Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector David Clyant v Dalway Enterprises Pty Ltd. [2004] NSWIRComm 379 PROSECUTOR: Inspector David Clyant PARTIES : DEFENDANT: Dalway Enterprises Pty Ltd FILE NUMBER: IRC 6248 of 2003 CORAM: Haylen J CATCHWORDS : Occupational Health and Safety Act 2000 - s 10(1) - plea of guilty entered by company responsible for building work - construction work undermines and destabilises adjoining building - failure to provide adequate supervision - failure to provide adequate temporary support to wall of adjoining building - adjoining wall collapses and building demolished - no workplace injuries - builder relies on expertise of structural engineer - defendant accepts serious nature of breach - general and specific deterrence considered - significant subjective factors - penalty imposed HEARING DATES: 11/29/2004 EXTEMPORE JUDGMENT DATE : 11/29/2004 PROSECUTOR: Mr D O'Neil of counsel SOLICITORS: Carroll & O'Dea LEGAL REPRESENTATIVES: DEFENDANT: Ms P McDonald of counsel SOLICITORS: Phillips Fox JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HAYLEN J 29 November 2004 Matter No IRC 6248 of 2003 Inspector David Clyant v Dalway Enterprises Pty Ltd. Prosecution under s.10(1) of the Occupational Health and Safety Act 2000 EX TEMPORE JUDGMENT [2004] NSWIRComm 379 1. This morning I have heard submissions on penalty on a plea of guilty in this matter following some further negotiations between the parties and a further amended application for order that was filed in court by leave. The essential issues in this case fall within a narrow compass. The defendant, Dalway Enterprises Pty Ltd, was involved in construction and in control of a construction site located at 82 Parramatta Road, Camperdown. That construction site was located adjacent to a two storey building occupied by a business known as Central Autohaus at 84 Parramatta Road. 2. The short history is that over a period of time there were inspections of the adjoining building, there was initially a crack and later there was a wider crack in the western wall. The defendant relied on a number of experts - who I will come to in a moment - to advise it as to what should be done but unfortunately on the 25 November 2001 the adjoining wall collapsed and ultimately the next door building was demolished by order of the police. 3. The defendant has pleaded guilty to a charge under s 10(1) of the Act that is framed this way: that between 2 November 2001 and 24 November 2001 the defendant being a person who had control of the premises used by people as a place of work failed to ensure that the premises were safe and without risks to health in that; it failed to provide adequate supervision to people working at the premises to ensure that the construction work undertaken at the premises did not expose persons working at the premises to risks of health and safety arising from risk of collapse of the adjoining wall of the neighbouring building; it failed to provide adequate temporary support of the adjoining wall of the neighbouring building to ensure it was not at risk of collapse. As a result of the defendant's failings, people, including but not limited to Kerry Burgess, using the premises as a place of work were exposed to risks to their health. 4. A document was tendered which, during the course of submissions, was accepted as an agreed statement of facts. I don't seek to read that document or incorporate it in the transcript but it sets out the course of firstly the commencement of this construction work after consent was granted by the South Sydney Council on the 5 July 2001 and. secondly, alteration ultimately to that plan in September 2001. The agreed statement of facts accepts that Delway Enterprises was in control of the construction site at 82 Parramatta Road, Camperdown. It records that Mr Hannan was the project manager of the development and at the time the sole director of the defendant. There were structural engineers known as Birzulis Associates Pty Ltd engaged, involving Mr Birzulis and Mr Grogan, an engineer and Andrew Brooking, a draftsman. The defendant also engaged architects referred to as CIVITAS Partnership and also retained Mr Kerry Burgess as site construction manager of the development. CIVITAS Partnership completed the bulk of the excavation in mid to late October 2001 but what was explained in evidence as a batter was left in place to allow for subsequent detailed excavation and underpinning. 5. On the 2 November 2001, Mr Marcos who was the principal of Central Autohaus and who occupied the building situated next door at 84 Paramatta Road, raised some concerns about a gap between the floor slab and the eastern boundary wall of his building and he retained on that day a Mr Byatt, a structural engineer who ultimately came to inspect the premises. Mr Byatt expressed some concern as to the long term and short term stability of the embankment at the footing of the premises. He expressed the view at an inspection with Mr Burgess and Mr Grogan that the wall should have underpinning in addition to the underpinning that had already occurred to the western boundary. 6. Between 2 November and 24 November 2001 demolition and excavation work continued to be performed at the premises. Then between 5 November 2001 through to 19 November 2001 inspections were conducted involving Mr Birzulis, Mr Byatt, Mr Kerry Burgess and also Mr Hannan (certainly on the 5 November). Mr Burzulis requested, on the 7 November 2001, a report on the footings of the northern building from geotechnical engineers. It appears from what was said to the Prosecutor from that source when they prepared the report they were unaware of cracks in the neighbouring building. 