Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Larobina v Mahmoud Khodr t/as MK Tiling and Anor [2003] NSWIRComm 473 Prosecution: Inspector Larobina PARTIES : Defendants: Mahmoud Khodr t/as MK Tiling Khaled Wehbe t/as MK Tiling FILE NUMBER: IRC3542&3543 of 2002 CORAM: Peterson J CATCHWORDS : Occupational health & safety - s15(1) - pleas of guilty entered - application for relief under s10 Crimes (Sentencing Procedure) Act 1999 rejected - principles of proportionality considred - discounts applied - penalty imposed Occupational Health and Safety Act 1983 s15(1) LEGISLATION CITED : Crimes Act 1900 s556A Crimes (Sentencing Procedure) Act 1999 s10 Inspector Carmody v Power in [2002] NSWIRComm286 WorkCover Authority (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 100 IR 64 Wong v Melinda Group Pty Ltd (1998) 82 IR 118 Wong v R (2001) 207 CLR 584 CASES CITED : Norbis v Norbis (1986) 161 CLR 513 McCarthy v Sell & Parker (2000) 102 IR 355 Thorneloe v Filipowski (2001) 52 NSWLR 60 Inspector Larobina v Jaymay Constructions Pty Limited & Patrick Sahyoun [2003] NSWIRComm 120 Inspector Stewart v Siemans Dematic Pty Ltd (formerly Mannesman Dematic Colby Pty Ltd) (No 2) [2003] NSWIRComm 45 HEARING DATES: 07/29/2003 DATE OF JUDGMENT: 12/19/2003 Prosecutor: Mr D. B. O'Neil of counsel Solicitors: Carroll & O'Dea LEGAL REPRESENTATIVES: Defendants: Mr I. Latham of counsel Solicitors: Warren F. Ball & Co Guildford JUDGMENT: - 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: PETERSON J DATE: 19 DECEMBER 2003 Matter No. IRC3542 OF 2002 INSPECTOR VICTOR LAROBINA v MAHMOUD KHODR TRADING AS M K TILING Prosecution under s15(1) of the Occupational Health and Safety Act 1983 Matter No. IRC3543 of 2002 INSPECTOR VICTOR LAROBINA v KHALED WEHBE TRADING AS M K TILING Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 Each of the defendants here have been prosecuted individually in relation to alleged breaches of s15(1) of the Occupational Health and Safety Act 1983 ('the OHS Act') arising out of an accident in which employees on a building site were injured when riding on an overladen materials hoist which collapsed. 2 Initially pleas of not guilty were entered by each defendant and three days were fixed for hearing, 12 - 14 March 2003. On 12 March 2003 those pleas were amended to guilty and agreed facts were tendered. The matter was stood over for sentencing hearing. 3 The issues which arise are whether the defendants ought be subjected to a money penalty and, if so, in what amount/s. 4 The charges in each matter are identical and are in the following terms: MAHMOUD KHODR (DOB: 1/12/68) T/AS M K TILING of 7 Morris Street, Smithfield in the State of New South Wales being an employer at a construction site located at 371 Hume Highway, Bankstown in the State of New South Wales DID FAIL, on 21 June 2000, contrary to s15(1) of the Occupational Health & Safety Act 1983 (NSW) ("the Act") to ensure the health, safety and welfare at work of all of his employees and, in particular, Mazen Khodr, Bilal Wehbe and Salah Elmir. 5 The agreed facts in Mr Khodr's case are as follows: 1. At all material times the Prosecutor was: (a) an Inspector duly appointed under Division 4 of Part 3 of the Occupational Health & Safety Act 1983 (NSW) ("the 1983 Act"); (b) taken to be appointed as an Inspector under the Occupational Health & Safety Act 2000 ("the 2000 Act") by virtue of Clause 11 of Division 3 to the 2000 Act; and (c) empowered under s.106 of the 2000 Act, as extended by Clause 13 of Division 3 to that Act to institute proceedings in the within matter. 2. At all material times Mahmoud Khodr (DOB 1/12/68) (hereafter "the Defendant") traded as M K Tiling in the State of New South Wales. 3. At all material times, the Defendant, along with his partner, Khaled Wehbe was an employer in the State of New South Wales and provided employees who carried out tiling and labouring duties at 371 Hume Highway, Bankstown in the said State ("the site"). 4. At all material times, Jaymay Constructions Pty Limited (ACN 001 019 585) ("Jaymay") employed John Sahyoun and Patrick Sahyoun at the said site. Patrick Sahyoun was employed by Jaymay as its foreman at the site and John Sahyoun was a director of Jaymay and also carried out supervisory duties at the site. 5. At all material times Booksan Pty Limited (ACN 064 365 895) ("Booksan") was the principal/builder carrying out the construction of 54 home units over three storeys at the site. Jaymay and Booksan are related companies and Booksan carried out development in the building and construction industry and sub-contacted Jaymay as a building consultant to provide building supervision ("the undertaking") at sites including the said site. In return, Booksan was charged a building supervision fee by Jaymay. 