Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Michael Dall v D F McCloy Pty Limited. Prosecution under s 16(1) of the Occupational Health and Safety Act 1986 [2002] NSWIRComm 51 PROSECUTOR Inspector Michael Dall PARTIES : DEFENDANT D F McCloy Pty Limited FILE NUMBER: IRC 3972 of 2000 CORAM: Haylen J CATCHWORDS : Occupational Health and Safety Act 1983 - s 16(1) - plea of guilty - sentencing of co-offenders - culpability of head contractor - primary responsibility borne by sub-contractor - principle of parity of sentencing applied - financial position of defendant considered - previous good record and reputation established - discount for early plea and other subjective factors - penalty imposed Occupational Health and Safety Act 1983 s 16(1) LEGISLATION CITED : Crimes (Sentencing Procedures) Act s 10 Occupational Health and Safety (Certificate of Competency) Regulations 1996 par 26 Doan (Chau Thi Bao) unreported NSW CCA 27 September 1996 Haynes v CI & D Manufacturing Pty Ltd and anor (1995) 60 IR 455 Inspector Carmody v Consolidated Constructions Pty Ltd (2001) 109 IR 316 Lowe v The Queen (1984) 154 CLR 606 CASES CITED : O'Brien (Edward Paul) unreported NSW CCA 7 April 1997 Postiglione v The Queen (1997) 189 CLR 295 at 303 R v Bibi (1980) 2 CrimApp R (S) 177 at 179 Steele (Robert Ernest) unreported NSW CCA 17 April 1977) WorkCover Authority of NSW (Inspector Benbow) v Converquip Pty Ltd (2001) 106 IR 258 WorkCover Authority of New South Wales (Inspector Dall) v R & D Enterprises (Newcastle) Pty Ltd [2001] Hungerford J NSWIRComm 329 - delivered 11 December 2001 HEARING DATES: 11/22/2001 DATE OF JUDGMENT: 03/22/2002 PROSECUTOR: Mr P Skinner of counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT: Mr C Jackson of counsel SOLICITOR: Mr P Hines JUDGMENT: - 26 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HAYLEN J 22 March 2002 Matter No. IRC 3972 of 2000 Inspector Michael Dall v D F McCloy Pty Ltd Prosecution under s 16(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2002] NSWIRComm 51 1 Following the investigation of an accident on a building site on 13 August 1998, Inspector Dall instituted proceedings against the defendant. 2 The defendant entered a plea of guilty to a charge brought under s 16(1) of the Occupational Health and Safety Act 1983. When the matter was listed to hear the evidence and submissions in relation to the plea the parties were able to tender a comprehensive Statement of Agreed Facts. 3 Putting aside the formal matters, the Statement of Agreed Facts contained the following matters: 3. The defendant prior to 13 August 1998 subcontracted to R & D Enterprises (Newcastle) Pty Limited (CAN 063 978 745, c/- K.H. Chartered Accountants, Level 1, 285 Hunter Street, Newcastle 2300 in the state of New South Wales), ("the subcontractor") to carry out works at the Fairfax Publishing construction site at Lot 2, Enterprise Drive, Holmewood Park Estate, South Beresfield in the state of New South Wales ("the site"), to supply all labour, plant and material to complete the installation of roof cladding, wall cladding, gutters, flashings and downpipes at the site. 4. The subcontractor at all material times employed Lee Patrick Sales ("the worker") as a labourer/roof plumber to work at the site. 5. On or prior to 13 August 1998 the subcontractor had been engaged in the affixing of soffit sheeting on the underside of an awning situated near the front of the building at the western side of the site ("the workplace"). 6. The awning referred to in paragraph 3 above was on a slope varying in height from about 9 metres at the front of the building down to about 6.5 metres at the back of the building. 7. Prior to 13 August 1998 the subcontractor had erected at the workplace an aluminium mobile scaffold ("the scaffold") which consisted of two individual bays with a third bay created by the gap between them, (the three bays hereinafter being referred to as the west, centre and eastern bays). 8. The scaffold measured approximately 1.35 metres in depth and 9.3 metres wide. It had an overall height of 7.7 metres approximately on the high side tapering down to 5.64 metres on the low side. 9. The subcontractor had used the scaffold to provide access to the awning to enable it to affix the soffit sheeting to the underside of the awning. 10. Prior to 10am on 13 August 1998 the soffit sheeting on the underside of the awning had been completed and the subcontractor had given instruction for the scaffold to be dismantled. 11. At about 10am on 13 August 1998 the worker, while in the process of dismantling the scaffolding, was standing on a plank in the centre bay and was attempting to pass down a second plank which had formed the platform along with the plank upon which he was standing for the centre bay. The worker was lowering the plank down to another employee of the subcontractor, Benjamin Starkey, who was holding the bottom of the plank when the worker fell and landed on the cement floor below ("the incident'). 12. The plank upon which the worker was standing at the time he was attempting to lower the other plank was situated approximately 5.2 metres above the cement floor. 13. At the time of the incident the centre bay of the scaffold was in the following condition: (i) It did not have any handrail, midrail or toeboard at the level of the plank upon which the worker was standing prior to the fall. (ii) The height of the scaffold exceeded three times its minimum base width and the scaffold did not have outriggers on each corner to ensure its stability. (iii) The scaffolding was not tied off or secured to ensure its stability. (iv) There were no access ladders provided to enable access to the scaffold. 14. When the worker fell the upper part of his body took the initial impact with the concrete floor below and he sustained injuries including multiple fractures to the skull, fractures to both wrists, to the left cheekbone and the jaw, a severed optic nerve, brain damage, vertebrae damage, chest and other associated conditions. 15. As a consequence of the injuries sustained by the worker he was unable to resume employment for a period of in excess of seven days. 16. At all material times on 13 August 1998 the subcontractor, while dismantling the scaffold at the workplace, was carrying out scheduled work within the meaning of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996 in contravention of the requirements of the said regulations. 