Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Martin Carmody v Ronald William Frankel [2002] NSWIRComm 333 PROSECUTOR Inspector Martin Carmody (WorkCover Authority of New South Wales) PARTIES : DFENDANT Ronald William Frankel FILE NUMBER: IRC 6979 of 2001 CORAM: Marks J CATCHWORDS : Occupational health and safety prosecution - Plea of guilty - Parity applied to sentence in other proceedings - fine imposed. LEGISLATION CITED : Occupational Health & Safety Act 1983 s 50(1) CASES CITED : Inspector Carmody v Power (2002) NSWIRComm 286 HEARING DATES: 11/29/2002 DATE OF JUDGMENT: 12/10/2002 PROSECUTOR Ms I M McManus of counsel SOLICITORS Phillips Fox LEGAL REPRESENTATIVES: DEFENDANT Mr G M Galluzzo of counsel SOLICITORS Sparke Helmore JUDGMENT: - 1 - INDUSTRIAL RELATIONS OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Tuesday 10 December 2002 Matter No IRC 6979 of 2001 INSPECTOR MARTIN CARMODY v RONALD WILLIAM FRANKEL Prosecution pursuant to s 50(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 The defendant Ronald William Frankel has pleaded guilty to a breach of s 50(1) of the Occupational Health and Safety Act 1983 ("the Act"), in connection with an alleged contravention by Willtara Constructions Pty Ltd ("Willtara") of s 16(1) of the Act. 2 An agreed statement of facts was tendered, which contains within it details of the charge to which the defendant has pleaded guilty. The agreed statement of facts is in the following terms: "1. At all material times the Prosecutor was an Inspector duly appointed and empowered by Section 48 of the Occupational Health and Safety Act 1983 to institute proceedings in the within matter. 2. At all material times RONALD WILLIAM FRANKEL ( the Defendant ) of Unit 6, 138 Holt Avenue, Cremorne in the State of New South Wales was a director of Willtara Constructions Pty Limited (ACN 050 335 987) ( Willtara ). 3. At all material times KEVIN PATRICK POWER ( Power ) of 3-11 Aintree Close, Charlestown in the State of New South Wales was a director of Yonti Formwork Pty Limited (ACN 081 038 511) (formerly known as Tableforms Aust Pty Ltd) ( Yonti Formwork ). 4. At all material times, Willtara: 4.1 was the principal contractor and project manager at a construction site at 51-53 Bourke Road, Alexandria in the State of New South Wales ( the site ). 4.2 contracted Yonti Formwork to supply, erect and dismantle formwork at the site. 4.3 contracted Ularay Pty Ltd ( Ularay ) to carry out concrete pouring at the site. 4.4 Employed Stephen Coffey as a Site Manager. 5. At all material times Yonti Formwork: 5.1 was a formwork contractor; 5.2 was contracted by Willtara to supply, erect and dismantle formwork at the site. 5.3 contracted with Burgess and Arnott Pty Ltd to provide structural engineering certification of formwork supplied and erected at the site. 5.4 employed Douglas Crane as Site Manager at the site. 6. At all material times Burgess & Arnott Pty Ltd: 6.1 conducted an engineering consultancy; 6.2 sub-contracted to Grava Consulting the task of formwork inspection and structural engineering certification at the site; 6.3 employed Robert Grava ( Grava ) to carry out the duties of inspecting engineer, including the inspection and certification of formwork on constructions sites. 7. On 28 October 1999 formwork collapsed whilst concrete was being poured. This area was identified as pour one; level one ( pour one, level one ). As a result of the accident the following workers suffered injuries: 7.1 Mr Graham Earnshaw ( Earnshaw ), a 40 year old self employed contractor who sustained a cut to the right arm, left knee and bruising to the chest. 7.2 Mr Kalolo Kupu Matavesi ( Matavesi ), a 47 year old employee of Ularay who sustained a cut to his right knee and ringing in his ear. 8. The formwork used on the site was described as the Multiform formwork system . The system incorporated a table form that comprised of four vertical frames approximately 5.5 metres high arranged to form rectangle tables of variable size. These were arranged along a grid of six rows running east – west at approximately 6 metre intervals. 9. On the western boundary of pour one, level one, the formwork was erected on top of an earth cutting approximately 1,200 mm deep and the outer most legs were placed approximately 600 mm from the edge of this earth cutting on unstable sand. This section of formwork supported a large perimeter beam which when placed with concrete required substantial founding at the base of the frames. 10. On the northern boundary footings had been cut into the excavated face to enable the formwork frames outer most legs to be founded at the reduced ground level on the base soil providing a more appropriate founding for the formwork erected along this boundary. 11. On 19 October 1999, 9 days before the accident, Grava, as inspecting engineer undertook an inspection of formwork assembly at pour one level one. At the time of the inspection the formwork assembly on the western boundary was incomplete. 12. On 19 October 1999, Grava issued a structural engineering's certificate stating that the formwork assembly conformed with AS1170 and AS3610 subject to correction of the listed defects in the engineer's report. This action breached Regulation 86 of the Construction Safety Regulations 1950 as the report was issued nine days before the concrete pour and failed to consider the whole formwork assembly which was yet to be completed. 