Industrial Court of New South Wales CITATION: Inspector Richard Mulder v Process Engineering Group Pty Ltd and Anor [2008] NSWIRComm 36 Prosecutor: Inspector Richard Mulder PARTIES: Defendants: Process Engineering Group Pty Ltd Mark Joseph Griffith FILE NUMBER(S): IRC1090; IRC1091 of 2006 CORAM: Kavanagh J Corporate defendant - plea of guilty - company providing service of individual defendant as construction manager - no assets - no intention to continue trading - consideration of application of ss10A, 10 - penalty must reflect objective seriousness of offence --principles of parity CATCHWORDS: Individual defendant - plea of guilty - charged for offence under s 8(2) by virtue of s26 (1) - sole director of company - controlling mind of company - service as construction manager - unsafe system in failure to secure penetration, to properly inspect and to warn of on-going risk - subjective features - no expression of remorse - penalty LEGISLATION CITED: Occupational Health and Safety Act 2000 s8(2) Crimes (Sentencing Procedure) Act 1999 s10A, s21A Capral Aluminium Ltd v WorkCover Authority of NSW (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Lawrenson Diecasting Pty Limited v WorkCover Authority of NSW (Inspector James Swee Ch'ng) (1999) 90 IR 464 Capral Aluminium Ltd v WorkCover Authority of NSW (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Inspector Sara Bestre v Jontari Pty Ltd & Anor; Inspector Jessica Doyle v Gignen Pty Ltd & Anor [2007] NSWIRComm 190 Inspector Jennifer Short v The Crown in the Right of the State of NSW (NSW Police) [2007] NSWIRComm 138 Insp Templeton v Haddon Rig Pty Ltd [2005] NSWIRComm 284 Markarian v R (2005) 215 ALR 213 McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310 CASES CITED: Millner v Raith (1942) 66 CLR 1 Morrison v Powercoal Pty Ltd and Anor (2004) 137 IR 253 Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] 99 IR 163 R v Thomson; R v Houlton (2000) 49 NSWLR 383 WorkCover Authority of NSW (Inspector Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316 WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 WorkCover Authority of NSW (Inspector Ankucic) v McDonalds Australia Limited (2000) 95 IR 383 WorkCover Authority of NSW (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 WorkCover Authority of NSW (Inspector Page) v Walco Hoist Rentals Pty Ltd and Anor (No 2) (2000) 99 IR 163 HEARING DATES: 22/01/08 DATE OF JUDGMENT: 18 March 2008 Prosecutor: Mr R. Reitano of counsel Solicitors: LEGAL REPRESENTATIVES: Mr H. Bell WorkCover Authority of NSW Defendant: Mr M.J. Griffith, Solicitor JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Kavanagh J Tuesday 18 March 2008 Matter No IRC 1090 of 2006 INSPECTOR RICHARD MULDER v PROCESS ENGINEERING GROUP PTY LTD Prosecution under s8(2) of the Occupational Health and Safety Act 2000 Matter No IRC 1091 of 2006 INSPECTOR RICHARD MULDER v MARK JOSEPH GRIFFITH Prosecution under s8(2) and s26(1) of the Occupational Health and Safety Act 2000 JUDGMENT [2008] NSWIRComm 36 1 Two prosecutions are brought by way of Applications for Order by Inspector Richard Mulder of the WorkCover Authority of New South Wales, one against Process Engineering Group Pty Ltd (the corporate defendant) under s8(2) and the other against Mark Joseph Griffith (the individual defendant) under s8(2) through s26(1) of the Occupational Health and Safety Act 2000 (the Act). Mr Griffith operated his services as a Construction Manager on a construction site through his service company, the corporate defendant. 2 It is alleged the corporate defendant on 12 July 2004 contravened s8(2) of the Act in that it failed: . . . to ensure that persons other than its employees, and in particular, Louay Sadik, were not exposed to risks to their heath or safety arising from the conduct of the defendant's undertaking while they were at the defendant's place of work, contrary to s8(2) of the Occupational Health and Safety Act 2000. The defendant in particular: (a) failed to ensure that penetrations at the construction site and, in particular the covers to penetrations in Fan Room No 1, were secured in a manner that ensured that people working near the penetrations were not at risk of falling through the penetrations; (b) failed to ensure that there was a proper and appropriate inspection of the area in which persons were working, known as Fan Room No 1, so as to identify and rectify any risks associated with inadequately guarded or secured penetrations; (c) failed to adequately identify the risks to persons working in the area known as Fan Room No 1 and to warn persons working in that area about the risk created by inadequately guarded or secured penetrations; (d) As a result of the defendant's failures Louay Sadik and other persons working at the construction site were placed at risk of injury. 3 It is alleged the individual defendant on 12 July 2004 contravened s8(2) of the Act in that it failed: . . . to ensure that persons other than its employees, and in particular, Louay Sadik, were not exposed to risks to their heath or safety arising from the conduct of the corporation's undertaking while they were at the corporations place of work. The defendant, as director of the corporation, in particular: (b) . . . failed to ensure that penetrations at the construction site and, in particular the covers to penetrations in Fan Room No 1, were secured in a manner that ensured that people working near the penetrations were not at risk of falling through the penetrations; (c) . . . failed to ensure that there was a proper and appropriate inspection of the area in which persons were working, known as Fan Room No 1, so as to identify and rectify any risks associated with inadequately guarded or secured penetrations; (d) . . . failed to adequately identify the risks to persons working in the area known as Fan Room No 1 and to warn persons working in that area about the risk created by inadequately guarded or secured penetrations; (e) . . . As a result of the corporation's failures Louay Sadik and other persons working at the construction site were placed at risk of injury. 4 Each defendant pleaded guilty to the charge. 5 Mr R. Reitano of counsel appeared for the prosecution. The prosecution relied upon an Agreed Statement of Facts, Photographs, a Factual Inspection Report, a Statement of Prior Convictions and Record of Interview between Inspector Mulder and Mr M.J. Griffith dated 1 September 2004. The prosecution called two witnesses, Messrs Martin Fahey and Peter Smits. 