Industrial Court of New South Wales CITATION: Inspector Steven Nikolovski v Northpac Constructions Pty Limited and Anor [2009] NSWIRComm 204 This decision has been amended. Please see the end of the judgment for a list of the amendments. PROSECUTOR: Inspector Steven Nikolovski PARTIES: DEFENDANTS: Northpac Constructions Pty Limited Nicholas Commisso FILE NUMBER(S): 1026 of 2007; 1027 of 2007 CORAM: Backman J CATCHWORDS: Occupational health and safety prosecution - defended hearings under s 8(2) and s 10(1) of the Occupational Health and Safety Act 2000 - bricklayer suffers serious injuries after falling off third level of building under construction in an area which did not have catch scaffolding - risk to safety was fall from height - alleged failures to ensure adequate fall protection and adequate supervision - undertaking of corporate defendant considered - place of work considered - s 28 defences relied upon by corporate defendant - held: s 8(2) offence proven - s 10(1) offence considered - whether Mr Commisso or his company Cross City Pty Ltd was person in control of the premises - s 10(1) offence dismissed - orders. LEGISLATION CITED: Occupational Health and Safety Act 2000 CASES CITED: St Hilliers Contracting Pty Ltd v WorkCover Authority (NSW) (2007) 162 IR 241 WorkCover Authority of New South Wales (Inspector Byer) v Cleary Bros (Bombo) Pty Ltd (2001) 110 IR 182 HEARING DATES: 29-30/04/2008, 1-2/05/2008, 20/05/2008, 12/06/2008, 5/12/2008, 18/03/2009, 14-17/04/2009 DATE OF JUDGMENT: 27 November 2009 PROSECUTOR: Mr P Skinner, of counsel Solicitors: DLA Phillips Fox Lawyers (Judith Healy/Donna Trembath) LEGAL REPRESENTATIVES: DEFENDANTS: Mr R Moore, of counsel Solicitors: McCabe Terrill Lawyers (Matthew Curll) JUDGMENT: - 22 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: BACKMAN J 27 November 2009 Matter No IRC 1026 of 2007 INSPECTOR STEVEN NIKOLOVSKI v NORTHPAC CONSTRUCTIONS PTY LIMITED Prosecution under section 8(2) and in the alternative prosecution under section 10(1) of the Occupational Health and Safety Act 2000 Matter No IRC 1027 of 2007 INSPECTOR STEVEN NIKOLOVSKI v NICHOLAS COMMISSO Prosecution under section 10(1) of the Occupational Health and Safety Act 2000 JUDGMENT OF THE COURT [2009] NSWIRComm 204 Introduction 1 Before the Court are two prosecutions arising out of an incident on 22 June 2005 at 300-306 Canterbury Rd, Canterbury where a number of workers were assisting in the construction of a north-western wall at the premises. Daryl Sadler, a 41 year old bricklayer, was performing bricklaying services at the premises, having been contracted verbally to do so by Dennis Sewell, a sole trader also working at the site. At about 2.40pm on the day, Mr Sadler was assisting in the construction of the north-western wall on level three when the wall blew over during a gust of wind. Mr Sadler attempted to push against the collapsing wall, but overbalanced and fell off the edge of the building approximately 2.5m onto scaffolding on the lower level of the building. Other workers in the vicinity at the time managed to escape the collapsed wall. At the time of the accident scaffolding had not been raised from level two to level three in the area where Mr Sadler fell. Mr Sadler was taken to St George Hospital. He suffered fractures to his vertebra at lumbar 1-3 and injuries to his knees and shoulders as a result of the fall. 2 At the time of the accident Mr Sewell operated his own business, Combined Brick and Block Laying. The business was a bricklaying business which provided the services of Mr Sewell and contractors such as Mr Sadler, Greg Ramsay, Robert Stewart and Steve Helmsley, all of whom were contracted to erect brick work and block work at the premises. According to Mr Sewell, he had a verbal contract with "Northpac Constructions" to perform the services. It was conceded by Northpac that it employed a number of persons at the premises including Tsognemekh Turtogtokh. A PAYG payment summary for the financial year ending 30 June 2005 which nominates Northpac Constructions as the "Payee" and Mr Turtogtokh as the "Payee" confirms the latter's employment by Northpac during the period. 3 Northpac was charged under s 8(2) of the Occupational Health and Safety Act 2000 (2000 Act), that on 22 June 2005 at the premises it failed to ensure that persons not in its employment, in particular Daryl Sadler, were not exposed to risks to their health or safety arising from the conduct of its undertaking while at its place of work. Particulars of the contravention alleged against Northpac are: (i) failed to ensure that adequate fall protection measures were in place for bricklayers working on level three of the premises; (ii) failed to adequately supervise work performed on the premises so as to prevent bricklayers from working in an area without adequate fall protection. 4 Northpac was also charged in the alternative under s 10(1) of the 2000 Act. That charge alleges that on 22 June 2005, Northpac, being a person who had control of the premises used by people as a place of work, failed to ensure that the premises were safe and without risk to the health of persons in particular Daryl Sadler. The particulars alleged are identical to the particulars alleged against Northpac under the s 8(2) charge. 5 Nicholas Commisso was charged under s 10(1) of the 2000 Act that on 22 June 2005, being a person who had control of the premises, used by people as a place of work, he failed to ensure that those premises were safe and without risk to the health or safety of persons in particular Daryl Sadler. Particulars of Mr Commisso's contravention are: (i) failed to ensure that adequate fall protection measures were in place for bricklayers working on level three of the premises; (ii) failed to adequately supervise work performed on the premises so as to prevent bricklayers from working in an area without adequate fall protection. 