in connection with an activity referred to in subclause (1), … (f) any work connected with an excavation, (g) any work connected with any preparatory work or site preparation (including landscaping as part of site preparation) carried out in connection with an activity referred to in subclause (1), … 291 Meaning of "high risk construction work" In this Chapter, high risk construction work means construction work that— (a) involves a risk of a person falling more than 2 metres, or … (f) is carried out in or near a confined space, or (g) is carried out in or near— (i) a shaft or trench with an excavated depth greater than 1.5 metres, or (ii) a tunnel, or … (n) is carried out on, in or adjacent to a road, railway, shipping lane or other traffic corridor that is in use by traffic other than pedestrians, or (o) is carried out in an area at a workplace in which there is any movement of powered mobile plant, or … 293 Meaning of "principal contractor" (1) In this Chapter, a person conducting a business or undertaking that commissions a construction project is, subject to this clause, the principal contractor for the project. (2) If the person referred to in subclause (1) engages another person conducting a business or undertaking as principal contractor for the construction project and authorises the person to have management or control of the workplace and to discharge the duties of a principal contractor under this Chapter, the person so engaged is the principal contractor for the project. (3) If the owner of residential premises is an individual who directly or indirectly engages a person conducting a business or undertaking to undertake a construction project in relation to the premises, the person so engaged is the principal contractor for the project if the person has management or control of the workplace. (4) A construction project has only one principal contractor at any specific time. Division 2 High risk construction work—safe work method statements 299 Safe work method statement required for high risk construction work (1) A person conducting a business or undertaking that includes the carrying out of high risk construction work must, before high risk construction work commences, ensure that a safe work method statement for the proposed work— (a) is prepared, or (b) has already been prepared by another person. … (2) A safe work method statement must— (a) identify the work that is high risk construction work, and (b) specify hazards relating to the high risk construction work and risks to health and safety associated with those hazards, and (c) describe the measures to be implemented to control the risks, and (d) describe how the control measures are to be implemented, monitored and reviewed. (3) A safe work method statement must— (a) be prepared taking into account all relevant matters, including— (i) circumstances at the workplace that may affect the way in which the high risk construction work is carried out, and (ii) if the high risk construction work is carried out in connection with a construction project—the WHS management plan that has been prepared for the workplace, and (b) be set out and expressed in a way that is readily accessible and understandable to persons who use it. 300 Compliance with safe work method statement (1) A person conducting a business or undertaking that includes the carrying out of high risk construction work must put in place arrangements for ensuring that high risk construction work is carried out in accordance with the safe work method statement for the work. … (2) If high risk construction work is not carried out in accordance with the safe work method statement for the work, the person must ensure that the work— (a) is stopped immediately or as soon as it is safe to do so, and (b) is resumed only in accordance with the statement. … 301 Safe work method statement—copy to be given to principal contractor A person conducting a business or undertaking that includes carrying out high risk construction work in connection with a construction project must, before the high risk construction work commences, ensure that a copy of the safe work method statement for the work is given to the principal contractor. … 302 Review of safe work method statement A person conducting a business or undertaking must ensure that a safe work method statement is reviewed and as necessary revised if relevant control measures are revised under clause 38. …" The Facts The evidence of the witnesses 1. Evidence in the form of affidavits was received from four witnesses, being: 1. Barry Morris, who was employed by Diona as a Health Safety Environment and Quality Advisor. 2. Paul Stewart, who was employed by Diona as National Health Safety Quality and Environment Manager, and Mr Morris' immediate manager. 3. Trevor Savage, who was employed by SafeWork as a Principal Inspector in the Construction Services Group/Metropolitan North team and was the inspector responsible for issuing the relevant improvement notice. 4. Kim Jones, who was employed by SafeWork as Coordinator, Reviewable Decisions, and was the person who made the internal review decision. 1. Ms Jones' evidence was confined to providing the material which she considered and relied on in coming to her internal review decision. She was not required for cross examination, as might be expected, given the basis on which the external review is conducted, being a de novo review of the original improvement notice. 