6 The defendant tendered in evidence Arenco Daily Diaries (extracts), Affidavit of Mark Joseph Griffith sworn 18 January 2008 with attachments. The defendant, Mr Griffith, was required for cross-examination. 7 The Agreed Statement of Facts relevantly read: 2. At all material times Process Engineering Group Pty Ltd [ABN: 90 103 607 610] a corporation whose registered office is situated at 49 Hudson Parade, Clareville, in the State of New South Wales ("Process Engineering"). 3. At all material times Mark Joseph Griffith, whose address is Unit 1/17 Old Barrenjoey Road, Avalon in the State of New South Wales was the sole director and employee of Process Engineering ("Mr Griffith"). 4. In October 2002 Waste Services NSW entered into a public/private partnership with Global Renewables Ltd to construct the UR-3R Facility at Eastern Creek, New South Wales. Global Renewables Ltd is jointly owned by GRD Ltd (GRD Minproc's parent company) and Hastings Funds Management Ltd. Global Renewables Ltd developed, owns and operates the Eastern Creek UR-3R Facility under contract to Waste Service NSW. 5. At all material times GRD Minproc Ltd ("GRD Minproc") was contracted to design and construct the UR-3R facility at a construction site located at the Waste Management Centre, Wallgrove Road, Eastern Creek, in the state of New South Wales ("the site"). 6. On 30 January 2004 GRD Minproc, as the main contractor, entered into a contract with Axis Metal Roofing Pty Ltd ("Axis"), as a subcontractor, to install and erect wall & roof cladding at the site. The contract between GRD Minproc and Axis was a written contract no. 50766-3008. 7. Axis commenced work at the construction site in March 2004. 8. GRD Minproc, at the site established a Health Safety & Environment (HSE) Plan. A requirement by GRD Minproc was for all of its contractors to comply with this system of work. Each contractor at the site also needed to submit a copy of their own HSE plan to GRD Minproc for review once awarded the contract to undertake works. 9. The Construction Manager had overall responsibility to implement the HSE plan on site, ensure that contractors complied and adhered to HSE requirements and monitor and report on OHS issues that were raised. 10. Mr Griffith was a director at Process Engineering. Mr Griffith was an employee of Process Engineering. 11. James Wright ("Wright") was the director of JR Wright Consulting Pty Ltd. Wright was required to report to the defendant up to mid-June 2004. 12. At all material times Axis employed Louay Sadik ("Sadik") as a 1st year apprentice roof plumber. Sadik was 16 years of age on 12 July 2004. Sadik commenced employment with Axis in February 2004. 13. At all material times Axis employed Shayne Riley ("Riley") as a labourer. Riley had been employed by Axis for approximately six years at the time of the incident on 12 July 2004. 14. At all material times Axis employed Peter Smits ("Smits") as the on site leading hand at the site. Smits was responsible for the supervision of Sadik and Riley on 12 July 2004. 15. Axis commenced work in an area at the site known as Fan Room No 1 a couple of days prior to 12 July 2004. The area was on the ground floor with an underground room below it. This was known as the plenum. There were a number of penetrations in the floor of the fan room which opened to the plenum below. 16. Prior to Axis commencing work on the wall and roof cladding for Fan Room No 1 the civil works in this area were to be completed. The civil works contractor at the site was Arenco Pty Ltd ("Arenco"). Initially Arenco used plywood to cover the penetrations within Fan Room No 1. The plywood covers were replaced with 200 x 200 mm square mesh to allow both light and ventilation to the plenum below. 17. The penetration through which Sadik fell had been covered with reinforcing bars tied at right angles into a mesh configuration ("mesh configuration") of approximately 100mm x 100 mm squares using tie wire. 18. During a Site Safety Committee inspection on 2 June 2004 members of the Safety Committee expressed concerns that someone could get their boot caught within the gap of the 200 x 200mm mesh. It was then decided to upgrade the penetration covers with smaller 100 x 100mm squares. Some of penetrations were covered with 100 x 100 mm square mesh ("mesh"). The penetration through which Sadik fell had been covered with reinforcing bars connected at right angles into a mesh configuration ("mesh configuration") of approximately 100 x 100 mm squares. 19. The covers of each penetration were secured by reinforced steel bars and double ties. A standard type of tie wire was used to secure the mesh or mesh configuration to the reinforcing bars placed under the steel flanges around each penetration. 20. The upgrade of the penetrations was completed prior to the next Safety Committee inspection on 8 June 2004. 21. On 7 July 2004 GRD Minproc issued a letter to Arenco approving completion for the area of the Compost Building (which included Fan Room No 1). Upon the certificate of substantial completion being issued, the work area was handed back to GRD Minproc. Under the procedure that was applied at the site the contractor remained responsible for works associated with repairing defects but was not otherwise responsible for the general maintenance of the area. 22. Prior to commencing work, Axis requested the fans installed within Fan Room No 1 be removed to allow less clutter and better access to the site. Wright was responsible for the removal of the fans, which was carried out prior to Axis commencing work in Fan Room No 1 area. 23. Upon completion of civil works, mechanical works commenced in the Fan Room No 1 area. There was no formal handover undertaken by GRD Minproc between construction stages (i.e from civil works completion to mechanical works commencement). 24. After Arenco's hand over of the Fan Room No 1 area and prior to Axis commencing work in Fan Room No 1, Axis's director Hugh Tabone undertook an inspection of the work area. He checked the penetrations and considered them to be securely covered. Prior to commencing work, Axis requested that other trades not undertake work in the fan room area whilst they were working there to avoid congestion. 25. On 12 July 2004 Smits instructed Sadik and Riley to work in Fan Room No 1 at the site. They were instructed to undertake the task of bolting brackets to a 'V' shaped Colorbond Aramax roof sheet and to attach winch cables to the brackets. 