Industrial Court of New South Wales CITATION: WorkCover Authority of New South Wales (Inspector Davidson) v Favro Constructions Pty Limited and Tony Favro [2007] NSWIRComm 201 PROSECUTOR: WorkCover Authority of New South Wales (Inspector Davidson) PARTIES: DEFENDANTS: Favro Constructions Pty Limited Tony Favro FILE NUMBER(S): IRC 340 & 341 of 2007 CORAM: Staunton J CATCHWORDS: Occupational health and safety - pleas of guilty - general principles - foreseeability - objective seriousness of the offences - general and specific deterrence - no prior convictions - subjective features taken into consideration - financial capacity of defendants considered - penalties imposed - orders as to penalty, moiety and costs. Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Fines Act 1996 Occupational Health and Safety Act 2000 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Ferguson v Nelmac Pty Limited (1999) 92 IR 188 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Markarian v The Queen [2005] HCA 25: 18 May 2005 CASES CITED: Morrison v Powercoal Pty Limited [2003] 130 IR 364 R v Gallagher (1991) 23 NSWLR 220 R v Thomson; R v Houlton (2000) 49 NSWLR 383 R v Way [2004] NSWCCA 131 Thorneloe v Filipowski (2001) 52 NSWLR 60 HEARING DATES: 6 August 2007 DATE OF JUDGMENT: 14 August 2007 PROSECUTION: Mr C Magee of counsel SOLICITORS: Criminal Law Practice Legal Group LEGAL REPRESENTATIVES: DEFENDANTS: Mr M Galvin of counsel SOLICITORS: Peter Prior & Co Solicitors JUDGMENT: - 21 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Staunton J DATE: 14/10/2007 Matter No IRC 340 of 2007 WorkCover Authority of New South Wales (Inspector Davidson) v Favro Constructions Pty Limited Prosecution pursuant to section 8(1) of the Occupational Health and Safety Act 2000 Matter No IRC 341 of 2007 WorkCover Authority of New South Wales (Inspector Davidson) v Tony Favro Prosecution pursuant to section 8(1) of the Occupational Health and Safety Act 2000 by operation of section 26 of the Act JUDGMENT [2007] NSWIRComm 201 1 The first defendant in this matter, Favro Constructions Pty Limited (Favro), has entered a plea of guilty in relation to an offence under s 8(1) of the Occupational Health and Safety Act 2000 (the Act). The second defendant, Mr Tony Favro, the sole director of Favro, has also entered a plea of guilty in relation to an offence arising under s 8(1) of the Act pursuant to the deeming provisions of s 26(1) of the Act. 2 In relation to the first defendant, it is said it: Failed to ensure the health, safety and welfare at work of all its employees, in particular Edward Hall, contrary to Section 8(1) of the Occupational Health and Safety Act 2000 in that: The defendant failed to ensure a system of work that was safe and without risks to health, particularly for performing work at height, in particular: (a) Failed to install adequate fall prevention measures for Edward Hall whilst he was working at a height in excess of 2 metres; (b) Failed to ensure the systems of work for installing flooring were safe and without risks, as the system used involved workers standing on unsecured flooring, with the risk of unsecured boards tipping under the weight of the worker and the associated risk of falls, particularly when working close to an edge; (c) Failed to provide a Safe Work Method Statement entailing details of assessed activities, associated safety risks and control measures, in particular for the work at heights that Edward Hall was to undertake; (d) Failed to provide a site induction to Edward Hall ensuring he understood the activities and safety risks of the site; (e) Failed to ensure that Edward Hall, an employee, had undertaken OHS induction training for construction work, as required by the legislation. 3 The offence charged and the particulars pleaded in relation to Mr Favro are in identical terms to the corporate defendant. On that basis, I do not repeat them. 4 The prosecutor has tendered an agreed statement of facts. With respect to the two defendants, the following is agreed: [1] At all material times Favro Constructions Pty Ltd (ACN 050 038 045) ("the company") was an employer. [2] At all material times, Tony Favro was a director of the company. [3] On 15 June 2005 at 9 Lindley Avenue, Narrabeen in the State of New South Wales, the defendants breached the Occupational Health and Safety Act 2000 by failing to ensure the health, safety and welfare at work of all its employees, in particular, Edward Hall. Background [4] At all material times, Edward Hall was an employee of the company. [5] At all material times, 9 Lindley Avenue, Narrabeen in the State of New South Wales ("the Lindley Avenue site") was the company's place of work. [6] The company was engaged in a construction project at the Lindley Avenue site. The company had been engaged by the owner of the premises to construct a two storey residential building on sloping land. The timeframe for the project was a period of 160 days with work scheduled to commence on 1 February 2005. [7] Edward Hall was employed as a labourer on the construction project at the 9 Lindley Avenue, Narrabeen. [8] Mr Hall's first day working at the Lindley Avenue site was 15 June 2005 (the date