17. At all material times on 13 August 1998 the managing director of the subcontractor, Dale Green, was the person responsible at the site for the works being conducted there on behalf of the subcontractor. 18. Dale Green was at all material times the holder of a Certificate of Competency in Basic Scaffolding. 19. Dale Green at all material times on 13 August 1998 was the person on behalf of the subcontractor who had responsibility to ensure that employees of the subcontractor working on the site were given appropriate instructions and supervised the way in which all work on behalf of the subcontractor was to be conducted. 20. At the time of the incident Dale Green failed to comply with the provisions of section 26 of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996 in that he failed to provide appropriate supervision at the workplace. 21. At the time of the incident Dale Green failed to comply with the provisions of section 27(1) of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996 in that he failed to ensure that any person supervising scheduled work at the workplace held a Certificate of Competency with respect to basic scaffolding. 22. At the time of the incident an employee of the subcontractor, Brett Arthur McDonald, was a foreman/leading hand in charge of the worker ("the supervisor"). 23. The supervisor instructed the subcontractor's employees, being the worker, Benjamin Starkey, Matthew Thomas and Robert O'Sullivan, to dismantle the scaffold. 24. Dale Green on behalf of the subcontractor had authorised all of the subcontractor's employees engaged at the workplace to work from the scaffold notwithstanding its aforementioned deficiencies. 25. Dale Green on behalf of the subcontractor had authorised the supervisor to instruct the worker and the subcontractor's employees to dismantle the scaffold. 26. At all material times on 13 August 1998 neither the supervisor, the worker nor any of the aforementioned employees of the subcontractor were on a log book system as being trainees carrying out scaffolding work under supervision. 27. At all material times on 13 August 1998 neither the supervisor, the worker nor any of the aforementioned employees of the subcontractor held any certificates of competency with respect to scaffolding. 28. The work being conducted by the subcontractor at the time of the incident which required the use of scaffolding enabling access at a height of greater than 4 metres was conducted by the subcontractor in breach of section 8(2) of the Occupational Health & Safety (Certificates of Competency) Regulation, 1996. 29. At all material times the defendant employed Robert Joseph Herbert as its general foreman ("the General foreman") at the site. 30. The general foreman did not hold any Certificate of Competency with respect to scaffolding at the material time. 31. The general foreman on behalf of the defendant was in charge of all works being conducted at the site including the works being conducted by the subcontractor. 32. The defendant at all material times on 13 August 1998 had control of the site to the extent that it was able to command or direct the subcontractor to comply with relevant safety codes in relation to the scaffold. 33. The general foreman had last observed the scaffold prior to the incident around 9.00 to 9.30am on 13 August 1998. 34. The defendant had its own Safety Policy at all material times on and prior to the incident. 35. Section 3 of the defendant's Safety Policy headed "Accident Prevention Procedure" contained on page 8 a "Scaffolding Check Sheet". This "Scaffolding Check Sheet" contained a list of items which required checking with respect to scaffolding to ensure it complied with relevant standards. 36. The defendant failed to comply with its own procedures with respect to site safety by ensuring the scaffold erected on the site complied with all the requirement set out it its own Safety Policy. 37. The subcontractor was at all material times on and prior to 13 August 1998 conducting building or construction work within the meaning of the Construction Safety Act, 1950. 38. The defendant was at all material times carrying out building or construction work within the meaning of the Construction Safety Act, 1950. 39. The work being carried out at the workplace at the time of the incident was being carried out in contravention of: (i) Regulation 73(1) of the Construction Safety Regulations, 1950 in that the scaffolding was not suitable and safe for the purpose for which it was being used. (ii) Regulation 73(3) of the Construction Safety Regulations, 1950 in that no landings were provided at intervals on the scaffold to prevent persons from falling a distance of in excess of 1.8 metres. 40. The alleged offence under section 16(1) of the Occupational Health & Safety Act, 1983 is that the defendant being an employer failed to ensure that persons not in its employment and in particular, Patrick Lee Sales, were not exposed to risks to their health and safety arising from the conduct of its undertaking while such persons not in the defendant's employment were at its aforesaid place of work in that: (a) The defendant failed to ensure that all works conducted at its aforesaid site, including works conducted on its behalf by subcontractors, and in particular R & D Enterprises (Newcastle) Pty Limited, were carried out safely in that work was carried out from scaffolding that was not suitable and safe in contravention of regulation 73(1) of the Construction Safety Regulations, 1950. (b) The defendant failed to ensure that all works conducted at its aforesaid site, including works conducted on its behalf by subcontractors, and in particular R & D Enterprises (Newcastle) Pty Limited, were not carried out safely in that work was done from a mobile scaffold when there was no proper fencing or other means of securing the safety of non-employees working from the scaffold where they were liable to fall a distance of more than 1.8 metres contrary to regulation 73(3) of the Construction Safety Regulations, 1950. (c) The defendant allowed its subcontractor, R & D Enterprises (Newcastle) Pty Limited to carry out work from a mobile scaffolding which was in excess of 4 metres in height when the non-employee of the defendant doing such work did not hold a recognised qualification in relation to that kind of work contrary to section 8(2) of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996. 