26. On 12 July 2004 at approximately 1.45pm Sadik and Riley were attempting to move a 12m Colorbond Aramax roof sheet to place it upon timber provided to make room for the next roof sheet which required brackets to be fixed. They proceeded to slide the sheet along with Riley pulling the sheet and Sadik pushing it from the other side. Whilst pushing the sheet Sadik placed one foot on the steel mesh configuration covering a penetration. As he attempted to move the 12m Colorbond Aramax sheet, the mesh configuration slipped and tipped beneath Sadik's foot exposing the penetration. Sadik lost his balance and fell through the penetration down to the concrete plenum floor approximately 4.4 metres below. The penetration was approximately 820mm in width. 27. The incident was witnessed by Riley. Riley attempted to grab Sadik as he fell but was unable to reach Sadik in time. Following the incident Riley looked into the penetration through which Sadik had fallen. It was dark but he could see that Sadik was lying still. Riley called out but received no response. He then sought assistance from co-workers working in a boom lift at the western end of the fan room. A ladder was obtained to access Sadik and first aid was notified. 28. As a result of the incident on 12 July 2004 Sadik suffered from a broken left forearm with medium nerve injury and bruising to the head. Sadik was off work from 12 July 2004 to 9 September 2004. Sadik returned to work under suitable duties from 9 September 2004. 29. On 12 July 2004 shortly after the incident, Martin Fahey an employee of Arenco was asked by Mike McKenzie and Charlie Katancamp on behalf of GRD Minproc, to undertake rectification work by resecuring all penetration covers in the fan rooms. Three or four of the penetration covers in the area were not properly secured as the wire ties that were supposed to be attached to the reinforcing bars under the steel flange appeared to be cut at one end. The covers were sitting over the penetrations but were not securely tied down which would allow the covers to slide off the penetrations. 30. Smits said that he did a site inspection on 12 July 2004 and that a pre start meeting took place. No records were produced by Axis for the site inspection on 12 July 2004. No records were produced by Axis or GRD Minproc for the pre-start meeting being held on 12 July 2004. 30(sic) Axis as a subcontractor was required to comply with the Health Safety & Environment (HSE) Plan adopted by GRD Minproc. Axis was also required to submit their own HSE Plan to GRD Minproc for review. 31. Axis indicated that it was using two OHS management systems to cover the UR-3R Facility project. A Site Specific Safety Plan dated 9 August 2004 and OHS&R management system dated 10 August 2004. The documents provided to WorkCover are dated post the incident date of 12 July 2004. Hugh Tabone director of Axis indicated that similar documents were in place at the time of the incident. 32. Part of GRD Minproc's HSE plan was for subcontractors to conduct daily documented inspections of subcontractor work areas, pre-start meetings and the development of Job Safety Analysis (JSA) for work to be carried out. Up to June 2004, JSA's were to be submitted to Griffith or an HSE supervisor for review. 33. The purpose of the Pre-Start meeting included informing employees of any changes to the Job Safety Analysis through a review, and any changes to the worksite. Each employee in attendance was required to sign off on this activity. Other general safety issues were also to be discussed i.e hardhat requirements, safety harnesses, PPE. Nothing specific for the work undertaken by Sadik and Riley on 12 July 2004 was discussed at the pre-start meeting which took place on that day. 34. Axis apprentices are given supervision by the site supervisor and/or the tradesmen on site. At the time of the incident on 12 July 2004, Sadik and Riley's supervisor, Smits, was undertaking work at the site office. 35. Sadik and Riley were trained in installing of brackets on roof sheeting approx 4 to 6 weeks prior to commencing work in Fan Room No 1. The training provided was verbal and "on the job" training. Both Sadik and Riley had been inducted for work at the site. 36. Prior to Axis being given access to the site of Fan Room No 1 GRD Minproc's supervisor was to hand over the area safe. Wright stated that an inspection of the site was done and all penetrations appeared to be securely covered and the deck clear. No records were kept of the supervisor's inspection or handover to the subcontractor. Wright was unaware that daily supervisor checklists were required to be completed. No risk assessment was undertaken in respect of the penetrations prior to work commencing in the area other than to visually check that the penetration covers were over the penetrations. 37. GRD Minproc's HSE plan provides that supervisors were required to attend Site Specific HSE training. Wright had not received induction training from GRD Minproc in the responsibilities of supervisors. Wright conducted informal safety inspections of the work areas randomly. Wright said that he would have completed a safety walk the afternoon before the incident. He stated that he noticed the penetration covers, but did not kick them or push them or touch them. 38. Prior to Axis recommencing work at the site following the incident on 12 July 2004 the mesh and mesh configuration were welded down to prevent them from being untied, or moved or otherwise interfered with so that they remained securely in position or serve the purpose of securely covering the penetrations in such a way as to prevent someone falling through them. A procedure was also implemented that no new work area was to be opened without an inspection being carried out by an appointed GRD Minproc's Safety Supervisor. 8 A number of further factual issues were pressed by the prosecution and remained in dispute between the parties. They included the role and duties of Mr Griffith on the day of the incident, whether the contractor previously on site, Arenco, was working beneath Fan Room No.1 on the day of the incident and the role Mr James Wright, director of JR Wright Consulting Pty Ltd, had on the site. The outstanding issues between the parties were the subject of evidence. 