Industrial Court of New South Wales CITATION: Inspector David Waterhouse v East Coast Contracting Services Pty Ltd & Ors [2007] NSWIRComm 178 Prosecutor: Inspector David Waterhouse PARTIES: Defendants: East Coast Contracting Services Pty Ltd David Burgun FILE NUMBER(S): IRC3236; 3237; 3238; 3239 of 2006 CORAM: Kavanagh J CATCHWORDS: OH&S Act - s8(1) & s8(2) - guilty pleas - collapse of awning at building demolition site - failure of company to notify WorkCover Authority of procedure to demolish - failure to comply with Australian Standards for demolition work - failure to file site specific work method - breach of regulations under the Act - objective seriousness of the offence - risk posed by unsafe system of work - principle of totality applicable - two charges against corporate defendant - maximum penalty for each offence $550,000 - penalty imposed - two charges against individual defendant - maximum penalty for each offence $55,000 - penalty imposed LEGISLATION CITED: Occupational Health and Safety Act 2000 Crimes (Sentencing Procedure) Act 1999 Haynes v CI&D Manufacturing Pty Limited (1995) 60 IR 149 Inspector Ken Kumar v David Aylmer Ritchie [2006] NSWIRComm 323 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Markarian v R (2005) 215 ALR 213 Millner v Raith (1942) 66 CLR 1 CASES CITED: Morrison v Powercoal Pty Ltd and Anor (2004) 137 IR 253 R v Thomson; R v Houlton (2000) 49 NSWLR 383 Tyler v Sydney Electricity (1993) 47 IR 1 WorkCover Authority of New South Wales (Inspector Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316 WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited & Anor (No 2) (2000) 99 IR 163 HEARING DATES: 02/07/07 DATE OF JUDGMENT: 26 July 2007 Prosecutor: Mr R.J. Bromwich of counsel Solictiors: Ms J. O'Sullivan WorkCover Authority of NSW LEGAL REPRESENTATIVES: Defendants: Mr D.M. Roberts of counsel Solicitors: Mr T. Steer Moneywise Legal Services Pty Ltd JUDGMENT: - 20 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Kavanagh J Thursday 26 July 2007 Matter No IRC3236 of 2006 INSPECTOR DAVID WATERHOUSE v EAST COAST CONTRACTING SERVICES PTY LIMITED Prosecution under s8(1) of the Occupational Health and Safety Act 2000 Matter No IRC3237 of 2006 INSPECTOR DAVID WATERHOUSE v DAVID BURGUN Prosecution under s8(1) of the Occupational Health and Safety Act 2000 (by virtue of s26(1) of the Occupational Health and Safety Act 2000) Matter No IRC3238 of 2006 INSPECTOR DAVID WATERHOUSE v EAST COAST CONTRACTING SERVICES PTY LIMITED Prosecution under s8(2) of the Occupational Health and Safety Act 2000 Matter No IRC3239 of 2006 INSPECTOR DAVID WATERHOUSE v DAVID BURGUN Prosecution under s8(2) of the Occupational Health and Safety Act 2000 (by virtue of s26(1) of the Occupational Health and Safety Act 2000) JUDGMENT [2007] NSWIRComm 178 1 Two applications for order are brought by Inspector David Waterhouse of the WorkCover Authority of New South Wales (the prosecutor) against East Coast Contracting Services Pty Limited (the defendant company) under s8(1) & s8(2) of the Occupational Health and Safety Act 2000 (the Act) and two further prosecutions against David Burgun (the individual defendant) under s8(1) & s8(2) of the Act by virtue of s26(1). 2 It is alleged in Matter No. IRC3236 of 2006 the defendant company, and in Matter No. IRC3237 of 2006 the individual defendant (by virtue of s26(1)), contravened s8(1) of the Act in that each failed to: ensure the health, safety and welfare at work of all the defendant's employees, in particular David Burgun, Adam Gibbs, Edward Murdoch, Glenn Bradshaw and Tim Fletcher, contrary to section 8(1) of the Act. In particular, the defendants: a) failed to ensure that the premises controlled by the defendant where the employees work, particularly, David Burgun, Adam Gibbs, Edward Murdoch, Glenn Bradshaw and Tim Fletcher was safe and without risks to health, including failing to: i) ensure adequate control of the demolition process; ii) demolish the buildings by sequential methods; iii) to provide adequate overhead protection; iv) to implement a compliant work plan; v) to implement a site specific and/or adequate safe work method statement. b) failed to ensure that systems of work and the working environment of the employees were safe and without risks to health, including failing to: i) ensure adequate control of the demolition process; ii) demolish the buildings by sequential methods; iii) to provide adequate overhead protection; iv) to implement a compliant work plan; v) to implement a site specific and/or adequate safe work method statement. c) failed to provide any adequate instructions, information, training and/or supervision as was necessary for the employees, particularly, Adam Gibbs, Edward Murdoch, Glenn Bradshaw and Tim Fletcher ensure their health and safety at work in relation to the control of the demolition process, including the provision of: i) a compliant work plan; ii) an adequate site specific and/or safe work method statement. As a result of the said failures David Burgun, Adam Gibbs, Edward Murdoch, Glen Bradshaw and Tim Fletcher were placed at risk of injury. 