4 For the defendant an affidavit of Jeffrey Raymond McCloy was tendered. Mr McCloy was one of the two directors of the defendant, the other director being his father. The company had been incorporated in 1961 and from that time had carried on business as a builder of commercial premises. In 1995, the defendant opened a second office in Sydney, increasing its staff from approximately 30 to over 45. When the injury was suffered by Mr Sales in 1998, the company was still employing approximately 45 people. 5 The expansion into the Sydney market was not successful and a number of jobs resulted in losses to the company. As a result of the difficulties associated with the move into the Sydney market, the defendant stopped taking new jobs in 1999. The defendant no longer carries on business as a builder and no longer has any employees although the company has not been wound up. Mr McCloy said that the company had remained in business principally to honour its obligations in relation to rectification of defects in buildings it had completed, to pursue litigation in relation to a dispute over work performed on one building project in Sydney and, also, because of this prosecution. Mr McCloy and his father now carry on business through another family company which was essentially involved in property development but was not involved in the building industry. 6 In his affidavit Mr McCloy stated that the company was very sorry that Mr Sales had suffered the injuries he did while working on one of the company's sites. He noted that the work site on which this accident occurred was approximately one hectare in area and at the time of the accident there were two employees of the defendant and approximately 45 sub-contractors engaged on the site. 7 Annexed to the affidavit was an accountant's report which in brief outlined the company's financial position. The company's accountant, Mr L P Fehlberg, signed a statement that he was the accountant for the defendant and that annexed documents were a copy of the preliminary accounts for the company for the year ended 30 June 2001. The statement said that the accounts revealed that the company had accumulated "negative equity of $185,387". In answer to a question I raised with counsel for the defendant, I was informed that the defendant was pursuing through litigation an alleged debt of in excess of $300,000, a figure which seems to be supported by an entry in the Profit and Loss Statement for the year ended 30 June 2001 showing a provision for "doubtful debts" showing the sum of $366,886. 8 The defendant also tendered three references attesting to the community involvement of both the defendant company and Mr Jeffery McCloy. THE SUBMISSIONS 9 The prosecutor informed the Court that the defendant had no prior convictions known to the Authority. The Court was also informed that the co-offenders in this matter, R & D Enterprises and the director of that company Mr Green, who were the sub-contractors to the defendant, had pleaded guilty in proceedings before Hungerford J earlier in the year. The judgment in relation to that matter was reserved and had not been delivered at the time of the hearing regarding this defendant. 10 The prosecutor submitted that the defendant was the principal contractor and it bore a separate culpability to that borne by the sub-contractor R & D Enterprises (Newcastle) Pty Ltd. As the principal or head contractor the defendant had a responsibility to ensure the safety of its workers as well as people on their site who were not its workers. 11 As to the gravity of the offence, the prosecution conceded that it was not at the high end of the range. It was assessed to be at the lower end of the spectrum in the sense that that person was not killed but was severely injured and could easily have been killed. Overall, the prosecution assessed the matter as being between the low and the mid-range. The relevant factor here was that it was a very experienced company and, as clear from the photographs of the scaffolding which were in evidence, it was a very obvious unsafe system of work where the sub-contractor's employee fell a long way from a dangerous position. The defendant had its own, simply stated, step-by-step check lists of matters to be attended to in ensuring that scaffolding was safe. If this check list had been applied in the current instance it is doubtful that the accident would have occurred. 12 As to the subjective circumstances, it was said that the documents dealing with the financial state of the defendant, in the affidavit from the defendant's director Mr McCloy, did not indicate an inability to pay the fine. It was submitted that at the time of the offence the defendant seemed to be a fairly large company conducting a large project. 13 It was further submitted that this was a case where general deterrence was a consideration. 14 For the defendant it was submitted that, in terms of relative culpability, this particular offence was in the low range. There was absolutely no denying the seriousness of the risk that the worker was exposed to and there was no denying the seriousness of the injuries. These matters however had to be assessed in the context of the particular facts of this case. The accident occurred while the scaffolding was in the process of being dismantled, and it was common ground that there was no Australian standard in relation to the dismantling of scaffolding. It was accepted that it was an inherently dangerous task: the defendant was not suggesting that the scaffolding could not have been dismantled in a safer manner. 