9 When factual matters are in dispute in a hearing as to penalty, the onus of proof in such a circumstance has been considered by Staunton J in Inspector Templeton v Haddon Rig Pty Ltd [2005] NSWIRComm 284 who stated at [8]: The pleas of guilty were entered in circumstances where some of the factual matters relied upon by the prosecutor remained in dispute. These matters were addressed by the parties on the hearing of submissions on penalty. The prosecutor bears the onus of establishing such disputed facts, adverse to the defendants, to the criminal standard and the defendants bear the onus to the extent that facts may be taken into account in favour of the accused if they are proved on the balance of probabilities: R v Oldbrich (1999) 199 CLR 270. 10 As to the criminal responsibility of the individual defendant, Starke J in Millner v Raith (1942) 66 CLR 1 said of a provision similar to s8(2) and s26(1) (at 5): They make a director or person concerned in the management of a body corporate responsible as a principal for any act or fact specified in those sections merely because of his relation to the body corporate. and the Full Bench in Morrison v Powercoal Pty Ltd and Anor (2004) 137 IR 253 said at [170]: It is quite apparent why the legislature included s 50 in the Act; without it those natural persons who direct a corporation's acts or omissions that are contrary to the requirements of the Act would avoid prosecution. The section recognises that it is not only directors who may be the guiding lights of corporations but also "persons concerned in the management". Section 26(1) of the Occupational Health and Safety Act 2000 has a similar effect to s50 of the Occupational Health and Safety Act 1983. The individual defendant, Mr Griffith, is the sole director and controlling mind of the defendant company. He was also a person contracted as Construction Manager for the corporation, GRD Minproc, which was the principal contractor on site. 11 The first factual issue in dispute was Mr Griffith's role at the site on the day of the incident. The prosecution asserts as Construction Manager on 12 July 2004, Mr Griffith was responsible for safety at the worksite. It was asserted such responsibility would have included ensuring safety in the design and implementation of the coverings over the penetrations in Fan Room No. 1. In support of this allegation the prosecution tendered in evidence a record of interview Mr Griffith gave to WorkCover Inspector Richard Mulder on 1 September 2004. (It was the first in a series of interviews, only the first of which was tendered in evidence as in the further interviews Mr Griffith claimed the protection from self-incrimination he is entitled to under s65 of the Act). Mr Griffith, in the interview, agreed he was Construction Manager on the day of the incident and was responsible for all site Occupational Health and Safety Issues on site. 12 In evidence, Mr Griffith resiled from that earlier statement. He asserted that he had been mistaken in giving his statement as to his duties on the day of the incident. Mr Griffith said he was not acting in the capacity of Construction Manager but rather was a Contracts Administrator on the date of the incident. He said: I believe I had been instructed by my superiors at GRD Minproc that I was to focus my attentions on other matters and that another person, namely David Henderson had been appointed to take over the duties of construction manager. 13 I accept Mr Griffith believes he was not GRD Minproc's Construction Manager on the day of the incident. I accept his duties had been extended and he was occupied with the preparation of a contract dispute matter with another contractor on site, Arenco. However, in evidence, he also conceded he was still physically on site; still held the title Construction Manager; still fielded inquiries from contractors on the site; agreed no contractors had been informed of any change to his position; managers (of contractors) sought him out; the person nominated to fill in for him as Construction Manager was away on leave on the date of the incident and not on site. Further, Mr Griffith conceded he designed the site safety plan, organised the site safety committee and inspected the site regularly. I am therefore persuaded Mr Griffith bore the substantive responsibilities of Construction Manager on site and substantive responsibility for the method chosen to cover the penetrations on the worksite. He was responsible for all work conducted on the UR-3R site on the day of the incident. 14 A second issue of fact in dispute between the prosecution and the defendant was the role of Arenco on the day of the incident. Mr Fahey, of Arenco, gave evidence. Arenco diary entries revealed Arenco carried out no work in the plenum below Fan Room No.1 on the date of the incident, 12 July 2004, but there had been work by Arenco in the plenum under Fan Room No.1 on 7 and 9 July 2004. This evidence set the foundation for a submission from Mr Griffith that others on site could have interfered with the penetration covers. However, Mr Fahey also gave evidence that when working in the plenum below Fan Room No.1 in the days prior to the incident, there was designated by Arenco an access to the plenum through a clearly identified caged access point in Fan Room No.2. 15 The evidence of Arenco's activities on site, coupled with the evidence that after the incident three or four of the penetration covers were found cut, cannot lead me to conclude that others on site, namely Arenco employees, interfered with the covering on the penetrations in Fan Room No.1 prior to the incident. 16 The third issue in dispute identified by the prosecution related to the role of Mr James Wright on the site. This question was raised by Mr Griffith's assertion that Mr Wright, while contracted as a Mechanical Supervisor, actually worked in the role of Mechanical Engineer. He raised this point to advance the assertion Mr Wright did not receive supervisory safety training nor did he undertake daily inspections. I find no relevance from this fact in my consideration. 