3 The defendants plead guilty to the charges. 4 It is alleged in Matter No. IRC3238 of 2006 the defendant company, and in Matter No. IRC3239 of 2006 the individual defendant (by virtue of s26(1)), contravened s8(2) of the Act in that they failed to: ensure that persons not in its employment were not exposed to risks to their health or safety arising from the conduct of the defendant's undertaking while they were at the defendant's place of work, contrary to section 8(2) of the Act. In particular, the defendants: a) failed to ensure that the premises controlled by the defendant where the employees work, particularly, David Burgun, Adam Gibbs, Edward Murdoch, Glenn Bradshaw and Tim Fletcher was safe and without risks to health, including failing to: i) ensure adequate control of the demolition process; ii) demolish the buildings by sequential methods; iii) to provide adequate overhead protection; iv) to implement a compliant work plan; v) to implement a site specific and/or adequate safe work method statement. b) failed to ensure that systems of work and the working environment of the employees were safe and without risks to health, including failing to: i) ensure adequate control of the demolition process; ii) demolish the buildings by sequential methods; iii) to provide adequate overhead protection; iv) to implement a compliant work plan; v) to implement a site specific and/or adequate safe work method statement. c) failed to provide any adequate instructions, information, training and/or supervision as was necessary for the employees, particularly, Adam Gibbs, Edward Murdoch, Glenn Bradshaw and Tim Fletcher ensure their health and safety at work in relation to the control of the demolition process, including the provision of: i) a compliant work plan; ii) an adequate site specific and/or safe work method statement. As a result of the said failures David Burgun, Adam Gibbs, Edward Murdoch, Glen Bradshaw and Tim Fletcher were placed at risk of injury . 5 The defendants plead guilty to the charges. 6 Mr R.J. Bromwich, of counsel, appeared for the prosecution. The prosecution relied upon: an Agreed Statement of Facts; 12 colour photographs taken by Inspector Sharpin; a Factual Inspection Report dated 15 April 2005; Statement of Inspector Waterhouse dated 27 March 2007, statements of John Sharpin dated 13 April 2005 and 28 April 2006, Weather Records, a diagram of the awning, an affidavit of John Raymond Sharpin sworn 22 June 2007 and an affidavit sworn by David Waterhouse sworn 29 June 2007. The prosecution called one witness, David Waterhouse, who was cross-examined. 7 Mr D.M. Roberts, of counsel, appeared for both defendants The defendants tendered: a report of Mark Dohrmann dated 7 May 2007, sample Work Method Statements dated 27 October 2004 and 29 October 2004, Financial Statements for the year ended 30 June 2006, the current East Coast Safety Management System, an affidavit of David Anthony Burgun sworn 19 June 2007, an affidavit of Adam Ross Gibbs sworn 29 June 2007, an affidavit of Edward Thomas Murdoch sworn 15 June 2007 and Bank Statements of Mr Burgun. No witnesses were called on behalf of the defendants. 8 The Agreed Statement of Facts relied upon is similar for each prosecution and relevantly reads: 1. At all material times, Inspector David Waterhouse of the WorkCover Authority of New South Wales, Level 1, 60-70 Elizabeth Street, Sydney in the State of New South Wales was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 and empowered under Section 106 of the said Act to institute proceedings in the matter. 2. At all material times East Coast Contracting Services Pty Limited (ACN 090 074 221) (hereinafter referred to as the first defendant company) was a company duly incorporated with its registered office situated at 6 Wells Street, East Gosford in the State of New South Wales. 3. At all material times David Burgun (hereinafter referred to as the second defendant) of 12 Lyndsey Street, Shelley Beach, in the State of New South Wales was the sole director of the first defendant company and by virtue of s26(1) of the Occupational Health & Safety Act 2000 (the Act), is taken to have contravened Section 8(1) & (2) of the said Act. 4. At all material times: 4.1 The first defendant company undertook the business of contract demolition; 4.2 The first defendant company had a contract with Gormick Constructions Pty Limited (ACN 074 114 551) (hereinafter referred to as "Gormick"), to provide demolition services at 72-82 Mann Street, Gosford (hereinafter referred to as "the site"); 4.3 The first defendant company and the second defendant utilised the site in the course of their undertakings as a place of work place; 4.4 The second defendant was the sole director of the first defendant company; 4.5 The second defendant, Adam Gibbs, Edward Murdoch, Glenn Bradshaw and Tim Fletcher were employees of the first defendant company; 4.6 The first defendant company held a type DE2 (demolition licence with restriction, Licence No. 203001) (hereinafter referred to as "the demolition licence"). The licence was initially granted on 26 March 2002 and expires on 26 March 2008. 