15 Although it was not suggested that it absolved the defendant in any way, it was submitted that this was a very large building site and on the morning of the accident there were in the order of 47 independent contractors working there. R & B Enterprises had a supervisor qualified in basic scaffolding but had delegated the responsibility to an employee of that company who did not have a scaffolding certificate. It was accepted that the defendant had last inspected the scaffolding at 9.30 am and that the accident occurred at 10.30 am. It would appear from the photographs tendered in evidence that the scaffolding was not in an advanced stage of being dismantled when the accident occurred. It was said that it can therefore be assumed that the failure of the defendant lies in not having observed the process of dismantling which occurred sometime after 9.00 am and which was in progress at 10.30 am. The principal failing was one of supervision but the defendant was not suggesting that the scaffolding was adequate in every respect. 16 The problem for the defendant, it was submitted, was that there is just so much supervision that could be appropriately provided. Nevertheless, the culpability of the defendant was not as great as that of the sub-contractor R & D Enterprises. The carelessness of the defendant was essentially a lapse and was not in the nature of an ongoing breach. The record was very good considering that the company was involved in the building industry and had recorded no convictions over a period of nearly 40 years in that industry. They had also co-operated fully with the WorkCover Authority in relation to its investigation. 17 The defendant had also been a contributor to the Newcastle community in terms of voluntary work and financial support to organisations including voluntary organisations. The defendant had expressed its contrition and had also pleaded guilty at the point when appropriate charges had been offered against it. 18 In relation to the defendant's financial state and its trading position, it was emphasised that the defendant had not threatened to wind-up or become insolvent. It was not using the corporate structure to avoid the effect of the charge. The directors were people in a prominent position in the Newcastle and Hunter area and they were certainly not suggesting that if the Court imposed a fine then the defendant would not find some way of paying the fine. It was perfectly clear that the company had honoured its obligations to date in relation to rectification of any building defects in relation to work it would have performed in 1999 and earlier. Essentially, the financial information in evidence simply presented the nature of the company that came before the Court in the sentencing process. DELIBERATION 19 In relation to the objective seriousness of the risk to health and safety involved in this accident, it is undoubtedly correct, in my view, that the sub-contractor bears the major responsibility for its failure to properly dismantle the scaffolding. In a comparative sense, the defendant's culpability is at a lower level but nevertheless it was in a position to impose conditions upon the sub-contractor and to give directions to the sub-contractor which could have entirely avoided this accident. 20 It is somewhat surprising that in a project of this size, involving so many sub-contractors, that the defendant only had two employees engaged. The defendant's general foreman did not possess any relevant scaffolding certificate but it was not a difficult task to enforce the defendant's own check list in relation to scaffolding. I accept the prosecution's submission that had the defendant required adherence by the sub-contractor to the defendant's own policy in relation to scaffolding then this accident would not, or at least might not, have occurred. The nature of the breach is also serious because the defendant actually observed the scaffolding some one and a half hours before the accident. The defendant accepts that the scaffolding was in no proper state and that the safety breaches were numerous. 21 I also accept the prosecution's submission that this is a case where general deterrence is a factor to be considered. In this case the injuries suffered by Mr Sales were serious, and considering the height from which he fell, could easily have been fatal. The failure to abide by the regulations referred to in the Statement of Agreed Facts, the absence of handrails and other safety features and the whole structure of this scaffolding meant that its risk to the health and safety of those working upon it was readily foreseeable. This is another important consideration in weighing the gravity of the offence. 22 The defendant through one of its two directors has expressed its contrition that this accident took place. The defendant's counsel in submissions frankly accepted the seriousness of the risk that the worker was exposed to and stated that there was no denying the seriousness of the injuries. In my view, these concessions also go to the issue of the defendant's contrition and are matters which the defendant is entitled to have taken into account as a mitigating factor in assessing the penalty to be imposed. 23 After a consideration of the earlier listings of this matter, I accept that, at an early stage, when an appropriate charge was framed, the defendant entered a plea of guilty. In the circumstances of this case, I believe that the defendant is entitled to a 25 per cent discount on the basis of its early plea. 24 The defendant has been involved in the building industry for nearly 40 years and has no known prior convictions. I accept the defendant's submission that this is a good record which is to be assessed in the context that the defendant operates in an industry which has numerous inherent dangers for employees working in it. That good record also has to be assessed in circumstances where the prosecution asserts, and which I accept, that for a number of years the defendant has been a company of some significance employing directly up to 45 people and being involved in quite large building projects. In this particular case, the defendant's record therefore assumes significant importance as a mitigating factor. This factor is further supported by the quite impressive evidence of the defendant's good citizenship as a corporation and through its individual directors. 