2. Diona took issue with the basis on which Ms Jones came to her internal review decision. It appeared that Ms Jones believed Mr Savage had revisited the worksite, when no such revisit had occurred. While it appears that Diona's criticism of Ms Jones is correct, nothing material turns on this because of the nature of the external review. Ms Jones was not cross-examined, so the apparent error in her internal review was not put to her. 3. With the exception of the criticism set out above, neither party made any material reference to Ms Jones' evidence. It was proper for SafeWork to have filed Ms Jones' evidence, but it is not necessary for the Commission to analyse her evidence, the internal review, or the file on which she relied. 4. Mr Morris gave evidence that: 1. Diona was engaged by Hunter water as the principal contractor, and in turn Diona engaged Cahill to excavate trenches and lay pipe strings in those trenches. 2. The trenching and pipe laying work was performed by Cahill who had in place a safe work method statement (SWMS) 3. Diona, as principal contractor, reviewed and approved the SWMS, but did not have its own SWMS in place as it was not performing the work and did not have the expertise to do the work. 4. Mr Morris' job included overall monitoring of safety but he was not responsible for safety in each and every aspect at all times along the multi-kilometre length of the work. No one else from Diona was specifically employed to ensure that Diona was in a position to monitor safety across the full breadth of the work at all times. 5. In the two months prior to the incident Diona had conducted 40 formal observations, inspections, Take-5s and audits, with the only non-compliance by Cahill's employees and contractors being minor issues such as failing to keep shirtsleeves rolled down. He gave evidence specifically that there was no non-compliance with the requirement of the SWMS, and in particular, of remaining clear of exclusion zones between the pipe string and a trench. 6. At the time of the incident on 12 August, Mr Morris was present at the workplace but was on a meal break at the time the incident occurred, and no other employee or representative of either Diona or Hunter Water Corporation was present at the site where the incident occurred. 7. Set out interactions between Diona and Mr Savage, the interpretation of which was contested but the events of which were not in dispute between the parties. 1. Mr Stewart gave evidence of having read Mr Savage's affidavit and stating that he did not dispute the factual matters set out in Mr Savage's affidavit. He then set out a series of matters, which are best recounted directly from his affidavit: "(a) For the purposes of achieving compliance with the Work Health and Safety Act 2011 (WHS Act) and the Work Health and Safety Regulation 2017 (WHS Reg), Diona operates under a WHS management plan titled, "Project Safety Management Plan - 21194-HWC-SMP-001" (Diona WHS management plan). I understand this to be a requirement of principal contractors under Chapter 6 of the WHS Reg. (b) The Diona WHS management plan was first produced on 28 February 2022 and has undergone a number of revisions. (c) The Diona WHS management plan sets out how Diona seeks to manage contractors to ensure the health and safety of workers and how Diona seeks to comply with its obligations under the WHS Reg. (d) Chapter 5 of the Diona WHS management plan sets out how Diona monitored compliance by contractors with their Safe Work Method Statements (SWMS). (e) To the best of my knowledge and belief, Diona was in full compliance with the Diona WHS management plan. (f) Inspector Savage never asked me for a copy of the Diona WHS management plan. At the time of his investigation, he did not share with me what was the focus of his investigation and I did not know whether the Diona WHS management plan would be useful for him. I provided to Inspector Savage the documents he asked for. … (h) Diona engages a professionally qualified auditor to conduct regular audits against AS/NZS ISO 45001:2018 "Occupational health and safety management systems - Requirements with guidance for use" (ISO 45001). (i) In part, ISO 45001 provides guidance on how principal contractors should manage contractors. Diona was audited against this part of ISO 45001. To the best of my knowledge and belief and based upon the audit reports provided by the professionally qualified auditors, Diona complied with ISO 45001. (j) Inspector Savage never asked me for a copy of the ISO 45001 audit reports. At the time of his investigation, he did not share with me what was the focus of his investigation and I did not know whether the ISO 45001 audit reports would be useful for him. I provided to Inspector Savage the documents he asked for. … (l) On 4 October 2022, I received an email from Inspector Savage attaching an improvement notice issued by him. … (m) Between the date of the incident on 12 August 2022 and the issue of his improvement notice on 4 October 2022, Inspector Savage had not asked or intimated that he wanted works stopped in the way by contractors and sub-contractors. (n) After having received the email of Inspector Savage, I telephoned him on his mobile number on 5 October 2022 at 12.52pm. (o) During my telephone conversation with Inspector Savage, I told him I wanted to better understand the reasoning for Diona being issued the improvement notice and the close out date for the improvement notice. I explained to Inspector Savage Diona's safety systems for contractor Safe Work Method Statements and that the sub-contractor was in control of the works on the site. (p) Inspector Savage then said words to the effect of, "to close the improvement notice out, just document the improvements Diona had already done". (q) In this regard, I understood that Inspector Savage was referring to items in my email dated 18 August 2022 referred to in paragraph 14 of Inspector Savage's affidavit and exhibited at pages 4 to 5 of Exhibit TS-1 of his affidavit. However, the action items described in my email, other than holding a workshop with the crew, had already been completed at the time of my email." 