6. At all material times John and May Sahyoun were directors of Jaymay. At all material times, the Directors of Booksan were John Sahyoun, Ron Sahyoun, Michael Sahyoun and Lorraine Sahyoun. 7. At all material times Booksan sub-contracted with the Defendant and Khaled Wehbe trading as M K Tiling to carry out tiling and labouring duties at the said site. 8. At all material times the site was the Defendant's place of work. 9. At all material times Patrick Sahyoun held a Certificate of Competency to operate a materials hoist and was the authorised hoist operator at the site. 10. At all material times Booksan owned the transmission technology hoist type TT3 ("the hoist") at the site, which had a rated lift capacity of 500 kilograms. 11. At all material times Mahmoud Khodr and Khaled Wehbe trading as M K Tiling employed the following persons to carry out duties at the site: (a) Bilal Wehbe, aged 18 years, as a Tiler; (b) Salah Elmir, aged 23 years, as a Labourer; (c) Mazen Khodr, aged 25 years, as a Labourer. 12. The Defendant was at all material times a Tiler and partner of the business carried out by himself and Khaled Wehbe. 13. On 21 June 2000 ("the accident date") Khaled Wehbe and the Defendant left the site at approximately 11.30am to purchase a wheelbarrow to carry sand. During their absence from the site a truck driven by Kozhaya Sassine and Peter Sassine, employees of Tile Powers (a division of N & N Universal Pty Limited) attended the site to deliver three pallets of boxes of tiles to Booksan. 14. Bilal Wehbe, Salah Elmir and Mazen Khodr, with the assistance of Patrick Sahyoun, proceeded to unload the pallets from the truck. Mr Patrick Sahyoun instructed these employees of Mahmoud Khodr and Khaled Wehbe trading as M K Tiling to load the tiles onto the hoist at the site. 15. The materials hoist had been previously installed and erected at the site by John Sahyoun, Director of Jaymay. Whilst Mr Sahyoun had building qualifications and held a trade restricted Certificate of Competency Class 1, he did not have a Certificate of Competency to erect and install the said materials hoist. 16. The said employees of Mahmoud Khodr and Khaled Wehbe trading as M K Tiling loaded approximately half a pallet onto the materials hoist platform and were instructed by Patrick Sahyoun to load the full pallet which consisted of approximately 50 boxes of tiles. The number of boxes loaded onto the materials hoist platform was approximately 40-45 boxes of tiles. Patrick Sahyoun then instructed the employees of Mahmoud Khodr and Khaled Webhe trading as M K Tiling to complete the loading of the platform of the materials hoist with the pallet of the tiles and then climb onto the hoist to carry the load to level 3 of the building at the site where the tiles would then be unloaded. 17. Bilal Wehbe was reluctant to climb onto the materials hoist because the platform was clearly under a heavy weight. The Defendant advised Patrick Sahyoun that he believed there was too much material on the materials hoist. Patrick Sahyoun disagreed and instructed the employees to proceed with loading the materials hoist to full capacity. Patrick Sahyoun then instructed all employees to climb onto the materials hoist, assuring Mr Khodr that it was safe to do so. 18. Bilal Wehbe, Salah Elmir, Mazen Khodr and the Defendant then rode the materials hoist, with Patrick Sahyoun operating the materials hoist. Patrick Sahyoun pressed the operation button on the materials hoist and proceeded up to the third floor. Once it reached the third floor, the materials hoist proceeded down approximately half a metre before collapsing. All four persons on the materials hoist fell to the ground, suffering injuries. 19. Mazen Khodr suffered a hair line fracture of his arm, pain in his side and back pain. 20. Salah Elmir suffered a break to the left side of his body and back, a cut to the lip and dizziness. 21. Bilal Wehbe suffered a broken skull, internal bleeding with possible brain damage, a broken right hand, cut to the face and right hand, an 18 centimetre laceration to his back and tissue damage to his right ankle. 