13. There was no re-inspection undertaken by Grava, nor was any inspection requested by Willtara, Yonti Formwork or Grava Consulting. 14. There were prolonged periods of heavy rainfall experienced in the area of the site during the period between the formwork inspection on 19 October 1999 and the pouring of concrete on 28 October 1999. 15. On 27 October 1999 Yonti, through its Site Manager Mr Crane, sent a memorandum to Stephen Coffey of Willtara advising of the potential collapse of the formwork due to the effects of the stormwater. Mr Crane also proposed to Mr Coffey that several columns be poured prior to undertaking the concrete pour. This was not done. 16. At approximately 6.00am concreting workers from Ularay ( the concreters ) arrived at the site to prepare pour one, level one. The prepared formwork for pour one, level one was approximately 5.5 metres above ground level and located on the north western sector of the site ( the formwork ). The foreman of Ularay, Matt Tomasic ( Tomasic ), held discussions with Stephen Coffey and Douglas Crane, and both persons advised him that the formwork was ready for the pouring of concrete. Tomasic then directed the pump operators to set up the pump lines while he commenced checking the desired levels for the finished concrete floor. 17 At approximately 8.10am the pouring of concrete commenced. On completion of pouring approximately 20 cubic metres of concrete, Tomasic checked the pour levels against the desired levels which were found to be correct. The concreters then poured another 20 cubic metres and again Tomasic checked the levels. He then stopped the concrete pumps immediately after noticing that the formwork deck had dropped approximately 20mm. Matavesi noted that further concrete was added to that which had been expected to be needed and this was poured as an attempt to correct the observed slump in levels. 18. Stephen Coffey confirmed that the formwork deck level had dropped 20mm and entered into a discussion with Tomasic as to what measures were to be taken concerning the movement of the formwork deck. At approximately 8.20am a section of the formwork assembly along the western boundary beam started to collapse causing approximately 20 persons who were working in the immediate area to run away from the collapsing section of formwork ( the accident ). 19. On 28 October 1999 Senior Inspector Jim Moore and the Prosecutor attended the premises and observed as follows: 19.1 At the main entrance to the site from Bourke Road, Alexandria, the right side entrance gate there were two signs. The sign on the left read "Willtara Constructions, Builders Licence 56503C, ACN – 050 335 987, 5 Talvera Road North Ryde 2113". A smaller sign to the right of the first sign read "No Entry" and displayed a no entry symbol. 19.2 On the site fence adjacent to the left main entrance gate to the site from Bourke Road, was a large sign, which read "Architects: Krikis Taylor Architects 9922 3680". 19.3 On entering the site at the left of the main gate were amenities sheds and portable offices. Adjacent to the amenities were several stacks of table form modular soffit sections. 20. On 1 November 1999 Gary Truswell, Consultant Engineer of Gary Truswell & Associates Pty Limited Consulting Engineers produced a written report to Willtara which found as follows: 20.1. The weight of the wet concrete when poured triggered the collapse of the formwork. 20.2 That the extended legs of the formwork along the western boundary cutting were unstable due to the positioning of the formwork and the sand base of the formwork. It could be seen that that the formwork installers had recognised this danger along the northern boundary as the footings had been cut into the excavated face to enable the formwork outer most legs to be founded at the reduced ground level on a soil foundation which was stable. 21. On 1 November 1999 Mark Bartel, Consultant Engineer of Network Geotechnics Pty Ltd produced a written geotechnical report for Willtara which found as follows: 21.1 The footings of the formwork along the western boundary were located on top of and about 0.5 metres from the edge of the existing 1.3 to 1.5 high cut batter. 21.2 The footings to the formwork should not have been founded adjacent to excavations unless adequate structural support had been provided for the excavation. 21.3 The footings should have been founded with medium dense to dense sands at about 0.3 metres below the existing bulk excavation level and proportioned for an allowable bearing pressure of 100Kpa. 21.4 The allowable bearing pressure of the footings of the formwork that collapsed at the site was approximately 70Kpa which was well below the required bearing pressure. 22. In June 2000 Dan Leavy, Senior Engineer of WorkCover Authority of New South Wales produced a written report after inspecting the site on 28 October 1999 which found as follows: 22.1 The formwork assembly collapsed because the legs of the formwork on the western boundary were placed in an unsuitable position on unstable foundations. The collapse was triggered once the formwork was loaded with the additional weight of the concrete, machinery and workers. 