1. Mr Savage gave evidence that: 1. He first became aware of the accident at Diona's worksite on 14 August 2022 through an email from another inspector employed by SafeWork, the purpose of which email was to advise Mr Savage and a number of other people that the other inspector intended to conduct a site visit on the following day. 2. On 15 August 2022 Mr Savage was assigned responsibility for investigation of the accident due to the inability of the other inspector to conduct the investigation. 3. Savage reviewed the report which had been received by SafeWork to that point, had a telephone conversation with Mr Morris and then at approximately 10.00am visited the worksite. Representatives of Diona and Hunter Water were involved with meetings with Mr Savage on 15 August 2022, as were a number of other people who Mr Savage was unable to identify. 4. Work had been allowed to continue given the location of the worksite and its impact on the community and so Mr Savage was unable to view the worksite as it had been at the time of the accident. 5. During his visit Mr Savage was informed that a worker had "put themselves in the wrong spot and been struck by a pipe" 6. During the visit Mr Savage gave an overview of the information he would be requesting, and later that day sent an email to Mr Morris seeking further information and documents in relation to the incident. Mr Savage instructed Mr Morris that further information should be provided to Mr Savage before Diona could continue with further trenching or pipe laying. 7. On 18 August Mr Savage received an email from Mr Stuart responding to Mr Savage's request for information, and outlining immediate actions completed and underway by Diona in response to the incident. 8. As set out in Mr Savage's affidavit: "15. On 20 August 2022, I sent an email to Mr Stewart in reply to his email of 18 August 2022. In that email, I informed him, among other things, that the changes he had made 'appear to address the uncontrolled movement of the 'string' as well as the interaction/impact with persons' and stated that 'you can move forward with this work...'. I also said that 'I will review the incident information [provided by Mr Stewart] in depth asap.' … 16. My initial emails sent on 15 and 20 August 2022 were sent for three purposes: namely to: i. identify any further information required to be obtained by me in relation to the Incident: ii. confirm that asphalting could continue as it was a public road and this work was not involved in the Incident: and iii. obtain sufficient information to allow the work to progress whilst the Incident was being investigated. 17. Having regard to the information provided to me by Mr Stewart. I was prepared to allow the work to continue while the investigation remained ongoing for the following reasons: i. I was satisfied that some steps had been taken by Diona to improve the system of work; ii. I was conscious that it may take me a few weeks to review the information obtained from Diona, to possibly obtain further information from Diona and other persons involved in the Incident, and that I could not finalise my investigation until this had occurred; and iii. I considered that it was important that the work continue in the interim as it involved the supply of services to the public and was being conducted on a public road." 1. Mr Savage had a series of interactions, including direct telephone discussion and an exchange of emails, with the injured worker as to the events of the day on which the accident occurred. On 20 September 2022, Mr Savage sent Diona a document, originally drafted by Diona concerning the accident, into which Mr Savage had inserted questions seeking further information and/or documents about the accident. 2. On 27 September 2022, Mr Savage received a response from Mr Morris which included responses to each of Mr Savage's questions and which attached additional documentation. 3. As set out in Mr Savage's affidavit: "Decision to issue improvement notice 22. On 27 September 2022, I reviewed all available information in relation to the Incident and formed the view that Diona was in breach of section 19 of the WHS Act and clause 300(2) of the WHS Regulation in relation to the works undertaken at the Site. 23. The information that formed the basis of my belief is as follows: i. The information obtained in the course of my visit to the Site on 15 August 2022; ii. The information provided to me by representatives of Diona in email correspondence received between 18 August and 27 September 2022, including information contained in the applicable Safe Work Method Statement (SWMS) prepared by E&M Cahill. Diona's overview of the Incident, and Mr Stewart and Mr Morris's responses to my requests for information; iii. The information provided to me by the injured person. Mr Bourke, on 8 and 16 September 2022, which included his account of the Incident; iv. Parts of the Code of Practice: Construction Work dated August 2019, a copy of which is at pages 84 to 173 of Exhibit TS-1. The specific sections that formed the basis of my belief are highlighted in yellow. 