Industrial Court of New South Wales CITATION: Inspector Rowe v Mintark Pty Ltd and Harvey [2009] NSWIRComm 216 Inspector Andrew Rowe of WorkCover Authority of New South Wales (Prosecutor) PARTIES: Mintark Pty Ltd (First Defendant) Rodney Gerald Harvey (Second Defendant) FILE NUMBER(S): IRC 217; IRC 221 of 2009 CORAM: Marks J CATCHWORDS: OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(1) of the Occupational Health and Safety Act 2000 by the corporate defendant - personal defendant deemed guilty by s 26(1) - early guilty pleas - appropriate penalty - objective seriousness - inadequate safety procedures and risk assessment - serious breach - injured worker - general and specific deterrence - remorse and contrition - ultimately financial burden will be borne by personal defendant - financial penalty on personal defendant reduced - no prior convictions - penalties imposed LEGISLATION CITED: Occupational Health and Safety Act 2000 - s 8(1), s 26(1) CASES CITED: Webster v AGG Concreting Pty Ltd, Darryl Coffey and Steven Stathis [2009] NSWIRComm 55 HEARING DATES: 2 December 2009 DATE OF JUDGMENT: 18 December 2009 Mr D Chin of counsel (Prosecutor) Solicitor: Legal Group LEGAL REPRESENTATIVES: WorkCover Authority of New South Wales Mr M Gillis (solicitor) (First and second defendants) Solicitor: Gillis Delaney Lawyers JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Friday 18 December 2009 Matter No IRC 217 & 221 of 2009 Inspector Andrew Rowe v Mintark Pty Ltd and Rodney Gerald Harvey Prosecution pursuant to s 8(1) and s 8(1) by virtue of s 26(1) of the Occupational Health and Safety Act 2000 JUDGMENT [2009] NSWIRComm 216 1 The prosecutor, Inspector Andrew Rowe of the WorkCover Authority of New South Wales, has charged Mintark Pty Ltd ("Mintark") and Rodney Gerald Harvey with breaches of s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"). Mr Harvey is charged with that breach by reason of the provisions of s 26(1) of the Act, he being a director of Mintark at all relevant times. 2 s 8(1) of the Act is in the following terms: 8 Duties of employers (1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. 3 s 26(1) of the Act is in the following terms 26 Offences by corporations — liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 4 The charge brought against Mintark as contained in the application for order is that it being an employer, on 20 February 2007, at Lot 159 Howden Street, Holsworthy in the State of New South Wales FAILED TO ensure the health, safety and welfare at work of all its employees, and in particular, Jamie Kirchen, contrary to section 8(1) of the Act. The particulars of the charge are: a) The defendant failed to ensure that floor joists were adequately installed and stabilised at the site so as to render the floor joists safe to work on and support loads, in particular that: i. adequate blocking (or equivalent) was installed to ensure rigidity/stability; ii. temporary battens braced back to a point of rigidity (no more than 2.5m apart) to hold the top flange of each joist straight between supports were installed. b) The defendant failed to ensure that persons working on or egressing or accessing floor joists at the premises were not exposed to the risk of falling through or from the floor joists. c) The defendant failed to provide its employees with a safe system of work with respect to working at heights in that the defendant failed to ensure that its employees working at the site were provided with and/or were using an adequate fall prevention system whilst working at heights. d) The defendant failed to ensure that loads, in particular pallets of floor sheeting, were not placed on floor joists on the first floor level of the building under construction at the site until joists were installed across the whole floor area and were adequately secured. e) The defendant failed to ensure its employees did not undertake work at the site for which they were not qualified including: i. directing the operation of any cranes at the site; ii. undertaking dogman duties at the site such as slinging loads at the site; iii. hooking and unhooking loads onto and from cranes at the site. f) The defendant failed to ensure its employees were adequately supervised at the site in respect to: i. working at heights; ii. the installation of flooring; iii. working with or in the vicinity of cranes. g) The defendant failed to conduct an adequate risk assessment in relation to: i. working at heights upon the site; ii. the installation of flooring at the site. h) The defendant failed to provide its employees and in particular Jamie Kirchen, with adequate information, instruction or training with respect to: i. working at heights; ii. the installation of flooring; iii. working with or in the vicinity of cranes. As a result of the defendant's failures employees and in particular, Jamie Kirchen were placed at risk of injury. 5 Each of the defendants pleaded guilty and this judgment is concerned only with the question of penalty. 6 An agreed statement of facts was filed in each of the proceedings and I set out hereunder that which was filed in connection with the proceedings brought against Mr Harvey because all of the facts are relevant also to the proceedings against Mintark. 