Industrial Court of New South Wales CITATION: Inspector Spence v Michael Carter and Black Cat Roofing Pty Limited [2009] NSWIRComm 161 Inspector Ronald Spence (Prosecutor) PARTIES: Michael John Carter (Defendant in IRC2008/1786) Black Cat Roofing Pty Limited (Defendant in IRC2008/1789) FILE NUMBER(S): IRC1786; IRC1789 of 2008 CORAM: Kavanagh J CATCHWORDS: OCCUPATIONAL HEALTH AND SAFETY - penalty - foreseeability - prosecutions under s 8(2) and s 26(1) of the Occupational Health and Safety Act 2000 - s10 Crimes (Sentencing) Procedure Act - pleas of guilty - head contractor - objective seriousness - instinctive synthesis - asbestos - unsafe safety mesh under roofing - unsafe work methods - no protective equipment - victim impact statement - defendants' capacity to pay fine - apprentice employees/contractors/sub-contractors - lack of appropriate training by sub-contractor - failure to ensure safe work procedure implemented by sub-contractor - no recognition of risk on assessment - gravity of offence - general and specific deterrence - early plea - co-operation with Work Cover - parity LEGISLATION CITED: Occupational Health and Safety Act 2000 Crimes (Sentencing Procedure) Act 1999 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Inspector Downie v Menzies Property (2004) 136 IR 449 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Markarian v R (2005) 228 CLR 357 Morrison v Powercoal Pty Limited (2003) 130 IR 364 Morrison v Powercoal Pty Ltd & Anor (No 3) (2005) 147 IR 117 CASES CITED: R v Gallagher (1991) 23 NSWLR 220 R v Thomson; R v Houlton (2000) 49 NSWLR 383 R v Way (2004) 60 NSWLR 168 Tyler v Sydney Electricity (1993) 47 IR 1 WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Limited (Schmidt J, CT93/1025, 25 February 1994, unreported) WorkCover Authority of New South Wales (Insp Page) v Walco Hoist Rentals Pty Limited & Anor (No 2) (2000) 99 IR 163 WorkCover Authority (NSW) v Profab Industries (2000) 100 IR 64 HEARING DATES: 31 August 2009 DATE OF JUDGMENT: 9 October 2009 Ms P E McDonald of counsel (Prosecutor) WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: Mr I Latham of counsel (Defendants) Gillis Delaney Brown JUDGMENT: - 19 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Kavanagh J Friday 9 October 2009 IRC1786 of 2008 INSPECTOR RONALD JOHN SPENCE v MICHAEL JOHN CARTER Prosecution under s8(2) by virtue of s26(1) of the Occupational Health and Safety Act 2000 IRC1789 of 2008 INSPECTOR RONALD JOHN SPENCE v BLACK CAT ROOFING PTY LTD Prosecution under s8(2) of the Occupational Health and Safety Act 2000 JUDGMENT [2009] NSWIRComm 161 1 These prosecutions are brought by Inspector Ronald Spence of the WorkCover Authority of New South Wales against Michael John Carter and Black Cat Roofing Pty Ltd under s8(2) of the Occupational Health and Safety Act 2000 (the Act) by way of an Application for Order in each matter. 2 It is alleged the personal defendant, Michael John Carter, on 21 September 2006 contravened s8(2) by virtue of s26(1) of the Act in that he failed to: Ensure that people other than its employees, particularly Anton Frank Simic, James Newbery, Ramon Bit-David, Andrew Gavelan, Shane Toomey, Garu Nauman, Edo Nauman, Jared Symonds and Karl Daly were not exposed to risks to their health or safety arising from the conduct of the corporation's undertaking whilst they were at the corporation's place of work contrary to section 8(2) of the Occupational Health and Safety Act 2000. 3 In particular: (a) failed to provide a safe system of work with respect to work at heights in that the corporation failed to ensure that non-employees working at the premises were provided with and/or were using an adequate fall prevention system whilst working at heights; (b) failed to ensure that the systems of work for working on non-residential roofs were carried out in accordance with an adequate Safe Work Method Statement (SWMS); (c) failed to carry out any risk assessment or any adequate risk assessment in relation to work undertaken by non-employees on non-residential roofs; (d) failed to ensure that non-employees received proper training, instruction and information on the risks and hazards associated with working on non-residential roofs; (e) failed to supervise or adequately supervise non-employees working at the premises; (f) failed to ensure that non-employees were adequately experienced or qualified to carry out work on the roof of the premises; (g) failed to ensure that non-employees were provided with adequate personal protective equipment; (h) failed to ensure that its documented safety procedures contained it its Occupational Health and Safety Management System were implemented and maintained at the premises; (h) As a result of these failures, Anton Frank Simic, James Newbery, Ramon Bit-David, Andrew Gavelan, Shane Toomey, Garu Nauman, Edo Nauman, Jared Symonds and Karl Daly were placed at risk of injury, and Anton Frank Simic was seriously injured, whilst at the defendant's place of work. 4 It is alleged the corporate defendant, Black Cat Roofing Pty Ltd, on 21 September 2006 contravened s8(2) of the Act in that it failed to: Ensure that people other than its employees, in particular Anton Frank Simic, James Newbery, Ramon Bit-David, Andrew Gavelan, Shane Toomey, Garu Nauman, Edo Nauman, Jared Symonds and Karl Daly, were not exposed to risks to their health or safety arising from the conduct of the defendant's undertaking whilst they were at the defendant's place of work contrary to section 8(2) of the Occupational Health and Safety Act 2000. 