22. The Defendant suffered head, arm and back injuries and a fracture to his leg in three places. 23. Following the said accident, WorkCover Inspectors attended the scene and arranged for the tiles that were loaded onto the materials hoist platform to be weighed. The weight was 1210 kilograms. 24. The materials hoist had a sign affixed to it which prohibited the riding of the materials hoist by persons. The employees of Mahmoud Khodr and Khaled Wehbe trading as M K Tiling were unaware of such a prohibition. 25. As John Sahyoun did not hold qualifications to erect the materials hoist it was not correctly erected. The tower was fixed to the building with only one lateral tie instead of two. The vertical prop installed on the balcony to connect the tie was also not fixed in the concrete structure. If the materials hoist had been installed correctly the tower section may not have pulled away from the building structure and fallen. 26. Prior to the accident the employees of Mahmoud Khodr and Khaled Wehbe trading as M K Tiling had not received any instruction, information or training in relation to the safe use of hoists and the importance of not riding on material hoists. 27. It is alleged that the Defendant, Mahmoud Khodr (DOB 1/12/68) trading as M K Tiling breached Section 15(1) of the Occupational Health and Safety Act 1983 (NSW) on 21 June 2000 in that, being an employer at a construction site located at 371 Hume Highway, Bankstown in the State of New South Wales, he did fail to ensure the health, safety and welfare at work of all his employees and in particular, Mazen Khodr, Bilal Wehbe and Salah Elmir ("the said persons"), in that: (a) The Defendant failed to provide a safe system of work in relation to the use of the materials hoist so as to ensure that employees would not ride on the said materials hoist. (b) The Defendant failed to provide such information, instruction, training and supervision, at the site, of the said employees so as to ensure that employees would not travel on the materials hoist. 6 In Mr Wehbe's case, the agreed facts are relevantly identical. However, Mr Wehbe is not identified by them as being present at the time of the collapse or, consequently, as having ridden on the hoist. 7 The defendants are the co-owners of the business name, M K Tiling. They have no prior convictions. The main features of this case exhibit no unusual aspects, the primary question being the assessment of penalty in the context of the usual sentencing principles. However, the defence case has involved a detailed and extensive submission in support of the application of s10 of the Crimes (Sentencing Procedure) Act 1999 in favour of the two defendants. That submission has sought to develop the proposition that the court sitting as a single judge applying the provisions of s10 is not fettered by the decision of the Full Court in WorkCover Authority (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 100 IR 64. 8 In the course of the judgment in Profab, the Full Court adverted to the application of s556A of the Crimes Act 1900, the predecessor to s10, as being available in "only very limited circumstances" (at [19]); "would rarely be available in significant offences against the legislation and any application for the benefit of the provision should be rigorously tested" (at [21]); and also referred to (at [23]): the rare cases in this Court where s 556A might be applied in occupational health and safety prosecutions. Although the exercise of prosecutorial discretion determines the jurisdiction in which proceedings are commenced: see s 47 of the Occupational Health and Safety Act 1983, experience indicates that the most serious prosecutions are usually commenced in this Court. The Full Bench referred to a judgment of Hungerford J in Wong v Melinda Group Pty Ltd (1998) 82 IR 118 which was said to exemplify such rare cases. The Full Bench continued (at [24]): Accordingly, when an application is made to a judge of this Court in sentencing proceedings under the Occupational Health and Safety Act for the exercise of the discretion under s 556A, that will invariably occur in relation to a serious breach of the Act. 9 Mr Latham submitted that this approach added an additional fetter upon the exercise of discretion, one which is not contained within the provisions of s10. As to whether the Commission as presently constituted is bound by the Full Bench decision in Profab, counsel referred to the observations of the High Court in Wong v R (2001) 207 CLR 584 and Norbis v Norbis (1986) 161 CLR 513. 