Industrial Court of New South Wales CITATION: Inspector John Patton v Darren Paul Mercer [2010] NSWIRComm 111 PARTIES: Inspector John Patton (Prosecutor) Darren Paul Mercer (Defendant) FILE NUMBER(S): 2081 of 2008 CORAM: Backman J LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Occupational Health and Safety Act 2000 CASES CITED: Inspector John Patton v Romeo Elias Ibrahim and Others [2010] NSWIRComm 109 WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 HEARING DATES: 3 February 2010 DATE OF JUDGMENT: 9 August 2010 Mr I Taylor of counsel (Prosecutor) WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: (Mr D Hall) Mr D Mercer (self-represented Defendant) JUDGMENT: - 27 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Backman J ­­­­­­­Monday, 9 August 2010 Matter No IC 2081 of 2008 Inspector John Patton v Darren Paul Mercer Prosecution pursuant to section 8(2) by virtue of section 26(1) of the Occupational Health and Safety Act 2000 JUDGMENT OF THE COURT [2010] NSWIRComm 111 Preliminary matters 1 Darren Paul Mercer has pleaded guilty to one offence under s 8(2) by virtue of s 26(1) of the Occupational Health and Safety Act 2000 (2000 Act). At the time of the offence on 18 November 2006, Mr Mercer was the sole director of Colmerc Projects Pty Limited (Colmerc) which was the principal contractor at a construction site in Kiama, New South Wales. Colmerc, the Court was informed, is under external administration. Mr Mercer was the site manager and construction manager. His responsibilities included the day to day operation of Colmerc's operations at the site. 2 The offence concerns an incident which occurred at the construction site in Kiama on 18 November 2006 when Mohammed El Gendy, a 24 year old labourer, was crushed by a concrete block wall after it collapsed. Mr El Gendy suffered very serious injuries as a result of the incident which included multiple fractures to the base of his skull. Agreed facts 3 The project under construction at the site was a multi-storey hotel and convention centre, known as "Kiama Blue", a three-stage development located in Kiama. The project was under the control of Colmerc as the principal contractor. The first stage of the project entailed the construction of residential units, a restaurant, brasserie, and a shop, which had been completed in early 2006. Stage Two involved the construction of a motel complex (serviced apartments) built over three basement levels and four hotel levels. Stage Three involved the renovation and conversion of an existing old heritage-listed school building into a convention and function centre. Stages Two and Three were run concurrently, with the incident occurring during Stage Two. The value of the construction work for Stage Two was about 12 million dollars. 4 In Stage Two of the project, the building was being constructed in two halves because of the post-tensioning of the concrete floors. A concrete pour step was poured between the two floor slabs after the two slabs were tensioned. The strip divided the building into two halves designated as west and east. The ground floor hotel level on the west side, designated "H1 West" was the site of the incident. 5 A number of other corporate entities and businesses were involved in the project. These entities and businesses are listed below: a. Multi-Formwork & Hire Pty Ltd , concrete package sub-contractor; c. REI Construction Pty Ltd , sub-contractor to Multi-Formwork & Hire; d. A1 Formwork (Aust) Pty Ltd , sub-contractor to REI Constructions; e. B-Stress , post-tensioning concrete contractor to REI Constructions; f. DJJ Construction Pty Ltd , concrete placement and steel fixing; g. Kajima Construction Pty Ltd , supervision contractor; h. Talon Lock Enterprises Pty Ltd , supervision contractor; i. O & H Construction Pty Ltd , labour hire; j. JML Bricklaying , Bricklaying contractor. 6 The agreed facts provide some further detail with regard to some of the sub-contractors. These details I have attempted to summarise below: (a) Multi-Formwork & Hire Pty Ltd (Multi-Formwork) entered into a written contract with Colmerc worth about $1.75m to undertake formwork, steel-fixing and concreting at the premises, being work to create reinforced and stressed concrete floors. Multi-Formwork then sub-contracted the works to REI Construction Pty Ltd (REI). Multi-Formwork owned the formwork and falsework that was used at the premises by REI to construct the concrete floors and columns; (b) Romeo Elias Ibrahim (Mr Ibrahim) was a director of REI at the time of the incident. REI has since been placed under external administration. Mr Ibrahim had, at an earlier stage, been the sole director of Multi-Formwork and at the time of the incident he retained effective management control of that company. Mr Ibrahim signed the contract with