Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Dunlop v Robert Shone Constructions Pty Ltd [2002] NSWIRComm 222 PROSECUTOR: Inspector Dianne Dunlop PARTIES : DEFENDANT: Robert Shone Constructions Pty Limited [ACN 056 803 439] FILE NUMBER: IRC 92 of 2002 CORAM: Schmidt J CATCHWORDS : Occupational, Health and Safety - prosecution under section 16(1) of the Occupational Health and Safety Act 1983 - early plea entered - no prior record - first offence - building industry - small family company - two directors - financial circumstances - any fine imposed to be born by the proprietors - fatality - contrition - mitigation - co-operation with investigating authority - defendant guilty of charge - penalty imposed - reduced fine - costs as agreed or assessed by the Court LEGISLATION CITED : Fines Act 1966 Occupational Health and Safety Act 1983 Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsey) (2000) 49 NSWLR 610 Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 Haynes v C I & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 R v Thomson, R v Houlton (2000) 49 NSWLR 383 CASES CITED : R v Sharma [2002] NSWCCA 142 Ridge Consolidated Pty Ltd v Mauger [2002] NSWIRComm 108 WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Limited (Unreported, Walton J Vice President, Kavanagh and Boland JJ, 16 November 2001) WorkCover Authority of NSW (Inspector Dall) v R & D Enterprises (Newcastle) Pty Ltd (2001) 110 IR 469 HEARING DATES: 08/30/2002 DATE OF JUDGMENT: 09/06/2002 PROSECUTOR: Mr J Galluzo of counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT: Mr R Warren of counsel SOLICITORS: Hunt & Hunt JUDGMENT: - 11 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J DATE: 6 September 2002 MATTER NUMBER 92 OF 2002 INSPECTOR DIANNE DUNLOP v ROBERT SHONE CONSTRUCTIONS PTY LTD Prosecution under s16(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 This prosecution was brought under s16(1) of the Occupational Health and Safety Act 1983. The summons charged that: 'It is alleged that the defendant ROBERT SHONE CONSTRUCTIONS PTY LTD an employer, breached Section 16(1) of the Occupational Health and Safety Act 1983, at Sapphire, in the State of New South Wales in that it failed to ensure that persons not in its employment and in particular John HERIS were not exposed to risks to their health, safety and welfare arising from the conduct of its undertaking at its place of work namely Lot 279 Blue Water Place, Sapphire.' 2 The particulars of the charge were: 'a) Failed to provide means by fencing or otherwise for the securing this safety of the said non-employee at a place from which he was liable fall a distance for more than 1.8 metres contrary to Regulation 73 (3) of the Construction Safety Regulations, 1950. b) Failed to effectively fence the open sides of the stairwell penetration in contravention of Regulation 73 (8) of the Construction Safety Regulations, 1950. c) Failed to ensure that the stairwell penetration was rendered safe before engaging the painting contractor to work at the said premises. d) Failed to provide or maintain a safe system of work in that it allowed work to proceed notwithstanding the absence of safe access to paint walls and ceilings above stairwell. e) Failed to provide such information, instruction, training and supervision to ensure the health and safety of all persons not in its employment at the said place of work, being Lot 279 Blue Water Place, Sapphire. 3 The defendant pleaded guilty and an agreed statement of facts was tendered, which provided: 1. At all material times the Informant was an Inspector duly appointed pursuant to Clause 11 Schedule 3 of the Occupational Health & Safety Act, 2000 under Division 1 of Part 5, and is empowered by section 106 of the said Act to institute proceedings in the within matter. 2. At all material times the defendant, ROBERT SHONE CONSTRUCTIONS PTY LIMITED [ACN 056 803 439] was a company duly incorporated with its registered office at 246A High Street Coffs Harbour in the state of New South Wales. 3. At all material times the defendant carried on the business of building. 4. At all material times the defendant was the principal builder at premises located at Lot 279 Blue Water Place Sapphire in the state of New South Wales ("the site"). 5. At all material times the defendant was the principal builder for the construction of a two level residential premises at the site. 6. On or prior to 20 May 2000, the defendant contracted with John Heris, trading as Crest Painters. 7. At all material times pursuant to the contract John Heris performed painting work at the site. 8. At all material times the defendant had ultimate control of the site, and was responsible for: (a) all works being conducted therein; and (b) Safety at the site. 9. Approximately one week prior to 19 April 2000, a stairwell penetration had been cut to provide access between the ground level and the first level of the premises. 