10 Mr Latham referred also to the judgment of the Full Bench in McCarthy v Sell & Parker (2000) 102 IR 355, an appeal from a decision of the Local Court where a s10 order was made in favour of the defendant. The Full Bench concluded that the approach taken in Profab was appropriate in proceedings before an Industrial Magistrate pursuant to s 47 of the OHS Act. It referred to the conclusion in Profab as that "the exercise of the discretion under s556A must be considered as extraordinary and highly exceptional". 11 Marks J in Inspector Carmody v Power in [2002] NSWIRComm286 adverted to this court having "created an additional qualification on the discretion conferred by" s10 and the former s 556A. Accepting that view to be correct, I note that Spigelman CJ in Thorneloe v Filipowski (2001) 52 NSWLR 60 at [170], rejected the submission that the formulation of the approach in Profab suggested legal error. I consider that I am bound by the decision in Profab. In my view any re-visiting of that matter as was suggested by Mr O'Neil of counsel for the prosecutor may have to be taken elsewhere if the defendants wish to persist with it. 12 On 17 April 2003, Boland J gave judgment in two matters involving Inspector Larobina v Jaymay Constructions Pty Limited & Patrick Sahyoun [2003] NSWIRComm 120 being prosecutions under ss16(1) and (19)(1) respectively of the OHS Act. Those matters arose out of the activities of those defendants in the context of the collapse of the hoist involved in the present matter. In the course of his reasons, Boland J said: 23 I detected in the first defendant's submissions a suggestion that the main party at fault in causing the detriment to safety was the second defendant and that mitigates the seriousness of the first defendant's offence. The second defendant is, indeed, seriously culpable and I have taken that into account. What I must consider, however, is the objective seriousness of the offence with which the first defendant is charged. 24 The failures by the first defendant to ensure persons were not exposed to risks were serious and demonstrate a careless disregard for the safety of workers. The risk to safety created by the failures to correctly erect the hoist, to ensure that the hoist was not overloaded and to ensure that persons did not ride on the hoist, is self-evident. Moreover, such failures were likely to - and did - lead to serious consequences. 13 After taking into account objective and subjective features of the matter, his Honour assessed an appropriate penalty as $90,000, which was discounted by 17.5% for the guilty plea and other subjective factors, resulting in a fine of $74,250.00 upon Jaymay Constructions. In relation to Patrick Sahyoun, a cousin of the principals of Jaymay and an employee of Jaymay Constructions, the penalty was assessed as $2,700.00 (the maximum being $3,300.00) reduced by 15% for subjective features to $2,295.00. 14 It was submitted by Mr Latham that the sentence for Mr Sahyoun "must fix the absolute top end of the range of possible penalties for the defendants". 15 Mr O'Neil submitted that the relevant detriment to safety in this case lay in: (a) the overloading of the materials hoist; (b) riding on the hoist; (c) the poor construction of the hoist. There was a real risk of serious injury, including death. 16 It was submitted that the defendants were capable of establishing a safe system by making it clear to employees they were never to ride on the materials hoist. Mr Mahmoud Khodr, being present himself, should not have permitted employees to ride on the materials hoist. Of course, he did himself ride on the hoist and suffer the injuries referred to in the Agreed Facts. 