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, Rodney Gerald Harvey of 5 Warner Street, Bridgewater Estate, Camden Park in the State of New South Wales ("the defendant") was a director of Mintark Pty Limited (ACN 067 071 961) ("Mintark") a corporation whose registered office is situated at Suite 14, 185 Airds Road, Leumeah in the State of New South Wales ("the corporation") 3. At all material times the corporation was an employer at Lot 159 Howden Street, Holsworthy in the State of New South Wales ('the site'). 4. At all material times the corporation was undertaking carpentry work at the site, including the installation of flooring to the first level of a residential dwelling upon the site ('the dwelling') BACKGROUND 5. At all material times Mirvac Homes (NSW) Pty Limited ("Mirvac") were the principal contractor at the site. Mirvac was erecting approximately 46 Villas and townhouses as part of a housing development known as the Holsworthy Estate. The development included the construction of a two storey building on the site. Mirvac was registered with ASIC on 23 January 1998. 6. Mirvac engaged Mintark to provide carpentry work with respect to the construction of the villas and townhouses. Mintark was registered with ASIC on 16 November 1994. 7. Jamie Leigh Kirchen ("Mr Kirchen"), a 19 year old fourth year apprentice carpenter, had been employed by Mintark since November 2003 and was working at the site on 20 February 2007. Mr Kirchen's direct supervisor at the site was Mr Harvey. 8. Mirvac had contracted with Mr Kirchen's employer, Mintark, to provide carpentry work with respect to the construction of the villas and townhouses. That carpentry work included the installation of floor joists and laying sheet flooring. There was no written contract between Mirvac and Mintark. 9. Mintark has two directors Rodney Gerald Harvey ("Mr Harvey") and Tanya Louise Harvey. Mr Harvey was a working director and was undertaking duties at the site since 20 February 2007. 10. Mirvac had contracted with Stephensons Cranes Pty Ltd ('Stephensons Cranes') to carry out crane work at the site on 20 February 2007. That work involved the use of a mobile crane to move pallets of floor sheeting from the ground level onto erected first level floor joists at the site. Each pallet contained 27 sheets of flooring with each floorboard measuring 4.0m x 1.2m x 0.2m. The weight of each pallet was approximately 1 tonne. 11. There were three supervisors at the site employed by Mirvac, Jean-Michel Bijoux ("Mr Bijoux"), Alex Schvetz ("Mr Schvetz") and Craig Young ("Mr Young"), although it would appear that Mr Schvetz had the direct responsibility of supervising the construction at the site. 12. On the day of the incident Nathan McNeill ("Mr McNeill"), an employee of Stephensons Cranes, was operating the crane. Mr McNeill was employed by Stephensons Cranes as a dogman but was operating the crane on 20 February 2007 as a trainee under the direct supervision of Richard Gordon Soltau ("Mr Soltau"). 13. Mr Soltau was employed by Stephensons Cranes as a crane operator but was acting as a dogman on the day of the incident. Nonetheless his duties and responsibilities as an employee of Stephensons Cranes on 20 February 2007 included the delivery and operation of the crane, as well as overseeing the crane's crew, including any person working as a dogman. Mr Soltau had the overall responsibility for supervising the hooking and unhooking of pallets of floorboards onto and from the crane at the site. Mr Soltau was supervising the operation of the crane when Mr Kirchen fell from the first level of the dwelling under construction. INCIDENT 14. On the morning of 20 February 2007 Mr McNeill attended the site office and obtained from Mr Schvetz instructions as to the location where work was to be carried out that day. About half an hour later the crane was set up ready to lift pallets at the site. 15. Mr McNeill slung the first load, and using the crane lifted it to the first level of the dwelling without incident. Mr Harvey unhooked that first load. The second load lifted that morning was slung by Mr Soltau and then lifted, also without incident. The fourth or fifth load lifted at the site that day, consisting of the pallet of flooring that eventually fell, initially had slings placed around it by Mr Soltau. 16. After Mr Kirchen gave directions to the crane operator as to the position he wanted the load set down, the crane then lifted the pallet. The load was set down but its position was unsatisfactory to Mr Kirchen and asked that it be moved a short distance to the right. This was done after which time the load was set down onto the erected first level floor joists. 17. Mr Kirchen then directed the crane operator to lower the load in order that Mr Kirchen could remove the slings from it. He removed the left sling from the load and went to remove the right sling but before he was able to move to the right hand side of the load, the load started to lift. The right hand side of the pallet of floorboards was raised, placing pressure on the inner last floor joist, upon which Mr Kirchen was standing, which flipped over onto its side. 18. Shortly afterward, the second floor joist tilted over causing Mr Kirchen to fall through a floor joist, 2.5m to the cement floor below, landing on his back. 19. The pallet of floorboards followed, due to the pallet slipping through the partially unhooked sling. 