25 The issue of the company's financial status arose in almost a neutral manner. The defendant placed financial documents before the Court indicating that the company was making a loss although it had not sought new business since 1999. The defendant did have outstanding litigation in which, if it were successful, it might recover in the order of $360,000. The defendant did not submit that there was an inability to pay any fine imposed and it asserted quite strongly that it was not using its corporate structure to avoid its obligations in this prosecution. In many respects, the financial status of the company therefore was presented as an objective fact and one of which the Court should be aware. In submissions, counsel for the defendant stated (as I have noted earlier in this judgment) that the directors were prominent in the Newcastle and Hunter area and were certainly not suggesting that if the Court imposed a fine then the company would not find some way of paying the fine. Its financial status was simply relevant to the company's financial state and its capacity to pay. 26 In Haynes v CI & D Manufacturing Pty Ltd and anor (1995) 60 IR 455 the Full Court of the Industrial Court had evidence that the defendant companies had been operating for some 38 years and had never been the subject of charges brought under industrial safety legislation. There had been an expansion of the business but due to the downturn in the building industry the companies had to subsidise the Somersby plant where the fatal accident had occurred: the overall position was that the financial viability of the group was said to be "precarious". A director of the companies had said that he had put a substantial amount of his own money into the enterprise to enable it to survive. In relation to that issue the Court stated: An issue to which the Court was taken obliquely was the manner in which we should deal with pleas of impecuniosity when considering the fine to be levied. The penalty which the legislature has made applicable to breaches of the OHS Act is a fine, and, as was pointed out by Cullen J in Gordon v MIJO (NSW) Pty Ltd (unreported, Cullen J 2 December 1993, Matter No CT 1002 of 1993), the legislature itself introduced a differentiation of penalty by providing that there should be a different penalty for corporate defendants from that for personal defendants. The number of cases decided under the OHS Act where the corporate structure of the defendant has shown to be a little more than the means of distribution of earnings arising from personal exertion, of where, as a matter of corporate structure, the burden of any fine levied would fall on one person or one family ownership, the Court has seen it appropriate to impose a fine substantially less than if the corporation was functioning as a company with assets of a substantial kind (see Gordon v MIJO (NSW) Pty Ltd; Ford v Warrah Reach Pastoral Company Pty Ltd (unreported, Bauer J, 23 September 1994, Matter No CT 1109 of 1993); Robins v C T Plumbing Pty Ltd (unreported, Fisher P, 16 December 1991, Matter No 522 of 1991) and Mauger v Krcmar Engineering Pty Ltd (1993) 47 IR 359). We consider that as precedent has developed there are two strands to the consideration of fines under the OHS Act. The first comes into play when the defendant is an individual and there is no corporate structure. Where the defendant is a company with the structures above considered, the principles and approach adopted in the cases above cited are to be applied. In our opinion, the respondents here are entitled to have the Court take into account, when assessing the fine, the following matters: the company's industries record - · Showed there had been no convictions for the period of 38 years; · There was no indication that the activities of the companies had otherwise come under adverse notice of the safety authorities during any relevant period; Prompt remedial action - · The companies acted promptly to put in place methods of safety assessment and implementation designed to diminish the risk of injury occurring in all of their operations. The cost of the programme is ongoing. Contrition - · The responsible officer of the respondents showed contrition and regret for the accident and the companies acted generously in attempting to reduce the emotional impact of the death on the widow (see Neal v The Queen (1982) 149 CLR 305 at 315) Means of the defendant - · The financial position of the company group indicated that the imposition of heavy fines would be a burden on the financial resources. 27 More recently, the President, Wright J has given consideration to the financial status of a corporation in the sentencing process. In WorkCover Authority of New South Wales (Inspector Benbow) v Converquip Pty Ltd (2001) 106 IR 258 there was evidence of changes in the financial position and operating circumstances of the defendant company after the accident, the subject of the charge under the Act. A variety of corporate changes were explained and there was evidence before his Honour that at the time of the accident the defendant company and the business operated by it was not profitable for the group of companies with which it was associated. The evidence did however demonstrate that the defendant was not a small operation and during the last financial year it had total wages of over $337,000 and was associated with companies of some significance and its overall financial and other circumstances were to be considered in the context that they referred to continuing fixed and floating charges to major banking corporations. In submissions, the defendant in that case related its capacity to pay to a submission made as to s 10 of the Crimes (Sentencing Procedures) Act. There was a real risk, it was submitted, that any order that the Court would make would have no practical effect. It was submitted that such an order would have a potential to be "vacuous" and that it would be inappropriate in such circumstances for the Court to impose a penalty. In regard to these matters the President, Wright J, stated: 53. Section 6 of the Fines Act 1996 makes plain that, in the exercise by this Court of its discretion to fix the amount of any fine, it is required to consider, inter alia, 'such information regarding the means of the accused as is reasonably and practically available to the Court for consideration'. Such matters were considered in Ferguson v Nelmac Pty Ltd and also in Walco Hoist. This was said in the second of those cases (again without setting