24. In forming the view referred to above at paragraph 22, I considered that the installation of the sewer main at the Site was a 'construction project' within the meaning of section 292 of the WHS Act as it met the requirements of that provision. Further, I determined that Diona was the 'principal contractor' of the project as they had management and control of the workplace in accordance with subsection 293(2) of the WHS Act. 25. I considered that Diona was in breach of subclause 300(1) of the WHS Regulation in circumstances where Diona was in control of the relevant activity, namely the laying of the pipe at the time of the Incident, and where the activity had been undertaken outside the controls specified in the applicable Safe Work Method Statement, specifically by: i. having a worker (Mr Bourke) in Plant Operating Zone (POZ) at the time that plant was operating: and ii. not having the pipe. also referred to as the 'string', controlled at both ends. 26. I also considered that Diona was in breach of subclause 300(2) of the WHS Regulation because the activity was not stopped when the worker was inside the POZ. 27. Based on the information provided to me as at 27 September 2022. I formed a view that breaches of the applicable SWMS may still be occurring as I had not been provided with any information that confirmed that the following measures were being implemented and monitored so far as reasonably practicable: i. A clear system of work to ensure that the SWMS was being implemented and followed; ii. Measures ensuring that it was clear who was control of the activity and how that control was exercised; iii. Measures addressing where the person in control should be positioned; iv. Measures addressing how the person in control communicates considering the length of the strings; v. Measures addressing the spotter's role in relation to the person in charge and/or plant operators, specifically how they communicate with each other; and vi. Measures addressing the action that should be taken if there is a breach of the POZ, including by identifying who can instigate the action. 28. In forming the belief referred to at paragraph 22, I considered the Notice ought to be issued to Diona, rather than E&M Cahill, having regard to the fact that Diona was the principal contractor on-site and oversaw the contractors and the reasonably practicable implementation of the SWMS. I also had regard to the fact that Diona had conducted a SWMS review prior to the Incident and that Mr Morris was at the Site and overseeing the work at the time of the Incident. Further, I had regard to Diona's involvement in the response to the Incident, specifically that Diona was able to implement a review of systems after the incident, was the entity that disseminated information regarding the Incident to other workplaces and controlled changes made to the system of work at the workplace." Findings as to events 1. The parties materially agreed about the events leading to the accident and the course of the investigation. 2. The precise details of events leading to the accident were not clear from the evidence. It is not necessary to clarify those events to resolve the issues in dispute between the parties. For the purpose of the dispute between the parties, it is sufficient to record that a worker was injured in the course of pipe laying, and that the underlying cause of the accident was an inadequately secured pipe string rolling into a trench before that movement was planned to occur, combined with a decision by the injured worker himself to enter a zone he should not have entered. 3. It is also clear that during the, likely brief, period between the worker entering the prohibited zone and the pipe string rolling into the trench, no one observed the worker entering the POZ. Accordingly, no one was in a position to call a halt to work. 4. The Commission observes that the inadequately controlled pipe string likely meant that even if the worker's entry into the POZ had been observed no action could have been taken which would have prevented the accident. Which is to say that it appears from the evidence that the worker entered the accident only shortly before the pipe string rolled in an uncontrolled manner and so any system which relied on observation of the control zone would have itself been inadequate to prevent the accident. 5. It is clear that only two steps could have been taken which would have prevented the accident occurring as it did, namely the worker not entering the POZ, and/or the pipe string being more securely controlled. 6. It is uncontroversial that the investigation proceeded on the basis that: 1. Mr Savage attended the site, which was no longer as it had been at the time of the accident; 2. Following receipt of some information on 20 August 2022, Mr Savage indicated his agreement that work could continue on the site; 3. At just after 4.00pm on 27 September 2022, Mr Savage received the final information from Diona, and after reviewing this information he formed his view to issue the improvement notice; 4. The notice was not formally issued until 4 October 2022, despite that improvement notice stating Mr Savage had made his decision to issue the improvement notice at 5.00pm on 27 September 2022; 5. Mr Savage received information from Diona and its sub subcontractor Country to Coast, but appears to have had no interaction at all with Cahill. It is clear that no information was requested directly from Cahill; 6. Mr Savage did not know whether trench digging and pipe laying was occurring on either 27 August or 4 October 2022, although it is clear that work of that nature continued after 4 October 2022, and on at least some days between 20 August 2022 and 4 October 2022; 7. The material provided to Mr Savage by Diona on 27 September 2022 did not specifically contain a system of work to ensure Cahill was complying with its SWMS. However, Mr Savage never specifically asked for such a work system, nor did he specifically ask Diona whether in fact such a system existed. In the event, it is clear that no such system was specifically in place by Diona. Arguments The applicant 1. Diona's closing submissions concluded that: "190. The Commission would conclude that there was not in existence on 27 September 2022 at 5pm (or on 4 October 2022), facts that were sufficient to induce a reasonable person to form the belief that Diona was on that date, "contravening" either section 19 of the WHS Act or clause 300(2) of the WHS Regulation. 