of the incident). Mr Hall had previously done work for the company, however that was several months before and at a different site. [9] Mr Hall's job on the Lindley Avenue site included laying and securing plyboard sheeting in the form of flooring. The incident [10] Between 2pm and 3pm on 15 June 2005, Mr Hall was in the process of laying and securing plyboard sheeting on an upper level of the building works, when he apparently stepped onto an unsecured sheet of plyboard near the edge of building. The plyboard sheet tilted under Mr Hall's weight, resulting in him falling off the edge of the building, and landing on concrete steps below – a fall of approximately 5 metres. [11] At the time of the incident there was no fall prevention equipment in place on the front of the building where Mr Hall was working. Mr Hall was not wearing a harness or other personal fall prevention equipment. An incomplete scaffold was erected around the part of the building's perimeter, however this did not include the area where Mr Hall was working. Pieces of wood, made into a handrail, were apparently in place before the incident, however some of this had been removed resulting in a large gap and no edge protection in the vicinity of where Mr Hall was working. [12] As a result of the fall, Mr Hall received two cracked ribs, a laceration to the back of his head requiring several stitches, and a shattered scapula (one of the bones forming the shoulder blade) which subsequently required surgery. Mr Hall now has a metal plate and 8 screws inserted as a means of reshaping his scapula. He also sustained a chipped tooth and had a large laceration on his right calf muscle. Mr Hall has suffered back pain since the incident as well as some memory loss. Mr Hall's treating doctor also referred him for counselling for post-traumatic stress. Corporate structure – Broadside Constructions and Favro Constructions [13] On the date of the incident, 15 June 2005, the company's registered name was Broadside Constructions Pty Ltd. [14] On 3 October 2005, the company (ACN: 050 038 045) lodged with the Australian Securities and Investments Commission (ASIC) a ' Notification of Resolution Changing Company Name ', advising of a change in the name of the company from Broadside Constructions Pty Ltd to Favro Constructions Pty Ltd. This change of company name was processed by ASIC on 18 October 2005. [15] An ASIC Historical Company Extract dated 30 October 2006 indicates that the Australian Companies Number (ACN) of the company remained unchanged, and there was no change in the office-bearers of the company at that time. The ASIC Historical Company Extract indicates that Favro Constructions Pty Ltd (ACN: 050 038 045) is the same legal entity as that previously known as Broadside Constructions Pty Ltd. [16] The company also confirmed, in response to a Notice issued under section 62 of the Occupational Health & Safety Act 2000, that its name was Broadside Constructions Pty Ltd at the time of the incident (15 June 2005) and that the legal entity had changed its name to Favro Constructions Pty Ltd on 18 October 2005. [17] Mr Tony Favro has been a Director of the company since 10 August 1990. Mr Favro is and was at all material times actively involved in the day-to-day construction activities of the company. [18] The company has changed its name several times since it was formed in 1990. It was originally named Silktale Pty Ltd, changing its name to Top Trowel Bricklaying Pty Ltd in 1992, and to Broadside Constructions Pty Ltd in 1994. As indicated above, the company changed its name to Favro Constructions in 2005. Mr Favro remained a Director throughout this period. Lack of fall preventions [19] There was scaffolding in place on part of the building, however not on the section where Mr Hall was working. [20] There had apparently been a makeshift handrail in the area where Mr Hall was working, but this had been removed prior to Mr Hall working on the plyboard sheeting in that area. [21] Mr Hall was not provided with a safety harness, or any other fall prevention or fall arrest measures. [22] The risk of falls from heights in the constructions industry is well known. [23] The company has operated in the construction industry since 1990. The second defendant, Mr Favro has worked in the construction industry since 1983. Details of system of work up to and at the time of incident [24] There were no Safe Work Method Statements for any of the works being carried out at the Lindley Avenue site. [25] The defendants allowed Mr Hall to undertake work without him having completed the mandatory Occupational Health and Safety Induction Training for Construction Work. [26] There was no site-specific induction training provided to Mr Hall. Details of the systems of work after incident [27] Inspector Julie Townsend issued the following notices: 7-86219 – Access and Egress 'Reason for issue' – From the street to the front of the home there was hindered access in the form of a steep decent, which was slippery and undefined. Notice issued to ensure unhindered access and prevent slips, trips and falls. 