22.2 The design of the formwork assembly was unsuitable for the concrete pour. Testing reports from Low & Hooke (Australia) Pty Ltd, contracted to test the equipment in 1986, show that the formwork system had not been tested in the configuration used at the time of the accident. A singe test proposed on the formwork system in its taller configuration was aborted due to it failing in a strong gust of wind. 22.3 The structural engineering certification process of formwork at the site failed to comply with Construction Safety Regulations 1950, in particular regulation 86(16) which states that: "A person must not pour concrete into the formwork for a suspended slab or beam unless a qualified engineer: (a) has inspected the formwork to ensure it complies with Clause 5.3.4 of AS 3610 which relates to the adequacy of components of a formwork assembly; and (b) has certified in writing that the requirements of that clause have been satisfied." 22.4 Grava, the inspecting formwork engineer, failed to comply with clause 5.3.4 of AS 3610 – 1995 – Formwork for Concrete as required by the Construction Safety Regulation 1950. The certificate was issued by Grava and Grava Consulting on behalf of Burgess & Arnott on 19 October 1999, nine days before the formwork assembly was completed. The formwork that failed along the western boundary on the date of the accident had not been erected at the time this certificate was issued. As a result, Grava was unable to properly appraise the complete formwork assembly. 22.5 Grava Consulting and Grava failed to revisit the site once the formwork assembly had been completed to assess that the whole assembly, including checking whether the foundations were safe after heavy rain and whether listed defects in the report, had been rectified. 22.6 Grava Consulting and Grava should not have issued the certificate with the legs of the frames founded so close to the edge of the cutting along the western boundary which breached AS 3610 which states: " The formwork shall be founded on material that has adequate strength, stability and stiffness to comply with the formwork documentation." The formwork documentation in clause 4.7 of AS 3610 specified identifying such items as the foundation material, its safe bearing value and limitations on settlement and recommends referral to geotechnical reports for this purpose. 22.7 The inability of the soil adjacent to the cut face to support the formwork assembly was identified at the inspection of the site by Grava on 19 October 2001 but inadequate steps were taken by Willtara and Yonti Framework to correct the defects listed on the certificate pour to directing the concrete pour. 22.8 Surface water produced by heavy rain at the site prior to the collapse weakened the top soil on which the formwork was founded by increasing its water content and reducing its sheer strength and bearing capacity. 22.9 The inadequate supervision of the work on site by Willtara and Yonti Formwork contributed to the accident because Grava should not have been instructed to attend the site and certify the formwork while it was still incomplete. 22.10 Directions by Willtara and Yonti Formwork to go ahead with the concrete pour should not have proceeded until the entire formwork system had been assessed and certified as being in accordance with the relevant sections of AS 3610. 22.11 Willtara and Yonti Formwork failed to use the practice of cutting pockets in the soil to allow the frames of the formwork legs to be founded on firm level soil along the western boundary, as was used in the case of the northern boundary. 22.12 An appropriately qualified person of Willtara and Yonti Formwork should have been monitoring the effects of the concrete pour. 23. As a result of the Prosecutor's investigations and inspections, the following was found: 23.1 Tests were carried out on the multiform formwork system by Low & Hooke (Australia) Pty Ltd in 1996 but they were inadequate because tests were carried out at the shorter frame configuration. The test results were not applicable to the taller configuration used for the construction project at the site. 24. Since the accident Willtara and Yonti Formwork have provided documented safe work method statements to the WorkCover Authority. 25. It is alleged that the Defendant, RONALD WILLIAM FRANKEL of Unit 6, 138 Holt Avenue, Cremorne in the State of New South Wales, being a director of Willtara Constructions Pty Ltd (ACN 050 335 987), contravened Section 50(1) of the Occupational Health & Safety Act 1983 on 28 October 1999, in that Willtara Constructions, an employer, breached Section 16(1) of the Occupational Health & Safety Act 1983 on 28 October 1999 at a site located at 51-53 Bourke Road, Alexandria in the State of New South Wales, in that it failed to ensure that persons not in its employment were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at its place of work, in particular Graham Earnshaw and Kalolo Matavesi. In particular, Willtara Formwork failed: 25.1 To ensure that the formwork at the site was properly inspected and certified by an engineer (in accordance with Regulation 86 of the Constructions Safety Regulations 1950) prior to carrying out a concrete pour at the site on 28 October 1999; 25.2 To take adequate steps to correct the defects in the formwork after obtaining the engineer's report and becoming aware that the structure, design and foundations of the formwork were unsafe prior to the concrete pour; 25.3 To implement appropriate measures to ensure