191. The evidence before the Commission demonstrates that Inspector Savage's 'belief' was based upon a litany of assumptions, which were unreasonable. 192. A belief that there was inadequate "arrangements in place" requires consideration of the Applicant's: (i) Critical risk observations; (ii) Inspections; (iii) Take-5s; (iv) Audits; and (v) the adequacy of those observations, inspections, take-5s and audits. 193. This was not done by the Inspector, and more importantly, there was no consideration of what measures were in place at the time of the issue of the Notice to form the foundation of a belief in the fact of a contravention on the part of Diona. 194. The Respondent's reliance on the absence of information to support the formation by the Inspector of the belief should not be accepted by the Commission. 195. The Commission should find that where an Inspector fails to delay the issuing a Notice under the WHS Act, in circumstances where he knows that the applicant was cooperative - it is not objectively reasonable for him to base his belief on the absence of information. 196. Instead, what the absence of information demonstrates is a clear failure on the part of the Inspector make reasonable inquiries. 197. The Applicant was cooperative throughout the Inspector's investigation, and he could have easily attempted to test, in a timely and practical manner, the facts as they existed at the time he issued his Notice – but impermissibly failed to do so. 198. For the reasons set out above and, in the Applicant's original submissions, the Commission should make orders that the Internal Review Decision be revoked, and that the decision made by the Inspector to issue the Notice to Diona be wholly set aside." 1. This was supported by the following submissions and references to the evidence: 1. A belief in a contravention on 12 August 2022 does not suffice to induce a reasonable belief that the contravention was still occurring on 27 September 2022 or 4 October 2022. 2. Inspector Savage's departure on 12 August 2022 without issuing an improvement notice and his email on 20 August 2022 indicate he did not believe there was an ongoing or likely future contravention at that time. 3. The inspector's conversation with Mr. Stewart on 5 October 2022 further demonstrated that the Inspector had no basis for his belief, as he only required documentation of existing improvements to close the Notice. 4. The inspector issued the improvement notice based on an alleged contravention of section 19 of the WHS Act and clause 300 of the WHS Regulations. However, the notice did not clearly specify how Diona had contravened these provisions. 5. For Inspector Savage to form a belief that section 19 of the WHS Act was being contravened, he needed to consider what was reasonably practicable for Diona, which he did not do. 6. Inspector Savage needed to consider the facts and circumstances as they relate to a principal contractor, not as they might relate to the PCBU doing the work. 7. The reasonably practicable requirement applies to matters within the power of the defendant to control, supervise, and manage. There is no evidence of the inspector considering or making inquiries about what was within Diona's power to control, supervise, or manage, or what was reasonably foreseeable. Inspector Savage did not consider what Diona should be doing in its role as a principal contractor. 8. A belief in inadequate arrangements requires consideration of Diona's critical risk observations, inspections, Take-5s, and audits, which was not done. 9. Evidence of what was within Diona's power to control, supervise, or manage was available, as deposed by Barry Morris, the HSEQ Advisor. 10. Diona had a comprehensive WHS Management Plan in place, which included measures for monitoring and ensuring compliance with safety protocols by its contractors. 1. The WHS Management Plan outlined how Diona managed contractors to ensure they complied with their WHS obligations, including the monitoring of compliance with Safe Work Method Statements (SWMS). 2. The Cahill SWMS was prepared by Zain Jafar, HSEQ Manager for Edara Systems on behalf of Cahill, and reviewed by Diona's HSEQ Advisor, Barry Morris, before being forwarded to Hunter Water for review. 3. Diona provided a HSEQ Advisor and a Site Supervisor to the Project, who were onsite when work was being undertaken by contractors, including Cahill. Diona also had a Project Manager who attended the site. 1. Inspector Savage should have considered the contractual terms defining power to control, supervise, or manage among the involved parties. 2. The inspector's belief was speculative and based on an absence of information rather than concrete evidence. He failed to request necessary information from Diona, demonstrating a lack of reasonable inquiry. 3. The inspector did not know if the high-risk work was being conducted on 27 September 2022, making it impossible to form a reasonable belief about Diona's compliance. 