10. On 19 April 2000, a staircase was fitted into the void. 11. The staircase was removed from the void the same day due to a mistake in staircase type. 12. The staircase penetration did not have any permanent fencing or guarding from on or prior to 19 April 2000, to 20 May 2000. 13. The opening was usually completely covered with temporary particle board flooring which was removed from time to time, as required, when the area was being used by various tradesmen. 14. The distance between ground level and the first level on the site was approximately 2.85 metres. 15. On 20 May 2002, John Heris attended the site to carry out the work of painting the walls and ceiling of the first level of the premises on the site. 16. At all material times on 20 May 2000, John Heris was alone at the site. 17. Whilst carrying out work on the first level of the site in proximity to the open stairwell penetration, John Heris fell into the penetration. 18. John Heris fell approximately 2.85 metres onto the concrete floor of the ground level. 19. As a result of the fall John Heris sustained injuries. 20. John Heris was found at the front of the premises by persons, who were passing the site at approximately 1.30 pm on 20 May 2002. Those persons were Anne-Marie Tarsuik and Barbara Mary Elizabeth Haynes. 21. Ms Haynes in her statement to WorkCover dated 1 August 2000 at question 8 stated in part: ".....He was lying on his right side holding his head up off the floor with his right hand. His head and hand was totally covered in blood. He was trying to hold his back with his left hand. He was in a lot of pain as he was groaning....." 22. An ambulance attended the scene and removed Mr Heris. 23. Mr Heris was pronounced dead by Dr David Oliver, at approximately 4.50 pm on 20 May 2000 in the Intensive Care Unit of Coffs Harbour Hospital. The cause of death as identified on the death certificate was stated to be " cerebral haemorrhages " and " fractured base of skull ", resulting from a " fall from a ladder/scaffold ". 24. At all material times there was no information, instruction training or supervision provided to ensure the health and safety of persons not in the defendants employment. 25. At all material times the defendant relied upon the fact that John Heris was an experienced tradesman, and that his services had been engaged on other work sites of the defendant. 26. It is alleged that: The defendant, ROBERT SHONE CONSTRUCTION PTY LIMITED, an employer breached Section 16(1) of the Occupational Health and Safety Act 1983, at Sapphire in the state of New South Wales in that it failed to ensure persons not in its employ, and in particular, John HERIS, were not exposed to risks to their health safety and welfare arising from the conduct of its undertaking at its place of work, namely Lot 297 Blue Water Place Sapphire. In Particular the defendant: (a) Failed to provide means by fencing or otherwise securing the safety of the said non-employee at a place from which he was liable to fall a distance of more than 1.8 metres contrary to Regulation 73(3) of the Construction Safety Regulations 1950, (b) Failed to effectively fence the open sides of the stairwell penetration in contravention of Regulation 73(8) of the Construction Safety Regulations 1950, (c) Failed to ensure that the stairwell penetration was rendered safe before engaging the painting contractor to work at the said premises, (d) Failed to provide or maintain a safe system of work in that it allowed work to proceed notwithstanding the absence of safe access to paint walls and ceilings above the stairwell. (e) Failed to provide such information, instruction, training and supervision to ensure the health and safety of all persons not in its employment at the said place of work being, Lot 297 Blue Water Place Sapphire. 27. These proceedings were commenced with the filing of proceedings in the Registry of the Industrial Relations Commission on 9 January 2002. 28. The Proceedings were listed for plea or mention before his Honour Justice Wright president of the Industrial Relations Commission of New South Wales in Court Session on 11 March 2002. 29. Proceedings were adjourned upon the defendant's application to 23 April 2002. 30. On 23 April 2002, the defendant through its' legal representatives, entered a plea of guilty to the charges as laid on 9 January 2002. 4 Inspector Dunlop and Mr Robert Shone, one of the principals of the defendant, gave affidavit evidence. They were not required for cross-examination. It was common ground that the defendant had no prior record and that the maximum penalty applicable was $550,000. 5 Mr Galluzo of counsel, appearing for the prosecutor, accepted that the defendant had entered an early plea and that the company was a small operation, involving a husband and wife as directors, employing a part-time secretary and a safety officer. It was also accepted that the defendant had cooperated with the investigating authority, after the accident. 