the formwork foundations were made safe after becoming aware of water saturation from heavy rains adversely affecting the stability of the formwork foundations after obtaining the engineer's report and before the concrete pour; 25.4 To supervise or adequately supervise persons of the site prior to and at the time of the concrete pour." 3 Paragraph 3 of the agreed statement of facts refers to the involvement of Yonti Formwork Pty Ltd and refers also to its director Kevin Patrick Power. Proceedings were also commenced by the prosecutor against Mr Power under s 50(1) of the Act in connection with an alleged breach by Yonti Formwork Pty Ltd of s 16(1) of the Act. In a judgment delivered on 5 November 2002 I concluded that in all of the circumstances Mr Power should be exposed to a penalty of $6,000 to be reduced to $4,500 after applying a discount for an early plea of guilty. 4 Much of the factual material tendered in these proceedings was identical to that tendered in the proceedings against Mr Power. Some of that material may conveniently be repeated in the form summarised in my judgment in Power and I reproduce hereunder paras 2 to 6 of that judgment. "2. In addition to the agreed statement of facts there was tendered into evidence a factual investigation report of the prosecutor and photographs. The defendant gave evidence and relied on additional evidentiary material being a witness statement made by a Mr Douglas Crane to the prosecutor, a copy of a memorandum from Mr Crane to Mr Stephen Coffey of Willtara Constructions Pty Limited, a letter from Gary Truswell & Associates Pty Limited Consulting Engineers addressed to Willtara Constructions Pty Limited dated 1 November 1999 and two character references. 3. The statement given by Mr Crane to the prosecutor and the memorandum of Mr Crane to Stephen Coffey of Willtara Constructions Pty Limited amplifies some of the material contained in the agreed statement of facts. The memorandum of 27 October 1999, the day before the accident advised Mr Coffey that the storm water diversion had washed out the false work along the boundary at grid 8 and that the area was "a potential collapse because of this". He suggested that work in this area cease immediately and that the pump cease operation. Mr Crane indicated that it might be necessary for rectification work to be carried out on the formwork. After the pump ceased operation Mr Crane instructed employees of Yonti Formwork to repack the boards on which the formwork footings were positioned. He conceded that notwithstanding this action "the full extent of the washout …was not investigated thoroughly enough." 4. Mr Crane had also asked Mr Coffey on 27 October 1999 to pour the remaining columns along the western elevation to help "lock the deck in, it is an added safety precaution." This request was made orally. Mr Coffey is alleged to have told Mr Crane that it would cost too much in extra pump hire to bring a separate pump in on 27 October just to pour those columns. 5. At the start of the concrete pour on 20 October 1999 Mr Crane had requested that all of the remaining external columns on the construction site be poured first, presumably to increase the stability. However, he was informed later on that this had not occurred. The work of pouring the concrete was under the control of Willtara Constructions Pty Limited. 6. Mr Gary Truswell, consulting engineer in his report to Willtara Constructions Pty Limited dated 1 November 1999 had said that he attended the site on the day of the accident. It was his opinion that the weight of the wet concrete when pouring started "triggered the collapse of the formwork directly over the bank which in turn dragged the remainder of the bay in towards it." He then commented that "fortunately the concrete building columns had been poured some days earlier which probably prevented the collapse being more extensive. It is well known that sand is generally unstable at slopes greater than about 1 vertical to 2 horizontal. The props that supported the formwork on the western side were well within this unstable zone with the resultant unfortunate result." 5 I also reproduce observations which I had made in Power with respect to the cause of the incident giving rise to that prosecution which, for reasons which will later emerge, have some significance for these proceedings. These are contained within para 12 of the judgment in Power. "12. Whilst it is clear that the ultimate cause of the accident was contributed to by a number of factors, there can be no doubt that Tableforms Australia Pty Limited was in breach of s 16(1) and that the breach was a serious one. Insufficient attention had been given to the nature of the ground where the legs of the formwork on the western boundary had been located. In addition, there was a failure to adequately investigate and assess the overall nature of the ground along the western boundary after the integrity of the ground had obviously been affected by both rainwater and stormwater discharge. Certainly, the alleged failure by Mr Grava, engineer, to carry out his inspection in a proper and appropriate manner and the alleged failure of the head contractor to respond appropriately to the request to pour the western columns first all contributed to the ultimate accident. Nevertheless, the positioning of the legs of the formwork was a vital