4. By 4 October 2022, the inspector had no proper basis to believe Diona had contravened the WHS Act. His email to Mr Stewart reinforced that the Notice was issued due to Diona's role as principal contractor, not due to any specific failure. 5. Diona contends that the relevant duty holder was Cahill and/or Coast to Country. 6. Diona, as the principal contractor, did not breach any duty imposed on it under section 19 of the WHS Act in relation to the systems of work for pulling the pipe string into the trench. The responsibility lay with Cahill, Country to Coast, and Mr. Bourke, who had the capacity to influence and control the systems of work. 7. Chapter 6 distinguishes between the PCBU commissioning the work, the principal contractor, and the PCBU doing the work. 8. For Inspector Savage to form a belief that section 300 was being contravened, he needed to consider the Applicant as the PCBU doing the work, which is a misinterpretation. 9. The PCBU doing the work is not the PCBU commissioning the work or higher in the contractual chain. 10. The PCBU commissioning the work has duties under the WHS Act and specific duties under Chapter 6. 1. The principal contractor has overall management or control of the workplace and specific duties under Chapter 6. 2. Chapter 6, Division 2, deals with SWMS, which describe control measures for risks associated with the work. 3. The obligation to create a SWMS rests on the PCBU doing the work. 1. The PCBU doing the work is best positioned to create the SWMS and ensure the safety of its workers. The respondent 1. SafeWork summarised their case as: "134. The Commission should be satisfied that Inspector Savage at the time of issuing the Improvement Notice had made reasonable enquiries, and that his belief that a contravention was continuing in the circumstances prescribed by s 191(1)(a) constituted a reasonable belief." 1. This was supported by the following submissions and references to the evidence: 1. The object of the WHS Act is to secure the health and safety of workers and workplaces by protecting against harm, assisting in achieving a safer working environment, and ensuring compliance through effective measures. 2. Inspectors are appointed under the WHS Act to ensure compliance by requiring adherence to the Act through issuing notices. 3. The purpose of an improvement notice is to require the duty holder to take steps to remedy or prevent a contravention or to address the causes of a contravention. 4. The inspector's belief that Diona was contravening the WHS Act was based on several factors, including the presence of a SWMS, the requirement for a POZ, the injured worker being in the POZ without action taken to stop the task, and the lack of control over the pipe string. 5. The Improvement Notice included specific details on how the provisions were being contravened, such as the failure to take action when a person was in the POZ and the lack of control over the pipe string. 6. On 15 August 2022, Inspector Savage was allocated the matter for investigation. He had a telephone call and subsequent meeting on-site with Mr Morris, Iain Thomas (Project Manager), and James Paton (Hunter Water Corporation Project Manager). During this meeting, Inspector Savage inspected the site, which had not been preserved. 7. The incident occurred because the pipe string was not secured at both ends by the excavators. 8. Following the incident, Diona changed the work methodology to ensure that all pipes or strings moved into position for lowering into a trench would be connected at both ends to an excavator. 9. The inspector made reasonable inquiries with Diona and others concerning compliance with the SWMS during the period between the incident and the issuance of the Improvement Notice. 10. The inspector's request for further information was in the context of Diona having already ceased the pipe laying works as a prudent response to the incident. 11. The inspector was not required to conduct a full investigation before forming his reasonable belief. 12. On 27 September 2022, Inspector Savage reviewed all the information provided to him regarding the incident and formed a reasonable belief that Diona was contravening two provisions of the WHS Act, namely section 19 of the Act and clause 300 of the Work Health and Safety Regulation 2017. 13. The inspector considered Diona's role as a principal contractor and decided to issue the Notice to Diona rather than its subcontractor E & M for several reasons, including Diona's oversight of contractors and expertise in safety matters. 14. The inspector did not receive information confirming that measures were being implemented and monitored to ensure compliance with the SWMS. 15. The HRCW SWMS provided to the inspector included control measures for working in areas with powered mobile plant, such as maintaining positive communication and stopping work if people enter the POZ. 16. The inspector formed the belief that Diona was contravening the WHS Act and Regulations based on the information provided by Diona and the lack of adequate arrangements to ensure compliance with the SWMS. 17. The Improvement Notice was issued on 4 October 2022, identifying that the Inspector formed his belief on 27 September 2022 at 5.00pm. The notice described the contravention as a lack of arrangements to ensure compliance with the SWMS. 18. The inspector's email outlining the reasons for issuing the Improvement Notice highlighted the failure to stop work when a person was in the POZ, unclear control of the task, and failure to maintain control of the pipe string. 