6 It was submitted that relevant to penalty was the foreseeability of the risk the subject of the charge. The offence was argued to have been a serious one because the risk in question was readily foreseeable, work being performed around and near an open stairwell void which allowed for an obvious risk of falling from level one of the building to a concrete floor, approximately 2.8 metres below. Thus both an obvious and foreseeable risk had arisen in circumstances which the defendant did not put appropriate and available safety measures in place. 7 It was also submitted that the work of painting, on which the injured worker was engaged when the accident occurred, could have been rendered safe by the provision of effective fencing, which would have eliminated the risk. While the employer had relied upon the employee's experience, it had an obligation to ensure that the work was rendered safe, before it commenced. 8 It followed that the offence was a serious one. It was submitted that regard must also be had to the consequences of the offence, namely a fatality. That result did not dictate the size of the appropriate penalty, but did demonstrate the seriousness of the detriment to safety to which the offence gave rise. 9 It was further submitted that it followed that general deterrence was a matter necessary to be here reflected in the penalty imposed. The judgment in Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at p388 was relied upon, although it was accepted that the penalty imposed should not be so high as to be oppressive. (See Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsey) (2000) 49 NSWLR 610). It was also submitted that the circumstances were such as to warrant a penalty in the medium range. 10 Mr Warren of counsel, appearing for the defendant, submitted that it was relevant in assessing penalty to have regard to the evidence, which demonstrated that this was not a case where no arrangements had been put in place as to the safety of this particular work; rather, the system in place had failed. This was relevant to a proper assessment of the defendant's degree of culpability. 11 It was also submitted that account would be taken of the defendant's excellent prior safety record in an industry not inherently safe. So too would the nature of the defendant's operations. It was a relatively small family business, not generating large returns or assets, with considerable debts. Mr and Mrs Shone, the proprietors, would bear any fine out of their own pockets, in circumstances where the evidence showed that their business had been detrimentally affected by the crisis in insurance affecting this section of the building industry. 12 It was submitted that various other factors would be taken into account in mitigation, including the defendant's early plea, the evidence of its clear contrition; the evidence of the effect which the accident had had on Mr and Mrs Shone, as well as the assistance provided to the deceased worker's family; and the defendant's cooperation with the investigating authority. 13 As to the range of the penalty, reliance was placed upon the approach adopted by the Full Court in WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Limited (Unreported; Walton J Vice President, Kavanagh and Boland JJ; 16 November 2001) and that of Hungerford J in WorkCover Authority of New South Wales (Inspector Dall) v R & D Enterprises (Newcastle) Pty Ltd (2001) 110 IR 469 at pp480-81. It was submitted that in the case of small corporations such as the defendant, account would be taken of the impact of a severe penalty upon them, even in cases where serious offences under the Act had been committed. Consideration 14 The evidence and the admitted facts demonstrated that the guilty plea here entered was a proper one, demonstrating an acceptance of the defendant's breach of the requirements of the Act. 15 The approach to be adopted to sentencing of offenders under the Act is well settled and requires no discussion here. Penalty must reflect the nature and quality of the offence in question and in the case of a plea, the principles discussed in R v Thomson, R v Houlton (2000) 49 NSWLR 383 are to be followed. (See R v Sharma [2002] NSWCCA 142 and Ridge Consolidated Pty Ltd v Mauger [2002] NSWIRComm 108 at [37]). 16 The evidence was that in the two-storey building being constructed by the defendant, no fencing had been erected around the stairwell void. Mr Stone explained in evidence that this was because of the work being performed prior to the accident, which included gyprocking, which prevented such fencing being a practical measure for the particular void, given its formation and nature and the way in which it had to be used for the work to be performed. Instead, planking was used to cover the void, when work was not being performed which required material to be passed through it. 17 Regrettably, on the day when the deceased worker was working alone on the site, performing painting work, the planks had not been replaced and the void was uncovered and unfenced. How, or why, Mr Heris came to fall through the void was not known. The safety risk inherent in him performing painting work in the vicinity of the uncovered and unfenced void was, however, an obvious one. Subcontractors on site had been made aware of the necessity to cover the void, but it was not and Mr Heris, nevertheless, went to work. The evidence suggested that his safety would have been assured, had the planks been in use, or had fencing been erected around the void. After the accident, such fencing was erected, demonstrating that a readily available safety measure, required under the applicable regulations under the Construction and Safety Regulations, would have ensured that this accident did not occur. 