20. The pallet subsequently crushed Mr Kirchen's lower torso and legs. Police and Ambulance officers attended the scene and Mr Kirchen was taken to Liverpool Hospital for treatment of his injuries. Mr Kirchen suffered serious injuries to his pelvis, abdomen, bowel and right leg. Mr Kirchen remains unfit to undertake his pre injury duties. DETAILS OF SYSTEMS OF WORK PRIOR TO THE INCIDENT 21. There was no fall prevention system in place, other than standing with either foot on adjoining joists. In particular absent from the first level of the dwelling at the site was any perimeter scaffolding or temporary hand railing. Mr Kirchen was not provided with a fall arrest harness. 22. The system of work in place at the site at the time of the incident allowed loads of floor sheeting weighing approximately one tonne to be placed on unsecured floor joists where workers were standing. The system of work also allowed loads to be placed on the floor joists prior to all the floor joists being in place. Approximately a third of the floor joists had been erected at the time the load was placed on the first floor joists 23. The manufacturer's recommended system of joist installation and stabilisation was not followed on the day of the incident. The manufacturer's guide for installation stated that before loading joists and before the attachment of flooring, blocking should be installed at supports described in the guide and between supports, and temporary battens should have been braced back to a point of rigidity no more than 2.5 metres apart to hold the top flange of each joist straight between supports. On the day in question floor joists were being installed with blocks at irregular intervals but without temporary support battens. It was the defendant's normal practice prior to 20 February 2007 to install flooring joists without support battens and to load the joists up without the support mechanisms referred to in the manufacturer's guide for installation 24. There was inadequate demarcation of duties and responsibilities of workers at the site. Mr Kirchen and Mr Harvey undertook duties associated with dogging and the operation of a crane at the site. These duties were outside the scope of the duties ordinarily associated with carpentry and were duties which they were not qualified to undertake. 25. Although Mr Soltau was present on site to supervise crane operations, he failed to access the landing areas to ensure the loads were hooked, landed and unhooked safely. RISK ASSESSMENT 26. No adequate risk assessment was undertaken by Mintark or Mirvac with respect to the task of the installation of floor joists at the site. There was no adequate risk assessment undertaken on the task of placing pallets containing floorboards onto the floor joists. 27. Mintark's safe work method statement was generic and did not relate to the specific work being undertaken at the site. Mirvac had a written safe work method statement, which had been signed by Mr Kirchen and Mr Harvey before they commenced work at the site, but it was not followed. INFORMATION 28. There was no written or verbal information given to Mr Kirchen from Mintark, Mirvac, or Stephensons Cranes in relation to how the pallets containing floorboards were to be placed on the first level of the dwelling on the site. No information was given to Mintark from Stephensons Cranes. No information was given to Mintark from Mirvac with respect to how to load the pallets of floorboards, other than a generic work method statement. 29. The system of directing the crane to move the pallets of floorboards from the ground level to the first level of the dwelling was left almost entirely up to Mr Kirchen. This can be seen from the fact that there was no procedure in place for loading the pallets on 20 February 2007. 30. Although Mr Kirchen received instructions from Mr Harvey on 20 February 2007 as to the work to be undertaken at the site on that day, Mr Kirchen did not receive any instructions as to the method to be employed to load and unload pallets of flooring to the first level of the dwelling. 31. Stephensons Cranes never gave Mr Kirchen any instructions on how to load, or unhook the pallets of flooring. Similarly Mirvac did not provide any such instructions to Mr Kirchen. 32. Mr Kirchen relied upon his previous experience as a carpenter only in directing the operation of the crane and in hooking/unhooking loads to and from it on the day of the incident. SUPERVISON 33. On the day of the incident Mr Kirchen was being directly supervised by Mr Harvey, a director of Mintark. At the time of the incident Mr Kirchen was left by Mintark to direct the crane and hook/unhook loads, on his own. At the time Mr Kirchen fell from the first level of the dwelling, Mr Harvey was installing blocking to the floor joists at Lot 160 Howden Street, Holsworthy. Mr Soltau was supervising Mr McNeill. None of the supervisors from Mirvac were present at the site when Mr Kirchen was injured. TRAINING 34. At no time prior to and including 20 February 2007 had Mr Kirchen received any training in the procedures for directing crane operations and the hooking/unhooking of loads. Mintark knew that Mr Kirchen did not possess the necessary qualifications with respect to those tasks. The only experience Mr Kirchen had with respect to those tasks was experience he had gained directing crane operations whilst employed with Mintark on previous occasions. That experience was ad hoc and informal. NOTICES ISSUED 35. On 20 February 2007 the Inspector issued Prohibition Notice No.148934 prohibiting Mirvac from inter alia, working from heights at the site. 36. On 2 March 2007 the Inspector issued the defendant's corporation with Prohibition Notice No.170226 prohibiting persons working on an inadequately secured floor joist whilst loads were being placed upon it at the site. 37. On 8 March 2007 the Inspector issued a further Prohibition Notice No.170228 to Mirvac prohibiting persons working at height on inadequately supported floor joists. DETAILS OF THE SYSTEMS OF WORK AFTER INCIDENT 38. All work ceased on 20 February 2007 at the site. 39. A review of the systems of work was undertaken by Mintark with the following additions: a. That crane operations be conducted by competent / certified personnel; b. That the joists are to be installed across the whole floor area and temporarily braced as per manufacturer's recommendations; c. To lay floor sheeting out in front of work area, to reduce the risk of falls. 