4.7 The second defendant was nominated as the competent person in the demolition licence application. 5. On 30 September 2004, the first defendant entered into a contract with Gormick, to demolish five buildings at the site to allow for future re-development of the site. 6. The site adjoins a public thoroughfare with a footpath alongside the common boundary. Demolition Permit 7. On 4 October 2004, Michelle Sternbeck, office worker employed by the first defendant company, sent a facsimile to WorkCover NSW dated the same day. That facsimile indicated that site fencing was being erected during the period 5 October 2004 to 8 October 2004, with demolition to commence on 11 October 2004 on the site. 8. Regulation 333(1)(a) of the Occupational Health and Safety Regulation 2001 ("the OHS Regulations"), requires that an application to perform demolition work must be lodged with WorkCover in the approved form. 9. The only document received by WorkCover NSW in relation to the proposed demolition work, was the facsimile referred to in paragraph 7 above. It was not in the approved form. Incident 10. The first defendant company commenced demolition on the site by mechanical means on 11 October 2004. On 27 October 2004, the demolition work had progressed to the stage where the majority of the buildings had been removed with the exception of a portion of the roof framing on the south-east corner of the premises. The façade and attached awnings were still intact for the entire length of the Mann Street frontage. 11. Clause 249(1) of the OHS Regulations and clause 2.2.1.1 of the Australian Standard AS 2601-1991 ("AS 2601") (cl 247(1) of the OHS Regulations) requires that when premises are demolished, that demolition should, as far as practicable, be performed in a sequential method. That is, in the ordinary course, structures should be demolished in the reverse order to that of their construction. 12. Applying the above principle the order of demolition at the premises should have been: pull down the awning, then the top of the façade before reducing and removing the supporting brickwork behind. 13. In the second defendant's record of interview dated 25 January 2006 when questioned on sequential demolition, he replied that, "If I had any say in it I would have pulled that façade, the top of the façade down". 14. The awning and façade at the southern end of the street frontage of the site consisted of a corrugated iron awning, which was held up by metal stays to a 230mm cavity brick parapet above. The parapet stood approximately 2000mm above the awning. The awning and façade to the northern end of the street frontage of the site consisted of a timber frame awning sheeted on the top with corrugated iron and on the under side with asbestos cement sheeting. This frame was supported by rolled steel joists extending from the curb line outside in the street to inside the building approximately 1800mm. This rolled steel joist was in turn held in position by a "hoop iron" strap built into the brickwork extending down into the brickwork below and an undetermined volume of brickwork above. The façade above this awning consisted of a light timber frame sheeted with asbestos cement sheeting on both sides and extending approximately 1500mm above it. 15. No hoarding or overhead protective structure had been erected along the Mann Street frontage of the site. The defendants had relied on the existing façade to protect the public. 16. The weather (as per the recordings taken at the Gosford (Narrara) Research Station) around the time of the incident was fine with a maximum air temperature of 32 degrees Celsius. The wind speed at 9 am was 6-km/h, 11km/h at 3pm and building to 48 km/h at 4 pm, which was the maximum wind gust for the day. 17. At approximately 11.25am on 27 October 2004, movement in the awning (which the defendants say were caused by a gust of wind) loosened the brickwork counter-weighing the awning. As the brickwork collapsed it caused the awning at the north end to tilt into the roadway. The awning at the south end of the site became unstable collapsing the 230mm brick parapet above. The collapsing awning and brickwork fell onto the roadway onto an unoccupied motor vehicle parked in the kerb side lane. At the time of the incident there were no pedestrians on the footpath immediately below the awning. 18. The employees of the first defendant company who were on site at the time of the incident included Mr Burgun, Adam Gibbs (Site Foreman), Edward Murdoch (truck driver), Tim Fletcher (labourer) and Glenn Bradshaw (labourer). 19. At the time of the incident, the demolition foreman, Adam Gibbs was in an excavator located approximately 50 metres from the front wall, which collapsed on Mann Street. Mr Gibbs was in the process of separating timber for recycling and cleaning up generally. 