17 Evidence was that a significant number inspections of the penetrations in Fan Room No.1 were conducted by the Site Safety Committee (which Committee was formed under the auspices of the Health Safety and Environment Plan (HSE Plan) devised by Mr Griffith). Inspections were conducted by contractors either leaving the site or taking control of the site. Evidence from Mr Griffith persuades me there were significant inspections on site in accordance with the requirements of the HSE Plan. The fact the plan was adhered to is positive evidence Mr Griffith ensured safe procedures were followed. I accept Mr Griffith, over a period, conducted daily site inspections if not one on the relevant date. I do not accept there should be a deflection of Mr Griffith's role on to Mr Wright (whether or not he was properly trained and qualified). 18 A fourth issue of fact for determination was raised by Mr Griffith in evidence and was not one initially identified by the prosecution as outstanding. Mr Griffith asserted before the incident the mesh covers for the penetrations could not have been secured through welding the mesh down, firstly, because welding near the plenum chamber was hazardous given the potential for methane gas to be present in the chamber. Additionally, he asserted welding the mesh penetration covers could hinder any rescue effort if someone was injured in the plenum chamber. 19 Mr Fahey of Arenco gave evidence that addressed both issues. He opined that methane gas was not a problem in the plenum chamber as there was always a monitoring machine in use. Further, Mr Fahey was of the opinion as there was identified and caged access through Fan Room No. 2 to the plenum of Fan Room No. 1, the welding of mesh to the metal flange to secure the penetration covers in Fan Room No.1 would not hinder any rescue given the access available. I am further persuaded the welding of the mesh after the incident used to secure the penetration left the opportunity (given the access as identified through Fan Room No.2) if further access to the plenum chamber was needed to cut off the mesh at the flange. 20 I reject the proposition from Mr Griffith that it was not reasonable prior to the incident to weld the mesh as the covers needed to be able to be opened for safety purposes. A number of the penetration covers in Fan Room No. 1 were removed to rescue Mr Sadik but I balance this fact with the overall evidence, including that of Mr Fahey, as to access to the plenum chamber and the possibility of cutting through the mesh if necessary. Relevant Principles 21 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R (2005) 215 ALR 213 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s8(2) of the Occupational Health and Safety Act 2000 with ss21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor and could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 22 Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 23 Spigelman CJ in R v Thomson; R v Houlton (2000) 49 NSWLR 383, correctly, given the consideration in Markarian, recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. 24 Proper regard is to be had to express legislative provisions and to the relevant statutory regime (Markarian at [27]). The object of the Act is to compel attention to occupational health and safety issues so that persons are not exposed to risks to their health, safety and welfare at the workplace. Consideration 25 In a consideration as to penalty, the court assesses the objective seriousness of the offence or, as has been said, "the nature and quality of the offence". (Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474)). 26 This court is, as was Hungerford J, assisted by the words of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 (at 257): Whilst . . . it was natural to concentrate on the events giving rise to the actual cause of the death, such a concentration exhibits an error in law as was pointed out by the Full Court in . . . CI&D Engineering . . . . The actual event of the accident and injury is relevant; but it goes to satisfy the evidentiary burden that failure gave rise to a risk to health, safety or welfare. 27 The system adopted for covering the penetrations in Fan Room No.1 through the actions of the defendants was not safe and led to the known risk, namely, a fall through the penetrations. It was the responsibility of Mr Griffith as the Construction Manager on site to ensure safety. By not properly securing the penetrations, not properly inspecting the covers to identify the ongoing risk and failing to warn of the ongoing risk posed by the penetrations, the defendants failed to ensure safety on the site. 28 The court therefore does not have to determine how the mesh covering the penetration slipped and the fall occurred. It need not decide whether the ties to the penetration covers were cut and/or loosely tied; whether the bars were not placed properly beneath the flange; whether the mesh was unable to hold in place against the strain exerted upon it by the apprentice, Mr Sadik, or whether the covers were cut by persons unknown on the work site prior to the incident. On the day of the incident, there was a risk of injury from a improperly guarded penetration. Each of the asserted failures of the defendant, as particularised by the prosecution, contributed to the risk. 29 In WorkCover Authority of New South Wales (Inspector Ankucic) v McDonalds Australia Limited (2000) 95 IR 383 (at 437) in Walton J, Vice-President said regarding penalty after a plea of guilty was entered that relationships between contractors on site are relevant to a consideration of the culpability of a defendant so a proper assessment must be made as to the contribution of the parties to the incident (see also Workcover Authority of New South Wales (Inspector Farrell) v David Carl Schrader [2002] NSWIRComm 25 per Walton J, Vice-President at [61].) 30 The contribution to the risk of third parties is therefore relevant. GDR Minproc was the principle contractor on site and had responsibility for all Occupational Health and Safety matters on its site. It imposed upon the various site contractors who brought employees onto the site a HSE Plan. The plan's purpose was to ensure a safe workplace before any employee commenced on site. A Site Safety Committee had assessed hazards and recognised the penetrations were hazardous and re-designed the security covers for the penetrations. It had also carried out inspections on the covering of the penetrations with the contractors on site. 31 The ultimate responsibility for the safe worksite lay with GRD Minproc and each employer on site. Mr Griffith's services were provided through the defendant company to GRD Minproc to act as their Construction Manager. Mr Griffith played a significant role in administering this Occupational Health and Safety System and designed the site's HSE Plan. He carries the burden of that responsibility when there was a failure to ensure the worksite was safe. 32 While the Plan in its implementation recognised the penetrations as hazardous, the system chosen to guard against the risk of falling through the penetrations in Fan Room No.1 was faulty. I accept there was a contribution to the risk from third parties including the principal contractor on this worksite and especially through the inspection activities on site in failing to recognise the ongoing risk posed by the penetrations. The individual defendant (through his company) failed to recognise the safety precautions taken were not a guarantee of safety. His plea of guilty is a recognition of that responsibility. 