Industrial Relations Commission of New South Wales CITATION: WorkCover Authority of New South Wales (Inspector Jones) v Protogeros; WorkCover Authority of New South Wales (Inspector Jones) v Carrier Electrical Services Pty Ltd [2005] NSWIRComm 237 PROSECUTOR WorkCover Authority of New South Wales (Inspector Jones) DEFENDANT PARTIES: Jim Protogeros DEFENDANT Carrier Electrical Services Pty Ltd FILE NUMBER(S): 3737; 3738 of 2004 CORAM: Marks J CATCHWORDS: Occupational Health and Safety prosecutions - guilty pleas - injured worker untrained, unlicensed and unsupervised although experienced - simple safety measures not taken - committment of defendants to OH&S obligations - defendant's submissions regarding application of s 6 of the Fines Act rejected because not made in appropriate fashion - penalty to taken into consideration the objective seriousness of the offence - specific and general deterrence considered - subjective factors considered - defendant a substantial shareholder in defendant company - comparative application of penalty in Inspector Glass v BT Engineering - penalties imposed. Fines Act s 6 Occupational Health and Safety Act 1983 s 15(1) LEGISLATION CITED: Occupational Health and Safety Act 2000 ss 8(1) 26 Ferguson v Nelmac Pty Limited [1999] 92 IR 188 Inspector Frank Glass v BT Engineering Pty Ltd as Trustee of the Bruce Thomas Family Trust [2004] NSWIRComm 245 CASES CITED: Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSWIRComm 339 McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353 HEARING DATES: 07/08/2005 DATE OF JUDGMENT: 09/07/2005 PROSECUTOR Ms K Nomchong of counsel SOLICITORS: Carroll & O'Dea Solicitors LEGAL REPRESENTATIVES: DEFENDANTS Mr P Givorshner of counsel SOLICITORS: Holt & Allen Solicitors JUDGMENT: - 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Marks J Wednesday 7 September 2005 Matter No IRC 3737 of 2004 INSPECTOR ALAN JONES v JIM PROTOGEROS Prosecution under s.8(1) of the Occupational Health and Safety Act 2000 by virtue of s.26 of the OH&S Act Matter No IRC 3738 of 2004 INSPECTOR ALAN JONES v CARRIER ELECTRICAL SERVICES PTY LTD Prosecution under s.8(1) of the Occupational Health and Safety Act 2000 JUDGMENT ON PENALTY [2005] NSWIRComm 237 1 The Court has heard, concurrently, proceedings instituted by the Prosecutor, Inspector Alan Jones of the WorkCover Authority of New South Wales, against two defendants. The first defendant is Jim Protogeros, who is charged with a breach of s 8(1) of the Occupational Health and Safety Act 2000 NSW ("the Act") by virtue of s 26 of the Act in that he is a director of the second defendant. The second defendant is Carrier Electrical Services Pty Ltd ("Carrier"), which is charged with a breach of s 8(1) of the Act. 2 Both defendants pleaded guilty and this judgment is concerned only with the question of penalty. 3 Statements of facts were tendered into evidence. I set out below the statement of facts with respect to the defendant, Protogeros, which contains all of the material relevant also to the corporate defendant. "1. At all material times the Informant was: (a) an Inspector duly appointed under Division 4 of Part 3 of the Occupational Health and Safety Act 1983 (NSW) ("the 1983 Act"); (b) taken to be appointed as an Inspector under the Occupational Health and Safety Act 2000 ("the Act") by virtue of Clause 11 of Schedule 3 to the Act; and (c) empowered under s.106 of the Act, as extended by Clause 13 of Schedule 3 to that Act to institute proceedings in the within manner. 2. At all material times, the Defendant was a Director of Carrier Electrical Services Pty Ltd (ACN: 071 697 517) ("the Company") a duly incorporated company with its registered office at Kamper & Associates, 524 Rocky Point Road, Sans Souci NSW 2219. in the State of New South Wales. 3. At all material times, the Company was an employer in control of a site located at Lot 6, 25 Bennelong Road, Homebush Bay in the State of New South Wales ("the premises"). 4. At all material times, David Battaglia ("Battaglia") was an employee of the Company. 5. On 30 August 2002 ("the accident date"), Battaglia was working at the premises. 6. At the time of the accident, Battaglia was assisting with the installation of electrical work at the premises and in particular was drilling a hole in a distribution board to allow for conduits to be put into the board. 7. The electrical supply to the distribution board was connected at the time of the accident. The supply could have been turned off at the main switch. 8. While drilling into the distribution board, Battaglia sustained electrical flash burns to his face, neck and both of his hands and required treatment at a burns unit at hospital. 9. At the time of the accident Battaglia was not a qualified electrician and not qualified to perform the work he was undertaking. 10. At the time of the accident, Battaglia was not supervised by any employee of the Company or any other persons. 11. At all material times, the Defendant was aware that Battaglia was not a qualified electrician and not qualified to perform the work he was undertaking on the accident date. In addition, the Defendant did not require Battaglia to be supervised at the time of the accident. 