5 In particular: (a) The defendant was engaged by Barjema Pty Ltd to inter alia remove and replace the roof, wall cladding, wire flashing and box gutters of a warehouse located at the premises ("the undertaking"); (b) The defendant failed to provide a safe system of work with respect to work at heights in that the defendant failed to ensure that non-employees working at the premises were provided with and/or were using an adequate fall prevention system whilst working at heights; (c) The defendant failed to ensure that the systems of work for working on non-residential roofs were carried out in accordance with an adequate Safe Work Method Statement (SWMS); (d) The defendant failed to carry out any risk assessment or any adequate risk assessment in relation to work undertaken by non-employees on non-residential roofs; (e) The defendant failed to ensure that non-employees received proper training, instruction and information on the risks and hazards associated with working on non-residential roofs; (f) The defendant failed to supervise or adequately supervise non-employees working at the premises; (g) The defendant failed to ensure that non-employees were adequately experienced or qualified to carry out work on the roof of the premises; (h) The defendant failed to ensure that its documented safety procedures contained in its Occupational Health and Safety Management System were implemented and maintained at the premises; (i) As a result of the defendant's failures, Anton Frank Simic, James Newbery, Ramon Bit-David, Andrew Gavelan, Shane Toomey, Garu Nauman, Edo Nauman, Jared Symonds and Karl Daly were placed at risk of injury, and Anton Frank Simic was seriously injured, whilst at the defendant's place of work. 6 The defendants plead guilty to the charge. 7 Ms P.E. McDonald of counsel appeared for the prosecution and Mr I.C. Latham of counsel appeared for the defendants. The prosecution relied upon an Agreed Statement of Facts, Photographs, Factual Inspection Report, the Prior Conviction Record of the company, Improvement Notices, Section 62 Notice dated 12 January 2007, letter dated 16 October 2006 with an Engineer's Report, the 2007 Balance Sheet for Black Cat Roofing and a Victim Impact Statement. 8 The defendants tendered the affidavits of Michael Carter and Jeanine Carter sworn 15 May 2009 and an affidavit of Donna Jane Child (nee Hawes), Black Cat Roofing Pty Ltd's Bookkeeper, sworn 5 June 2009. Inspector Spence and Michael Dempsey, a financial consultant, were cross-examined. 9 The Agreed Statement of Facts relevantly reads: Black Cat Roofing 2. Black Cat Roofing Pty Limited [ACN 001 945 035] ("Black Cat Roofing") is and was, at all material times a corporation whose registered office is situated at 31 Ross Street, Glebe in the State of New South Wales. 3. At all material times Black Cat Roofing carried on the business of a roofing contractor. 4. At all material times Michael John Carter ("Carter") and Jeanine Cornelia Carter were the directors of Black Cat Roofing. 5. On or about 10 August 2006 Black Cat Roofing was engaged by Barjema Pty Ltd ("Barjema") to inter alia remove and replace roof sheeting from a warehouse roof that it owned at 54-60 Belmore Road, Punchbowl in the State of New South Wales ("the premises"). 6. At all material times, the premises were Black Cat Roofing's place of work. 7. At all material times Black Cat Roofing was an employer and employed Jay Morrison Fox as its Production Manager at the premises. 8. At all material times William Bevan Thompson ("Thompson") carried on the business of a roofing contractor and traded under the business name "H.C. Roofing". 9. On or about 18 September 2006 Black Cat Roofing engaged Thompson as a roofing subcontractor to inter alia remove and replace roof sheeting from the premises. 10. At all material times Thompson employed Anton Frank Simic ("Simic"). The Undertaking 11. On or about 10 August 2006 Barjema engaged the services of Black Cat Roofing to inter alia remove asbestos roof sheeting from its warehouse roof at the premises and replace it with new metal roof sheeting. There was approximately 8,695 sqm of roof and wall cladding work to be carried out by Black Cat Roofing. 12. The warehouse had a saw-toothed profile roof and was approximately 120 metres long and 55 metres wide with asbestos roof sheeting, asbestos wall cladding and some alsynite sheets used in the vertical walls of the saw-tooths and as skylights in the roof. Skillion-roofed asbestos sheeted offices were located on the western side of the warehouse. A skillion-roofed metal-sheeted office was located on the southern side of the warehouse. 13. Internally the lowest point of the roof was approximately 4 metres from the warehouse floor and the highest point of the roof internally was approximately 7.5 metres from the warehouse floor. The warehouse floor was concrete. There was wire mesh beneath the asbestos roof sheeting. 