7-86217 – Working at heights 'Reason for issue' – There was no edge protection on the first floor where the injured person fell approximately 5 metres. Notice issued to prevent further potential fall from heights incidents. [28] In response to Notice 7-86219 – Access and Egress, the company installed wooden access steps and platforms. [29] In response to Notice 7-86217 – Working at heights, the company installed full perimeter scaffolding. Further safety improvements following the incident [30] In addition, the following safety-related measures were also instituted: (a) Regular toolbox meetings commenced at the site. (b) Training of employees in the Occupational Health and Safety Induction Training for Construction Work. (c) The defendants began to seek and receive Safe Work Method Statements from subcontractors. (d) Documented systems of risk assessments and site inductions commenced. [31] If the measures indicated above had been taken before the incident, it is likely that the incident would have been prevented, and the risk of injury arising from working at height would have been addressed. Prior convictions [32] Both defendants have no prior convictions under Occupational Health and Safety legislation. Co-operation with WorkCover [33] The defendants cooperated with WorkCover throughout its investigation. Moiety [34] The prosecutor seeks a moiety of any fine imposed. Costs [35] Defendants to pay the prosecutor's costs and disbursements as agreed in the total sum of $7,543.73. 5 In addition to the agreed statement of facts, the prosecution has tendered a bundle of documents including: (1) A WorkCover report confirming that both defendants have no prior convictions; (2) Statements of various WorkCover Inspectors, including: (a) Statement of Inspector Clive Woodington, dated 15 June 2005; (b) Statement of Inspector Julie Townsend, dated 15 June 2005; (c) Statement of Inspector Sue Davidson, dated 15 June 2005. (3) A copy of a Factual Inspection Report written by Inspector Woodington, dated 27 June 2005; (4) Copies of nine photographs taken at the accident site on 15 June 2005 by Inspector Woodington; (5) Copies of five photographs taken at the accident site on 21 June 2005 by Inspector Townsend; (6) Copies of WorkCover Improvement Notices issued to Broadside Constructions Pty Ltd by Inspector Townsend on 16 July 2005; (7) Extract from construction contract between Martin and Karen Mitchell and Broadside Constructions Pty Ltd; (8) Copy of Safe Working at Heights Guide 2004. 6 On behalf of the defendants, the affidavit of Mr Tony Favro was tendered without objection. Mr Favro's affidavit detailed the events that occurred on the day of the accident involving Mr Hall as well as the actions taken by the company and himself following the accident. Copies of various documents including the company's safety management plans which were implemented following the accident as well as financial documents relevant to both defendants were also attached. 7 Three testimonials as to Mr Favro's safe work record and good character were also tendered. They included as follows: (a) Mr Terry Taylor. Mr Taylor is a Structural Engineer and is the principal of TJ Taylor Consultants Pty Ltd, an engineering consultancy firm. (b) Mr Marc Tovo. Mr Tovo is the director of Tovo Lighting. (c) Mr Bruce Gaal. Mr Bruce Gaal is an accredited certifier and has known Mr Favro for 25 years through his involvement at the Long Reef Surf Life Saving Club. 8 No oral evidence was received in the proceedings. Relevant principles 9 The overall approach to be followed in relation to the determination of penalty is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 (CSPA) and in particular in relation to these proceedings, ss 3A Purposes of Sentencing, 21A Aggravating, mitigating and other factors in sentencing, 22 Guilty plea to be taken into account. 10 In R v Way [2004] NSWCCA 131 it was emphasised that the provisions of the CSPA referred to above are not to be construed as representing 'a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice'. As was said at [59]: ....it is clear that the legislative policy.......so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges...but rather were intended to provide 'further guidance and structure to judicial discretion.' 11 It is well settled that the starting point for considerations as to penalty is the objective seriousness of the offence charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474. 12 Further, as was said 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: ... 13 The principle of foreseeability as a factor in determining the objective seriousness of an offence was considered and affirmed in the Full Bench decision of Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 646. 14 On the issue of foreseeability, the Full Bench in Capral also stated: 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 Nelmac 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. 15 The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken on that issue has also been dealt with in some detail in Capral at 643-645. Without detailing all that the Full Bench had to say on those issues I believe the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644 as follows: ... 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. 