Industrial Court of New South Wales CITATION: Inspector Gelonese v Ghevondian & Hyecorp Construction Pty Ltd [2010] NSWIRComm 12 Inspector Bruno Gelonese of WorkCover Authority of New South Wales(Prosecutor) PARTIES: Vigen Ghevondian (First defendant) Hyecorp Construction Pty Ltd (Second defendant) FILE NUMBER(S): IRC 174; 175 of 2009 CORAM: Marks J CATCHWORDS: OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(2) of the Occupational Health and Safety Act 2000 by the corporate defendant - personal defendant deemed guilty of same offence by s 26(1) - early guilty pleas - appropriate penalty - objective seriousness - inadequate safety procedures - inadequate risk assessment - serious breach - general and specific deterrence - remorse and contrition - no prior convictions - penalties imposed LEGISLATION CITED: Occupational Health and Safety Act 2000 - s 8(2), s 26(1) HEARING DATES: 14 December 2009 DATE OF JUDGMENT: 11 February 2010 Mr M Scott of counsel (Prosecutor) Solicitor: Legal Group, WorkCover Authority of NSW LEGAL REPRESENTATIVES: Mr J Mendel of counsel (First and second defendants) Solicitor: Diamond Conway Lawyers JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Thursday 11 February 2010 Matter No IRC 174 and 175 of 2009 Inspector Bruno Gelonese v Vigen Ghevondian and Hyecorp Construction Pty Ltd Prosecution under s 8(2) by virtue of s 26(1) and under s 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT ON PENALTY [2010] NSWIRComm 12 1 The prosecutor, Inspector Bruno Gelonese of the WorkCover Authority of New South Wales, has charged the defendant, Hyecorp Constructions Pty Ltd ("Hyecorp") with a breach of s 8(2) of the Occupational Health and Safety Act 2000 ("the Act"). The prosecutor has also charged the personal defendant, Vigen Ghevondian, with the same breach, by reason of the application of s 26(1) of the Act in that Mr Ghevondian was a director of Hyecorp and is deemed to have committed the same offence as Hyecorp. Both defendants pleaded guilty to the offences with which they are charged and this judgment is concerned only with the question of penalty. 2 An agreed statement of facts was tendered into evidence, which is in the following terms: 1. At all material times the Prosecutor was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 ("the Act") and empowered under Section 106(1)(c) of the Act to institute proceedings in the within matter. 2. At all material times, Hyecorp Construction Pty Ltd [ACN 112 562 428] ("Hyecorp") was a corporation whose registered office is situated at 1, 253 Penshurst Street, Willoughby in the State of New South Wales. Hyecorp undertook the business of a construction company. Hyecorp was registered as a company on 19 May 2005. 3. At all material times Vigen Ghevondian ("Mr Ghevondian") of 25 Nowill Street, Rydalmere in the State of New South Wales was a director and the general manager of Hyecorp. 4. At all material times Hyecorp was the principal contractor at premises located at 110 Victoria Avenue, Chatswood in the State of New South Wales, also known as 106/110 Victoria Road and 15 Kooringa Road, Chatswood and/or 106 – 110 Victoria Road and 15 Kooringa Road, Chatswood in the state of New South Wales ("the premises") and was an employer. 5. At all material times Hyecorp was the principal contractor constructing approximately twenty residential units at the premises. 6. At all material times Hyecorp had two directors, Vigen Ghevondian and Kevork Benlian. Both directors were appointed on 19 January 2005. 7. Mr Ghevondian was the site manager and had direct control of the premises. As site manager, Mr Ghevondian was responsible for organising sub-contractors on a daily basis, conducting site inductions for sub-contractors, organising the delivery of building material and communicating with contractors about safety concerns. Mr Ghevondian was responsible for occupational health and safety matters at the premises. 8. Ariata Marsters, trading as Western City Construction ("Ms Marsters") was contracted to provide steel-fixing services to the premises pursuant to a sub-contract from Hyecorp on or about August 2006 and was at all material times undertaking work in accordance with that sub-contract. 9. At the time of the incident, Ms Marsters employed the injured person, Tuainekore Taripo ("Mr Taripo") as a steel-fixer from October 2006. Mr Taripo was 37 years old at the time of the incident. Mr Taripo had previous experience as a steel-fixer, however he did not have any formal qualifications in this field. 10. At the time of the incident, Ms Marsters employed Taringa Teao ("Mr Teao"). Mr Teao was the supervisor on the day of the incident. Mr Teao was an experienced steel-fixer and was able to give instructions to Mr Taripo. THE INCIDENT 11. On 15 February 2007, Mr Taripo arrived at the premises between 1:30pm and 2:00pm along with other employees of Ms Marsters. On arrival they did not inform the site manager that they were on site. Mr Ghevondian was at the premises at the time they arrived. 