19. There is no evidence to suggest that the cost of implementing appropriate arrangements to ensure was unreasonable or excessive. 20. Diona, as the principal contractor, had the power to stop the work and direct Cahill to perform the work in a different and safe manner at Cahill's cost. 21. The Commission should reject the submission that the relevant duty holder was Cahill and/or Coast to Country. It was reasonably practicable for Diona to be involved in maintaining and properly implementing safety procedures at the site. 22. Diona had control over Cahill and the work performed at the site. Diona had the expertise to judge whether the work was being performed safely and in compliance with the SWMS. 23. The duties held by Diona under the WHS Act cannot be delegated to subcontractors, and Diona remains responsible for ensuring compliance. 24. Clause 300 of the WHS Regulation applies to principal contractors, as indicated by a statutory note. 25. The statutory note forms part of the text of the WHS Regulation and must be considered in interpreting clause 300. 26. If the statutory note is not accepted, extrinsic materials can be used for interpretation, and the content of the note cannot be disregarded. 27. The provision should be construed by considering the words in context, including surrounding statutory provisions and the provision's purpose. 28. The context of clause 300 includes the meaning of 'principal contractor' established in clause 293(1), which defines a principal contractor as a PCBU. 29. Diona was both a principal contractor and a PCBU, and the inspector had a reasonable basis to believe that clause 300 applied to Diona and that it was being contravened. Consideration 1. Consistent with the analysis set out above at [35], the inspector had two substantial concerns arising from the accident on 12 August 2022. The first was that the pipe string was not adequately secured, and the second was a more complex concern arising from the combination of a worker entering the POZ, this not being detected and thus work not being immediately stopped when the worker entered the POZ. His concern in relation to the second aspect included a lack of clarity as to who was in charge of monitoring compliance with the POZ. 2. The Commission accepts the submissions of SafeWork as to the objects of the WHS Act, the reason for the existence of inspectors and the purpose of improvement notices. The authorities relied on by the parties, and in particular Lipman and Growthbuilt, have on their face taken these issues into account in coming to the principles set out therein. Accordingly, these submissions do not materially advance the position of SafeWork. 3. The Commission accepts in general terms the submission of SafeWork that the improvement notice set out details as to how various provisions of the WHS Act and Regulations were being breached. The difficulty for SafeWork is that this submission does not address the fundamental flaw which the Commission has concluded exists, being the absence of reasonable inquiries, and the absence of facts which could lead a reasonable person to conclude that a breach of the WHS Act and Regulations existed. 4. The Commission does not accept the submissions of SafeWork that the inspector made inquiries of "Diona and other parties" to the extent this phrase suggests. In particular, the Commission has concluded that reasonable inquiries should have been made of Cahill, and as to the relationship between Diona and Cahill and the relationship between Cahill and Country to Coast. Those inquiries were not made, and, in the absence of those inquiries, it is not possible to conclude that there was a reasonable basis on which the improvement notice could have been issued. 5. The Commission is concerned that the final documents on which the inspector relied on were received at approximately 4.00pm, and that by 5.00pm the inspector had concluded that there was a relevant breach requiring the issuing of an improvement notice. The documents were voluminous, to the extent that it is difficult to understand how they could have been properly understood in as little as one hour. 6. The submission set out by SafeWork above at [43(22-29)], are largely accurate in their terms. What the submissions do not address adequately is the phrase "reasonably practicable", nor the underlying, inherent structure of the WHS Act, requiring nuance and balance as to the responsibility which would be borne by each party in the specific circumstances of any improvement notice. 7. Even in submissions to the Commission, SafeWork did not address the relationship between the three parties. This should be contrasted with the concession by the inspector during cross examination that the improvement notice should also have been issued to Cahill. 8. This was a proper concession by the inspector, as it is obvious from the evidence before the Commission, that the parties actually conducting the relevant construction activity were Cahill and Country to Coast. 9. The Commission has concluded that the inspector did not have sufficient information to form a reasonable belief that Diona was breaching its obligations. 10. In part, this is for the reasons advanced by Diona, being that the inspector did not actually ask Diona directly whether there was a process by which it ensured compliance by Cahill with Cahill's SWMS. He was not entitled to assume that the absence of such a process without having specifically asked for that information. This also constitutes a failure by the inspector to have made adequate inquiries. 