6 The premises was owned by Berradawn Pty Ltd. On the premises a large mixed residential and commercial building was under construction. As at 22 June 2005, the building had been erected to level three. Prior to 11 March 2005, Northpac was known as Nord Pacific Developments Pty Limited. As at 22 June 2005, James Dominic Ciliegi was a director and secretary of Northpac. Northpac at the same time was wholly owned by Multi Pty Ltd. Mr Ciliegi on 22 June 2005, was also a director of JDC Project Management Pty Ltd. Northpac entered into a contract with Berradawn on 25 September 2004 to construct the building at the premises. The evidence indicated that at some unspecified time after the date of the contract it became apparent to Mr Ciliegi that Northpac did not have a current builder's licence. This state of affairs became apparent when Northpac was in the process of arranging bank finance for the construction of the complex at the Canterbury premises. JDC had a current builder's licence. With the agreement of Berradawn, Northpac's name was "whited out" on the contract document and JDC's name was inserted, as well as its builder's licence number, 154339C. Northpac's ABN (No. 78-104-013) remained on the second contract. The date on the second contract remained unchanged (namely 25 September 2004). Mr Ciliegi's signature appeared on both contracts. 7 Sometime in 2004 and before construction commenced at the Canterbury premises, a joint venture agreement was drafted between JDC, ABD Investments Pty Ltd, Cross City Ltd, Multi Pty Ltd and other corporate entities and individuals. Raymond Touma was the director of ABD, Mr Commisso was the director of Cross City. Under the terms of the arrangement, ABD, JDC and Cross City agreed to enter into a joint venture. It was envisaged that Multi would acquire land and properties for the purpose of re-development by constructing complexes of residential units or mixed complexes of residential and commercial units and the subsequent sale of the completed units for profit. Mr Commisso was to be the project manager. 8 All members of the proposed joint venture were to purchase and hold shares in Multi. Mr Touma's company, ABD, was to contribute $1,000,000 initial capital; Mr Ciliegi's company, JDC, $500,000; Mr Commisso's company, Cross City, $500,000; and a fourth company, Development Corporation Pty Ltd, $100,000. 9 The agreement was never formalised. According to Mr Ciliegi, he was unable to raise the $500,000 required to enable JDC to enter into the agreement. It was Mr Ciliegi's evidence that the building was constructed at the premises under an informal arrangement in which Northpac was the builder of the complex which comprised residential and commercial units at the Canterbury premises, and JDC's name and licence number were used as a device to enable Northpac to build the complex and obtain the finance (with the imprimatur of Berradawn). 10 Northpac financed the construction of the complex and paid the sub-contractors. By agreement with Berradawn, all payments due and payable under the second contract were to be made to Northpac. 11 Mr Touma, in his evidence, said that JDC, not Northpac, was the builder of the complex. According to him, Northpac was the main contractor, Mr Commisso was its representative at the premises, and JDC was in charge and in control of all site activities at the premises. He also said that Cross City was engaged by Northpac to provide project management services to the Canterbury premises. 12 These matters, about which there was considerable dispute during the proceedings, will be explored in more detail later in this judgment. 13 The elements of an offence under s 8(2) which the prosecutor must prove beyond reasonable doubt are: (i) Northpac was an employer; (ii) Northpac failed to ensure that persons not in its employ were not exposed to risk to their health and safety; (iii) the risks to health and safety arose from the conduct of Northpac's undertaking; and (iv) persons not in Northpac's employ were at its place of work. Northpac: an employer 14 The evidence with regard to the first element was that Northpac employed Mr Turtogtokh during the financial year ending 30 June 2005. The date of the alleged offence against Northpac falls within this period. There was a concession on the part of Northpac that it was an employer. Based on these matters, I find beyond reasonable doubt that the first element of the s 8(2) offence has been made out by the prosecutor. Whether Northpac failed to ensure the safety of non-employees 15 There was no issue between the parties that on 22 June 2005 catch scaffolding had not been raised to level three in the area where the bricklayers, including Mr Sadler, were working. The evidence indicated that there was an expectation on the part of the bricklayers that the scaffolding would be lifted to the balcony area on level three in order to provide them with adequate fall protection while working on the floor slab and constructing the walls on that level. 16 The prosecution explained that it relied on the absence of catch scaffolding on level three to establish the first particular alleged against Northpac, namely the failure to ensure that adequate fall protection measures were in place for the bricklayers working on level three. No other fall protection measures were relied upon. The risk to safety relied upon was the risk of a fall from height said to result from the absence of the catch scaffolding. 