20. The second defendant in his record of interview dated 7 September 2005 stated that the awning collapsed because of the gale force winds that day. Further, the second defendant admitted that given the wind, he would have gone about the control of the demolition differently. Systems of Work prior to the accident 21. The first defendant company failed to make an application for a permit to undertake the demolition work within 7 days of the demolition, or at all, as required pursuant to regulation 333(1) of the OHS Regulations. The first defendant company contravened regulation 332(1) of the OHS Regulations as the first defendant company undertook demolition work otherwise than in accordance with a permit, which is an offence. 22. At the time of the incident, the defendants failed to document a Work Plan which is a requirement of Clause 1.7.3 of AS 2601-1991, and in particular requires the following:- Clause 1.7.3(f): "A description of the proposed sequence of carrying out the demolition works and an estimate of the time, in days, that it is likely to take to complete all or each of the stages of the work"; and, Clause 1.7.3(g): "Details of the proposed hoardings and fencing required by Clause 1.5.1.4 of the Standard and of any overhead protection and scaffolding required by Clause 1.5.1.6 of the Standard." 23. At the time of the incident, the first defendant company had a generic safe work method statement which covered in general terms those items that would usually be expected on a demolition site, however that statement did not adequately address control measures to prevent an unplanned collapse. 24. The first defendant company allegedly held site inductions for all new workers and employees on the site, however these were not documented, nor were the workers required to sign off as having completed the site induction. 25. Each day the first defendant company allegedly held on the site what was described as a 'toolbox' meeting involving all personnel on the site to discuss each stage of the demolition. However these meetings were not documented in any way. 26. The daily toolbox meetings were not adequate to ensure the health, safety and welfare at work of all of the corporation's employees as the toolbox meetings failed to adequately ensure protective measures, including overhead protection and provide details of those protective measures as was required to be included in a documented work plan by clause 1.7.3 of AS 2601, including overhead protection (clauses 1.5.1.6). Systems of Work after the accident 27. Following the incident, the first defendant company immediately reported the matter to WorkCover NSW and took steps to prevent the public from entering the area of the collapse. The fallen materials were properly removed in a safe manner. 28. On 28 October 2006, Inspector Sharpin issued a prohibition notice (No. 7-68853), prohibiting the corporation from carrying out any further demolition work on the site until a safe work method statement adequately addressed the demolition risks at the premises. Inspector Sharpin on 28 October 2004 requested that the first defendant company attend to amending the statement so as to include adequate control measures in the event of an unplanned collapse. 29. On 29 October 2004, the first defendant company produced a revised safe work method statement for the premises to the satisfaction of Inspector Sharpin. That amended safe work method statement in relation to securing materials, added the words, "eg bracing of unsecured external materials (re-wind)". 30. The second defendant in a record of interview on 7 September 2005, stated that he "won't sign a [safe work method statement] off every day…I will sign that off for the whole job". However on 16 February 2006, WorkCover NSW received twenty safe work method statements dated from 11 October 2004 to 29 October 2004, all signed and dated by the second defendant. 31. The safe work method statement in existence at the time of the incident was a generic document and was not site specific to the demolition work to be carried out on the site. Australian Standard AS 2601- 1991/The Regulations 32. The defendants failed to carry out the demolition work in accordance with AS 2601 in that it failed to: a) prepare a work plan which complies with clause 1.7.3 of AS 2601; b) demolish by sequential methods as required by clause 2.2.1 AS 2601; c) protect the public as stipulated by clause 1.5 of AS 2601, namely: i) people walking or driving past the demolition work were not protected from the risk of falling objects, ii) throughout the demolition operations, safety was not maintained in public places adjoining the site, and iii) failed to provide a hoarding in accordance with the requirements of AS 2601. d) provide overhead protection as required by clause 1.5.1.6 of AS 2601, namely in addition to the hoarding referred to above, the footpath was not protected by an overhead protective structure and the facing façade was not protected by heavy duty scaffolding. 33. In failing to ensure that the demolition work was carried out in accordance with AS 2601, the defendants contravened s 247 of OHS Regulation 2001. 34. The defendants failed to ensure that the demolition work was carried out sequentially in contravention of clause 249(1) of the OHS Regulation 2001. 35. The defendants failed to ensure that an overhead protective structure be provided over the public walkway on Mann Street in contravention of clause 253 of OHS Regulation 2001. . . 