out the authorities relied upon), at par 27: 'As to the financial position of the defendants, it is to be accepted in terms of general sentencing policy that the means of a defendant are relevant. This consideration may, in appropriate cases, involve a careful examination of the means of the defendant, and consideration of the means of the defendant in fixing the amount of any penalty or fine; … this is, in any event, required by s 6 of the Fines Act … it is to be observed, however, that a consideration of the means of the defendant with the conclusion that a heavy fine may be a burden on the defendant and its financial resources does not necessarily preclude the imposition of a heavy penalty' 54 I accept that the financial situation of the defendant, at least when compared to many cases which come before the Court, is quite unusual. I accept that it has occurred independently of these proceedings or the defendant's culpability under the Act. That is, I accept that the situation of the defendant has arisen from commercial decisions taken bona fide by those controlling it on the basis that the steps were considered to be in the defendant's interests. Nevertheless, to impose a penalty entirely out of step with the objective circumstances of the offence, by having regard as the crucial consideration to the evidence before the Court as to the defendant's financial circumstances, would, I consider, be inconsistent with the role of the Court and would, in particular, represent a failure to impose a sentence with appropriate regard to the importance of deterrence in the sentencing process. In this case general deterrence have a particular relevance. 55 It is clear from what has been said that I consider it inappropriate to provide the benefit of s 10 of the Crimes (Sentencing Procedure) Act and indeed to do so in this matter will be contrary to recent authorities which bind me on that issue; … an important feature of those judgments was the reference to the important public purposes which sentencing under this statute serves. However, to ensure a just outcome in the proceedings before the Court I have taken into account all of the circumstances as to the current operating situation of the defendant and its financial situation. Notwithstanding the submission of the prosecution, I accept those from counsel for the defendant that the defendant at present has no assets, which represents a change in its circumstances. Although it has been essentially a service company it would have been able to pay any fine imposed. 56 The Court would obviously hesitate before it would impose a fine which could be described, as counsel for the defendant did, as "vacuous". However, what the Court must do is take all relevant circumstances into account. In that regard, as well as giving weight to the finding earlier made as to the bona fide commercial decisions which led to the present situation, I should also have regard to the acknowledgement by the defendant that the existence of these proceedings was not the only factor which lead to the defendant being kept in existence. Other considerations include that it had "a place in the market" and that situation is to be seen as having commercial benefit to its associated companies and those controlling them. 57 Taking all those considerations into account, I consider it is appropriate for the Court to impose a fine of significance to reflect the objective circumstances of the offence as found but with regard to all the objective and subjective circumstances to which I shall now return briefly. His Honour went on to impose a fine of $50,000. 28 I propose to be guided in this case by the approaches taken in CI & D and in Converquip. I am inclined to accept the defendant's submission that its decision to decline further business in the building and construction industry was brought about by its lack of success in its expansion into the Sydney market and that it was not designed to merely present a picture of impecuniosity for the purposes of these proceedings. The prosecutor, however, did not cross-examine on any of the documents dealing with the defendant's financial status and I have, therefore, been obliged to proceed upon the narrow factual basis presented by the defendant. 29 Since judgment has been reserved in this matter, Hungerford J has delivered reasons for imposing a fine of $30,000 upon R & D Enterprises (Newcastle) Pty Ltd [see WorkCover Authority of New South Wales (Inspector Dall) v R & D Enterprises (Newcastle) Pty Ltd [2001] NSWIRComm 329 - delivered on 11 December 2001]. In the Agreed Statement of Facts tendered in that prosecution it was accepted that the principal of the corporate defendant, who was a working director, Mr Dale Green, was not present at the immediate workplace at the time of the accident but was working at another part of the site. It was also accepted that at the time of the incident Mr Green failed to comply with the provisions of par 26 of the Occupational Health and Safety (Certificate of Competency) Regulations 1996 and that he failed to provide appropriate supervision of the workplace. Mr Green, on behalf of the company, had authorised all of the company's employees engaged in the workplace to work from the scaffold notwithstanding its deficiencies and further had, on behalf of the company, authorised the supervisor to instruct the workers and the company's employees to dismantle the scaffolding, although neither the supervisor, nor the worker, or any of the employees of the company, were trainees for the purposes of carrying out scaffolding work under supervision, nor did they hold any certificates of competency with respect to scaffolding. 30 Both Mr Green, as a director of the company, and R & D Enterprises (Newcastle) Pty Ltd were charged with offences under the Act. His Honour accepted that any fine imposed on the corporate defendant would essentially be paid by the personal defendant in light of the evidence adduced by the defendants in the proceedings. Hungerford J assessed the objective seriousness of the offence against the corporate defendant to be at the lower end of the range and in the amount of $40,000. His Honour also accepted that the corporate defendant had "modest financial means" and, in mitigation of the amount assessed, his Honour kept very much in mind: the early plea of guilty; co-operation of the corporate defendant with the investigation by the WorkCover Authority; absence of prior convictions for breaches of occupational health and safety legislation; remedial action promptly taken at not inconsiderable expense to implement safe work practices; and, importantly, a full measure of contrition for what occurred. His Honour was prepared in those circumstances to allow a discount of the fine against the corporate defendant of 25 per cent resulting in a fine of $30,000. 