17 On 22 June 2005 Mr Sadler was working in the balcony area where the catch scaffolding had not been raised. There were some handrails in the vicinity. According to Mr Sadler these had to be removed so that the wall could be constructed. Mr Commisso, in his record of interview, admitted against Northpac, said that handrails and scaffolding were the intended measures for fall protection on level three. He said it was Northpac's responsibility to supply the scaffolding. The handrails were installed as a preliminary measure awaiting the installation of the scaffolding. He appeared to accept in the interview that the scaffolding had not been erected in the balcony area of level three on 22 June 2005. He agreed in the interview that the handrails were not suitable as a fall protection measure in circumstances where the brick wall collapsed. Mr Sewell in his evidence said that on 22 June 2005 the scaffolding had not been built up to level three. When asked why the scaffolding had not been erected in the balcony area of level three (where Mr Sadler was working at the time of the accident) he responded: It's an absolute mystery to me. On that particular day, as I said the scaffolders were there for the express purpose of lifting the scaffold from level 2 to level 3 and yet they were allowed to leave the site at midday without completing, as I say, the work in its entirety. Whereas there were only 30 minute to one hour's work remaining and at that [sic] had they stayed and completed the work we wouldn't be having this discussion today. 18 According to Mr Ramsay he and the other bricklayers working on level three were concerned that the scaffolding had not been raised to that level. Mr Sadler said he was under the impression that the scaffolding had been erected. He thought that if he pushed the wall (at the time of the accident) that it would only go as far as the scaffolding. He pushed a bit too hard, because he believed the scaffolding was in place, over-balanced and fell over the balcony edge. Mr Sadler, from where he was working, said he could not see whether the scaffolding had been erected because the external wall had been built earlier that day, and it was above his eye-level. 19 The wall was a double skin construction using larger than standard house-sized bricks, called keg bricks. Mr Ramsay explained that "double skin" means two skins of brick with a cavity, generally 50 mm wide, between them. At the time of the accident Mr Sadler said he was bricking up the inner wall. 20 There was some contest during the proceedings as to the height of the brick walls where Mr Sadler was working at the time of the accident. Mr Ramsay described the height of the external wall at Mr Sadler's location as no higher than 1.5 metres. He estimated that height from where he was working on level three at around the time of the accident. From that position Mr Ramsay was standing on a lower level by comparison to Mr Sadler's position. By reference to a plan of the third floor of the building and the respective positions of both men nominated by them on the plan, Mr Ramsay would have been standing at a level no more than 100 mm lower than Mr Sadler's position. Other evidence suggested that the difference between the two levels may have been greater, somewhere in the vicinity of 400 mm. Mr Sadler described the height of the external wall as, "from my feet over two metres". He said he was 176cm tall and that the external wall was above his eye-level. The internal wall which he was constructing at the time of the accident he described as, "about waist level". 21 Mr Sadler's evidence was that he could not see over the external wall. He therefore did not realise at the time of the accident that the scaffolding had not been erected in the area where he was working. The significance of the height of the external wall at the time of the accident was explained by Mr Moore, counsel for Northpac, as, "the lower the wall the less likely it is to be affected by wind". 22 With regard to the risk to Mr Sadler's safety while working on level three, Northpac contended that the evidence established that the risk was "minimal or slight". The basis upon which the contention was advanced was Mr Sadler's precise location at the time of the accident. Mr Sadler nominated his position at that time by reference to the floor plan and photographs of the accident site. His position was confirmed by Mr Ramsay in his evidence. The evidence established that Mr Sadler was working behind the external wall on the balcony slab of level three while constructing the inner wall. Mr Moore, counsel for Northpac relied on a number of factors which were said to provide support for the proposition that the risk to Mr Sadler's safety was minimal. These were: 1. at all times Sadler was working from the concrete slab; 2. Sadler was not laying bricks "overhand" or at the slab edge, perhaps more correctly on the external perimeter wall; 3. Sadler was laying bricks from his left to his right, that is, from the slab side to the front balcony slab edge. 4. Sadler was not working in the area constructing any external wall by laying bricks "overhand". Sadler was engaged in the construction of the "extended balcony wall" on the same line as what was described as the "inner skin". 5. Sadler was exposed to lesser risk of falling as the wall increased in height. 6. The area of movement within which Sadler was moving was of short compass. 7. There is no identification of any "trip" hazards within the evidence. 23 Northpac also relied on an expert report of Neil Monteith to support its contention that Mr Sadler was exposed to a minimal risk to his safety. The report indicated that Mr Monteith had considerable experience in the building industry. At the time the report was prepared he was a building consultant. There was no challenge by the prosecution to Mr Monteith's qualifications or his knowledge, generally, of the building industry. Mr Monteith's conclusion was that the risk to Mr Sadler's safety on 22 June 2005 was "extremely low". His opinions were summarised by him in a letter to Northpac's legal representatives on 17 March 2008. In that letter he stated: 1. Yes, I consider that a risk existed to Mr Daryl Sadler of falling from height when he was laying bricks on RL18.10 on 22 June 2005. 2. The risk first arose when Mr Daryl Sadler commenced to lay bricks on the north corner and return on RL18.10 which is a location directly above the level 2 balcony on RL15.615. The distance between these levels is approximately 2.485 metres. 