16 In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A (1) of the CSPA relevant to the defendant. As was said in R v Way 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). 17 Ultimately, all of the above factors must be considered as part of 'a complex of inter-related considerations' (See R v Gallagher (1991) 23 NSWLR 220). Having said that, as was said by Spigelman CJ in Thorneloe v Filipowski (2001) 52 NSWLR 60 at 69, it still remains for the sentencing judge to ensure: ... that a sentence should be proportionate to the objective gravity of the offence. This necessarily requires a sentencing judge to consider, at some stage in the reasoning process, the sentence that is appropriate for the particular circumstances of the crime without reference to the subjective case of the particular offender. 18 In Markarian v The Queen [2005] HCA 25: 18 May 2005, the High Court, by majority (Kirby J dissenting) generally disavowed the sequential or two tiered approach to sentencing. In doing so, their Honours did not entirely reject the proposition that, in some circumstances, 'an arithmetical process' would be appropriate. As they said at [39]: Following the decision of this Court in Wong it cannot now be doubted that sentencing courts may not add and subtract item by item from some apparently subliminally derived figure, passages of time in order to fix the time which an offender must serve in prison. That is not to say that in a simple case, ... indulgence in arithmetical deduction by the sentencing judges should be absolutely forbidden. ... The law strongly favours transparency. Accessible reasoning is necessary in the interests of victims, of the parties, appeal courts, and the public. There may be occasions when some indulgence in an arithmetical process will better serve these ends . ... (emphasis added) 19 On that point, McHugh J also acknowledged the need, where appropriate, for the awarding of a nominated discount for 'some factor'. As he said at [74]: ... The distinction between permissible and impermissible quantification of "discounts" on a sentence will usually be found in whether the quantification relates to a sentencing purpose rather than some other purpose. So, the quantification of the discount commonly applied for an early plea of guilty or assistance to authorities is offered as an incentive for specific outcomes in the administration of criminal justice and is not related to sentencing purposes. The non-sentencing purpose of the discount for an early guilty plea or assistance is demonstrated by the fact that offenders are ordinarily entitled to additional mitigation for any remorse or contrition demonstrated with the plea or assistance, aside from the discount for willingness to facilitate the course of justice. Considerations 20 Favro has no prior convictions. As such, the maximum penalty that may be imposed is $550,000. As an individual with no prior convictions, the maximum penalty that may be imposed on Mr Favro is $55,000. 21 Mr Hall's task on the day of the accident was to secure plyboard sheeting on the upper level of the building site, which was some 5 metres above the ground. Given what was required of Mr Hall, it was incumbent upon the defendants to ensure that the risks associated with work performed by employees at heights were properly identified and addressed with proper fall protection measures. The inherent risks to safety posed by working at heights are well known. On any view, given the precarious circumstances in which Mr Hall was working, it was readily foreseeable that he was at a real risk of serious injury if safe work methods for working at heights were not in place. 22 As was said by the Full Bench in Capral at 650, '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'. In isolation, the potential for 'serious consequences' is not conclusive of the nature and quality of the offence, but it is clear that such a factor is a relevant consideration when assessing the ultimate culpability of a defendant. 23 Further, as was stated in Capral, the presence of foreseeability 'will necessarily result in the offence being more serious in nature'. As such, the starting point for the determination of the objective seriousness of an offence is whether there was 'an obvious or foreseeable risk to safety against which appropriate measures were not taken'. (Lawrenson Diecasting at 476). 24 It appears Mr Favro did not have any formal system of work in place prior to the accident that encompassed any kind of risk assessment for the work to be carried out on site. There was no safe work method statement in place setting out how Mr Hall was to undertake the work of laying the plyboard taking account of the hazards identified, including the need for adequate fall protection. As well, he was not given any kind of site induction which would have pointed out risks associated with working on-site, particularly the most obvious and pertinent risk to him, which was, in the circumstances, working at heights. 