14. As part of its undertaking Black Cat Roofing carried out inter alia the following: (a) It inspected the premises for the purpose of measuring and quoting. (b) It ordered new metal roof sheeting. (c) It arranged for the delivery of the new metal roof sheeting to the premises. (d) It engaged Brolrik Pty Ltd trading as Botany Cranes & Forklift Services ("Botany Cranes") to lift the new metal roofing sheets onto the warehouse roof. (e) It prepared a Safe Work Method Statement (SWMS) for the undertaking. (f) It provided the license for the removal of the asbestos. (g) It engaged Thompson, to inter alia remove asbestos roof sheeting from the warehouse roof and replace it with new metal roof sheeting. 15. On or about 15 September 2006 Botany Cranes lifted and positioned the new metal roofing sheets onto the warehouse roof. The crane was positioned in a way that prevented the metal roofing sheets being positioned on each of the roof's saw tooth as intended. As a result Thompson as part of his undertaking was required to reposition the new metal roofing sheets from one location on the warehouse roof to another in preparation for their installation. 16. On 21 September 2006 Thompson employed Simic as a roofer's labourer for the purpose of repositioning the metal roofing sheets. Simic answered an advertisement placed in the newspapers by Thompson. Thompson interviewed Simic over the telephone on 20 September 2006. 17. Simic was 43 years of age and had minimal experience as a roofer's labourer. He had minimal experience in working on roofs including asbestos roofs. 18. Thompson also engaged Andrew Gavelan, James Newbury, Ramon Bit-David, Shane Toomey, Garu Nauman, Edo Nauman, Jared Symonds and Karl Daly ("roof labourers") to assist him with his undertaking of repositioning the new metal roofing sheets from one location to another on the roof on the warehouse. Incident on 21 September 2006 19. On 21 September 2006 Simic commenced employment with Thompson between 6.00 am and 6.30 am. It was his first day of employment at the site. At approximately 7.45 am Simic, whilst working on the warehouse roof, fell through an asbestos roof sheet and the wire mesh beneath it, falling approximately 7.5 metres onto the concrete floor below. 20. At the time there were no anchor points or safety lines on the warehouse roof and Simic was not provided with a safety harness. No personal protective equipment was provided to Simic. 21. At the time of the incident all of the roof labourers were on the warehouse roof. 22. The site of the incident (measured internally) was approximately 70 metres from the western side of the warehouse and approximately 27 metres from the northern side of the warehouse. 23. Simic suffered multiple fractures of the pelvis (requiring surgery and insertion of screws), a fracture of the right forearm, multiple fractured ribs on the left side, fractures to the L3 and L5 vertebra and extensive damage to 6 anterior maxillary teeth, including both front teeth (requiring extensive orthodontic procedures). He was admitted to Liverpool Hospital on the day of the incident and discharged on 27 October 2006 (36 days later) to the Metropolitan Rehabilitation Hospital and discharged from their care on 7 December 2006 (41 days later). After discharge Simic underwent intensive physiotherapy and hydrotherapy treatment to increase his physical capacity. Simic passed away on 6 May 2008. The system of work prior to the incident 24. At the time of the incident Black Cat Roofing had four employees including its two directors. Jay Morrison Fox ("Fox") was employed as a Production Manager and Jenny Sinafea was employed as a receptionist. Black Cat Roofing provided roofing expertise in the form of its director Carter and its production manager Fox. 25. Prior to the incident Black Cat Roofing, through Carter and Fox, inspected and assessed the site. During those inspections the hazard of brittle roof was identified. 26. Michael Hugh Dempsey ("Dempsey") was subcontracted by Black Cat Roofing to assist Carter in measuring and quoting the job. He also identified the roof as being brittle. 27. The hazard of the brittle roof was not documented and does not appear in Black Cat Roofing's SWMS. 28. Newbery and Gavelan were informed on the day of the incident that the roof was brittle. The remaining labourers were not told about the brittle roof. Thompson inducted each of the labourers including Simic as to the manner by which they should walk on the roof. All of the labourers were advised to only walk on the "screw lines" which attached the roofing to the purlins. The workers were warned that if they did not, the roof may not support their weight and they may fall through. All of the labourers were advised not to walk on the alsynite as this could not support their weight. 29. Simic was not told about the brittle roof. 30. An assessment was carried out by Black Cat Roofing on the wire mesh beneath the asbestos roof sheeting as part of its quotation process. Carter and Dempsey inspected the wire mesh from the ground at the lowest point of the roof, being 4 metres high. The maximum height of the roof was approximately 7.5 metres from the concrete floor. Some sections of the wire mesh were inspected. 31. Fox on behalf of Black Cat Roofing prepared a SWMS on 24 August 2006 without any input by or consultation with Thompson. The SWMS was labelled "Replacement of the Asbestos Roofing and Box Guttering". It was not amended to address the repositioning of the new metal roof sheets positioned on the warehouse roof by Botany Cranes. 