3. There is some doubt as to the actual construction of the walls within this general area as it existed at the time Mr Daryl Sadler would have commenced to construct the north corner and return and the extent to which Mr Sadler had laid bricks that day within the area. Mr Sadler would have, in my opinion worked from RL 18.10 in the performance of the work. The work area would have required minimal movement by Mr Sadler in relation to the laying of the bricks. I am of the opinion that at the time of the incident the north corner and return in height were not much more than 600 mm high. I consider that the level of risk to which Mr Sandler [sic] was exposed was extremely low. Whilst working above the Level 2 balcony area Mr Sadler may have either overbalanced or tripped and fallen. 4. The wall under construction would have remained a "green" wall and as it increased in height it remained so. However, as it increased in height Mr Sadler would have increasingly become more erect in his stance and to my mind the risk of overbalancing correspondingly decreased. The risk of tripping or falling against the wall remained and as "green" wall it would offer vert [sic] little resistance. 24 The reference in the above extract to "RL18.10" is, as I understand it, a reference to a relative level of 18.10 metres. A "green" wall is a brick wall newly constructed, before the mortar has dried. It is, by definition, inherently unstable. 25 Based on Mr Monteith's opinions and his conclusion that the risk to Mr Sadler's safety was "extremely low" Northpac contended that if the work performed by an employee is removed sufficiently from the location of the perimeter edge of the slab then there is no relationship in terms of risk to the existence or otherwise of the catch scaffolding. 26 Two observations may be made about the contention. First, Mr Monteith's opinions do not discount the existence of a risk to the safety of Mr Sadler. Secondly, Mr Monteith's conclusion that the risk was "extremely low" appears to be based on the circumstances prevailing at the precise time of the accident. Access to level three was via an internal stairwell. The bricklayers commenced work on level three at about 10am on 22 June 2005. Shortly after, construction of the external wall was commenced by Mr Ramsay and Mr Helmsley. At the time Mr Sadler was constructing the inner wall, the external wall remained a "green" wall. In Mr Monteith's opinion there remained a risk of tripping or falling against the wall, which by reason of its recent construction, would have offered very little resistance. At the time of the accident Mr Sadler may have had limited movement. This is not to say that during the course of the day Mr Sadler's movements were so restricted. The whole of the external wall had been constructed on 22 June 2005 in the area where there was no scaffolding. This means that at all times during the period when the bricklayers were working on level three in that area they were placed at risk to their safety. There was no evidence to suggest that Mr Sadler was working in the centre of level three or in a position where the risk of falling over the edge of the building in the absence of any scaffolding could be considered too remote. Nor, in my view, does the height of the external wall at the time of the accident minimise, or even negative, the risk. It was a "green" wall and therefore, as Mr Monteith concluded, it would have offered very little resistance in the event someone or something fell against it. 27 It should also be observed, that the immediate cause of the accident, that is the sudden gust of wind bears no relevance to the issue of whether the absence of the catch scaffolding resulted in a risk to the safety of Mr Sadler, or the other bricklayers, while they were working on level three. I make this observation to dispel any notion that the precise circumstances of the accident have formed part of my consideration of the causative facts giving rise to the risk. It was submitted on a number of occasions by Northpac that the prosecution case incorrectly placed too much emphasis upon the actual incident's causation. I have not understood the prosecution's case to be presented on that basis. 28 In oral submissions the prosecution's case on the issue of causation was put in the following way: Whether or not the wind is said to be the immediate cause of the wall to collapse and which is then the immediate cause of Mr Sadler taking evasive action which overbalanced him, the fact that he was up there on the third level working on the perimeter of a drop building a structure which, as he then showed and also the expert yesterday gave evidence was not a stable structure, just in itself until the mortar set, it was green, the returns hadn't been fully built and there was no bracing, so in effect, even though it was there as a physical barrier, it wasn't an adequate physical barrier at all. There is some evidence about the hand rails, but it is pretty clear what may have been there before and there is some doubt about that, but assuming there were some hand rails there before they had to be moved to one side so there was only the wall. Once he was in a position of instability, and indeed as the expert said yesterday impacts his body with the wall, he was always at risk of falling. 29 For completeness I have not taken into account the fact that the wall was not braced. This fact did not form part of the prosecution's case. Mr Sadler, and other bricklayers were, on 22 June 2005, on the third level of a building located several metres above ground level in the process of constructing a wall in an area where there was no catch scaffolding. Mr Sadler and the other bricklayers were, by reason of these facts, exposed to a risk of falling. 30 According to Mr Commisso it was Northpac's responsibility to supply the scaffolding to level three. In making this admission, Mr Commisso was authorised by way of letter of authority signed by a director of Northpac to speak to the prosecutor on behalf of Northpac, "regarding the incident at Canterbury on 22 June 2005". 