38. The first defendant company does not have any prior convictions. 39. The second defendant does not have any prior convictions. 9 The defendants raised one issue in dispute, namely, the wind gusts on the day of the incident and the contribution played by such weather conditions to the asserted breaches of the Act. Relevant Principles 10 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R (2005) 215 ALR 213. In that case, their Honours were of the view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case, s8(1) & (2) of the Occupational Health and Safety Act 2000 with ss21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor. The court could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 11 Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach on the other. Such an approach involves the sentencing court to engage in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 12 Spigelman CJ in R v Thomson; R v Houlton (2000) 49 NSWLR 383, correctly, given the consideration in Markarian, recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. 13 Proper regard is had to express legislative provisions and to the relevant statutory regime (Markarian at [27]). The object of the Act is to compel attention to occupational health and safety issues so that persons are not exposed to risks to their health, safety and welfare at the workplace. Of particular significance is the effect of s21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing and states, inter alia: . . . (2) Aggravating factors . . . (d) the offender has a record of previous convictions, … (g) the injury, emotional harm, loss or damage caused by the offence was substantial, . . . (3) Mitigating factors . . . (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, … (k) a plea of guilty by the offender (as provided by section 22), (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23), . . . Consideration 14 In consideration of penalty, the Court must examine the objective seriousness of the offence or, as has been said "the nature and quality of the offence". The Full Bench commented in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474): . . . in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" . . . 15 By their own admission, the defendants notified generally the WorkCover Authority as to the intention to conduct demolition work on the site. The general notification submitted failed to include any site specific work method statement or work plan in accordance requirements of the regulations for demolition works under the Act and the Australian Standard (AS) for Demolition Work (clause 1.7.3 of AS 2601-1991). They failed to include any structural support system plan and any description of the bracing materials for the buildings to be demolished (clauses 1.7.3(f) and (g) of AS 2601-1991). The defendants also failed to give a description of the methods of demolition proposed to be used and the equipment for implementing those methods (clause 1.7.3(d) of AS 2601-1991). Further, there was hazardous material in the form of asbestos within the building to be demolished and while the defendant company's director was qualified to remove such hazardous material, no permit to remove asbestos was applied for during the demolition process. Relevantly, hoardings and overhead protection were not included even in the general description document sent to WorkCover. 16 A reverse sequential method is required to be followed in the demolition process. This involves a building being demolished in the reverse order to that which it was constructed. The defendants demolished the structures in a way contrary to clause 2.2.1.1 of AS 2601-1991 which reads: "shall be demolished in the reverse order to that of their construction". On examination, such a requirement is both practical and common sense. There was a failure to follow such methods in the demolition. This failure was at the heart of the incident. 17 The defendants took almost all of the building structure down before attending to the awnings attached to it. Only a partial corner of a double brick wall was left to hold up the awning which hung over a public walkway. In accordance with the statutory requirements, and even applying a commonsense approach, one would expect the awnings to be removed before the major structure was demolished. 