25 The proper measures to be taken for preventing falls from heights is outlined in WorkCover's Safe Working at Heights Guide, which at p. 7 summarises the requirements of cl 56 of the Occupational Health and Safety Regulation 2001 (the Regulation) as follows: … the appropriate risk control measures are not solely determined by conducting a risk assessment. Instead, clause 56 specifies a mandatory hierarchy of controls, which relate solely to the risks associated with people falling from heights. The hierarchy of controls informs the risk assessment process. The control measures in order are: (i) The provision and maintenance of a stable and securely fenced work platform such as scaffolding or other form of portable work platform. (ii) If complying with (i) is not reasonably practicable, the provision and maintenance of secure perimeter screens, fencing, handrails and other forms of physical barriers that are capable of preventing the fall of a person. (iii) If complying with (ii) is not reasonably practicable, the provision of other forms of physical restraints that are capable of arresting the fall of a person from a height or more than two metres. 26 Mr Favro did have scaffolding installed on site but it did not cover the entire perimeter of the building. It only ran along the sides of the building and did not cover the front of the building where Mr Hall was working. It is unclear why scaffolding was not installed at the front of the building. It does not seem that it was impracticable to do so as photos taken by Inspector Julie Townsend following the accident depicted scaffolding installed at the front of the site as a result of a WorkCover issued Improvement Notice. The only safety measure in place in the area where Mr Hall conducted his work was a handrail which, in any event, had been removed before he commenced work on the day, leaving a gap with no edge protection. 27 Clearly, the removal of the handrail did not accord with accepted practices, which the WorkCover Guide stated as follows: 5.2 The safe use of guardrails The perimeter of buildings, structures, pits, tanks, floor openings, etc., should have guardrails to stop people falling over the edge. The guardrails should have the necessary strength so that they are able to withstand the impact of a person falling against them. Where guardrails are used, they should be in place prior to any work commencing and should not be removed until all work is complete (emphasis added). 28 It is self evident that Mr Favro should have ensured scaffolding surrounded the entire perimeter of the building and additionally, that the handrail was not removed. Mr Hall's fall graphically illustrates the repercussions of the defendants' failure to implement these straightforward and simple measures. Had both of these safeguards been in place, it is highly probable Mr Hall would not have fallen. Mr Favro has a considerable amount of experience in the construction industry and it should have been obvious to him to implement these measures. In the alternative, a safety harness would have also provided ample fall protection if, for whatever reason, Mr Favro had determined that the scaffolding or the handrail were not appropriate measures to guard against the risk of falling. 29 As stated in the agreed facts, Mr Hall was not given any site specific induction training or occupational health and safety induction training for construction work. This was clearly contrary to the requirement set out in the Regulation under cl 214 (1), which specifies: An employer must ensure that any employee whom the employer employs to carry out construction work has been provided with the OHS induction training required to be undertaken by the employee in accordance with this Part. 30 It may not have occurred to Mr Favro to provide such training. He had employed Mr Hall to perform work on previous sites and, as I understand, expected him to perform work safely based on that experience. However, previous experience or knowledge on the part of an employee is insufficient to impress upon workers the dangers and risk to safety posed by working at heights and the site specific measures in place to address the risks to safety in the work to be undertaken. An employer has an absolute duty to ensure that the work is safe and that the workers are instructed as to safe work methods to be followed in order to ensure the work is done safely 31 All of the above failures culminated in Mr Hall falling approximately five metres and receiving injuries including cracked ribs, a laceration to the back requiring stitches and a shattered shoulder blade. On any view, he is lucky to be alive. 32 It is relevant to the objective seriousness of an offence to consider if there were readily and easily available remediation steps which could have been undertaken by the defendant before the accident to prevent injury occurring. To put it another way, one should have regard to remediation or the extent of remediation that is done post the accident, as an indication of the extent to which foreseeability of injury was readily identifiable. 33 Following the accident, WorkCover issued two Improvement Notices to Mr Favro. The first Improvement Notice required Mr Favro to install a secure fenced work platform around the whole perimeter of the building to prevent falls whilst employees worked at heights. The second Improvement Notice required Mr Favro to provide and maintain safe access and egress to and from the workplace to prevent slips or falls. 