31 Based on this evidence and the evidence relied upon by the prosecution to establish the first particular alleged against Northpac under the s 8(2) charge, I find beyond reasonable doubt that Northpac failed to ensure that Mr Sadler and other non-employees on 22 June 2005 were not exposed to a risk to health and safety by failing to ensure that adequate fall proctection measures were in place while they were working on level three of the building. Whether Northpac failed to adequately supervise work on level three of the building to prevent the bricklayers from working in an area without adequate fall protection 32 The second particular relied upon by the prosecution emphasises a lack of supervision of the bricklayers working on level three in an area where there was no catch scaffolding or other adequate fall protection. 33 The basis upon which this second particular was advanced by the prosecution was that Northpac failed to prevent the workers on level three from working in an area where there was no fall protection. The same causative facts relied upon to establish the first particular were relied upon to establish the second particular. These facts have been earlier dealt with and require no repetition. The case, simply put, by the prosecution in relation to this second particular, was that although the bricklayers were experienced workers in their field and the work being undertaken was not complicated, they nevertheless should not have been permitted to work on level three without the scaffolding being put in place. There was evidence which suggested that Northpac did not ensure that the bricklayers provided work method statements to it before commencing work. This failure was not relied upon by the prosecutor in the proceedings. 34 There is obvious and considerable overlap between the two particulars. Nevertheless, a failure on the part of Northpac to prevent the bricklayers from working in an area on level three where the scaffolding had not been raised and in circumstances where Mr Sadler and the other bricklayers were under the mistaken impression that it had been raised constitutes in my view a failure to adequately supervise the work on level three. Mr Ramsay said he asked Mr Commisso to direct the scaffolders to raise the scaffolding up to level three. His evidence on the issue was to the following effect: Q. Were you concerned about the scaffolding still remaining at that level when you and the other brick layers were building the wall up on the higher level 3? A. We were, but not exactly at that particular time. Earlier on we mentioned to Nick about raising the scaffold up to the level of all the rest of it, up to the slab level. Q. Who is Nick? A. Nick Commisso, the foreman. Q. When you say he is the foreman, foreman for who, as far as you knew? A. For Northpac Constructions. Q. Did Nick give you instructions on that day? A. Not really, no. Q. Did Nick generally give instructions on that site over the previous months you were there about what to build and where to build? A. Sometimes he would. He would say we need this section up or whatever, and unless he would specify what we would make our own decision about what we thought was appropriate to build up. Q. You had said something to Nick about scaffolding. Why did you raise that topic with him? A. Because it was up to the builders to supply the scaffold, the external scaffold. Q. You said something about Nick had given you instructions generally in the weeks before, is that correct? A. Yes. Q. And how did he have the capacity to do that? A. He was in charge of the job, so the job basically had to be run the way he wanted it to be run. Q. The day that the wall collapsed, did you see scaffold workers there that day? A. Yes. Q. Did you understand them to be doing anything in relation to the scaffolding near where you were working? A. Well, we were under the impression that they were going to raise that section of the scaffold as they were there raising the other sections of the scaffolding up to that level. Q. Why were you under that impression? A. Well, I had asked Nick for them to raise it, but also the normal thing is when they come in, when they raise the scaffold they raise it all around the whole building. Q. You were building the brick wall by the over hand method? A. Yes. Q. What does that involve precisely? A. It means building the external skin from inside on the slab. Q. What's the purpose, then, of scaffolding beyond then the exterior of the building if you are building a wall in that method? A. It acts as catch scaffold, so, if you do fall, you don't fall too far. Q. What's your expectation as to the level the scaffolding has to be up to if you are building a wall by the over hand method? A. Well, I think the way the law works, and it is what everybody expects, is that you shouldn't be able to fall any further than two metres. Q. So you were building a wall on the third level, and I think you said you expected the scaffolding to be up to the level at least of your feet, is that correct? A. Yes, that's correct. Q. When it got to that level you could see that? A. Yes. Q. Did anyone tell you to either continue working or to not continue working? Did anyone give you some instruction about how you then continued building the wall as you obviously did? A. no. Q. Was Mr Commisso on the site that day as far as you knew? A. Yes. 35 Mr Commisso in the interview admitted against Northpac said his role at the Canterbury premises on 22 June 2005 was that of construction manager employed by Northpac, "with no remuneration". He said the contract of employment was verbal and was entered into with Mr Touma. He said it was Northpac's responsibility to supply the scaffolding but it was the scaffolding company's responsibility to ensure the scaffolding was raised to the correct level prior to work commencing. He said he told the scaffolders in his capacity as site manager when to come onto the premises. 