32. Black Cat Roofing did not formally assess the risk to safety presented by the presence of the brittle roof. The SWMS was inadequate in that it failed to identify the hazard of the brittle roof. 33. Black Cat Roofing did not inform Thompson through its SWMS of the hazard of the brittle roof. There was no transfer of information between Black Cat Roofing and Thompson to ensure that all hazards, (including the brittle roof) had been documented. 34. Black Cat Roofing failed to review its SWMS to ensure that all relevant information was available with regards to all hazards being identified and appropriate control measures established. 35. Thompson had no training in the preparation of a SWMS. 36. Black Cat Roofing failed to ensure that Thompson had sufficient training and knowledge to review and implement the requirements of an SWMS. 37. Black Cat Roofing failed to ensure that a SWMS was prepared for the repositioning of the new metal roof sheets. 38. Simic was not provided with a copy of the SWMS. 39. Black Cat Roofing did not conduct a formal risk assessment prior to the commencement of the work. 40. Black Cat Roofing failed to ensure that its subcontractor hired sufficiently trained and experienced personnel to work as roof labourers. 41. Black Cat Roofing failed to provide adequate instruction and information on the hazard of the brittle roof to Simic other than the instructions provided by Thompson once the roof labourers were already on the roof. 42. Black Cat Roofing failed to ensure that adequate controls for fall prevention were in place in the form of anchor points and safety lines. Thompson was not trained in the installation of anchor points and Black Cat Roofing failed to ensure that Thompson was sufficiently trained to install anchor points and safety lines. 43. Black Cat Roofing failed to verify and determine if Simic or the other roof labourers were experienced in the use of safety harnesses or fall arrest systems. No verification was made by Black Cat Roofing to determine if Simic or the other labourers had any rescue training from the safety harness. 44. Black Cat Roofing provided no training to Simic or the other labourers in rescue procedures from a safety harness. Black Cat Roofing failed to provide Simic and the other roof labourers with adequate personnel protective equipment and failed to provide adequate supervision to Simic and the other roof labourers whilst they were working on the warehouse roof. 45. Black Cat Roofing failed to ensure its documented procedures contained in its Occupational Health and Safety Management System were followed and implemented especially in relation to "Risk Management Procedure" PR-BCCR-02. Under this procedure contractors are obliged to complete "Hazard Inspections" which include a "Risk Assessment – Check list" and a "Work Place Check List". The system of work after the incident 46. After the incident all personnel were requested to sign the existing SWMS prepared by Black Cat Roofing on 26 August 2006. 47. SWMS were amended to address the issue of anchor points. An engineer's report was obtained identifying suitable locations for anchor points and the method to install them. The amended SWMS also addressed safe access to the warehouse roof and working areas. 48. A crane was hired from Botany Cranes to re-position the metal roof sheets. Black Cat Roofing supervised the re-positioning of the metal roof sheets by Botany Cranes. 49. Carter supervised the completion of the removal of the asbestos roof sheeting and the replacement with metal roof sheeting. All personnel were inducted into the amended SWMS. Safety harnesses were provided and all personnel were instructed to wear them for the re-positioning and removal of the roof sheets. . . . Facts in Dispute 10 Some facts were put in dispute by the defendants. The court accepted, after hearing arguments, the following further facts: 51. The wire mesh in this area was in poor condition. 52. A(n) ... assessment was carried out by Black Cat Roofing on the wire mesh beneath the asbestos roof sheeting as part of its quotation process. 53. Parts of the wire mesh from the site of the incident showed advanced stages of corrosion. An adequate inspection of the condition of the wire mesh beneath the roof sheeting was not carried out by Black Cat Roofing to ensure the structural integrity of the wire mesh throughout the warehouse roof. 54. The SWMS failed to provide adequate control measures for personnel required to work at heights for the repositioning of the sheets. 55. ... 56. Carter was unable to provide a copy of the contractor's agreement and contractor induction program referred to in the OH & S Management System. Carter... made two inspection of the site in order to measure it... Carter was not on the premises at the time of the incident. 57. Black Cat Roofing failed ... to ensure the sub-contractor completed the Risk Assessment Check List, the Hazard Inspection or the Work Place Check List. Relevant Principles 11 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s8(2) of the Occupational Health and Safety Act 2000 with ss21A, 22, 23 and 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, and 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). 