matter. I conclude that the breach objectively viewed was a serious one." 6 Mr Frankel gave evidence. He said that he had at the time of the incident been involved in the construction industry for some 27 years. Whilst he had overall control of the activities of Willtara, he relied on a number of persons to control various aspects of the company's operations including a construction manager. A number of project managers who had responsibility for particular projects reported to the construction manager and site managers at each site reported to a project manager. The defendant did not personally have involvement in any particular project and certainly had no direct personal involvement in the project which was the subject of the incident which gave rise to these proceedings. The defendant said that the building collapse in this particular project had a dramatic impact on the company's cash flow and the company ultimately went into receivership in early 2000, with total debts exceeding $10 million. The defendant himself entered into voluntary bankruptcy on 30 June 2000 which was annulled on 5 October 2002. 7 The defendant said that he accepted his responsibilities and obligations under the Act. He said that he obtained documentation from the WorkCover Authority of New South Wales after the incident which was distributed to all sites in order to enhance awareness concerning occupation health and safety matters. 8 It was common ground between the prosecution and the defence that objectively viewed, there was a serious breach of the Act by Willtara. It is that breach which determines in large measure the appropriate approach to penalty in these proceedings. I should add that the maximum penalty faced by the defendant as an individual is $55,000. 9 As I observed in Power there were a number of contributing factors to the incident which gave rise to these proceedings. The primary cause was the failure of the formworking company to adequately design and construct the formwork, particularly having regard to the nature of some of the ground upon which it was to be erected. In addition, the formworking company failed to ensure that the engineer Mr Grava had issued a satisfactory certificate with respect to the totality of the formwork. These problems were exacerbated by the prolonged heavy rain and further exacerbated by the failure of Mr Coffey to properly consider the engineer's report, to adequately inspect and consider the state of the formwork, to consider the request made by the formworking company to defer the concrete pour and to decline the suggestion that the columns be poured first so as to enhance the stability of the overall structure during the pouring phase. 10 Both parties agreed that the principle of parity would apply in terms of the fine imposed on the defendant Power. Ms McManus of counsel who appeared for the prosecutor submitted that overall the defendant in these proceedings had greater culpability by reason of the greater culpability of Willtara than that of Yonti Formwork Pty Ltd. Ms McManus emphasised that Willtara as the principal contractor had overall responsibility whereas the work of Yonti Formwork Pty Ltd was confined to a particular part of the building works. Mr Galluzzo of counsel who appeared for the defendant submitted that the culpability of the defendant in these proceedings was less than that of Power. 11 Whilst there are obvious differences in the responsibilities of both the principal contractor and the sub-contractor, there is, in my opinion, a degree of culpability of each of them, in the manner which I have summarised above. I do not feel it necessary to embark upon any detailed analysis of the relevant culpability of each of the defendants, and I doubt whether any such analysis can be undertaken on scientific grounds given that the focus of attention inevitably covers areas which have some commonality but also some differences. I conclude from my assessment of the evidence overall that it is appropriate to approach the assessment of the quantum of the penalty by applying parity in a sense of equal culpability. 12 I accept that the defendant has expressed contrition for what has occurred, took some measures to enhance awareness of occupational health and safety matters and, as was conceded by the prosecution, pleaded guilty at an appropriate early stage. I also accept that the defendant, on the evidence, cooperated with the WorkCover Authority of New South Wales in its investigations of the incident. I note that the defendant has no prior convictions. 13 In all the circumstances I consider the appropriate penalty is the sum of $6,000 to be reduced to $4,500 after applying a discount for an early plea of guilty. The prosecution has sought a moiety of the penalty which was not opposed. 14 The prosecution also sought an order for costs. The parties have asked that I reserve costs so that discussions may take place in an endeavour to reach agreement about quantum. ORDERS 15 I make the following orders: 1. The defendant is found guilty of the offence charged in the summons and is convicted accordingly. 2. The defendant is fined the sum of $4,500 with a moiety to the WorkCover Authority of New South Wales. 3. Costs are reserved and liberty to apply is granted with respect to costs. _____________________________ 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.