17 Mr O'Neil referred to the judgment of Haylen J in Inspector Stewart v Siemans Dematic Pty Ltd (formerly Mannesman Dematic Colby Pty Ltd) (No2) [2003] NSWIRComm 45 (4 March 2003). Dealing with the relevance of the culpability of others in relation to the same accident, Haylen J said (at [47]): . . . in establishing the overall criminality or culpability of the defendant, the focus remains on the charge and the risk to safety rather than the accident which is evidence of the risk. 18 Haylen J also said (at [45]): . . . The defendant is not able to avoid the seriousness of this offence by suggesting that it could not foresee that skilled and specialist contractors would not abide by their obligations, including contractual obligations, to announce and discuss their work plans at the regular co-ordination meetings and that they would undertake electrical work without notice to the defendant. The decisions of this Court dealing with breaches of the Act are liberally sprinkled with references to the provisions of the Act requiring employers to be pro-active in ensuring the safety and health of workers and warning that those obligations require consideration of the fact that there will be careless, inattentive and even negligent persons who may disregard specified workplace safety measures. Additionally, it is not beyond human experience that acknowledged diligent workers may, from time to time, under pressure of work, adopt some shortcut or alternative method of work which raises a risk to safety. These possibilities are part of common experience and the Act operates to require employers to adopt measures which will ensure the safety of employees even in circumstances arising from carelessness, inattention or workplace skylarking, tempered only by the defences specified in s 53. 19 It was also submitted for the prosecutor that the discount in relation to the defendants' pleas should be closer to 10% than to 25% given the plea came on the first listed day hearing. Conclusions 20 The maximum penalty in respect of individual defendants is $55,000.00. It is inappropriate to treat the penalty imposed on Patrick Sahyoun, where the maximum penalty for an offence against s19(1) is $3,300.00, as the maximum which ought be applied to the defendants here because of their relative culpability. In my view, the parity principle would require that the penalties imposed here should be proportionate to that imposed on Jaymay Constructions. Given Boland J's assessment of penalty in that matter at $90,000, within a maximum range of $550,000, the equivalent here would be $9,000 before discounts, assuming equal culpability. 21 While the defendant, Khaled Wehbe, was not present at the time of the accident, the charges against him and Mahmoud Khodr are concerned with the failure of the defendants to ensure the health, safety and welfare at work of its employees including those injured in the accident. The ignorance of those employees of the prohibition on riding on the materials hoist or in the safe use thereof was a direct result of the failure by the respondents to provide them with suitable instruction in that regard. It is immaterial that Patrick Sahyoun persuaded the employees and the defendant, Mahmoud Khodr, that it was safe to ride in the hoist. For the reasons propounded by Haylen J in Inspector Stewart v Siemans Dematic, the defendants here must also accept partial responsibility for the faulty erection of the hoist. 22 I can see no basis upon which the culpability of the two defendants here might be distinguished from that of Jaymay Constructions and Patrick Sahyoun. It follows that the penalty imposed ought be closer to that which I have identified, namely, $9,000.00 as a primary penalty before discounts. The plea of guilty was not entered at the earliest time. I would afford the defendants a discount of 15% on account of the guilty plea. I take into account also the fact that they have no prior convictions and this is a first offence for each of them. I pay regard to their standing in the community as identified by testimonials in evidence. Each of them appear to be hard working and honourable people. I also take into account their financial means. Their taxable income from the partnership for the year ended 30 June 2003 was only $16,066.00 each. In all the circumstances, I would afford them a discount on penalty of 25%. 23 I assess penalty in each case at $7,500.00 which results in an overall fine in each case of $5,625.00. 24 I convict the defendants of the offences with which they are charged and impose a fine in each case of $5,625.00 with moieties to the WorkCover Authority of New South Wales. The defendants are to pay the Prosecutor's costs in a sum as might be agreed or, in the absence of agreement, as determined by the court. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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