34 In response to the Improvement Notices, Mr Favro installed perimeter scaffolding around the entire property. Wooden access steps and platforms were also installed in front of the property to enable safe egress to and from the worksite. 35 In addition to implementing the steps identified above in the Improvement Notices, Mr Favro also contacted the Housing Industry Association (HIA) to assist him formulate a safety management plan for the company. Favro now conducts site inductions regularly for employees and subcontractors and ensures that principal contractor and subcontractor occupational health and safety management plans are in place. The company also obtains safe work method statements from subcontractors working on site prior to commencing work. 36 All of the above identified steps were implemented promptly, and commendably so. However, I would agree with the prosecutor's submissions that all of the above measures were relatively straightforward steps that could have been adopted prior to the accident occurring. 37 In all the circumstances, I assess the offence to be objectively serious and will consider penalty on that basis. 38 The decision of the Full Bench in Capral clearly indicates that general and specific deterrence are factors that should be given weight in all but exceptional circumstances. The Full Bench said at 643-644 that: We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Limited accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that those aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process. 39 In respect of specific deterrence, the Full Bench held in Capral at 644-645: In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The court may form such a view as a result of the rehabilitation of the offender: R v Corner (unreported, Court of Criminal Appeal, 19 December 1997) or because the offender will not have the opportunity to commit a similar offence in the future: R v Macdonell (unreported, Court of Criminal Appeal, 8 December 1995). However, we think it unlikely that the weight to be attached to specific deterrence could be reduced to zero in cases of offences under the Act. 40 General deterrence is a relevant consideration. Working at heights is a common practice within the construction industry and the risks to safety that such work represents are very real. Mr Favro and the corporate defendant continue to operate in the industry and as such, specific deterrence is also a relevant consideration tempered somewhat in light of the remedial steps effected by Mr Favro. I also accept counsel for the defendants' submission that Mr Favro has taken this incident very seriously and, by way of rehabilitation, has taken all the steps he can to avoid the likelihood of an accident of this kind occurring again. 41 Counsel for the defendants did not make any submissions of incapacity on the part of the defendants to pay a fine. However, the financial statements and documents tendered on their behalf were to place their respective financial circumstances into context. 42 In considering those documents, I am guided by the provisions of s 6 of the Fines Act 1996, which relevantly state: In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the Court for consideration, and (b) such other matters as, in the opinion of the Court, are relevant to the fixing of that amount. 43 Copies of financial statements for the 2006 tax year and to 31 May 2007 for Favro were attached to Mr Favro's affidavit. In 2006, after expenses and taxes, the company's retained profits were $44,408.22 as compared to $8119.51 for the previous year. The financial statement as of 31 May 2007 revealed the company's total income before expenses and tax payable was $53,348.85. The company's net profit for that period was $8,940.63. Its liabilities as set out in the balance sheet for 31 May 2007 was $150,872.81 including payables, interest bearing liabilities and current tax liabilities. 44 Mr Favro deposed in his affidavit that the income generated by the company as shown in the 2006 Tax Return was unusually high as a result of income derived from a large project in Mosman which took two years. The majority of the income was generated in the first half of the project. 45 Mr Favro also stated that the company predominantly undertakes building work with a contract value less than $200,000 and has only undertaken work in excess of $200,000 on five prior occasions. The Lindley Avenue job where Mr Hall's accident occurred was contracted at $397,000 including GST. 46 The individual 2005 and 2006 tax returns of Mr and Mrs Favro were also attached. Mr Favro's individual 2005 tax return revealed his total taxable income to be $49,429. After assessment of tax payable and payment of the Medicare levy, he was entitled to a tax refund of $87.87. His 2006 individual tax return revealed his taxable income to be $39,646 but after deductions for interest and dividend deductions he had net capital losses carried forward to later income years of $20,628. 