12. Prior to the accident date, the Company did not have in place safe systems of work to ensure that only qualified and trained employees performed electrical work. 13. Prior to the accident date, the Company did not have in place or maintain a safe system to ensure that only qualified and trained employees performed electrical work. 14. It is alleged that on 30 August 2002, at the said premises, the Defendant contravened section 8(1) of the Act by virtue of section 26 of the Act in that the Company, being an employer, contrary to section 8(1) of the Act, failed to ensure the health, safety and welfare at work of all the employees of the Company, in particular David Battaglia. In particular, the Company: (a) failed to ensure that the distribution board was isolated from all possible sources of electrical energy while David Battaglia was working on the board; (b) failed to ensure that adequate instruction and supervision was provided to David Battaglia while he was working at the premises. As a result of the Company's failure, David Battaglia suffered serious injury". 4 There was also tendered into evidence a series of photographs and details of factual inspections carried out by the prosecutor. 5 There was tendered into evidence on behalf of the defendants an affidavit of Jim Protogeros sworn 5 July 2005. That affidavit recited the circumstances surrounding the employment of the injured worker, David Battaglia, by Carrier. He commenced employment in 1996 as an apprentice but did not complete his apprenticeship. He remained employed by Carrier and commenced to carry out administrative duties as well as undertaking work as a trade assistant; that is, as an unlicensed electrician. He was highly trusted by Mr Protogeros and was considered an experienced and capable electrician, even though he was unlicensed. Accordingly, Mr Battaglia was not required to, and did not undertake, safety training and induction processes with respect to any particular contract or work site. He was not required to work under supervision. 6 On the day of the accident there was present at the site a supervisor, Mr El Hindi, who was a qualified electrician. However, he did not supervise the work that Mr Battaglia was carrying out on the day that he was injured. 7 Carrier had prepared a site safety plan for the particular project being undertaken, which was the site of the incident giving rise to these proceedings. However, as conceded by the defendants, neither Mr Battaglia nor Mr El Hindi had seen the site safety plan, nor had Mr Battaglia ever participated in any induction process referred to in that plan with respect to that particular site. 8 The defendants admitted that Mr Battaglia had been given informal and non-documented training when he commenced employment with Carrier, which was provided whilst he was working as an assistant to Mr Protogeros by way of "on the job training". To the extent that there was evidence that Mr Battaglia was to isolate and turn off any power to the area on which he was working, it is that some directions of a general nature had been given to Mr Battaglia but nothing by way of specific instructions. 9 As is made clear by the plea of guilty, Carrier had failed to ensure that the distribution board was isolated whilst Mr Battaglia was working on it, and had failed to ensure that Mr Battaglia had been given adequate instruction and supervision while he was working at the premises. 10 By way of submissions, the prosecution highlighted the dangers associated with working on live electrical installations and the obvious danger of failing to isolate the particular area on which work was being carried out. It was submitted that the dangers were increased given that Mr Battaglia was not qualified as an electrician, notwithstanding his considerable work experience. 11 It was not contested by the defendants that the distribution board could have easily been isolated from the main switchboard. 12 There is a reference in the affidavit of Mr Protogeros to an allegation made by Mr Battaglia in a statement made to the WorkCover Authority of New South Wales. That statement was not admitted into evidence. Nevertheless, I infer from the contents of the affidavit of Mr Protogeros that Mr Battaglia had asserted that he had failed to cut off the electricity supply because of pressure that was being put on him by Mr Protogeros to have the work carried out. Mr Protogeros said that there was no time pressure involved with respect to the particular task, particularly as the building site was a long way off from completion. Furthermore, the time taken to turn off the main switch so as to isolate the board would have been less than one minute. The isolation of the board would not have disrupted or caused delay in any other work being carried out at the site. 13 In his affidavit, Mr Protogeros detailed the commitment of Carrier to its Occupational Health and Safety obligations, including the retention of a consultant to assist in creating protocols for the creation of site safety plans, training, induction of employees and the like. He also said that he always engaged an independent contractor if any work was to be carried out on live electrical equipment. There was also evidence of regular toolbox meetings being conducted. 14 Mr Protogeros conceded his failure to properly instruct Mr Battaglia in carrying out work and in failing to have him supervised. This was because he regarded Mr Battaglia as his "right hand man performing a variety of senior administrative functions" so that the electrical work specifically undertaken by him had lessened over time. He also regarded Mr Battaglia as "a close personal friend". Accordingly, he had failed to monitor Mr Battaglia's employment practices and Mr Battaglia's adherence to safe working systems. 