12 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 pursuant to which the sentencing court engages 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]). 13 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. 14 Proper regard is to be had to express legislative provisions and to the relevant statutory regime (Markarian at [27]). The object of the Act is to protect employees from risk to safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the workplace. Of particular relevance is the effect of s21A of the Crimes (Sentencing Procedure) Act 1999. Consideration 15 In a consideration as to penalty, the court first assesses the objective seriousness of the offence as charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474): . . . 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" ... And in Morrison v Powercoal Pty Limited (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ... 16 The corporate defendant through its working director, the individual defendant, was responsible for ensuring its contractor provided a safe working environment for the roofing work being performed. Mr Carter conducted an on site inspection. He recognised the roof was brittle and the safety mesh under the roof was not in good condition. He prepared a safe work procedure. It did not record these two recognised risks. Therefore, the sub-contractor did not warn employees of the known risks. There was a failure to ensure qualified/experienced roofers were brought on site; a failure to provide to the employees with anchor points and safety lights on the warehouse roof for the attachment of safety harnesses; a failure to provide the appropriate protective equipment for work in removing asbestos. Further, as the safety mesh under the roof was corroded and not securely affixed, the risk should have been identified to the employees. I am therefore satisfied there was no safe system of work and no adequate prevention system in place for working at heights and no proper protective equipment provided to the relevant workforce. 17 The Occupational Health and Safety Act requires all employers to be diligent and proactive to ensure all safety at their worksites. Management of the corporation did not ignore the necessary protections. Its pre-existing safe work method statement specifically referred to the need for appropriate harness equipment. The failure to ensure appropriate attachments was a failure of the sub-contractor it was contended. However the corporate defendant was the head contractor who sub-contracted the task of the removal of asbestos sheeting and the installation of new roofing sheets and it failed to properly supervise its sub-contractor. 18 The court cannot condone a submission a corporate defendant can rely upon its perception that its sub-contractor always, except in this instance, had provided an experienced contract workforce which were properly trained to do these tasks safely. Past practice can be no defence to a particular failure to ensure safe working on a relevant date. The evidence reveals there were no experienced roofers in the workforce provided by the contractor on this worksite. They were therefore untrained. The defendants, while acknowledging the risk was most serious, pleads in the circumstances that penalty should be in the lower end of the scale of possible sentences. 19 I accept, in accordance with modern industrial practice, it may be a sensible industrial decision for a head contractor to contract out the performance of particular skilled tasks within its contract with the principal. However, this company operates all its successful tenders through sub-contracting out the work it tenders for, so on-site supervision was and is its major obligation. In such contracting out, a head contractor must ensure the rigorous instruction and training of employees at their worksite as to their job specifications and also to ensure there is on its worksite full compliance by the sub-contractor with its safe working obligations. Further, in this circumstance where there had been a risk assessment of the task, the known risks were not identified in the safe work method designed and therefore, the sub-contractor failed to ensure a rigorous training programme of its employees. The obligation under the Act was on this employer to properly identify risks, to design safe work procedures, to identify job specifications, then to ensure the training of the employees in the performance of those systems by the sub-contractor. This contractor was empowered to say "no" to the third party on its worksite who did not provide for its employees, a safe working environment. This was a most serious offence. 20 The principle of foreseeability is a factor in determining the objective seriousness of an offence. This was considered and affirmed in the Full Bench decision of Capral Aluminum Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610. On the issue of foreseeability, the Full Bench in Capral stated at [82]: The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nilma Pty Ltd (at 209-210) in these terms: … reliance on 'hindsight' must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. 