Industrial Court of New South Wales CITATION: Inspector Steven Nikolovski v Northpac Constructions Pty Ltd [2010] NSWIRComm 176 PARTIES: Inspector Steven Nikolovski (Prosecutor) Northpac Constructions Pty Ltd (Defendant) FILE NUMBER(S): 1026 of 2007 CORAM: Backman J Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Fines Act 1996 Occupational Health and Safety Act 2000 Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Inspector Dimitri Barlas v C&J Carpentry & Construction Pty Ltd and Others [2009] NSWIRComm 127 Inspector Marie Gregory v Boral Construction Materials Group Limited [2010] NSWIRComm 76 CASES CITED: Inspector Robert Johnston v Hire N' Higher Scaffolding Pty Ltd; Inspector Robert Johnston v Lipman Pty Ltd [2006] NSWIRComm 103 Inspector Steven Nikolovski v Dennis Sewell [2010] NSWIRComm 26 Inspector Steven Nikolovski v Northpac Constructions Pty Limited and Anor [2009] NSWIRComm 204 McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353; (2004) 137 IR 310 HEARING DATES: 1 July 2010 DATE OF JUDGMENT: 3 December 2010 Mr P Skinner, of counsel (Prosecutor) LEGAL REPRESENTATIVES: Mr R Moore, of counsel (Defendant) JUDGMENT: - 19 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Backman J Friday, 3 December 2010 Matter No IRC 1026 of 2007 Inspector Steven Nikolovski v Northpac Constructions Pty Limited Prosecution pursuant to section 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT OF THE COURT [2010] NSWIRComm 176 1 Following a summary defended hearing the defendant, Northpac Constructions Pty Limited (Northpac) was found guilty of an offence under s 8(2) of the Occupational Health and Safety Act 2000 (2000 Act): Inspector Stephen Nikolovski v Northpac Constructions Pty Limited and Anor [2009] NSWIRComm 204. 2 The offence arose out of an incident at a construction site at 300-306 Canterbury Road, Canterbury on 22 June 2005. On that day, Daryl Sadler, a 41-year old bricklayer, was performing bricklaying services at the premises, having been contracted verbally to do so by Dennis Sewell, a sole trader also working at the site. At about 2.40pm Mr Sadler was assisting in the construction of the north-western wall on level three when the wall blew over during a gust of wind. Mr Sadler attempted to push against the collapsing wall, but overbalanced and fell off the edge of the building approximately 2.5m onto scaffolding on the lower level of the building. Other workers in the vicinity at the time managed to escape the collapsed wall. At the time of the accident scaffolding had not been raised from level two to level three in the area where Mr Sadler fell. Mr Sadler was taken to St George Hospital. He suffered serious injuries as a result of the fall: Northpac at [1]. 3 The charge relied on two omissions by Northpac, namely that it: (i) failed to ensure that adequate fall protection measures were in place for bricklayers working on level three of the premises; (ii) failed to adequately supervise work performed on the premises so as to prevent bricklayers from working in an area without adequate fall protection. 4 Both omissions I found were proven beyond reasonable doubt: Northpac at [31] and [36]. 5 The defendant comes before the Court for sentence following the finding of guilt made against it. Having considered the objective criteria in existence before and at the time of the offence, I conclude, for reasons which follow, that the offence is objectively serious. Risk to safety was obvious and reasonably foreseeable 6 The risk to safety was the risk of a fall from height said to result from the absence of catch scaffolding. As I observed in Northpac (at [15]) there was no issue between the parties that on 22 June 2005 catch scaffolding had not been raised to Level 3 in the area where the bricklayers, including Mr Sadler, were working. The bricklayers, however, had an expectation that the scaffolding would be lifted to the balcony area on Level 3 in order to provide them with adequate fall protection while they were working on the floor slab and constructing the walls on that level. At the time of the accident, Mr Sadler was working on the balcony wall where catch scaffolding had not been raised and without any other form of fall protection having been made available. There were some handrails in the vicinity but according to Mr Sadler these had been removed to enable construction of the wall to proceed: Northpac at [16] [17]. 