33 An element of foreseeability to an offence can make that offence more serious (Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610). There was a failure to secure the penetrations. This contributed to the foreseeability of the incident. I take into account the history of inspections, the description of how those inspections were conducted, the activities of the Site Safety Committee, all of which were conducted under the auspices of Mr Griffith as Construction Manager on site. I accept the failure to conduct proper inspections contributed to the failure to be alert to the ongoing risk but did not contribute to the essential risk which was the failure to properly secure the penetrations. The failure to properly inspect the penetration covers did not therefore contribute to the foreseeability of the offence. 34 The risk posed by a fall through the penetrations had been clearly identified. That risk should have been warned against especially to an apprentice who clearly did not understand the risk when he placed his foot on or beside the cover. There was an obligation on the defendants to ensure recognised hazards were addressed. In presuming the system adopted was safe (which it was not) it was asserted there was no obligation to warn. I reject this proposition. In not properly securing the covers of the penetrations and in failing to warn a young apprentice of the recognised risk stemming from the penetrations, whether those penetrations be properly secured or not, both failures contributed to the foreseeability of the incident. Therefore, there was a foreseeable element to the offence. 35 A level of deterrence must be factored into the consideration as to penalty. This principle was cited by the Full Bench of the Commission in Court Session with approval in Capral Aluminium Limited v WorkCover Authority of NSW (2000) 49 NSWLR 610 [at 74] where it was said: . . . the . . . Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Limited (No. 2) [2000] NSWIRComm 39 at 40-43) we would expect such cases to be very rare . . . The defendant company no longer operates in the construction industry. The individual defendant is no longer employed in a management position on construction sites. The defendant company is still, however, in existence. The individual defendant consults in an advisory capacity to the construction industry but not through the defendant company. In such a circumstance, I believe a small element of specific deterrence is a necessary element of penalty against the company and specifically against the individual defendant. As to general deterrence once again the Court must warn of the inherent dangers on any large construction site and the need to review and check on existing systems in place to avoid recognised hazards. The facts also re-iterated the need for employers and managers to warn workers on site of the recognised hazards and to warn of particular dangers. 36 In considering subjective factors in mitigation of the offence, the company has no prior industrial convictions, nor has the individual defendant. 37 There can be some consideration in mitigation of penalty for the utilitarian value of the plea. Mr Griffith pleaded guilty as did his company at the earliest opportunity after agreement was reached as to some facts. In the circumstance there was delay allowing Mr Griffith to consider his and his company's plea. I accept Mr Griffith and the defendant company co-operated in the investigation with the WorkCover Authority. However, that co-operation was not maintained and led to a further use of the Court's time in litigation. The defendants are entitled to a discount in penalty for the utilitarian value of the plea of up to 25 percent according to the principle in R v Thomson; R v Houlton (2000) 49 NSWLR 383. I grant a discount of 10 percent to both defendants. 38 Under s21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999, contrition and remorse can serve as mitigating factors. Mr Griffith, while pleading guilty accepted his responsibility for this serious incident. He was without question deeply and painfully affected by the fact that a charge was brought against him and his service company. He was going to be relieved of his responsibility as Construction Manager by GRD Minproc once Mr Henderson took up his full duties. That had not occurred at the time of the incident. The ramifications of the Act on an individual and his service company (established for employment purposes) are most serious. In this case it is a twofold burden as the individual defendant and his company have both been brought to answer for offences under the Act. However, the stress and even outrage at litigation arising from such breaches should not be confused with remorse and contrition for the offence. While acknowledging a conviction recorded could have serious career ramifications and that the burden on an individual in Mr Griffith's situation is heavy, I find there has not been an acceptable expression of remorse in this circumstance. There shall be no mitigation of penalty to either defendant under s21A(3)(i). 39 The company's financial status reveals it has no assets, no income and has not traded since 2006. Mr Griffith no longer intends to operate the company but it remains on the register of corporations. On legal advice, Mr Griffith opined, the company stays on the company records given the conduct of these proceedings and out of respect to the Court. 