21 I accept there was a foreseeable element to the offence which makes it even more serious. The personal defendant, a director of the corporation, inspected the site. He did not ensure the weakness in the mesh, its corrosion, nor its faulty attachment and the brittleness of the roof were emphasised in the safe work method. He therefore failed to ensure safety on his worksite. There was a failure to ensure a safe system of work was carried out; there was a failure to ensure a sub-contractor properly instructed its employees as to a safe work system; a failure to provide appropriate supervision, particularly in a circumstances where the evidence reveals there were untrained employees on site. This is but another example of a safe work procedure being given by a head contractor to a sub-contractor but then the head contractor abandons all responsibility for safe working. A head contractor retains the obligation to ensure there is a proper implementation of its safe work system. 22 The availability of simple and straightforward steps to remedy the defects in the system is also relevant to the consideration of the objective seriousness of the offence (WorkCover Authority of New South Wales (Inspector Glass) v ACI Operations Pty Limited (Schmidt J, CT93/1025, 25 February 1994, unreported). There were obvious steps that could have been taken which, either singly or in combination, would have eliminated or reduced the risk. These steps have now been implemented. Such activity after the incident is indicative of the fact each amendment to the system of work was readily available and practical. 23 The gravity of the potential risk to safety flowing from a breach is relevant as a measure of gravity of the breach and the culpability of the defendant (Lawrence Diecasting Limited and WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474)). In this circumstance, the risk to safety became reality. The words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 (at 5), I find apposite: The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of 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. 24 The potential risk of significant injury or death was not a remote possibility. There was a high risk to the safety of any employee being required to walk across this roof, which roof was not in good order and not safely protected by properly structured safety mesh and where the employees were not properly protected with safe harnessing nor the appropriate protective clothing for exposure to asbestos. 25 The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral at [71]-[77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: ... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example , Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. 26 This employer continues to operate in the roofing industry, therefore an element of specific deterrence is necessary. The company seeks out roofing work and then finds contractors to perform the tasks. The court has been assured it now contracts out asbestos removal work to only specialist asbestos removal experts. However, it still operates all its jobs through sub-contracts. The defendants assured the court since the incident only qualified contractors are used to remove asbestos so the specific deterrence consideration in penalty should be minimal. However, given the corporate defendant, under the managing hand of Mr Carter continues to operate in the roofing industry, I find an element of specific deterrence must be included in penalty. 27 As to general deterrence: there are within the building and construction industry special protections required for the work of asbestos removal and also special safety procedures to be followed for work at heights. The court must once again remind this inherently dangerous industry of the need for the rigorous application of the basic and well known safety practices that are necessary for safe working at heights and around asbestos. There shall be an element of general deterrence in the consideration of penalty. 28 Submissions were made by the defendants relating to the applicable principles to be considered in penalty, such as the principle of parity. Mr Thompson, the sub-contractor, is still to come before the court. There has, therefore, been no prior sentencing of any other defendant related to this incident. However, I am satisfied there was a significant contribution to the risk by the sub-contractor employer, Mr Thompson, who took onto this site, to perform inherently dangerous tasks, an unskilled crew (of which the injured employee was but one) to work at heights without the statutory prosecutions related to exposure to asbestos materials and without proper safety practices for working at heights. There shall be some mitigation of penalty for the contribution to the risk by the employer on the worksite. 29 It is also necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A (1) of the Crimes (Sentencing Procedure) Act 1999 relevant to the defendants. As was said in R v Way (2004) 60 NSWLR 168 at [56]: ... it is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c). Ultimately, all of the above factors must be considered as part of "a complex of inter-related considerations" ( R v Gallagher (1991) 23 NSWLR 220 (at 228)). 30 A plea of guilty was entered at the earliest stage in the proceedings by both defendants (R v Thomson; R v Houlton (2000) 49 NSWLR 383). The defendants are therefore entitled to a discount of 25 percent for the utilitarian value of its early plea of guilty. The defendants fully co-operated with WorkCover Authority throughout the investigation of the incident. 