7 The wall under construction was a "green wall", that is, the mortar had not dried, it was therefore inherently unstable and would offer very little resistance in the event someone tripped or fell against it. Observations as to the state of the wall under construction at the time of the incident were set out in the expert report of Neil Monteith. The report provided support for Northpac's contention that Mr Sadler was exposed to the minimal or "extremely low" risk to his safety: Northpac at [23]. I came to a contrary conclusion, expressed in Northpac at [26]: Two observations may be made about the contention. First, Mr Monteith's opinions do not discount the existence of a risk to the safety of Mr Sadler. Secondly, Mr Monteith's conclusion that the risk was "extremely low" appears to be based on the circumstances prevailing at the precise time of the accident. Access to level three was via an internal stairwell. The bricklayers commenced work on level three at about 10am on 22 June 2005. Shortly after, construction of the external wall was commenced by Mr Ramsay and Mr Helmsley. At the time Mr Sadler was constructing the inner wall, the external wall remained a "green" wall. In Mr Monteith's opinion there remained a risk of tripping or falling against the wall, which by reason of its recent construction, would have offered very little resistance. At the time of the accident Mr Sadler may have had limited movement. This is not to say that during the course of the day Mr Sadler's movements were so restricted. The whole of the external wall had been constructed on 22 June 2005 in the area where there was no scaffolding. This means that at all times during the period when the bricklayers were working on level three in that area they were placed at risk to their safety. There was no evidence to suggest that Mr Sadler was working in the centre of level three or in a position where the risk of falling over the edge of the building in the absence of any scaffolding could be considered too remote. Nor, in my view, does the height of the external wall at the time of the accident minimise, or even negative, the risk. It was a "green" wall and therefore, as Mr Monteith concluded, it would have offered very little resistance in the event someone or something fell against it. 8 There was no contest on the evidence that the bricklayers who were working on Level 3 at the time of the accident were very experienced in their field or that the work being undertaken was not complicated. The prosecution case in relation to the second particular of the charge (failure to adequately supervise) was that notwithstanding the collective experience of the workers and the uncomplicated nature of the work, they should not have been permitted to work on Level 3 without the scaffolding having been put in place. As I earlier noted in these sentencing reasons, the bricklayers had an expectation that the scaffolding would be raised to the area where they were working. Mr Ramsay's evidence on the issue was reproduced in Northpac at [34]. 9 Mr Sadler mistakenly believed that the scaffolding had been raised at the time of his accident. His actions in attempting to compensate for the sudden gust of wind that hit the wall and blew it over (causing Mr Sadler to overbalance and fall over the edge) illustrate this point. His evidence on the issue was to the following effect: Q. You said something that when you went through the wall you expected the scaffolding to be there but it wasn't. Can you explain that? A. Well I thought if I pushed this wall over it's only going to go as far as the scaffold, that was my intention to get rid of that, push it over, hopefully it would encourage half of the other part of the wall to fall back that way as well, but not realising there was no scaffolding there, I pushed a bit too hard and over-balanced and went over myself. 10 The effect of this evidence is that Mr Sadler was in the process of constructing the wall in an area several metres above ground with no fall protection, where the wall under construction was inherently unstable, and would offer very little resistance if someone tripped or fell against it. These facts compel the conclusion that the risk of falling off the building was both obvious and reasonably foreseeable, while the wall was under construction. Consequences of the breach 11 The facts establishing the connection between Northpac's omissions and the risk to safety also demonstrate that Mr Sadler's exposure to the risk of falling had every prospect of serious consequences. The relevant principle was succinctly expressed in Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [94]: ... The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, CT90/1214, 30 June 1992 at p 9); Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456; Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131; WorkCover Authority (NSW) v Albury City Council (1999) 90 IR 397 at 408-409; Lawrenson Diecasting Pty Ltd (at 476); WorkCover Authority (NSW) (Inspector Ankucic) v McDonald's Australia Ltd at 428; and WorkCover Authority (NSW) (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) at 22. 