12. The building under construction at the premises consisted of two storeys. Level 2 was the top level of the building, with the first floor, ground floor and basement beneath this level. 13. Mr Taripo and his co-workers proceeded to take steel up to the top level of the building without informing Mr Ghevonian. 14. The top floor consisted of a concrete slab with some brick walls partially completed, full and empty brick pallets, and bricklayers trestles adjacent to some of the partially completed walls. There was a penetration in the concrete slab measuring approximately 1100 x 730 mm which was used as a mechanical ventilation shaft. The shaft extended down to the basement level. A plywood board measuring 1270mm x 905mm x 16mm covered the opening. The plywood was not secured over the opening. 15. Mr Taripo and his co-workers needed to clear up rubbish on Level 2 before they could perform their work. Mr Taripo was cleaning up rubbish around the mechanical ventilation shaft when he picked up the plywood covering the opening and fell through the opening, approximately 9 to 10 metres to the concrete floor on the basement level. 16. Mr Taripo sustained injuries as a result of the fall including an open right mid-foot dislocation, a fractured left tibia and fibula, open fracture to the left heel bone, and a pelvic fracture. 17. Mr Taripo states that he thought the plywood was part of the rubbish that he was clearing up. Mr Taripo was not aware that there was a penetration in the concrete slab on Level 2. He was not informed about the presence of the penetration by anyone employed by Ms Marsters or Hyecorp. The plywood covering the penetration was not secured and there was no indication in the concrete slab that it had ever been secured. There was no signage or warnings to indicate that a penetration existed on Level 2, nor was there any fencing or barricades placed around the penetration. SYSTEM OF WORK BEFORE THE INCIDENT 18. Prior to the incident Hyecorp did not undertake an adequate risk assessment for the work to be performed by the steel-fixers on Level 2 of the premises. 19. Western City Construction provided Hyecorp with a written safe work method statement ("SWMS") dated 16 September 2006. The SWMS for the premises was generic and not specific for all the work to be conducted at the premises. The SWMS failed to identify each specific task undertaken at the premises, including the work to be conducted on Level 2 on the date of the incident. The SWMS addressed the risk of falling from height through penetrations. However, this was in respect of suspended slabs and did not pertain to the penetration on Level 2. 20. There were no fall protection measures in place for working in the vicinity of the open penetration on level 2. The plywood covering the penetration was not bolted or secured to the cement. There was no barricading or fencing around the penetration. 21. Hyecorp did not ensure that Western City Construction's workers were adequately supervised at the premises, particularly in relation to any work which was required to be performed in the vicinity of the penetration on Level 2. 22. Hyecorp did not have an adequate system in place to ensure that non-employees reported to the site office prior to commencing work. Mr Ghevondian was responsible for providing site specific inductions at the premises. On the day of the incident, Mr Ghevondian states that he was not aware that Western City Construction workers had entered the premises and was therefore not able to induct them and give proper instruction and hazard identification prior to commencement of work. Mr Taripo was at all relevant times supervised by Teao. 23. Mr Ghevondian did not, on the day of the incident, inform Mr Taripo or anyone from Western City Construction that the penetration existed on Level 2. 24. Mr Taripo was given site-specific induction training at the premises on 3 October 2006 by Hyecorp. No further induction was provided to Mr Taripo between October 2006 and the incident date on 15 February 2007. 25. Toolbox meetings between subcontractors and foreman were held weekly but were not documented. However, steel-fixers did not work regularly at the premises and only worked on an as needs basis. The toolbox meetings with the steel-fixers would normally be held before they start work on the day they arrive at the premises. IMPROVEMENT NOTICES BEFORE THE INCIDENT 26. Prior to the incident, Hyecorp had been issued with the following: a) Three Improvement Notices on 17 July 2006 with regard to working at heights and/or inadequate guarding of open penetrations; b) Prohibition Notice on 17 July 2006 with regard to working at heights; and c) Penalty Notice on 19 July 2006 as a result of workers being exposed to the risk of falls through open penetrations on an access platform. IMPROVEMENT NOTICES FOLLOWING THE INCIDENT 27. On 16 February 2007, Inspector Ron Spence issued an Improvement Notice to Hyecorp to ensure that all floor penetrations were securely covered in order to prevent unauthorised or unintentional removal. SYSTEM OF WORK FOLLOWING THE INCIDENT 28. Following the incident Hyecorp changed their sign-in and sign-out procedure for contractors attending the premises. Hyecorp sent letters to all their contractors stating that they must present themselves to the site office before going on the premises. 