7. On Wednesday 14 November 2001, Mr Byatt met with Mr Marco to inspect new cracks in the building and on the 19 November Mr Marcos identified a crack in the building and organised an inspection with the building assessor accredited by the council and during the course of that inspection a request was made by Mr Marcos for a stop work order on the development. That was not granted by the council building assessor, there having been some discussions about the necessity for that step. On Tuesday 20 November 2001, there was a further meeting at the premises with the council assessor, Mr Birzulis, Mr Hannan, Mr Burgess and Mr Marcos and then agreement was reached between the parties that shoring of the walls be implemented using a number of raking shores. Also on that day a report from the geotechnical engineer was provided to Mr Byatt. That report did not identify a risk of collapse to the neighbouring building. 8. The parties were involved in some discussions about the details associated with the support to be given to the neighbouring building. That continued through 21 November and on the 22 November Mr Byatt again inspected the premises. He noted work had been done to prepare for footings and he also noted that concrete footings had been undercut. There were further discussions between Mr Byatt and Mr Birzulis about how to address the underpinning. I don't need to go into those details. By Friday 23 November when Mr Byatt again attended the premises with Mr Grogan it was noted that the shoring footing pads has been excavated and were ready for pouring. Mr Byatt discussed with Mr Grogan concrete buttressing as a further measure. 9. It seems all was in place for that support to be completed. But over the weekend, fortunately while nobody was at the site, the wall collapsed. An engineer employed by WorkCover, Mr Turner, has expressed some views as to what may have led to the collapse but again I don't need to enter that field. 10. To assist me in understanding this case beside that rather detailed agreed statement of facts, I have also had provided to me a number of photographs taken at various times during the construction and also a factual report prepared after the wall collapsed. It is common ground in these proceedings that the defendant has no prior convictions. That is a matter that I will return to shortly. 11. I firstly need to deal with the objective seriousness of the offence. As I understood the submissions for the defendant, it was not contested that this was a serious offence. A wall collapsing in a building site I think more than adequately meets the description of a serious offence. There are a number of matters that are put forward by the defendant to assess the seriousness of this offence within the range, namely that the fine has a maximum of $550,000 for a first offender. It is true that this was not a situation where the defendant ignored the warning signs of cracks in the wall or ignored the issues being raised by the operator of the adjoining premises. There were a number of inspections which were conducted and the defendant says - and I accept what is put in this regard - that being an expert area of professional undertaking it was relying on the advice of the consulting engineer in this particular matter. They were progressively becoming concerned about the adjoining wall. One looks at the evidence in its totality, but they thought that the steps that they were taking were adequate. As it turned out they were wrong. 12. At this point it is appropriate to consider the nature of the charge. Although a part - and a significant part - is the lack of supervision, as I have already indicated the heart of the charge really is the failure to take some step to provide temporary support. That does not seem to me to be too large a step while these discussions were taking place as to quite how the neighbouring property would be supported, some temporary support should have been provided and that is essentially the offence to which the defendant has pleaded guilty. 13. During the course of argument an issue arose about foreseeability. This is not a case where we have the assistance of some expert evidence. There is authority for the proposition that foreseeability it is to be approached on an objective analysis rather than being decided by what an engineer or a lawyer would think. When the first crack appeared there were understandably grounds for continuing the investigation. But early in November 2001 it is difficult to say that it was then forseeable that this wall would collapse. As the discussion continued and as other issues arose, further cracks appeared. I think during the course of this period, up until the 24 November a real risk to those working on and around the site could not be discounted so it is in that very general sense that I think there was a degree of foreseeability but not one that would make this charge one that could be described as a very clear and obvious foreseeable risk throughout the entirety of the period of the charge. On that basis I have formed the view, taking all those matters into account, that this is a serious offence. 