36 The effect of the foregoing evidence is that Mr Commisso as Northpac's construction or site manager at the Canterbury premises was the person who directed the workers, including the bricklayers, as to how the work was to be performed. He also acted as Northpac's representative organising the supply of scaffolding and instructing the scaffolders when to come onto the premises. He did not, as Northpac's representative, ensure that the scaffolding was raised to the area on level three where Mr Sadler, and the other bricklayers, were working at the time of the accident. Northpac could not in the circumstances delegate its statutory obligations to the scaffolding company to ensure the scaffolding was raised to level three in the area where the bricklayers were working at the time of the accident. It was Northpac's responsibility to ensure that the bricklayers did not or were not permitted to work in that area on level three until the scaffolding had been raised. The second particular alleged against Northpac has therefore been made out by the prosecution beyond reasonable doubt. Whether risk to safety arose from the conduct of Northpac's undertaking 37 At issue during the proceedings was which corporate entity was the builder at the Canterbury premises, Northpac or JDC. The issue was somewhat complicated, superficially at least, by the fact that Mr Ciliegi was at the time of the alleged offence, a director of both companies. The prosecution described Northpac's undertaking at the Canterbury premises as, a building, and the concept of an undertaking in the Act is essentially commence doing something for profit, helping to get a profit as opposed to a domestic arrangement [...] the company's undertaking was to do work for another entity, Berradawn Pty Ltd, for profit. 38 I take it from this description, together with other evidence led by the prosecution earlier referred to, that whichever corporate entity was in charge of constructing the residential and commercial complex at the Canterbury premises was undertaking (in the sense conveyed by s 8(2) of the 2000 Act) that work at the premises on 22 June 2005. 39 The evidence on this issue has already been dealt with in some detail. Mr Ciliegi, a director of both Northpac and JDC, said that Northpac was the builder of the complex. He said the later insertion of JDC's name and builder's licence no. in the contract between Northpac and Berradawn was simply a means by which Northpac could build the complex. Northpac arranged for the bank finance to build the complex and hired the sub-contractors to do the work. By agreement with Berradawn all payments due and payable under the contract, signed by Berradawn with JDC's corporate name and licence number inserted into the contract, were to be made to Northpac. 40 In addition, Mr Commisso in his interview admitted against Northpac, said he was employed at the Canterbury premises by Northpac as the construction or site manager. Other evidence indicated that he gave directions as to how the work was to be performed at the premises while the complex was under construction. Mr Ramsay, who described Mr Commisso as the foreman, said Mr Commisso handed him the floor plans for level three. Mr Commisso in the interview admitted against Northpac described his duties as site manager at the premises as "controlling the site, with leasing with the subcontractors and controlling the construction [...] to maintain safety issues, to control the documentation for those safety issues, to make sure they were done and work methods". He also said Northpac had an OHS Management Plan for the premises which had been prepared by Mr Ciliegi. Northpac also took out construction risk insurance with QBE Insurance (Australia) Limited issued on 2 May 2005 for the Canterbury premises. The period of insurance was from 1 August 2004 to 31 August 2005. The risk was described as a building site at the premises. 41 Mr Touma said Northpac was not the builder of the complex at the Canterbury premises. He said JDC did the work at the premises. Mr Ciliegi had intended that Northpac perform the work but it couldn't because it didn't have a builder's licence. JDC therefore took over the project, Northpac only paid the bills. Mr Ciliegi visited the premises in his capacity as a director of JDC, not as a director of Northpac. Mr Touma also said that Mr Commisso took instructions from Mr Ciliegi with respect to the Canterbury premises. He said Mr Ciliegi told Mr Commisso what he wanted done at the premises. Mr Touma described JDC as the principal contractor at the premises, Northpac he said paid the sub-contractors. 42 On behalf of Northpac, Mr Moore submitted that the contract between Berradawn and JDC, being second in time, and the fact that JDC had a current builder's licence, provided confirmation that JDC was the builder. Northpac's role was confined to paying the bills. This meant, in turn that Northpac had no undertaking at the premises causally connected to the risk to safety which arose only in connection with the construction of the complex. Whichever corporate entity was the builder had the relevant undertaking, and JDC was the builder. 43 There was some documentary evidence that indicated that Northpac invoiced JDC for work performed at the Canterbury premises. This could be consistent with Northpac "paying the bills" in its confined role at the premises. JDC, on paper, was the nominated builder at the premises during a period which included 22 June 2005. Mr Touma said that JDC was the builder. 44 In resolving this issue the Court must look at the reality of the arrangements between the parties. A joint venture was proposed between the various corporate entities by which it was envisaged that Northpac would build the complex at the Canterbury premises. That agreement never materialised. Mr Ciliegi could not raise the necessary finance. The contract between Berradawn and Northpac contemplated that Northpac would build the complex. The contract was replaced by a second contract between Berradawn and JDC as the builder, because it, not Northpac possessed a builder's licence. Curiously, Northpac's ABN remained on that contract. 