47 Mrs Favro's individual 2005 tax return revealed her taxable income was $49,429. After tax payable and the Medicare levy, she was entitled to a refund of $99.87. Mrs Favro's 2006 tax return revealed that her taxable income was $26,219. 48 What is clear, based on the material before me, is that the company is essentially a small company that trades profitably but on a relatively modest basis. As detailed in the financial statements for the company, the profits generated are not large. On the evidence, the business is essentially a small, family run business with Mr Favro as the sole director of the company. Mrs Favro is also involved in the business in the capacity of secretary. Both Mr and Mrs Favro draw income from profits generated by the company and as their tax returns reveal, that income is modest. 49 Based on the material put before me, it would appear that the company does not have large reserves to draw upon to meet any fine imposed. Indeed, counsel for the defendants indicated it would probably be necessary for the corporate defendant to raise a loan to pay the penalty imposed. Mr Favro is the alter ego of the corporate defendant and any fine imposed upon the corporate defendant would fall upon him to meet in addition to any fine imposed upon him personally. Counsel for the defendants stated that the imposition of a heavy fine upon the company would also impact directly upon the family. I would accept that. 50 I would characterise the defendants to be of modest means. However, in determining the amount to be fixed for penalty, I adopt the position as set out by Wright J in President in Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 210 where his Honour observed: ... whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty ... the penalty should reflect the objective seriousness of the offence. 51 In the determination of penalty, the defendants are entitled to have taken into account the plea of guilty entered. In assessing the impact of the plea, the Court is guided by the decision of R v Thomson; R v Houlton (2000) 49 NSWLR 383, the principles of which are well settled and need no elaboration, reinforced as they are by s 22 of the Crimes (Sentencing Procedure) Act 1999. 52 The prosecutor conceded that there were additional mitigating factors that were in favour of the defendants. The plea was entered at an early opportunity and the defendants cooperated with WorkCover during the investigations. 53 Counsel for the defendants submitted that the defendants had expressed remorse and contrition for the events which culminated in Mr Hall's accident. That much is evident in Mr Favro's affidavit, where he stated: [7] I was extremely affected and upset by the accident and more importantly the injuries suffered to Edward Hall, the guilt of which I will carry for the rest of my life. I fully accept responsibility for the accident... 54 Mr and Mrs Favro kept in regular contact with Mr Hall following the accident and tracked his recovery with the GIO Workers Compensation Rehabilitation officer. Mr Favro also gave Mr Hall financial assistance. Mr Favro deposed that he had spoken with Mr Hall where he: ... indicated that he was struggling financially with his weekly compensation and in particular in view of medical accounts associated with his girlfriend's pregnancy. I arranged for the company to send him an ex gratia payment of $600 to assist him. 55 As already discussed above, the defendants sought assistance from the HIA to implement a safety management plan. The company now actively conducts work site inductions for employees and sub-contractors and obtains safe work method statements from sub-contractors. Counsel for the defendants submitted that the adoption of these measures displayed a commitment and change to a culture of safety on the part of the defendants. I would agree with that proposition. 56 A number of testimonials were tendered on behalf of the corporate defendant and Mr Favro. They were tendered without objection and referred to the good character, reliability and professionalism of both defendants. I accept that they reflect the high regard in which Mr Favro and his company are held in by his peers and that Mr Favro personally is of good repute. 57 Taking into account all the matters I have referred to, I determine a penalty in these matters, reflected in the orders I now make, as follows: (1) Matter No IRC 340 of 2007: WorkCover Authority of New South Wales (Inspector Davidson) v Favro Constructions Pty Limited : Prosecution arising under s 8(1) of the Occupational Health and Safety Act 2000: (i) The defendant is guilty of the offence charged; (ii) I impose a penalty of $45,000; (iii) I allocate a moiety to the prosecutor on the usual terms. (2) Matter No IRC 341 of 2007: WorkCover Authority of New South Wales (Inspector Davidson) v Tony Favro : Prosecution arising under s 8(1) of the Occupational Health and Safety Act 2000: (i) The defendant is guilty of the offence charged; (ii) I impose a penalty of $5,000; (iii) I allocate a moiety to the prosecutor on the usual terms. (3) Between them, I order the defendants to pay the prosecutor's costs as agreed in the sum of $7543.73. 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.