31 In relation to the personal defendant, Mr Green, his Honour applied the provisions of s 10 of the Crimes (Sentencing) Procedure Act and dismissed the charge. His Honour regarded the fine against the corporate defendant as sufficient to meet the ends of justice for the identified risks to safety in the incident concerned. Mr Green had no prior convictions of any nature and during evidence his Honour considered that he presented as a sincere, hard working tradesman who was endeavouring to build and maintain a small business in difficult commercial circumstances. Mr Green's brief departure from the scene of the incident at the time it occurred in order to attend to a pressing problem on the site, while being no excuse for the state of the safety detriment which thereby arose, was nevertheless regarded by his Honour as a casual omission which should not result in a criminal record being created against Mr Green. 32 The parties were each given an opportunity to make further submissions in light of the judgment of Hungerford J regarding R D Enterprises Pty Ltd. The defendant submitted that the Court should have regard to the sentence imposed by Hungerford J and the reasons for imposing that sentence. There should not be any disparity in sentences imposed on these co-offenders such as to give rise to a justified sense of grievance in any of the co-offenders having regard to any factors which justify a different sentence. It was stated that a justifiable sense of grievance may be held in relation to a sentence even though it is lighter than the one with which comparison is being made (see R v Bridges, NSW CCA, unreported, 15 December 1995). It was noted that Hungerford J had assessed the objective seriousness of the co-offenders' breach at the lower end of the range and therefore the objective seriousness of the offence committed by D F McCloy should be assessed with reference to this assessment by Hungerford J. It was relevant that the general foreman for the defendant was not a qualified scaffolder, whereas Mr Green, the co-offender, was a qualified scaffolder. It was said to be understandable that some reliance would be placed by the principal contractor, especially on a large building site, on the expertise of a qualified sub-contractor. In circumstances where the failure was primarily a failure to direct supervision by a qualified expert, on a large building site, for a short period of time, the principal contractor's culpability must be less than that of the direct supervisor. 33 The defendant submitted that there was little to justify a different assessment of the subjective factors in mitigation of penalty in relation to D F McCloy as opposed to the co-offender. Given the Court's finding of general remorse in relation to the co-offender, it may be inferred that the need for specific deterrence did not feature prominently in Hungerford J's consideration of subjective features. It was submitted that the same approach should apply in relation to D F McCloy given that the company is no longer active in the building and construction industry. 34 In relation to appropriate penalty the following submissions were made for the defendant: (a) the defendant's objective culpability was less than that of the co-offender, R & D Enterprises, and thus the starting point, prior to taking account of mitigating circumstances, should be less than $40,000; (b) the defendant is entitled to a similar discount to the co-offender in recognition of its early plea of guilty, its excellent safety record over a long period of time, its excellent corporate citizenship, its remorse and its limited capacity to pay; (c) only a significantly lesser penalty than that imposed on the co-offender would accurately reflect the relative culpability of the offenders, and avoid a justified sense of grievance on the part of the present defendant. 35 In addressing the relevance of the decision of Hungerford J concerning the co-offender, the prosecutor submitted that in assessing the objective circumstances, or nature and gravity, of the offence and then the subject circumstances of the defendant, the sentencing Court must consider only the evidence before it. The findings upon evidence of another court in sentencing a co-offender are irrelevant unless arrived at independently by evidence before the sentencing court or as required to understand and analyse the sentence imposed upon the co-offender. For instance, it was irrelevant to the present case that Hungerford J had found that any fine imposed upon the corporate co-offender would essentially be paid by the personal defendant. This finding did not justify a substantially lower fine for the present defendant. The prosecutor accepted that it was open to the Court, if the evidence permitted it to do so, to assess the relative apportionment of culpability between the co-offenders. It was also open to the Court to take the view that the exercise could not be performed upon the evidence before it or that there were such points distinguishing the two co-offenders that a comparison of sentences was not open upon equal terms. 36 The prosecution did not accept that it followed that the defendant had a lower degree of culpability than the co-offender merely because it was the principal contractor rather than the sub-contractor and therefore not as directly involved in the daily arrangements that led to the risk as evidenced by the accident which took place in 1998. Indeed, the prosecutor admitted that the defendant, as the principal contractor, carried the greater responsibility overall for the safety of the site. Considerations of deterrence, both general and particular, may lead to the Court to impose a heavier penalty upon the principal contractor than that imposed upon an "entity lower down the chain". 