18 The charges for which the defendants are brought before the court and to which they plead guilty is "the offence" and that is what the court must address. Hungerford J in WorkCover Authority of New South Wales (Inspector Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316 re-iterated at [43]: . . . the penalty is fixed for the offence found to have been proven. It is, therefore, to the offence itself to which attention is to be directed and not . . . the occurrence of the accident and the contribution of other persons for what occurred. (emphasis added) In Haynes v CI&D Manufacturing Pty Limited (1995) 60 IR 149, the Full Industrial Court in the context of prosecutions under similar provisions in the prior Occupational Health and Safety Act stated (at 158-159): The general duties created by the OHS Act, such as in ss 15 and 16, are clearly directed, we think at obviating "risks" to safety at the workplace; it would therefore be wrong in considering whether an alleged breach of those general duties had been made out in any particular case to reason from the actual occurrence of an accident, even though causing death or injury, as the necessary detriment to safety and as to which a causal connection was to be shown. The accident itself may well, and probably does, manifest the existence of a detriment to safety and will, no doubt, be some measure of the degree of severity of the detriment; but, it seems to us, it is to the essential ingredients of the offence charged which one must attend by assessing the objective facts causing the detriment to safety and the causal connection therewith of the employer. 19 The incident and the contribution of other identities for what occurred can be used as factors to assist the court to determine the culpability of the defendants as charged. The court is, as was Hungerford J in Consolidated Constructions, assisted by the words of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 (at 257): Whilst . . . it was natural to concentrate on the events giving rise to the actual cause of the death, such a concentration exhibits an error in law as was pointed out by the Full Court in . . . C I & D Engineering . . . . The actual event of the accident and injury is relevant; but it goes to satisfy the evidentiary burden that (the) failure gave rise to a risk to health, safety or welfare. 20 The defendants relied on an expert's report to propose that a section of the remaining first storey brick wall collapsed due to gusty wind conditions on the day. It is asserted that wind caused the beam holding in place part of the awnings to be wrenched loose from the wall and thereby the awning to fall. The defendants' expert, Mr Dohrmann, viewed the collapse was "most likely" caused "because of the energy of the prevailing winds". While the weather conditions on the day may well have been windy if not gusty, and the site conditions may well have varied, it is not the cause of the accident which is the focus of this consideration of a breach of the Act. Rather, the court examines the risk posed to the safety of both employees and members of the public from this worksite which employed an unsafe system of work. 21 The failure to implement a site-specific work method along with the failure to provide adequate protection overhead and the failure to demolish the building by sequential methods were all systematic failures. Those failures created the risk to safety and gusty winds may have had an effect on what was already a risky building site. The effect of a wind gust on a partially demolished wall cannot be accepted as alleviating the defendants' liability. Further, I find the defendants failed to adequately instruct, inform and train its employees. The risk to safety arose out of the implementation of an unsafe system of work. 22 The defendant company advanced a further proposition: at approximately 11.10 am on the day in question, Mr Burgun had noted some movements in the awning (above Mann Street), so sensibly he ensured all pedestrians were stopped from going under or near the awning at street level. It was only then that a discussion was held as to a means of securing the parapet to which the awning was attached. At about 11.30 am while that discussion was occurring, the parapet, along with the awning, suddenly collapsed. It was submitted the action taken to prevent injury to passers-by from a potential collapse could also alleviate the objective seriousness of the offence. I reject this proposition. The risk to safety objectively existed by the time this ameliorating action was taken. While it was a sensible move by the company director on site and may subjectively be of credit, it cannot be a significant consideration in any objective assessment of the risk to safety. 23 There was therefore an element of foreseeability to the offence, as the work methods adopted were in total breach of those required by the Australian Standards and the New South Wales Regulations under the Occupational Health and Safety Act 2000 (namely, Regulations 246, 247, 249, 250, 251, 253, 256 and 333). 24 The words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 are apposite to the circumstances (at 5): The gravity and the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However the gravity or otherwise and the potential risks flowing from the breach and its foreseeability are clearly relevant. And as Wright J, President said in WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited & Anor (No 2) (2000) 99 IR 163 at [22]: . . . 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; WorkCover Authority (NSW) (Inspector Hannah) v Wonar Pty Ltd (at 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; Albury City Council (at 408-409); Lawrenson Diecasting Pty Ltd (at 476); WorkCover Authority (NSW) (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383. 