Colmerc on behalf of Multi-Formwork; (c) REI sub-contracted out the concrete placement, stressing and steel fixing work to other sub-contractors. It carried out the formwork erection and stripping work with the assistance of two other sub-contractors, A1 Formwork (Aust) Pty Limited (A1 Formwork) and O & H Construction Pty Ltd (O & H Construction). About three weeks before the incident, A1 Formwork left the site taking all its employees to another major project in Sydney. REI, as a result, required additional workers to assist it to do the formwork and falsework. Mr Ibrahim, on behalf of REI, entered into a verbal agreement with Yassir Abdalla Hussein (Mr Hussein) as director of O & H Construction to supply labour to the site in order to meet Colmerc's requirements. O & H Construction commenced to supply labour to the site from about the middle to late October 2006, a period which overlapped with A1 Formwork employees still working at the site; (d) REI appointed a sub-contractor, Kajima Construction Pty Ltd (Kajima) to supervise the work it was doing at the site. Kajima's nominated supervisor was Anwar Abdulmajeed, who was a director of Kajima; (e) Talon Lock Enterprises Pty Limited (Talon Lock) undertook the business of supervising and co-ordinating sub-contractors on building sites on behalf of developers and construction firms. Its director and general manager was Richard Warren Smith (Mr Smith). Talon Lock had a written agreement with Colmerc to supply Mr Smith, as site foreman on the project. As site foreman, Mr Smith was responsible for day to day supervision of the work being done on the project by the sub-contractors, including the planning and co-ordination of that work. 7 Mr El Gendy was employed by O & H Construction. About five to ten employees were supplied to REI by O & H Construction to work on the project. Some of those employees were overseas students, recently arrived in Australia on student visas, who had no previous construction experience. 8 Mr El Gendy did not speak English. He was an inexperienced labourer who arrived in Australia from Egypt about two months before the incident. He did not have a working visa and commenced to work on the project six days before the incident. O & H Construction did not assess his experience before, or at any stage after, he commenced working on the project. 9 Atef Nasser, another employee of O & H Construction was also an Egyptian citizen who had arrived in Australia on a student visa, about six weeks before the incident. He had no previous construction work experience when he commenced work at the site on the project about one or two weeks before the incident. 10 Mohamed Elzaher, also an employee of O & H Construction and also from Egypt, had arrived in Australia about one month before the incident. According to the agreed facts tendered against Mr Hussein and O & H Construction, he had no experience in construction work prior to commencing work on the project. Both sets of agreed facts record that he commenced work at the site about two weeks before the incident. 11 The agreed facts record that other employees supplied by O & H Construction to work on the project were either from Egypt or Sudan. These employees included Shokry Ibrahim and Tamer Moustafa, both of whom had been in Australia for a relatively short period and neither of whom had any relevant work experience. Arkangelo Kon and Shitag Akot, also employees of O & H Construction, had both been in Australia for two to three years but had no relevant work experience. 12 At the date of the incident, Mr Hussein had only eight months experience as a construction worker. 13 At the site, Mr Abdulmajeed would give instructions (on behalf of REI) to either Osman Abdalla, an employee of O & H Construction, or Mr Hussein, for the work required to be done. If either of those two persons were not on site, Mr Abdulmajeed gave instructions directly to O & H Construction employees. According to the agreed facts, the O & H Construction employees were not entirely sure who was their supervisor as they took instructions from all three men. 14 The O & H Construction employees were employed to clean and stack the formwork and carry it to higher levels of the building. 15 Colmerc also had a bricklaying sub-contract with JML Bricklaying to erect the brickwork and block work on the site. Earlier in the week, before the incident, employees of JML Bricklaying had constructed the brick wall that fell over, crushing Mr El Gendy. 16 The wall, the subject of the incident, was about 1.6 metres wide and 2.7 metres high. It was made of two skins (columns) of hollow bricks with a cavity between them. The skins were joined by brick ties (loops of galvanised steel) every three or four rows (known as courses) with mortar laid on top. Each hollow block with the mortar attached weighed about 2.5 kilogrammes. The wall was constructed of approximately 180 blocks giving it a total weight of about 450 kilogrammes. 