37 Although D F McCloy Pty Ltd and R & D Enterprises Pty Ltd were not, strictly speaking, charged with the same offence, I believe it is appropriate to treat them as co-offenders and to apply the principles of parity in sentencing when dealing with co-offenders. The offence for each defendant is essentially the same; the charges are brought under different sections of the Occupational Health and Safety Act in recognition of their status in relation to the employees who were performing the work, although the identification of the relevant detriment to safety was largely indistinguishable. 38 It was acknowledged by Gibbs CJ in Lowe v The Queen (1984) 154 CLR 606 that: It is obviously desirable that persons who have been parties to the commission of the same offence should, if other things are equal, receive the same penalty … However, it has also been said that courts should not aim at achieving uniformity of sentence, rather what they should aim at is uniformity of approach (per Lord Lane as cited in R v Bibi (1980) 2 CrimApp R (S) 177 at 179). It has also been said that there is a danger in taking too far the idea of co-offenders receiving the same sentence: that approach may apply if all other things are equal ( Doan (Chau Thi Bao) unreported, NSW CCA, 27 September 1996); Steele (Robert Ernest), unreported NSW CCA 17 April, 1977); O'Brien (Edward Paul) , unreported NSW CCA, 7 April 1997. 39 It is now clear that parity in sentencing is a matter to be determined by having regard to the circumstances of the co-offenders and their respective degrees of culpability. Different criminal histories and custodial patterns may justify a real difference in the time each will serve in prison and like must be compared with like when applying the parity principle (Postiglione v The Queen (1997) 189 CLR 295 (at 303). This approach does not involve apportioning a total penalty as between persons said to be responsible for the occurrence of the accident. In Inspector Carmody v Consolidated Constructions Pty Ltd (2001 109 IR 316), Hungerford J, speaking of the error of that approach, stated: 48. I am of the view that that principle does not require a sharing or apportionment of culpability (and hence of sentence) but rather is designed to ensure that there should not be a marked disparity between sentences given to co - offenders for the offence for which they have been respectively found guilty. As Mason J, as his Honour then was, commented in Lowe v R (1984) 154 CLR 606 at pp 610 - 611): Just as consistency in punishment - a reflection of the notion of equal justice - is a fundamental element in any rational and fair system of criminal justice, so inconsistency in punishment, because it is regarded as a badge of unfairness and unequal treatment under law, is calculated to lead to an erosion of public confidence in the integrity of the administration of justice. It is for this reason that the avoidance and elimination of unjustifiable discrepancy in sentencing is a matter of abiding importance to the administration of justice and to the community. 49. Brennan J added in that same case (154 CLR at p 617): The sentencing of co-offenders always requires a comparison of their conduct and antecedents. The imposition of comparable sentences upon co-offenders whose respective conduct and antecedents warrant disparate sentences is unjust. Similarly, the imposition of disparate sentences upon co-offenders whose conduct and antecedents are comparable is unjust. A justified sense of unfair treatment is produced in either case. 50. In Postiglione v R (1997) 189 CLR 295 at 301, Dawson and Gaudron JJ cited the above comments from Lowe with approval and emphasised that the parity principle was concerned with treating like with like to do equal justice, but 'in the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances'. I see no support in the parity principle, or in sentencing principles generally, which would support the notion suggested here that a sentence should be fixed at a level larger than what it otherwise would have been for the offence because other persons may also have committed an offence in relation to the particular incident. 40 Earlier, at paragraph 43 of the judgment, his Honour had emphasised that what flowed from settled principles as to the sentencing process was that the penalties were to be determined by reference to the offence. It is these principles as discussed in the preceding paragraphs which I intend to apply in dealing with the present plea. 41 In the present case, I accept the defendant's submission that the penalty imposed on R & D Enterprises (Newcastle) Pty Ltd by Hungerford J has relevance for the application of sentencing principles. I also accept that R & D Enterprises Pty Ltd bore a higher degree of responsibility and culpability for this accident than D F McCloy Pty Ltd. It is not appropriate, in my view, that the fine imposed upon the defendant company in the present case should be the same or higher than that imposed by Hungerford J on R & D Enteprises Pty Ltd. A number of the factors considered by Hungerford J were also present in this case. Although more removed from the injured worker, the defendant, as the head contractor, demonstrated contrition and established its good corporate citizenship. Unlike R & D Enterprises Pty Ltd, however, the defendant company had been a sizeable company operating for a long period of time in this inherently hazardous industry. It spoke highly of its workplace practices that for nearly 40 years the defendant had not come to attention for a breach of relevant safety legislation. In those circumstances, and having regard to the principles of parity in sentencing, I believe that the appropriate fine in this case is $25,000. ORDERS 42 I make the following orders: 1. The defendant is convicted of the offence as charged. 2. The defendant is fined an amount of $25,000, with moiety thereof to the prosecutor. 3. The defendant is to pay the prosecutor's costs of these proceedings as agreed, or failing agreement, as ordered by the Court. oo00oo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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