12 According to the evidence, Mr Sadler fell off the edge of the building and landed on scaffolding some 2.5 metres below. He suffered very serious injuries which could have been more serious. Mr Sadler landed beside a planter box constructed from bricks. Availability of remedial steps 13 The risk to Mr Sadler's safety could have been obviated if the catch scaffolding had been erected to Level 3 in accordance with the original plan. The purpose of catch scaffolding, it was explained in the evidence was to "catch" objects, as well as any personnel in the event they fell over the edge of the building. Mr Ramsay, in his evidence, said that when he was building the wall on the third level he expected the scaffolding to be up to the level of his feet. He said the purpose of raising catch scaffolding was that, "if you do fall, you don't fall too far". Systems in place prior to offence 14 The nature and extent of a defendant's safety systems in place prior to and at the time of the offence may operate in mitigation of the objective seriousness of the offence. Here, there is little evidence of what, if any, safety systems had been implemented at the Canterbury site prior to the offence. The evidence indicated that Mr Sadler wore a hard hat at the time of the incident. Raymond Touma, now the General Manager of Northpac, was at the time of the offence the director of ABD Investments Pty Ltd (ABD), one of the companies involved in the proposal to enter into a joint venture with regard to the construction at the Canterbury premises: Northpac at [7]. Mr Touma provided an affidavit for the purpose of the sentence proceedings. In his capacity as a director of ABD he visited the Canterbury site, he said, prior to the offence. In relation to those visits, he deposed in his affidavit that he: ... did not observe a lack of care or attention by site management to site safety issues at any time prior to the incident causing injury to Mr Sadler. 15 Mr Touma did not develop this matter in his affidavit beyond his observation, expressed in general terms, that site management did not exhibit a lack of care or attention to safety issues, while he was present at the site. 16 No written documentation or other material evidencing any site safety management plans, safe work method statements or safe work procedures generally, for the work at the Canterbury premises, was tendered during the proceedings. Nicholas Commisso, Northpac's construction manager, who was present at the site at the time of the accident also provided an affidavit in the sentence proceedings. He sought to emphasise the extensive experience of the bricklaying team and said because of this, the team was allowed "considerable discretion ... in relation to the manner in which to perform the work required under the contract". He also sought to emphasise that he had continuing responsibility for safety matters at the site. He said he liaised with Mr Ramsay as the leading hand in terms of the work to be performed, "whenever it was necessary". Mr Ramsay, Mr Commisso said, "knew he could always approach me and did so throughout my time on the job when bricklaying was undertaken". 17 From the foregoing it may be inferred that the prevailing system at the site was one which afforded the bricklayers considerable latitude because of their perceived collective experience as bricklayers. There was no issue during the proceedings that the bricklayers were very experienced tradespeople. The fact remains however that Mr Ramsay asked Mr Commisso to raise the scaffolding up to Level 3, that is, up to the slab level, and the bricklayers, according to Mr Ramsay's evidence, were under the impression that it was going to be raised to the area of Level 3 where they were working. The system in operation at the site was one which appeared to depend upon informal communication between Mr Commisso and the bricklayers, notably Mr Ramsay. Mr Ramsay followed that system on the day of the offence when he approached Mr Commisso and asked him to ensure that the scaffolding was raised to the area where he and others were working. Mr Commisso, however, did not follow through with Mr Ramsay's request and ensure that the scaffolding was raised. 18 In oral submissions during the sentence proceedings on these issues three matters were emphasised on behalf of Northpac. First, that the system in operation at the site, involving the safety of the bricklayers, relied primarily on the experience and expertise of those bricklayers, as well as the construction supervisor (Mr Commisso). Secondly, notwithstanding the experience and expertise of those concerned, they all failed to appreciate that Mr Sadler was placed in a position of risk. Thirdly, protective equipment issues were addressed at the site, as demonstrated by the fact that Mr Sadler was wearing a hard hat at the time of the accident. 