14. I then need to deal with some related matters. For the defendant there were three affidavits read and in particular an affidavit from Mr Burgess, the site manager and also Mr McGeogh, Occupational Health & Safety consultant. In summary Mr Burgess appeared to be a person with a great deal of experience in the construction industry. He, while being experienced, showed that his concerns for Occupational Health & Safety were reflected in the way the site was securely fenced and he had been involved with Mr McGeogh, as it turns out only very briefly before this incident, in setting up Occupational Health & Safety regimes at the site. He recalls in his affidavit how Mr Marcos from the neighbouring property had complained about a crack in the wall and a door not closing properly. Mr Burgess promptly arranged for an engineer to inspect the building. He refers to relying on engineers especially when further cracks raised his concern but ultimately he was relying on the engineering advice he received as it was not his field and he did not feel confident to query or check the advice given by the engineer. He also notes that in the week before the collapse there was a site meeting with the council inspector, a representative of the defendant Mr Marcos and the inspector from the council declined to shut the site - a matter I have already referred to. He then speaks after the collapse of a close working association with Mr McGeogh in dealing with Occupational Health & Safety on the site. The evidence is there was no further problems on this site to its completion and he refers to co-operation with the WorkCover authorities. 15. Mr McGeogh was an Occupational Health & Safety consultant. He gave evidence as to his extensive qualifications. He came to the site on the 19 November. During the course of his inspection of the site he appears to have formed a favourable view from an Occupational Health & Safety perspective but during the course of that visit Mr Burgess raised with him a concern about support for the wall but perhaps in a general way. Mr McGeogh was not an expert engineer in the field and he did not see anything that warranted any action to be taken at that time. He came to the site after the incident on the 25 November. He dealt with representatives of the CFMEU and with the WorkCover Authority on that day and he sets out the steps that were taken, not only in co-operation with the WorkCover Authority but in developing Occupational Health & Safety rules for the site for the future of the construction. He does say (and Mr Burgess says something to the same effect) in his experience when a wall of this nature commences to collapse there is some warning. The brickwork makes a loud noise and there is usually some time to take action to remove people from the site. I do not find that conclusive. It does not suggest that will always be the case and nobody knows what happened here, whether it was a loud crack or otherwise but that evidence is put forward by the defendant to be taken into account on the seriousness of the offence and I do take that into account. 16. I now turn to both general and specific deterrence. There is no issue here that general deterrence has a role to play and it will in this sentencing exercise. In relation to specific deterrence this defendant appears to have been activated as a corporate entity to undertake this particular construction. I am told by counsel that it intends to undertake no further construction when the property is sold. The company, the defendant, will be deregistered or cease to function. It is then submitted in those circumstances specific deterrence has no role to play. While I accept what has been submitted about the intended future role of the company, those things are not always set in concrete. But I accept that in this case specific deterrence plays a much reduced role in setting the penalty. 17. I then come to consider the subjective features of the defendant in the context of this offence to which it has pleaded guilty. I accept that there is an early plea. As a result of the discussion today in fact a further particular was deleted from the charge. There is no doubt that the defendant in those circumstances had entered an early plea and I see no reason why it should not receive the full extent of the discount that is usually granted for that aspect and I therefore grant a discount of 25 percent on account of the early plea. 18. In relation to the other subjective features, this company has a short history so its lack of a record has to be considered in that context. Nevertheless the project continued and concluded without any particular difficulties. There was admitted co-operation with the WorkCover authorities. I take into account the various steps that were taken with consultants and advisors up until this wall collapsed and the systems of Occupational Health & Safety that Mr McGeogh instituted for the remainder of the project. In those respects I think a further discount of 10 percent is warranted, resulting in a total discount of 35 percent. 19. In those circumstances, the orders I make are: 1. The defendant is found guilty of the offence under section 10(1) of the Occupational Health & Safety Act 2000 to which it pleaded guilty to the amended application for order in matter No IRC 6248 of 2003. 2. The defendant is fined the sum of $78,000 with moiety thereof to the prosecutor. 3. The defendant is to pay the prosecutor's costs in the agreed sum of $12,446.94. 11 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.