31 The personal defendant submitted the level of culpability of a personal defendant who is deemed to have committed the offence by virtue of s26(1) cannot be greater than that of the corporation who has been convicted or otherwise assumed to be guilty for the purposes of the operation of the section. However, most pertinently for the present proceedings, it must be recognised the culpability of the personal or individual defendant may be less than that of the corporate defendant: Morrison v Powercoal Pty Ltd & Anor (No 3) (2005) 147 IR 117 at [133]. 32 Reliance is placed on s 10 of the Crimes (Sentencing Procedure) Act. In WorkCover Authority (NSW) v Profab Industries (2000) 100 IR 64, the court referred variously to the use of s10 as rare, extraordinary and highly exceptional in matters before the court. Relevantly, the court held that: [23] The judgment in Wong v Melinda Group Pty Ltd is also important for another reason. It exemplifies 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 , experience indicates that the most serious prosecutions are usually commenced in this Court. [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. The purpose of the statute, which is well known and often referred to in judgments of this Court, may be referred to as one for the benefit of the public generally and particularly employees at work to prevent, deter and punish breaches of health and safety requirements. Although the discretion under s 556A is wide, it is not unfettered; rather, it is limited initially to a series of defined circumstances and then extended to "any other matter which the court considers it proper to consider". ... [26] Nevertheless, in occupational health and safety offences before this Court the exercise of the discretion under s 556A (cf s 10 of the Crimes (Sentencing Procedure) Act 1999 (NSW)) must be considered as extraordinary and highly exceptional. When a defendant seeks its exercise cogent reasons must, in our view, be provided by the defendant for such exercise and also by the judge acceding to that submission. The obligation is increased rather than diminished in a situation, such as the present, where the exercise of the discretion is not sought by the defendant but raised by the Court. 33 The nature of the discretion of the court in the application of s 10 was further considered in Inspector Downie v Menzies Property (2004) 136 IR 449 where the court held at [55]: However, we agree with the respondent's submission that the decision of the Full Bench in Profab Industries does not impose a qualification or limitation on the exercise of discretion under s 10 of the Crimes (Sentencing Procedure) Act per se. What it does do is to ensure that the discretion under s 10 is exercised consistently with the scheme and purpose of the Occupational Health and Safety Act . As was described in Profab Industries, a significant purpose of the Occupational Health and Safety Act is "to prevent, deter and punish breaches of health and safety requirements". The Full Bench in that case referred to the purpose of the Act as being for the benefit of the public generally. Further, the "strongly defined duty of care, clear public policy considerations in the [ Occupational Health and Safety Act ] and major penalties provided" were identified in Shultz v Tamworth City and WorkCover Authority of (NSW) v Ecolab Pty Ltd . When seen in the light of these considerations, an offence which is objectively serious will, therefore, rarely attract the exercise of a sentencing discretion under s 10 in favour of a defendant. This approach also flows from the nature of the prosecutions which are typically brought before this Court (although we note the present matter is before us on appeal). 34 The current state of the law is summarised in Morrison v Powercoal No 3 where the court held that: [131] The application of s 10 was recently considered at length by a Full Bench in WorkCover Authority (NSW) v Menzies Property Services Pty Ltd (2004) 136 IR 449 . The Full Bench stated at [57]: [I]t is critical when determining a sentence to clearly distinguish those factors which are special considerations in sentencing, and in particular those which warrant the application of s 10 of the Crimes (Sentencing Procedure) Act ... Given the existence of a clear line of authority establishing that such orders are available only in limited circumstances, any decision to make such an order must necessarily include an examination of the relevant circumstances and an explanation as to why those circumstances fall within the limited class of circumstances contemplated by the established authorities. The Full Bench in WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700, 100 IR 64 expressly stated (at [26]) that "when a defendant seeks [the exercise of the discretion under s 10] cogent reasons must, in our view, be provided by the defendant for such exercise and also by the judge acceding to that submission." [58] We agree with the decision of Wright J, President in WorkCover Authority (NSW) v Ecolab Pty Ltd (1999) 90 IR 413 that there is little value in considering the particular approach taken in other decisions or judgments to the exercise of discretion under s 10 of the Crimes (Sentencing Procedure) Act, as