19 In my view, there may be instances where a system of safety which relies heavily on the experience and expertise of the workers and allows those workers considerable latitude in the decision-making process may nevertheless operate as an effective safety system. Clearly, it did not, in the circumstances of this offence. According to Northpac, none of the workers, and certainly not Mr Commisso, recognised the risk to Mr Sadler's safety. I have already made a finding that the risk was both obvious and reasonably foreseeable in circumstances where Mr Sadler was working next to a green wall several metres above ground in the absence of scaffolding to arrest his fall, and without any other form of protective fall equipment. In any event, it is not accurate to suggest that the bricklayers failed to recognise the risk to Mr Sadler's safety. They had an expectation that the scaffolding had been raised to the area where they were working. Mr Ramsay had specifically requested Mr Commisso to ensure that this was done. 20 The state of the evidence on this issue is that the system in place to protect the workers at the Canterbury site, taking into account the type of work being undertaken, was inadequate and insofar as it concerned the raising of scaffolding, seriously defective. 21 The only matter relevant to the existence of safety systems at the site prior to the offence, which may operate in mitigation of the objective seriousness of the offence (and which will be taken into account in Northpac's favour), is the third matter relied upon by Northpac concerning adherence at the site to "protective equipment issues", demonstrated by the fact that Mr Sadler was wearing a hard hat at the time of the accident, although it is not known whether this was at his own instigation or pursuant to a direction from Northpac. Deterrence 22 The frequency with which injuries occur at construction sites as a result of falls from height and the often serious nature of those injuries attests to the importance to be placed on the application of general deterrence in the sentencing process. On this issue, I adopt my observations in Inspector Robert Johnston v Hire N' Higher Scaffolding Pty Ltd; Inspector Robert Johnston v Lipman Pty Ltd [2006] NSWIRComm 103 at [11]; and in Inspector Dimitri Barlas v C&J Carpentry & Construction Pty Ltd and Others [2009] NSWIRComm 127 at [16]. 23 Northpac continues to operate in the construction industry which warrants the application of specific deterrence. Northpac's attitude to questions of workplace safety and any steps taken to improve safety following an accident may also be relevant to specific deterrence, the objective here being to deter the particular offender from repeating the offence: Capral Aluminium at [76]. 24 On this latter issue, Northpac, in written submissions stated that it relied on its safety history and record subsequent to the accident and its "ongoing enforcement of standard procedures across projects it has been involved in at all times thereafter". 25 Mr Touma deposed in his affidavit to the following matters: [20] To the best of my knowledge and recollection there has been no incident such as the one in which Mr Sadler was injured at the Canterbury Road site on 22 June 2005 on any of the projects undertaken by Northpac thereafter and that has given rise to further prosecution. [31] Fortunately over a period of approximately five years since the incident on the Canterbury Road site no further incident of a similar kind has arisen. I consider this is not solely due to "good luck" but has emerged through an adherence to a standardised "package" that is supplied and reviewed by regular site inspection. [32] In saying this I do not deny that on some sites from time to time Improvement Notices have been issued by the Authority. [33] Further to my knowledge, one Prohibition Notice was issued in relation to a site under Northpac's control relating to potential fall from height. Annexed hereto and marked "B" is a copy of the Prohibition Notice. [34] To my recollection the circumstances that gave rise to the issuing of this Notice involved the use of a ladder that was considered inappropriate as a work platform to perform work from. It has been an isolated incident. It has also constituted and operated as a warning to site supervision to be constantly vigilant. I view the issuing of the Improvement Notices and the Prohibition Notice as further indication of where matters may be improved upon to ensure site safety and overall industry safety and reinforces for all the need for constant vigilance. 26 The prohibition notice to which Mr Touma referred was issued on 16 August 2006 following an inspection by the WorkCover Inspector of a site at 225 Victoria Road, Gladesville. The reason for issuing the Notice was recorded as: Persons exposed to the immediate risk of injury from fall, and subsequent injury, when working at a height of approx. 6m without adequate fall protection. 27 Mr Commisso, in his affidavit, described a uniform system utilised by Northpac following the 22 June 2005 offence to ensure and maintain workplace safety across its various projects. According to Mr Commisso, this system is constantly assessed and, where necessary, improved upon, as well as being reviewed and checked by himself and Mr Touma. Mr Commisso also said in his affidavit, of the system: [38] Through our implementation of this system of workplace safety we have avoided within Northpac any further serious workplace injury of the kind that was suffered by Mr Sadler. I do not say the system is perfect and from time to time specific incidents have arisen requiring our prompt attention. However, I have and those associated with Northpac have tried to ensure workplace safety at all times. 