7 In addition, there was tendered into evidence for the prosecutor a number of photographs, a factual inspection report and, importantly, a guide for installation issued by the manufacturer of the joists which were being installed on the building site. 8 For the defendants, there was tendered into evidence a statement of Mr Harvey, a copy of the statement given by Mr Kirchen to the prosecutor and copies of some taxation returns for Mintark. 9 The defendants having pleaded guilty are taken to have pleaded guilty also to the particulars of the charges. 10 As is obvious from a reading of the charges and the agreed statement of facts, it is clear that Mintark failed to take adequate steps to prevent Mr Kirchen from being exposed to a risk of falling a distance of some 2.5 metres and the consequent serious injuries which he suffered. Mr Kirchen fell because the joists were not sufficiently stable to bear the load created by the force of the collapsing pallet of floorboards. 11 During the course of the hearing, some additional facts were agreed between the parties concerning the manner in which the joists had been affixed to the top of the frame. Firstly, the joists were nailed through pieces of edging which were glued to the joists' material and became part of the joists. The edging was about 50mm wide and each joist was somewhere between 20 and 25mm wide. Accordingly, there was somewhere between 10 to 15 mm of edging which protruded beyond each side of the joist itself. One or two 75mm nails were placed through this edging on either side of each joist into the top of the frame. Furthermore, blocks were placed between each alternate pair of joists and the blocks were nailed to the joists and the top of the frame. This produced a reasonable degree of stability, which was certainly sufficient to enable Mr Kirchen and others to walk on top of the joists while building work was being performed in the area. However, as was conceded by the defendants, no temporary battens had been placed across the top of the joists to increase their stability as was required by the manufacturer's installation instructions. Accordingly, whilst there was sufficient stability in the joists to allow "normal" work to be carried out whilst walking upon them, the stability was insufficient to bear the force created by the circumstances in which the packs of floorboards were inappropriately positioned during the course of unloading them by using the crane. 12 This situation was exacerbated by the fact that the floor joists were uncovered, there were open penetrations between each joint, there was no fall prevention system in place, including any fall arrest harness, scaffolding or temporary hand railing and Mr Kirchen had not been properly trained or instructed in carrying out work which was effectively to be undertaken by a qualified dogman. Furthermore, Mr Kirchen had not been instructed that he should not engage in activities that should be undertaken by a qualified dogman. All of these matters need to be considered against Mr Kirchen's age and relevant lack of experience and the fact that he was unsupervised at the time of the incident. Finally, I observe that the generic safe work method statement utilised by Mintark was inadequate to cover the work which was being undertaken by Mr Kirchen against the background that no adequate risk assessment of the work had been undertaken. 13 The commencement point for the assessment of the appropriate penalty is consideration of the objective seriousness of the offence. This is not the case of an employer that had no regard for the safety of employees or that did not have in place any appropriate or proper system of work and system of instruction, training, supervision and the like. On the evidence, Mintark was concerned to ensure that it undertook its work in a safe manner and it did have procedures and protocols in place to this effect. However, as is demonstrated by the matters to which I have referred, there were a number of deficiencies that, unfortunately, gave rise to the serious injuries which Mr Kirchen sustained. 14 Whilst this is not a worst-case situation, neither can it be considered at the lower end of the scale. Indeed, the defendants' solicitor properly conceded that the offences were serious. The injured employee was working in exposed conditions at a height, engaged in a process that he was not properly trained to undertake and without appropriate supervision for such a task. Viewed objectively, the offence is a very serious one. 15 In assessing penalty, I shall also take into account both the general and specific deterrent that the imposition of a penalty will create. Work performed in the building industry is notoriously fraught with danger and those engaged in that industry need to understand that any breaches of provisions of the Act will expose them to appropriate penalties provided by the Act. Furthermore, although there is some doubt as to whether Mintark continues to trade, on the evidence Mr Harvey is still engaged in the industry. I will deal with his circumstances later in these reasons for judgment. 