40 The personal financial status of Mr Griffith is also relevant. Evidence was before the Court that he owns a house jointly with his wife and owns himself another house as an investment. He earns $215,000 per annum in his current position. He owns a car and a yacht and has a mortgage debt in total of $798,000. I do not accept the individual defendant is not a man of significant means. The maximum penalty for the offence by the corporate defendant is $550,000 and the individual defendant is $55,000. 41 The provisions of s10 of the Crimes (Sentencing Procedure) Act 1999 are relied upon by both defendants. Section 10A states: 10A Conviction with no other penalty (1) A court that convicts an offender may dispose of the proceedings without imposing any other penalty. (2) Any such action is taken, for the purposes of the Crimes (Local Courts Appeal and Review) Act 2001 and the Criminal Appeal Act 1912, to be a sentence passed by the court on the conviction of the offender. In the second reading speech (Legislative Council, 21 November 2006 at 4326) the purpose of s10A was explained: Schedule 1.9 makes a number of amendments to the Crimes (Sentencing Procedure) Act 1999. Item [1] creates a new sentencing option for courts by inserting new section 10A providing that the court may decline to make any further sentencing order other than the recording of a conviction against the person. This option addresses an anomaly in the sentencing regime to overcome situations where inappropriate to have been imposed such as fines of $.50c. Imposing very small nominal fines costs the courts, and State Debt Recovery Office, more to administer and recover, than the value of fine; and where the offender is already serving a sentence of imprisonment, the fine is rarely recovered in any event. This amendment will address such cases. Generally, the provision of s10, be it s10A or s10 is available only in rare and limited circumstances for proceedings under the Act (see WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 at [45]). 42 The objective seriousness of the offence must be balanced with objective factors but "where the risk had potentially very serious consequences to the health and safety of employees and where the risk was easily preventable" (Inspector Jennifer Short v The Crown in the Right of the State of New South Wales (NSW Police) [2007] NSWIRComm 138 at [47]) there is little opportunity for the application of any of the s10 provisions. I do not apply the provision on either defendant. 43 The issue of parity in the penalty imposed against both the corporate defendant and the individual must be addressed. I take guidance from the analysis of Walton J, Vice-President in Workcover Authority of NSW (Inspector Farrell) v Ross Colin Morrison (No.2) (2002) 112 IR 312 at [69]-[72] as to the authorities outlining the relevant consideration (see Griffiths v The Queen (1997) 194 CLR 293 (at 326 327), Postiglione v The Queen (1997) 189 CLR 295 per Kirby J (at 341) and Dawson and Gaudron JJ (at 301-302)). It is also of relevance to consider the effect of the deeming provision of the Act (s26(1)) through which the charge is laid against the individual defendant. As Wright J, President observed in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd and Anor (No 2) (2000) 99 IR 163 at [38] of a similar provision in the 1983 Act: The construction and implications of s50 are relevantly these. First, the level of culpability of a personal defendant who is deemed to have committed the offence by virtue of s50(1) cannot be greater than that of the corporation who has been convicted or otherwise assumed to be guilty for the purposes of the operation of the section. . . . It is not, in my view, a question of considering their relative contribution but assuming that the purpose of the provision is to make an individual who is responsible to an extent for the management of the corporation similarly responsible and culpable for the acts or omissions of the corporation . On the view of Wright J, President, the deeming provision of s26(1) requires a penalty imposed against a company be not greater when compared with the penalty imposed against a director or a person involved with management. However, it is in his role as sole director and therefore controlling mind of the corporate defendant that Mr Griffith is brought before the court. 44 The Act does not permit an individual in the position of Mr Griffith, who was not an employer, to be brought before the court to answer for acts or omissions which reflect that risk. He is here as a director of his service company. The asserted failures were his acts or omissions through his service company and on behalf of the company GRD Minproc for whom he gave his services as Construction Manager and under whose undertaking at its place of work the incident occurred. 45 Haylen J said in Inspector Sara Bestre v Jontari Pty Lt & Anor; Inspector Jessica Doyle v Gignen Pty Lt & Anor [2007] NSWIRComm 190 at [43]: The proper treatment of closely related defendants has raised some difficulty from time-to-time in the exercise of this part of the Court's jurisdiction. Members of the Court, have, on occasions, raised with the prosecutor the rationale for charging both the corporate entity and the director in circumstances where the evidence has disclosed that the incorporation of the business is little more than an action taken, usually on the advice of a financial consultant, and is the means by which a person or a family has chosen to conduct its business. Those queries have usually been met with a reply that the principle of totality is available to ensure that the aggregate penalty is appropriate. That rather loose and imprecise reference to the principle of totality has disguised difficulties with cases of this nature. It cannot be doubted that it is within the realms of the responsibility of the prosecutor to decide what charges are to be preferred and against what entities. The clarification by the Full Court in Big Rivers of the circumstances in which the principle of totality applies should result in prosecutors closely examining what entities are charged or what charges are continued where the evidence demonstrates a close connection between two defendants involved in the same incident. His Honour then raised the question at [43]: What ends of justice are served by multiple prosecutions? and at [45]: it has been said that there is a common thread of the requirements of equity, fairness and equality of justice that underlines the various principles of proportionality, consistency, parity, comparability and totality. 