25 Photographic evidence revealed severe damage occurred within the streetscape from the collapse of the awning and to vehicles in the area. The damage is indicative of the detriment posed to the health and safety of both employees and members of the public. 26 As to the criminal responsibility of the individual defendant, Starke J in Millner v Raith (1942) 66 CLR 1 said of a provision similar to s8(1) and s26(1) (at 5): They make a director or person concerned in the management of a body corporate responsible as a principal for any act or fact specified in those sections merely because of his relation to the body corporate. and the Full Bench in Morrison v Powercoal Pty Ltd and Anor (2004) 137 IR 253 said at [170]: It is quite apparent why the legislature included s 50 in the Act; without it those natural persons who direct a corporation's acts or omissions that are contrary to the requirements of the Act would avoid prosecution. The section recognises that it is not only directors who may be the guiding lights of corporations but also "persons concerned in the management". and Haylen J in Inspector Ken Kumar v David Aylmer Ritchie [2006] NSWIRComm 323 reasoned as to the role of directors of corporations at [170]: . . . it is well to remember that the Act imposes a strict or absolute liability on employers in relation to safety at the workplace. It is quite consistent with that approach that where a corporation is the employer that strict liability applies to those who are the operative minds of the corporation, namely the directors. There is nothing incongruous or unlikely about such an approach. The legislature has, however, provided a limited defence by allowing liability to be avoided if the director demonstrates that he or she was not in a position to influence the conduct of the corporation in relation to the contravention or, being in such a position, used all diligence to prevent the contravention by the corporation. Those defences focus upon the contravention and, in a sense, recognise that in the "real world" (so heavily relied upon by the defendant) there may be situations where, for a variety of reasons, a director was not able to influence the conduct of the corporation. . . . To secure these objectives the legislature has adopted a system of strict or absolute liability of employers and has adopted provisions like s 26 to emphasise responsibility of persons in the corporate structure to ensure the safety of workplaces. The individual defendant, Mr Burgun, was the sole director of the defendant company. As the controlling mind of the company, Mr Burgun bears a burden for serious breaches of the Act in conducting an unsafe system of work. The plea of guilty acknowledges that burden. 27 The defendant company no longer operates in demolition within the construction industry. Since the incident, the defendant company has extended its operation and diversified its activities to include as its major work task quarrying in both Queensland and New South Wales. The defendant company is therefore still operating in heavy industry using heavy machinery in high risk occupations. Therefore, I believe elements of both specific and general deterrence are required in any consideration for penalty. This is an element applicable to each prosecution against each defendant. 28 Evidence reveals that Mr Burgun is a self-made businessman, who appears to be entrepreneurial. He has now rigorously re-educated himself as to the requirements under the Occupational Health and Safety Act. He tendered a comprehensive Safe Management System Plan, designed with expert advice, and one that will cover the diversification of his company's present operations. 29 I accept the defendant company had conducted induction meetings at the site of the incident for all employees, identified some possible dangers and had at least considered whether it was necessary for hoardings to be erected. I accept toolbox meetings were held on the site on a daily basis and methods were discussed at length at these toolbox meetings. However, Mr Burgun admits the reverse sequential procedures which the defendant company did not follow on this site had been a procedure previously employed at other work sites. At first he failed to accept the premises were not demolished in the required sequential method. He denies that he said to the WorkCover Authority: If I had any say in it I would have pulled that facade, the top of the facade down. In retrospect he accepts the systematic errors in the method of demolition are his responsibility in his failure to comply with s8(1) & s8(2) of the Act. 30 The facts of this case endorse the necessity for rigorous compliance with the notification provisions to the WorkCover Authority under the regulations of the Occupational Health and Safety Act and compliance with the Australian Standards for Demolition. 