15 Mr Protogeros gave evidence that he was suffering from depression as a consequence of the accident and that this had had a significant impact on him and his family. He was receiving treatment from a psychologist. 16 My impression of the material contained in his affidavit is that Mr Protogeros has expressed contrition and regret for what has occurred. It was submitted by Ms K Nomchong of counsel, who appeared for the prosecutor, that no such contrition could be derived from the affidavit. I disagree. Whilst the affidavit was clearly drafted by a legal practitioner, I am not prepared to read it in an unduly technical manner and certainly in a manner which would not admit of an expression of regret and contrition even though those specific words are not mentioned. 17 Mr Protogeros said that since the accident he has assumed full personal responsibility for undertaking overall supervision of work being carried out at sites upon which the company is engaged. He has also taken steps to ensure that non-qualified persons are required to work under the direct supervision of qualified supervisors. 18 Neither defendant has any prior convictions. 19 During the course of submissions, Mr P Givorshner of counsel, who appeared for the defendants, sought to rely on the provisions of the Fines Act by reference to the financial capacity of the defendants. There was tendered into evidence a profit and loss statement of Carrier for the year ended 30 June 2004, and the annual report of that company for the same year. No attempt was made to analyse the material in the annual report or to explain any of the items. The report shows an excess of liabilities over assets as at 30 June 2004 of $67,382. There are items of plant and equipment and motor vehicles shown as assets in the balance sheet exceeding $70,000 in value. There is no indication as to whether these depreciated values reflect historical or market value. Likewise, there is a non-current liability by way of loan of almost $80,000 from Carrier Electrical Services (NSW) Pty Ltd, which one might assume might be an associated entity. There is also shown a loan from Cosmo Electrical of $93,161. This may or may not be an associated entity. In any event, these two loans total $170,000 which the lenders might be prepared to forego in terms of financing the payment of any penalty. Likewise, the profit and loss statement would need clarification to ascertain whether any part of the $600,000 shown by way of salaries and wages was payable to Mr Protogeros or his wife. It is assumed that an amount of $27,560 shown for directors' fees might have been monies payable to Mr Protogeros. 20 The basis upon which the court is moved to apply the provisions of the Fines Act was discussed generally by me in Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSWIRComm 339 and applied in general terms with further comment by a Full Bench of this Court in McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353. If a defendant wishes to invoke the discretion of the court by reference to the Fines Act, it is necessary to adduce evidence in a proper form which is capable of being tested by the prosecutor and is capable of being clearly understood by the Court. In this case, even though the proceedings had been set down for hearing on 8 July 2005 in March 2005, the affidavit of Mr Protogeros sworn 5 July 2005 was filed in court immediately prior to the hearing commencing. Likewise, the annual report was only tendered into evidence during the course of submissions after the defendant's case had closed. If a defendant genuinely wishes to put a case before a court seeking relief by reason of the provisions of the Fines Act based on capacity to pay, then it is beholden on the defendant and the defendant's legal practitioners to ensure that such application is made in a timely fashion. 21 I regard it as unsafe to rely on any of the material in support of any application under the Fines Act in these proceedings. 22 The starting point for the fixing of an appropriate penalty is the objective seriousness of the offence. The prosecution submitted that in all the circumstances, the offence should be characterised "as one in the moderate to serious category". It is clearly a serious matter to fail to properly train and instruct an employee, particularly a person who is unqualified, in the carrying out of work to ensure that any live electrical installation is isolated. This is particularly so when it was a simple matter to have isolated the installation. On the other hand, it may be assumed that there is widespread knowledge throughout the community concerning the dangers inherent in dealing with any electrical installation which is live. It might be assumed that Mr Battaglia, who had had considerable experience in hands-on electrical work, would and should have known about the dangers of working on this particular piece of equipment without having isolated it. The defendant so submitted, albeit that Mr Battaglia was unqualified, unsupervised and had not been specifically instructed with respect to the need to isolate the equipment. It is obvious that there was a real risk of injury when working on live electrical equipment, that that risk was plainly foreseeable, and that a failure to isolate the equipment in all the circumstances was, to use plain language, stupid. 