28 No further information was provided by Mr Touma in his affidavit about the Improvement Notices which he said had been issued "from time to time", or by Mr Commisso in his affidavit with regard to his reference to "specific incidents" which required prompt attention. 29 The prosecutor however, in an affidavit produced all of the Improvement, Prohibition and Penalty Notices issued by WorkCover to Northpac since 22 June 2005. According to the prosecutor, 44 Improvement Notices were issued, six of which related to risks of falls from height. A cursory examination of these six Notices reveals that two were issued to Northpac at the Canterbury site the day after the 22 June 2005. The third Notice, issued on 11 July 2005 at the Canterbury premises, appears to closely mirror the risk to which Mr Sadler was exposed on 22 June 2005, in that it describes the risk of injury from "falls from height" as: Bricklayers are working at approximately 3 metres in height laying bricks overhead on Level 3 (facing Canterbury Road) without adequate fall protection. 30 The fourth Notice also issued on 11 July 2005 at the Canterbury site refers to the risk of a fall from height by reason of workers installing capping on the Level 3 roof with no fall protection. 31 Two further Notices issued on 16 February 2006 and on 9 March 2007 in relation to a site at 29 Epson Road, Rosebery refer respectively to persons, "whilst working at heights dogging crane loads without fall protection to open penetrations"; and, "persons placed at risk of injury from falling approximately 3 metres in height due to open penetration providing ladder access not being guarded". 32 WorkCover also issued to Northpac, after 22 June 2005, three Prohibition Notices, two of which related to a risk of falls from height in the absence of adequate fall protection. 33 Three Penalty Notices were also issued to Northpac, two of which related to risks of falls from height. 34 The nature and frequency of the exposure of workers at Northpac's sites to the risk of falls from height suggest that its approach to workplace safety, at least during the period in which the Notices were issued, from 23 June 2005 until 9 March 2007, has been less than adequate. These matters do not persuade the Court that Northpac is unlikely to re-offend. This is not to suggest that Northpac's efforts to initiate safety procedures after 22 June 2005 will not be taken into account in mitigation of penalty. I will deal with this issue shortly. I should add for completeness that it was not suggested, nor could it be on the state of the evidence, that Mr Touma had any knowledge of the Notices produced by the prosecutor, other than those to which he made specific reference in his affidavit. Maximum penalty 35 Northpac has no prior convictions and therefore faces a maximum penalty of $550,000. Other subjective factors 36 Northpac has responded to the circumstances of the offence by taking steps to initiate ex post facto safety measures. These measures have been set out in Mr Touma's affidavit. According to Mr Touma, after the accident, Northpac formulated a standard "package" (of safety measures) which it utilises at each of its sites. The package, he said, is under constant review, and improvements where identified are incorporated into the package. Mr Touma said that he and Mr Commisso routinely carry out site inspections during which he reviews the material in the package to ensure that it is complete, updated by the site supervisor, and meets the requirements for safety at each site. All personnel entering the site, he said, are now fully trained, inducted, and safe work method statements "as are appropriate" are provided for work to be performed at a specific site. Following Mr Sadler's accident, Mr Touma said that he has sought to emphasise the need for constant vigilance in terms of persons entering a site, in particular those who are engaged to perform work at height. The "package" described by Mr Touma is annexed to his affidavit. It sets out a number of comprehensive measures designed to ensure safety at Northpac's sites. It directs attention to hazards associated with working at height (falls, dropping objects). It also requires sub-contractors to submit safe work method statements which address risk controls, such as, ensuring that scaffolding is erected in accordance with manufacturer's specifications and complies with the relevant Australian Standard. It also sets out procedures for risk assessment and controls, and hazard identification and minimisation. 