18 The injuries which Mr Heris sustained, which led to his death some little time after the accident, demonstrated the magnitude of the risk to safety to which he was exposed, as did reference to the applicable regulations, which the defendant admitted it had breached. The evidence was such that the prosecution's submission that the offence was a serious one, must be accepted. Indeed, the plea entered and the submissions advanced for the defendant, properly accepted so much. It was submitted to be relevant that there had here been attention to safety; the void had not simply been left uncovered. Nevertheless, it was also accepted that the system which the defendant had put in place, was deficient and that it had failed. 19 The words of Hill J in WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 at p85, are yet again apt: 'This case is yet another illustration of the need for employers to exercise abundant caution, maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. It is essential that the approach should be a pro-active and not a re-active one; employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time in the workplace. I am satisfied that the defendant approaches its duties under the Act on that basis. But it is always possible to achieve greater effectiveness and success as this case demonstrates.' 20 I turn then to the matters raised in mitigation. I accept that it is appropriate to have regard to the evidence of the defendant's unblemished safety record, over the course of some 23 years in which Mr Stone has supervised work in the building industry, without prior accident or even a worker's compensation claim arising. This was not a case where such a record can be regarded as having resulted merely from good luck. The evidence showed a real degree of commitment to safety. 21 I also take account of the early plea entered, namely at the 'first reasonable opportunity' (see Ridge Consolidated at para [38]); the assistance provided to the investigating authority and the undoubted evidence of real contrition led, including the assistance provided to the deceased worker's family. The circumstances are such that I am satisfied that the maximum reduction in penalty available for such matters, both in relation to utilitarian savings and contrition, a total of 35%, should here be afforded the defendant. 22 I turn then to the amount of the penalty. I accept that it is proper to take account of the nature and size of this defendant's operations, reflective of s6 of the Fines Act 1966, which requires account to be taken of the defendant's means to pay any fine imposed. The defendant is a small family company operated by the directors, Mr Shone and his wife, resulting in fairly modest returns and assets, in an environment which I accept has been detrimentally affected by the current state of the building industry. The problems with the availability of insurance cover has prevented the defendant carrying on building work for some months, a situation which it is anticipated will continue for some further time. 23 I also accept that in the circumstances it is appropriate in this case to have regard to the fact that any fine imposed on the defendant would essentially be born by the proprietors and that this is a matter which would justify a fine substantially less than would otherwise be imposed. This flows from the judgment of the Full Court in Haynes v CI & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 at p457, where a number of earlier authorities were followed. 24 I am satisfied that an appropriate penalty for this first offence, serious as it was, involving the need for deterrence and taking account of all of the factors which I have mentioned, is $50,000. This is a fine less than that which would be imposed, but for the defendant's circumstances. It is, nevertheless, a substantial fine, reflective of the nature and quality of the offence to which the plea was entered. Applying the discount earlier mentioned, a proper penalty of $32,500 results. Orders 25 For all of the reasons given, I find the defendant guilty of the charge and make the following orders: 1 The defendant is to pay a penalty of $32,500, with a moiety to the prosecutor. 2 The defendant is to pay the prosecutor's costs as agreed, or in the absence of agreement, as assessed by the Court. ------------------------ 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.