3 For the defendant, Mr Ghevondian, there was tendered into evidence an affidavit sworn by him together with two character references. 4 On the basis of the evidence of Mr Ghevondian, I am satisfied that he has significant qualifications in the building industry including a post-graduate degree from the University of Sydney. He has demonstrated expertise in occupational health and safety matters and a commitment to compliance. 5 It was the evidence of Mr Ghevondian that the team of employees of Western City Construction, which were present on the worksite on 15 February 2007, the day of the incident, had actually arrived one day earlier than they had been scheduled. Furthermore, they did not provide any notice to Mr Ghevondian of their attendance nor did they make contact with him. The first occasion on which Mr Ghevondian was aware of the presence of these employees on site was when he heard screaming following Mr Taripo's accident. 6 After the incident, Mr Ghevondian retained, on behalf of Hyecorp, a firm to undertake an audit of the company's occupational health and safety protocols and procedures with a view to minimising any further problems of this kind occurring in the future. That report, dated 27 March 2008, was tendered into evidence and Mr Ghevondian asserted that the recommendations contained in the report have been put into effect. 7 I am satisfied, on the material contained in the evidence, that each of the defendants is guilty of the offence charged and that it was appropriate for pleas of guilty to be entered. 8 The starting point for the assessment of an appropriate penalty with respect to each of the offences is the objective seriousness of the offence. I immediately observe that the positioning of a hole in the flooring of the construction area covered by a piece of plywood the dimensions of which barely covered the size of the hole and which was unsecured and unmarked in any way, creates a serious risk to the health, safety and welfare of the persons in the immediate vicinity. The evidence in the proceedings was to the effect that after the incident Hyecorp ensured that any holes of this kind were covered, that the covering was affixed to the flooring by use of dynabolts, was painted in order to attract attention to it and that a suitable warning indicating danger was displayed. 9 In my opinion, the circumstances that I have described created a significant risk that was not ameliorated by the fact that the steel fixing employees arrived one day earlier than scheduled. This is because there is no evidence that any particular steps would have been taken to have reduced that risk of injury in anticipation of those employees arriving the next working day. 10 I regard the breaches, viewed objectively, as most serious. 11 In assessing an appropriate penalty I shall also take into account the need for both general and specific deterrence, which is provided by the imposition of a penalty. The building industry is notoriously dangerous and, unfortunately, there seem to be subcontractors engaged within the building industry with less than appropriate regard for their obligations under the Act. 12 There are, however, a number of mitigating subjective matters which I shall take into account in favour of the defendants when assessing penalty. Pleas of guilty were entered at the earliest possible opportunity and the defendants co-operated fully with the WorkCover Authority of New South Wales in and about its investigation of the incident. The defendants expressed remorse and contrition for what occurred and Mr Ghevondian provided tangible assistance to Mr Taripo after the incident and was genuinely concerned for his welfare. 13 Mr Ghevondian, on the evidence, is a person of excellent character. I note that both defendants have no prior convictions. 14 The maximum penalty that may be imposed upon Hyecorp is $550,000 and upon Mr Ghevondian, $55,000. In all the circumstances, and having regard to the matters to which I have referred, I intend imposing a penalty upon Hyecorp of $120,000 and upon Mr Ghevondian of $10,000. 15 The prosecutor sought orders for a moiety and the payment of costs, which were not opposed. Orders 16 I make the following orders: 1. Each of the defendants is found guilty of the offence charged and convicted accordingly. 2. I impose a penalty of $120,000 on Hyecorp Constructions Pty Ltd and a penalty of $10,000 on Vigen Ghevondian with a moiety in each case to the prosecutor. 3. The defendants are to pay the costs of the prosecutor in an amount assessed by the Court in default of agreement. Such costs are payable by each of the defendants in the proportion that the penalties imposed bears to $130,000. 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.