46 Only one incident gave rise to these proceedings and there is not just a large overlap but a repetition of the factual circumstances relied upon which created the breaches (WorkCover Authority of New South Wales (Inspector Green) v Giannikouris [2005] NSWIRComm 229). The charge against each defendant is the same, the asserted particulars are the same and the incident is the same. These are separate but closely related defendants who have been similarly found guilty of the same offence. The administration of justice requires these matters be given proper consideration. Mr Griffith chose to provide his service through a corporation. He had the taxation advantages attached to incorporation but also carried the burden of liability under the Act as a director and controlling mind of the company. 47 While the pecuniary status of each defendant is relevant, as Wright J. President, said in Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] 99 IR 163 at [27] that cannot outweigh the objective seriousness of an offence which must be reflected in penalty: As to the financial position of the defendants, it is to be accepted in terms of general sentencing policy that the means of a defendant are relevant. This consideration may, in appropriate cases, involve a careful examination of the means of the defendant, and consideration of the means of the defendant in fixing the amount of any penalty or fine: see for example Ferguson v Nelmac Pty Limited (at 206 - 207, 209); R v Rushby [1977] 1 NSWLR 594 at 598; WorkCover Authority of New South Wales v Overtop Pty Ltd (1998) 86 IR 319 at 335. This is, in any event, required by s6 of the Fines Act 1996 as it was by the predecessor provision in the now repealed s 440AB of the Crimes Act 1900. It is to be observed, however, that a consideration of the means of the defendant with the conclusion that a heavy fine may be a burden on the defendant and its financial resources does not necessarily preclude the imposition of a heavy penalty: Ferguson v Nelmac Pty Limited at 209; Department of Mineral Resources of NSW v AM Hoipo & Sons Pty Ltd (1999) 99 IR 137. See also R v Rahme at 86 - 87 and R v Sgroi at 201. 48 The Court can take into consideration the lack of income or assets of the corporate defendant under s6 of the Fines Act (see Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSWIRComm 339 per Marks J approved of by the Full Bench in McColl v John Watson Building Services Pty Limited (2004) 137 IR 310). 49 The apposite principles were summarised in McColl v John Watson Building Services where in the consideration of the financial situation of a corporate defendant, the Full Bench said at [25]: [25] . . . 1. In the context of determining penalties in prosecutions for a breach of occupational health and safety legislation by a corporation, it may be appropriate, in some limited circumstances, for the Court to have regard to whether the defendant's corporate structure is little more than a means of distributing earnings arising from personal exertion or where the burden imposed by a fine will fall on one person or family, compared with a corporation which is functioning as "a company with assets of a substantial kind": see Haynes v CI & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 at 457. However, it is now also clear that the fact that a corporation may represent the alter ego of a person or family and that any penalty imposed on the corporation will consequently have a financial impact on that person or family does not, of itself, warrant a reduction in penalty: WorkCover Authority (NSW) v Chen (2004) 137 IR 33; Inspector Maddaford v Coleman [2004] NSWIRComm 317. 2. The financial position and the means of a defendant should be taken into account when determining penalty. It is well established that, notwithstanding such considerations, the penalty must ultimately reflect the objective seriousness of the offence: Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209; WorkCover Authority (NSW) v Schrader (2002) 112 IR 284 at 308-309; Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority (NSW) (2001) 106 IR 435. 50 The corporate defendant has no assets and no income. Mr Griffith inferred it has not and will not continue to operate. However, the company is still on the record and could operate and a penalty for a serious offence must be recorded. 51 The individual defendant, Mr Griffith was the company's sole director and he and his wife the two shareholders. He has assets. Further, it was Mr Griffith's asserted failure in his services to GRD Minproc as provided through his service company, the corporate defendant, which led to the breach of the Act. Penalty must be imposed on Mr Griffith to reflect that obligation. 52 As it cannot be said necessarily that any penalty imposed on the corporate defendant will have an impost on the individual defendant, I do not give deductions to the individual defendant for the financial circumstances of the defendant company (see WorkCover Authority of NSW (Insp Wilson) v Safdar Ghafoor & ATS All Time Security Pty Limited [2005] NSWIRComm 430 (Staunton J) at [58]-[59]). 53 The penalty imposed on one of the contributing third parties, Axis Engineering, is also relevant in a consideration of parity. 54 Allowing for disparity in maximum penalty and the differing financial status of each defendant, the similarity in the offences, the different subjective factors related to each defendant and given the company and Mr Griffith sit as alter egos, but allowing for the gravity of each offence, I make the following findings. 55 I find the corporate defendant guilty. The corporate defendant is fined in the sum of $50,000 56 I find the individual defendant guilty. The individual defendant is fined in the sum of $20,000. 57 There shall be one order as to costs as agreed or assessed. Orders 58 The Court makes the following orders: 1. In Matter No IRC1090 of 2006, I find the corporate defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $50,000 with a moiety to WorkCover Authority of New South Wales. 3. In Matter No IRC1091 of 2006, I find the individual defendant guilty of the offence as charged. 4. The defendant is fined in the sum of $20,000 with a moiety to WorkCover Authority of New South Wales. 5. There shall be one order as to costs as agreed or assessed to be met by the individual defendant. 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.