45 Northpac submitted that the second contract established that only JDC had a legal right to perform the obligations under the contract. That may or may not be so, but in my view it does not reflect the reality of the circumstances which prevailed on 22 June 2005 at the Canterbury premises. Mr Ciliegi was a director at that time of both Northpac and JDC. His evidence was that Northpac was the builder. Mr Ciliegi was clearly in the best position to know as a director of both corporate entities which of those entities was building the complex on 22 June 2005. Mr Commisso certainly proceeded on the basis that Northpac was the principal contractor undertaking the construction of the complex at the Canterbury premises. Documentary evidence reveals that Mr Commisso's company, Cross City, was invoiced by Northpac for work done during the period spanning 22 June 2005. It does not inevitably follow from Mr Commisso's evidence alone that Northpac was the principal contractor at the premises. Mr Commisso's dealings were with Mr Ciliegi. He may not have been aware of which particular corporate interests Mr Ciliegi was representing at the premises. He did not, however, contradict Mr Ciliegi's evidence concerning Northpac's role at the premises, rather his evidence supported it. 46 The issue therefore may be resolved by reference to Mr Ciliegi's evidence and other evidence which supported it. He was, as a director of both Northpac and JDC the person best placed to reveal which corporate entity was the builder of the complex. Mr Ciliegi gained no obvious advantage by nominating Northpac as the builder. There was no basis established in the evidence for the Court to disbelieve Mr Ciliegi or otherwise find that he was an unreliable witness. 47 Mr Commisso in the interview admitted against Northpac described Northpac's role or undertaking at the premises. It was, he said, the principal contractor and Mr Commisso was its representative at the premises as the construction or site manager. 48 The evidence on this issue establishes that Northpac undertook the building of the complex and hired and paid sub-contractors. It invoiced Berradawn for work performed. The risk to safety, that is the risk of a fall from level three in an area where there was no catch scaffolding, arose in the conduct of that undertaking. Northpac was responsible as the principal contractor for the construction work at the premises. It was Northpac's responsibility as the principal contractor, (the builder), to supply the scaffolding and ensure that it was raised to the area of level three where the bricklayers were working at the time of the accident. I find therefore, beyond reasonable doubt, that the risk to safety arose from the conduct of Northpac's undertaking. Persons not in Northpac's employ were at its place of work 49 There can be little doubt on the evidence that the bricklayers, including Mr Sadler who were sub-contracted to do the work by Northpac, were performing the work at Northpac's place of work. Northpac as the principal contractor was in charge of the construction work at the premises, which included the work being performed by the bricklayers on level three of the complex on 22 June 2005. Mr Commisso was Northpac's site manager at the premises. The bricklayers acted under his instructions. This element of the s 8(2) charge is therefore made out by the prosecution beyond reasonable doubt. Defences under section 28 of the 2000 Act 50 Northpac is therefore guilty of the offence under s 8(2) of the 2000 Act, unless it is able to make out a defence under s 28. 51 Northpac relied on both limbs of s 28 of the 2000 Act. Section 28 provides: It is a defence to any proceedings against a person for an offence against a provision of this Act or the regulations if the person proves that: (a) it was not reasonably practicable for the person to comply with the provision, or (b) the commission of the offence was due to causes over which the person had no control and against the happening of which it was impracticable for the person to make provision. 52 The section provides two defences, first that it was not reasonably practicable to comply with s 8(2) and, secondly that the commission of the offence was due to causes over which Northpac had no control and against the happening of which it was impracticable for it to make provision. 53 With regard to s 28(a) Northpac relied on the report of Mr Monteith and the opinion expressed in that report that the risk to safety was "extremely low". Balanced against this "extremely low" risk, the Court, it was said, would take into account the amount of time that would be required, the evidence suggested 1.5 hours, to construct the scaffolding in the area where Mr Sadler was working and conclude that it was not reasonably practicable to raise the scaffolding. 54 Section 28(a) is concerned with a balancing of the nature, likelihood and quality of the risk to safety against the costs, difficulty and trouble necessary to avert the risk: see for the relevant approach to be taken to s 28(a): WorkCover Authority of New South Wales (Inspector Byer) v Cleary Bros (Bombo) Pty Ltd (2001) 110 IR 182 at [87] [88]; and, St Hilliers Contracting Pty Ltd v WorkCover Authority (NSW) (2007) 162 IR 241 at [26] to [28] [33] to [44]. 55 Contrary to Northpac's contentions with regard to the risk to safety the Court does not agree, for reasons earlier expressed, that the risk to safety was "extremely low". Mr Sadler may have been working behind the external wall at the time of the accident but the wall by its nature was a "green" wall and was therefore inherently unstable. It was also constructed in an area where no catch scaffolding had been raised. The risk to Mr Sadler's safety while working in that area on level three was both foreseeable and serious. The magnitude of the risk, in my view, far outweighs the time it would have taken for the scaffolders to raise the scaffolding to the remaining area of level three before the bricklayers could resume work. I am therefore not satisfied on the balance of probabilities that Northpac has established a defence under s 28(a) in relation to the offence under s 8(2) with which it has been charged. 