each matter turns on its own facts. However, we note that in Department of Mineral Resources (NSW) v Berrima Coal , the Court gave explicit details of the "extraordinary and highly exceptional circumstances" which existed in that case which warranted the exercise of the Court's discretion under s 10 of the Crimes (Sentencing Procedure) Act . Whilst we would not wish to suggest that there are particular or defined criteria which will inevitably lead to the exercise of that discretion (as it is a wide discretion), it is pertinent to highlight the decision in Department of Mineral Resources (NSW) v Berrima Coal as being one in which extensive reasoning was given to support the proper exercise of discretion under s 10 of the Crimes (Sentencing Procedure) Act , in stark contrast to the matter presently before us where there is a total absence of such reasoning. 35 I will deal firstly with the financial evidence. These reasons were submitted in support of an application under s 10. The individual defendant, it is asserted, has an unblemished record, needs to travel overseas, is concerned as to his status of a person with a criminal conviction and is a man of limited means. As to the latter submission, the Michael Carter Family Trust, trading as Black Cat Roofing, distributed $143,578 to Mr Carter as revealed in the 2008/2009 Profit and Loss Statement of the Trust. The Trust acknowledged an income of $1.9 million from the business of Black Cat Roofing. Mr Carter has informed the court he has mortgages on his home and at least two investment properties. It is difficult to see from the financial records of Mr Carter and the Michael Carter Family Trust how Mr Carter, or the Trustee, meets these mortgage payments. When cross-examined as to his financial affairs, Mr Carter could offer no explanation as to the details of his finances except to say his wife handled the "bills" and his financial arrangements were in the hands of his accountant. I found him to be evasive if not untruthful in his unhelpful answers to questions related to his financial arrangements. It is my view the turnover of the company in 2009 at $1.9 million was significant given the evidence of Mr Carter that the business was suffering financially. The company records reveal up to $97,000 per year from the Trust is regularly donated to a particular church fund. There are regular distributions to family members. I am satisfied there should be no deduction in penalty due to the financial means of the defendants, especially in the circumstance of what I find was a serious offence. Penalty must reflect the seriousness of the offence. 36 I accept the defendants have a good industrial record. 37 The personal defendant is otherwise of good character. The personal defendant has been, I accept, affected by this prosecution. He has expressed contrition. He places reliance upon a fear that his conviction will potentially affect his travel overseas, which he does each year to the United States of America, for church purposes. He offers no evidence in support of this proposition. On this basis and generally he makes application that his circumstance should allow the application of s 10. I do not accept the particular circumstance before me should attract the use of my discretion to give an order under s 10. 38 I also take into account the subjective elements placed before me. I accept the company had occupational health and safety procedures in place, but it failed to ensure its sub-contractors complied with its standard for safe working. 39 I find the defendants guilty as charged. 40 The prosecutor tendered a Victim Impact Statement from Mary Gardikiotis, the sister of the injured employee. I received Ms Gardikiotis' statement in accordance with s 28(1) of the Crimes (Sentencing Procedure) Act 1999, which states: If it considers it appropriate to do so, a court may receive and consider a victim impact statement at any time after it convicts, but before it sentences, an offender. The injuries suffered by Anton Simic were serious. He continued to suffer ongoing disability related to his shattered pelvis, broken rib, broken arm, broken leg and punctured lung. He had injuries to his entire body and several broken teeth. His mental health deteriorated. This impacted not only on his gainful employment, but on his lifestyle. The family in supporting the injured employee through his partial recovery, were greatly affected by this incident, as was the injured employee. In a circumstance where the defendant had suffered significant impairment that, in itself, affected the family. The court expressed its concern to Ms Gardikiotis for the effect this incident had on the family particularly in a circumstance where while still impaired from the incident the injured employee has since died (from an unrelated cause). 41 I make the following orders: Orders 1. In matter No IRC1786 of 2008, I find the personal defendant guilty. 2. The defendant is fined in the sum of $15,000 with a moiety to WorkCover Authority of NSW. 3. In matter No. IRC1789 of 2008, I find the corporate defendant guilty. 4. The defendant is fined in the sum of $120,000 with a moiety to WorkCover Authority of NSW. 5. The defendants shall pay one costs order. Leave to relist if no agreement can be reached. 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.