17 At the time of the incident, the wall was freestanding and not braced or secured by any means. It was not connected to the ceiling and was constructed on a layer of damp proof course, a thin strip of bitumen-coated aluminium, which separated it from the concrete slab. It was not structural or load-bearing. There was no barrier which prevented workers being in proximity to it. 18 The circumstances immediately prior to and at the time of the incident have been conveniently set out in the agreed facts as follows: On the day of the incident at H1 east, immediately adjacent to the area where the incident wall fell over, there were employees of REI stripping formwork and falsework from the underside of the H2 east floor above. One of the REI workers was Ali Saddick. There were five Sudanese workers employed by O & H who were denailing, cleaning and stacking the formwork and the falsework frames that were being stripped from this area. Four of these Sudanese workers were Shitag Akot, Arkangelo Kon, Manut Madouk and Dut Deng. The four Sudanese employees of O & H and Mr Saddick, employed by REI, then carried the larger timbers, plywood and the falsework frames through to H1 west and placed the materials on the cleared concrete slab in that area. The Sudanese workers commenced stacking the steel formwork frames up against the surrounding walls in H1 west area. They did this because it was the only available space. One of the walls chosen to lean the frames against was the incident wall. Approximately 20 frames were stacked upright, leaning against the wall. At about that time Mr El Gendy, Mohamed Elzaher and Atef Nasser were carrying the smaller formwork pieces, namely the formwork jacks, and some of the formwork, up the scaffold stairs from the ground floor level to a higher level on the site. The supervisor, Mr Abdulmajeed, observed two of the workers carrying the jacks up the stairs and stopped them. Mr Abdulmajeed directed that the three of them to form a chain, that is, one person stand on the ground floor, one on the scaffold and one on the higher level and pass the material up that way rather than walk it up the stairs. At the time of the incident, approximately 8:10am, Mr Elzaher and Mr Nasser were standing on the ground floor level (H1 west) adjacent to the incident wall. Mr Nasser was passing on Mr Abdulmajeed's instructions to Mr Elzaher and was deciding on whom of the workers was going to go to the higher level. Mr El Gendy was standing approximately three metres away on the same level, but in front of the incident wall. The weight or force of the leaning frames against the block wall caused the wall to fall. Mr El Gendy, Mr Elzaher and Mr Nasser were standing by the incident wall when it began to move. Mr Elzaher pulled Mr Nasser away from the wall as it was falling and as a result both avoided being struck by the falling blocks. Mr El Gendy was turning and saw the wall falling. He put his arms up as the wall struck him. Mr El Gendy struck the side of his head on the scaffold next to him and fell to the ground with the concrete blocks on top of him. On top of the blocks were some of the steel formwork frames that had been leant against the wall, the other having slid away from the area. Mr El Gendy sustained extensive skull base fractures, developed double vision and meningitis due to the fracture to the base of his skull. He also sustained two cuts to his right cheek and forehead requiring stitches. Systems of work in place prior to offence 19 The system of work employed at the site at the time of the offence has been set out in the agreed facts as follows: REI used a conventional formwork system at the site to construct the suspended floors of the buildings, that is, steel falsework frames, jacks, U-head jacks, upon which timber falsework is placed (timber bearers, joists and plywood) to form a deck. This system requires the formworkers to erect the steel falsework across an open area, erect the timber formwork on top, place the steel reinforcement and stressing ducts, pour the concrete, stress the deck, then wait an appropriate period for the new concrete and steel floor to set before lowering the adjustable falsework so that the timber formwork can be stripped out and the metal formwork can be removed from under the suspended floor. To construct the next section of work, the formwork and falsework material is then moved to the next area where a floor is to be constructed (usually the next level). The usual building practice is for the metal formwork frames, when not in use, to be stored horizontally, with the frames tied together and moved either by forklift or by pallet jack to