56 Nor in my view can Northpac successfully establish a defence under s 28(b). The defence requires a consideration of the causes of the commission of the offence and an assessment whether Northpac had no control over those causes. It concerns causation between the failures alleged and the relevant risk, not causation between the failures alleged and the accident: St Hilliers at [71], [73]. Here, the cause of the offence was the failure to ensure that the scaffolding was raised to the area on level three where the bricklayers were working. This cause, for reasons earlier expressed, was within the control of Northpac, the principal contractor at the site. 57 Northpac is therefore guilty of the offence under s 8(2) of the 2000 Act. Northpac: section 10(1) offence 58 The prosecution relied on the charge under s 10(1) in the alternative. Having found that the charge under s 8(2) against Northpac has been established beyond reasonable doubt it is not necessary for the Court to consider the s 10(1) charge. Mr Commisso: section 10(1) offence 59 The charge under s 10(1) against Mr Commisso requires the prosecution to prove that he was a person who, at 22 June 2005 had control of the Canterbury premises. According to Mr Commisso, his company, Cross City was the manager at the Canberbury premises. Any liability which might attach to Mr Commisso could be only in his capacity as a director of Cross City. No charge was brought against Mr Commisso in that capacity. The prosecution did not directly address this issue except to say in written submissions that Northpac utilised Mr Commisso, "through his company, Cross City Pty Ltd" as a supervisor at the site. 60 Mr Commisso took part in a second record of interview which was admitted against himself. In that interview he said that he was employed by Northpac on 1 July 2004 as a construction manager. He described his roles and responsibilities at the Canterbury premises as, "controlling the site as in contractors, work to be performed, how they were to be performed, conversing with authorities, the owner". He also volunteered that he had occupational health and safety responsibilities at the premises which included, "[controlling] the site in a safe order to control the workers to work in a safe environment". He also said that he was responsible for site inspections at the site at the time of the accident. These matters suggest that Mr Commisso had control of the Canterbury premises in his capacity as construction manager for Northpac. During the interview however Mr Commisso was not asked any questions about his company Cross City, or whether that company had any interest or involvement at the premises. A letter dated 24 October 2005 was sent to the prosecutor and signed by Mr Commisso as construction manager for Northpac. The letter however was signed some months after the date of the accident and on that basis has little weight in an assessment of which person or entity was the construction manager at the Canterbury premises at the time of the accident. 61 Mr Ciliegi gave the following evidence under cross examination on this issue: Q. If one just turns to Mr Commisso at the moment, Mr Commisso's services on the site, on your understanding, and based on the evidence you were just given were provided through Cross City on your understanding of the joint venture arrangements? A. Cross City was invoicing Northpac for his service, yes. Q. And the services that Cross City were providing were being provided by the individual, Mr Commisso? A. Yes. Q. You recall I put to you those documents which have just been marked for identification? A. Yes. Q. As being invoices raised by you? A. Yes. Q. Approved by you? A. Yes. Q. Related to site management services on the Canterbury site? A. Yes. Q. In regards to that is it your evidence that your understanding is that Mr Commisso's company, that is Cross City, raised similar invoices for the provision of his services? A. Yes, that's my understanding, yes. 62 Documentary evidence tendered during the proceedings tended to support Mr Ciliegi's evidence that Cross City invoiced Northpac for Mr Commisso's services at the premises. A document headed "Northpac Constructions Pty Ltd ... Card Transaction [Accrual]" for the period 1 July 2004 to 13 January 2006 sets out a series of payments made to Cross City between 28 October 2004 and 23 December 2005. 63 Mr Ciliegi's evidence and the documentary evidence which lends some support to his evidence raises a reasonable doubt as to whether Mr Commisso was on 22 June 2005 the construction or site manager at the Canterbury premises. It suggests that Cross City was the appropriate entity which provided the management services at the premises. It suggests in turn that Cross City, not Mr Commisso, was the "person" with the requisite degree of control of the Canterbury premises on 22 June 2005 for the purposes of s 10(1). 64 The offence under s 10(1) of the 2000 Act against Mr Commisso has therefore not been established by the prosecution beyond reasonable doubt. Orders 65 The Court makes the following orders: (1) In Matter No IRC 1026 of 2007 the defendant Northpac Constructions Pty Ltd is found guilty of the offence. (2) Matter No IRC 1027 of 2007 is dismissed. (3) In Matter Nos IRC 1026 and 1027 of 2007 costs are reserved. (4) Matter Nos IRC 1026 and 1027 of 2007 are set down for directions hearings at 9:30 am on 15 December 2009. _______________________ AMENDMENTS HISTORY: 18/12/2009 - Incorrect spelling of first name of WorkCover Authority (NSW) Inspector. - Paragraph(s) Coversheet/Heading/Citation 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.