23 Whilst the Court is not bound by the characterisation given to the objective seriousness of the offence by the prosecutor, and whilst on one view of the matter the objective seriousness is greater than that contended for by the prosecutor, I acknowledge that the objective seriousness of the risk might in all the circumstances be seen to be in the "moderate to serious category" as contended for by the prosecutor. I propose to proceed on that basis. 24 I take into account that Carrier remains in business and that there is a need to have regard both to the specific deterrent effect as well as a general deterrent effect of any penalty imposed. 25 I also take into account in favour of the defendants, a number of subjective factors. These include cooperation with the WorkCover Authority of New South Wales in the carrying out of its investigations, the entry of any early plea of guilty, expressions of contrition and regret, and the fact that this is the first offence in circumstances where Carrier has been engaged for some time as an electrical contractor. 26 For reasons which I have earlier advanced, I do not propose to take into account any mitigating factors by reference to the application of the Fines Act. 27 Finally, the prosecutor quite properly conceded that the evidence was to the effect that Mr Protogeros was a substantial shareholder in Carrier. Accordingly any fine imposed on Carrier would impact upon the value of the shareholding of Mr Protogeros in that company. I propose to take this into account in fixing an appropriate penalty to be imposed on Mr Protogeros. 28 Ms Nomchong submitted that, in determining the amount of penalty, I should have regard to the judgment of Staff J in Inspector Frank Glass v BT Engineering Pty Ltd as Trustee of the Bruce Thomas Family Trust [2004] NSWIRComm 245. Those proceeding involved a plea of guilty by a defendant to a breach of s 15(1) of the Occupational Health and Safety Act 1983 which, for all relevant purposes, is equivalent to s 8(1) of the Act. The defendant in those proceedings conducted a business of manufacturing bricklaying machinery. It employed a person as a second-class fitter and turner. The defendant corporation decided to carry out repairs to the roof of premises, which I assume were premises occupied by the defendant. The deceased worker was required to perform repair work with another employee and for this purpose to climb onto the roof of the building. It appears that neither he nor the fellow employee, nor indeed the defendant, had had any experience in carrying out roofing repairs. The deceased employee was attempting to walk along the top of a roof ridge when a polycarbonate sheeting collapsed under his weight and he fell to his death. No risk assessment was carried out, and no instructions and/or training was given to the employees involved in the work. Neither did the defendant install any equipment or use any system by way of harnesses or the like to prevent or curtail injury. Furthermore, the two employees involved in the operation were not being supervised. 29 After considering a number of mitigating factors, and by reference to the objective seriousness of the offence, his Honour imposed a fine of $90,000. In doing so, his Honour took into account the financial position of the defendant as revealed in financial material put by way of evidence before him. In doing so, his Honour applied well-established principles to the effect that it is still necessary to give appropriate consideration to the objective seriousness of the offence (see for example the observations of Wright J, President, in Ferguson v Nelmac Pty Limited [1999] 92 IR 188 at [209] - [210]). 30 I observe that the circumstances surrounding the objective seriousness of the offence in these proceedings are not nearly as serious as those referred to in BT Engineering. In both proceeding the maximum penalty applicable to the corporate defendant is $550,000. Even allowing for the fact that Staff J took into account the provisions of s 6 of the Fines Act, and that I have declined to do so in these proceedings, on a comparative basis it would, in my opinion, be unjust to impose an overall fine on Carrier which exceeded that imposed on BT Engineering. Under normal circumstances, I would not have engaged in such a comparative exercise; but I was specifically asked to do so by Ms Nomchong and I shall accede to her submission made on behalf of the prosecutor. 31 Having regard to all of the circumstances I impose a fine on Carrier in the sum of $75,000. The prosecutor sought a moiety, which I hereby grant, and costs. 32 With respect to the defendant, Jim Protogeros, the maximum penalty is the sum of $55,000. Having regard to the matters to which I have referred I impose a fine of $5,000. The prosecutor sought a moiety of this penalty also, and costs. 33 I make the following orders: 1. Each of the defendants is found guilty of the offence as charged and convicted accordingly. 2. The defendant, Carrier Electrical Services Pty Ltd, is fined the sum of $75,000 with a moiety to the Prosecutor. 3. The defendant, Jim Protogeros, is fined the sum of $5,000 with a moiety to the Prosecutor. 4. The defendants are to pay the prosecutor's costs of the proceedings in an amount assessed by the court in default of agreement to be borne proportionally to the amount of each penalty. 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.