31 I accept the evidence of Mr Burgun who states: I deeply regret the occurrence of the collapse of the awning and parapet on 27 October 2004. I believe I have done all I can to remedy inconvenience to any person affected by the same. I have ensured the company's compliance and attendance to all safety issues in workplaces in which the company is involved, since the effects of 27 October 2004. I have ensured safety issues involving the company, its employees, subcontractors and members of the public and not compromised or jeopardised in any way in relation to the company's attitude to safety in the workplace and I repeat that the company has completely revised, in what I believe to be an extremely detailed manner, its attendance to work safety. 32 Subjectively there was some co-operation with WorkCover and I do accept there was an endeavour by the defendant company, through Mr Burgun's activities, to right the wrongs after the incident. I accept the incident was immediately reported to the WorkCover Authority. 33 An application is made to the court in consideration of penalty to take account of the financial status of both the defendant company and Mr Burgun. The defendant company's records show it currently has a turnover of over $2 million but the records reveal it shows little profit. The defendant company has a significant wages bill and carries some debt. It purchases and/or leases heavy equipment for its activities. I accept the defendant company's commitments have a significant effect on its profit margin. 34 Mr Burgun's personal financial situation revealed he is presently separated from his wife and pays over $300 a month in child support. He carries a $429,000 mortgage on a property valued at $600,000 and also a personal loan of some $300,000. The personal and defendant company's records have been placed before the court. Mr Burgun is not a man of considerable means although he earns approximately $100,000 in director's fees and wages. The defendant company has a different financial situation to that of the individual defendant. 35 I take into account the financial status of the defendant company and the individual defendant in my consideration of penalty but I do so in the context that I have found these breaches to be most serious offences. 36 An early plea of guilty was entered and I accept it should attract the maximum deduction for the utilitarian value of the plea in accordance with the principles of R v Thomson; R v Houlton (2000) 49 NSWLR 383. 37 Given charges brought under both sections s8(1) and 8(2) against each defendant rely on the same particulars, I apply the principle of totality to the benefit of each defendant. The offences all arise out of the same incident. It is unnecessary to apply the principle of parity given the different maximum penalty under the Act. The maximum penalty against the defendant company is $550,000 and against the individual defendant is $55,000 for each offence. 38 Taking into account the subjective features of the offence but giving weight to the objective seriousness of the offence, I find each defendant guilty for breaches of s8(1) and s8(2) of the Occupational Health and Safety Act 2000. 39 For the breach of s8(1) of the Act, the defendant company is fined in the sum of $110,000. 40 For the breach of s8(2) of the Act, the defendant company is fined in the sum of $110,000. 41 In the application of the principle of totality, the defendant company is fined in the sum of $140,000. 42 For the breach of s8(1) of the Act, the individual defendant is fined in the sum of $35,000. 43 For the breach of s8(2) of the Act, the individual defendant is fined in the sum of $35,000. 44 In the application of the principle of totality, the individual defendant is fined in the sum of $50,000. 45 Each defendant faces two charges, one under s8(1) and the other under s8(2) of the Act. The particulars of each breach, as established, were similar. I have determined the totality of penalty to be ordered against each defendant. Therefore, in the application of the total penalty determined against each defendant in a circumstance each charge was objectively serious and similar, the fine for each breach by each defendant will be similar. 46 The prosecution shall have one order as to costs. Orders 47 Accordingly, the Court makes the following orders: 1. In Matter No. IRC3236 of 2006, I find the defendant company guilty of the offence as charged. The defendant company is fined in the sum of $70,000 with a moiety to WorkCover Authority of New South Wales. 2. In Matter No. IRC3238 of 2006, I find the defendant company guilty of the offence as charged. The defendant company is fined in the sum of $70,000 with a moiety to WorkCover Authority of New South Wales. 3. In Matter No IRC3237 of 2006, I find the individual defendant guilty of the offence as charged. The individual defendant is fined in the sum of $25,000 with a moiety to WorkCover Authority of New South Wales. 4. In Matter No IRC3239 of 2006, I find the individual defendant guilty of the offence as charged. The individual defendant is fined in the sum of $25,000 with a moiety to WorkCover Authority of New South Wales. 5. There shall be only one order as to costs. As there has been no agreement between the parties as to the quantification of the costs, I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. 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.