37 Although the number of Notices issued to Northpac, referred to earlier in these sentencing reasons, may, to some extent, belie the effectiveness of Mr Touma's attempts to emphasise the need for constant vigilance, in particular, with regard to workers performing work at height, he was not required for cross-examination. The Court therefore accepts this uncontested evidence as reflecting favourably on Northpac in mitigation of penalty. Contrition 38 According to Northpac, the extent to which the Court may take into account its expression of contrition or remorse is demonstrated by the assistance rendered to Mr Sadler by Mr Commisso immediately following the accident and the fact that Northpac has not sought to place the blame on any particular person acknowledging instead that it had control of the site as principal contractor. 39 The extent to which a sentencing court may take into account contrition as a mitigating factor is governed by s 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 (CSPA). That provision requires two pre-conditions to be met, first that the offender has provided evidence revealing an acceptance of responsibility for actions the subject of the offence, and secondly, an acknowledgement of any injuries, loss or damage caused by him or her, or any reparation made for any injury loss or damage. 40 The evidence does not expressly indicate an acceptance of responsibility on the part of Northpac for its involvement in the circumstances of the offence, although Northpac acknowledged that it had responsibility for the site as the principal contractor. Mr Commisso, in his affidavit prepared for the sentence proceedings, said that he did not consider Mr Sadler to be at risk of falling at any time while he was working on Level 3 of the building. His affidavit did not mention the absence of the catch scaffolding in the area where Mr Sadler was working on 22 June 2005. 41 Mr Touma did attempt to address the requirements of s 21A(3)(i) of the CSPA, when he described in his affidavit, Northpac's safety "package", and he sought to emphasise that following the accident involving Mr Sadler, Northpac has endeavoured to address potential risks at its site and has given "due and on-going attention to its safety responsibilities" at its sites. The measures put in place following the accident in my view attest to an acknowledgement by Northpac of responsibility for its actions. In written submissions, Northpac expressed "genuine regret at (sic) the incident and its impact upon Mr Sadler". No objection was taken by the prosecution to this submission. Taking these matters into account the Court is prepared to accept that Northpac has expressed remorse in accordance with the provision. Assistance, co-operation and absence of prior convictions 42 Mr Commisso's assistance to Mr Sadler at the scene of the accident will also be taken into account in Northpac's favour, as will its co-operation with WorkCover during its investigation. In addition, Northpac comes before the Court as a first offender. It is entitled, therefore, to leniency normally extended to an offender who is not otherwise adversely recorded. Consistency in sentencing 43 In oral submissions, Northpac contended that the Court should take into account the principle of consistency in sentencing Northpac by reference to the judgment in Inspector Steven Nikolovski v Dennis Sewell [2010] NSWIRComm 26. 44 Mr Sewell was the subject of a separate prosecution under s 9 of the 2000 Act in relation to the incident on 22 June 2005 involving Mr Sadler. There, however, the similarity ends. Mr Sewell, in contrast to Northpac, faced a different maximum penalty ($55,000); pleaded guilty at the earliest opportunity; gave substantial assistance during the proceedings against Northpac (see Sewell at [21] to [24]); no longer operated in the construction industry in New South Wales at the time of his sentencing proceedings, and had a limited capacity to pay a fine. Mr Sewell successfully sought an order under s 10A of the CSPA. No objection was taken to this request by the prosecution. 45 The principle of consistency in sentencing was considered by this Court in Inspector Marie Gregory v Boral Construction Materials Group Limited [2010] NSWIRComm 76 at [58] to [73]. I adopt and apply my observations and analysis in that judgment as significant and relevant to these proceedings. In Capral Aluminium, a Full Bench recognised (at [62]) the relevance of the principle to the sentencing of different offenders with similar characteristics who have committed similar crimes while at the same time emphasising that what must be looked at when sentencing different offenders is whether the sentence is within the range appropriate to the objective gravity of the particular offence and to the subjective circumstances of the particular offender: Capral Aluminium at [63] citing R v Morgan (1993) 70 A Crim R 368 at 371 per Hunt CJ at CL. 46 As I have attempted to outline above, the factors on sentence, both objective and subjective, relevant to Northpac on the one hand and to Mr Sewell on the other, are so dissimilar as to warrant different approaches being taken to penalty. In the case of Northpac, I have made the finding that the offence was objectively serious and, having regard to subjective factors relevant to Northpac's circumstances, the Court