16 There are certain subjective matters that the court is entitled to take into account in favour of the defendants and I propose to do so. Each of the defendants pleaded guilty at the first available opportunity. There was full cooperation with the WorkCover Authority of New South Wales in and in connection with its investigation of the incident, there has been a sincere expression of contrition and remorse and the defendants have no relevant prior convictions. 17 The evidence of Mr Harvey is that he completed a carpentry apprenticeship in 1990. In 1992 he commenced working for himself. In about December 1994, he caused Mintark to be incorporated. The sole shareholders of that company are Mr Harvey and his wife. Mintark has performed carpentry work for residential project homebuilders since 1997. 18 It was Mr Harvey's evidence that the accident to Mr Kirchen had a profound personal effect on him. He rendered assistance to Mr Kirchen whilst he was in hospital and, after he was discharged, he assisted in carrying out modifications to enable Mr Kirchen to have wheelchair access to the home in which he resided. Furthermore, he ensured that Mr Kirchen completed his apprenticeship. 19 Mr Harvey was emotionally unable to return to work for some time after the accident but finally did so because of financial circumstances. He said that when he returned to the building site for the first time after the accident: I was physically sick. I would think about Jamie's accident and play it over in my mind how it occurred. Every time I went to work I would constantly think about his accident to the point of paranoia. I struggled emotionally to perform work until I was served with these papers prosecuting the company and me personally for this accident. When I received the papers I made the decision to complete all the jobs that I currently had and leave the industry. I had been in the industry at that time for 23 years. I considered I had a good reputation and business contacts and could have continued to earn a reasonable living in the industry which would have provided for my family. However, as I was so affected by Jamie's accident and the consequence of these proceedings, I knew I was unable to continue to work in the industry. 20 Subsequently, Mr Harvey qualified for and commenced work carrying out pre-purchase inspections and he obtained a builders consultancy licence. As a result, he said that he suffered a significant drop in income and he and his wife sold their house in June 2008 and are currently living in rented accommodation. They have two school-aged children. 21 In about the beginning of November 2009, Mr Harvey commenced work as a site supervisor for a project home company. 22 The prosecutor sought a moiety of any penalty imposed and an order for costs, neither of which was opposed by the defendants. 23 Having regard to all of the matters to which I have referred including especially the objective seriousness of the offence, the need to take into account the matters going to deterrence and the subjective mitigating factors, which I have briefly described, I intend imposing a monetary penalty on Mintark of $115,000. I note that the maximum penalty that could be imposed is $550,000. 24 The maximum penalty applicable to Mr Harvey is $55,000. I would assess his culpability as equal to that of Mintark because he was, in effect, the directing and controlling mind of Mintark and, in reality, a working director. However, in considering the appropriate monetary penalty to be imposed on Mr Harvey personally, I note and take into account the significant financial impact that the consequences of the incident have already had on him and his family, namely a financial loss culminating in the sale of the family home and the rental of alternative accommodation. I accept his evidence that the impact of the incident personally on him resulted in significant loss of income and resulted in him abandoning project home work as a source of income. I note also that he has, on his evidence, been profoundly emotionally affected by the serious injuries suffered by his apprentice. 25 Furthermore, I note that Mr Harvey and his wife are the sole shareholders of Mintark and that the financial burden imposed on that company by the imposition of the penalty of $115,000 will ultimately be borne by them as shareholders. Consistent with the reasoning that I adopted in Inspector Webster v AGG Concreting Pty Ltd, Darryl Coffey and Steven Stathis [2009] NSWIRComm 55, I propose to take this matter into account also in fixing an appropriate penalty to be paid by Mr Harvey. In all the circumstances I propose imposing a penalty on Mr Harvey of $3,000. Orders 26 I make the following orders: 1. Each of the defendants is found guilty and convicted of the charges brought against them. 2. I impose a penalty of $115,000 on Mintark and $3,000 on Rodney Gerald Harvey 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, in such proportion as the penalties imposed upon each of the defendants bears to $118,000. 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.