11. The evidence before the Commission demonstrated that the inspector's understanding of this aspect was correct, but the inspector assumed this, rather than having a proper basis for reaching his conclusion. 12. Largely, though, the absence of sufficient information to form a reasonable belief is for the reasons set out below at [56-63]. 13. During the investigation and the subsequent exchange of documents, the first of Mr Savage's concerns, properly securing the pipe string, was addressed through a change to the Cahill SWMS. This change required the pipe string to be adequately secured at both ends, such that it could not move in an uncontrolled manner. 14. Whilst the inspector considered that the Cahill SWMS had been properly updated, his concern was that there was not an adequate process in place to ensure compliance with the SWMS. It should be noted that contrary to the submissions of SafeWork, this change was not to the Diona work method. 15. On its face, this is a reasonable concern. However, there was no consideration by the inspector in issuing the improvement notice, nor in his evidence to the Commission, addressing why in the circumstances that obligation was solely held by Diona. There was no evidence that he raised the issue with Cahill at any time. 16. There is force to Diona's submission that Mr Savage has taken the simple, Diona called it lazy, approach by determining that any inadequacy must be visited upon the principal contractor. At no point in the inspector's evidence was there consideration of the interaction between the parties or the extent to which the expert party was Diona or Cahill. 17. This concern is exposed further by the inspector's concession during cross examination that, on reflection, the improvement notice should also have been issued to Cahill. 18. The inspector pointed to several overarching obligations under the WHS Act but did not explain logically why in the particular circumstances Diona should bear all of the responsibility, or even co-responsibility. The most that Mr Savage could say was that Diona was engaged in detail in the process, assessed Cahill's SWMS as was required by the WHS Act and had certain expertise. As indicated elsewhere, the net effect of these is a perverse incentive for a principal contractor to have less expertise, and to be less engaged because to be engaged will expose them to greater liability. 19. In any event, this evidence from the inspector ignored the evidence of Mr Morris that at the time in question the most that could be said of Diona's personnel was that there were some of them somewhere along the project. The specific evidence of Mr Morris was that Diona was not physically engaged in supervising the trenching or laying of pipes. 20. It may well have been that, had a proper analysis of the relationship between all three parties been considered by the inspector, that an improvement notice could have been validly issued to Diona. Unfortunately, the information necessary to make that assessment was not available to the inspector, as he did not make inquiries of Cahill or as to the relationship between the three parties. No evidence was before the Commission for the Commission to make such an assessment. 21. The submission of Diona, that the inspector was not aware of whether trench digging and pipe laying work was physically in progress at 5.00pm on 27 September, or on 4 October when the notice was actually issued, does not ultimately persuade the Commission. This is because the breach identified by the inspector, should it be otherwise supported, goes to process. Whether or not trenching work was happening at precisely those times is an unreasonably narrow question. 22. It is clear the trenching work continued between 20 August and 27 September, and on at least some days after 4 October 2022. In that context, the inspector was entitled to address the inadequacy, as he saw it, of the system of work at the project whether or not at precisely 5.00pm on 27 September that specific work was occurring. 23. If, contrary to the above determination of the Commission, there were in existence facts which could have caused a reasonable person to conclude that it was likely that Diona was in breach of the WHS Act and Regulations, the correct and preferable decision by the Commission would in any event have been to revoke the improvement notice. This is for the same reasons as set above, namely the absence of logical basis for the Commission to set out the allocation of responsibilities between the parties. 24. On the material available to the Commission, it is doubtful that the improvement notice should have properly been issued to Diona. Fundamental to this is the apparent expertise of Cahill and Country to Coast, and the fact that, contrary to the assertions of the inspector, Diona was not actively involved in supervising the specific activities which were the subject of the improvement notice. 25. The most that it appears likely to the Commission that Diona ought to have done was to have insisted upon more explanation by Cahill as to how Cahill would ensure compliance with Cahill's SWMS. That was not the subject of the improvement notice. 26. Accordingly, the external review application should succeed, the internal review should be revoked, and the Commission should make an order revoking the original improvement notice. Orders 1. The Commission orders: 1. The external review is upheld. 2. The internal review decision made by the SafeWork reviewer on 19 October 2022 is revoked. 3. The decision to issue Improvement Notice No. 7-427418 on 4 October 2022 is revoked. C Muir Commissioner ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 November 2024