may proceed to determine penalty by reference to the appropriate range of penalties available for offences of a similar severity: see Boral Construction at [73]. Capacity to pay a fine 47 Mr Touma, in his affidavit, outlined Northpac's current financial position in support of a contention that it had a limited capacity to pay a fine. The relevant parts of his affidavit which deal with this issue are extracted below: Despite the volume of work that has been undertaken in the period following the incident involving Mr Sadler, in recent times whether arising from the impact of the Global Financial Crisis or otherwise, it has become increasingly difficult for Northpac to find "profitable work" to perform. Currently Northpac is engaged in a single project with no further projects in anticipation upon its project book. This current project has recently been commenced having progressed to the stage of the footings and is located at 34 Victoria Road, Rozelle. It has a total project value of $1.3MM and is due for completion in or about November or December 2010. Northpac presently has no employees. The project identified above is to be undertaken with contractors and subcontractors engaged by Northpac and the number of these persons will vary in terms with the demands of the job. Further, as a consequence of the lack of work Northpac terminated the employment of its then remaining employee, Alex Chidiac in or about November 2009. In terms of its current trading and financial position Northpac is in a position where a substantial fine or penalty may give rise to a need for the Directors to consider whether it should cease to trade. I understand from the directors that Northpac would wish to avoid this situation arising. However, an assessment has recently been made by Northpac's accountants that without continuing support from its shareholders it will fail to be in a position to meet its debts as and when these may fall due. 48 A letter of 9 April 2010 from Northpac's accountants was annexed to Mr Touma's affidavit. It stated: We refer to your request regarding the future viability of Northpac Constructions Pty Ltd based on the Financial Report of the Company for the year ended 30 June 2009 and our comments are as follows: (A) The issued and Paid Up Capital of the company is 200 Ordinary $1 Shares fully Paid. (B) During the year ended 30 June 2009 the company incurred a Net Loss of $282,479.00. (C) Accumulated losses to 30 June 2009 amount to $917,984.00. (D) At 30 June 2009 Liabilities exceed Assets in the sum of $917,784. (E) That the Company has no further contracts in hand. The Company's liabilities exceed its Assets and it has been able to continue through the ability of its Director to raise additional borrowings and in our opinion the Company is technically insolvent. A company becomes insolvent when it cannot pay its debts as and when they fall due. In the event that the Company incurs further costs it is our recommendation that the Company be put into Liquidation. 49 Under s 6 of the Fines Act 1996, the Court is required to consider "such information" regarding the means of a defendant as is reasonably and practicably available, and, "such other matters" as are relevant to the fixing of that amount. 50 A defendant's capacity to pay a fine has been the subject of extensive judicial consideration in this jurisdiction. One principle of some significance that emerges from that consideration is that in pleading an incapacity to pay a fine a defendant should place before a court all the necessary information relied upon in order for the Court to properly consider that information in the exercise of its discretion. Information that is necessary in order for the Court to properly undertake the exercise consists of all reasonably available and relevant financial records such as banking records, taxation records and, where the defendant is a corporation, records such as profit and loss statements and balance sheets. No financial records have been placed before the Court by Northpac in order to support the statements made by Mr Touma and by Northpac's accountants. The Court does not know, for example, how the accumulated losses for the financial year ending 30 June 2009 came about, or how they were calculated. In the absence of any primary source documents dealing with Northpac's financial situation, the Court is unable to properly exercise its discretion in accordance with s 6 of the Fines Act: McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353; (2004) 137 IR 310 at [27]. Orders 51 In Matter No. IRC 1026 of 2007, the Court makes the following orders: (1) The defendant, Northpac Constructions Pty Limited, is convicted of the offence. (2) The defendant is fined $110,000 with a moiety to the prosecutor. (3) The defendant is to pay the prosecutor's costs of the summary defended proceedings and of the sentence proceedings, as agreed or, in the absence of agreement, as assessed. ___________________ 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.