a point with external access (such as a landing platform which juts out from the building) where the frames can be lifted by crane to the floor above for re-assembly in order to construct the next concrete floor. Multi-Formwork pursuant to their contract with Colmerc, was to supply their own cranage to lift their formwork to a higher level. This meant that REI, as Multi-Formwork's sub-contractor, was responsible to organise a mobile crane to come to site to move and lift the formwork between floors. However in practice, mobile cranes for use by a number of subcontractors were organised by both Colmerc and REI. There was no crane on the day of the incident. If a crane had been in use then the O & H employees would not have moved the materials by hand and the incident would not have occurred. Colmerc and Mercer had organised for a mobile crane and a loading platform to be onsite from the Monday following the day of the accident. A loading platform would have allowed the formwork equipment to easily be removed and lifted between floors and would not have required the O & H employees to store it against a wall nor to walk the formwork up the stairs. 20 Colmerc had a site-specific OHS Management Plan (the Plan) for the site. Under it, Mr Mercer's responsibilities as construction manager and site manager were set out. They included the following matters: · Identify system verification requirements and allocation of human, technical & financial resources, adequate to meet any needs. · Define responsibilities of personnel responsible and qualified for OHS & R matters. · Manage compliance with OH & S legislation, regulation, standards & codes. · Define Mercer Constructions occupation (sic) health & safety policies & objectives. · Approve, authorise and issue quality safety plans. · Disseminate OHS & R information to personnel. · Distribute OHS & R information to personnel. · Ensure that all personnel on site receive induction training and implementation of the company's OH & S & R procedures. · Ensure compliance with the site rules and monitoring compliance to SWMS or PSSP'S. · Ensure safe equipment and plant are provided and maintained with a regular program for inspections. · Review safety reports and inspections and initiate rectification where necessary. · Ensure risk analysis is carried out and implemented to reduce any risk. · Review SWMS and PSSP's before contractors are to commence on site. · Conduct & complete audit report for site safety on a monthly basis. 21 During the sentencing proceedings Mr Mercer in evidence readily acknowledged his responsibilities under the Plan. 22 Andrew Pearson was Colmerc's nominated safety officer under the Plan. According to the agreed facts he carried out occupational health and safety (OH&S) site inductions during which he would check that an attendee had OH&S general construction induction certification. He followed the site induction presentation and information prepared by Colmerc and recorded the induction on a form attached to the Plan. It was an agreed fact that not all the workers at the site were given the OH&S induction. 23 Colmerc also conducted sub-contractor co-ordination meetings on a fortnightly basis at the site. Although OH&S was on the agenda for these meetings, safety issues with respect to bracing, securing walls, inexperienced sub-contractors, erecting, stripping, stacking, moving and transporting of formwork and falsework around and between floors were not discussed. Rather, these issues were dealt with by way of safe work method statements (SWMS). 24 All the contractors on site were required to submit SWMS prior to commencing work. REI submitted a SWMS to Colmerc before the incident, but it failed to deal adequately with stripping, stacking and moving formwork around the site and between floors. O & H Construction did not supply a SWMS to Colmerc. According to the agreed facts, Colmerc was not aware that REI had sub-contracted O & H Construction to supply labourers to work at the premises. 25 Other aspects of Colmerc's systems of safety in force at the site prior to the offence are set out in the agreed facts as follows: A safety committee was operating for the site throughout the project. Members of different trades were on the safety committee. Mr Pearson acted as the chairman of the committee for Colmerc, but was not voted into the position by the members. No member of the committee (other than Mr Pearson) had received the four day compulsory OHS consultation training. Records of safety committee 'meetings' include forms recording hazards identified by Mr Pearson during walks around the site. There were no formal minutes of any meetings held. Mr Pearson conducted daily walk-through inspections of the site. Generally, he would directly raise with the contractor or employee involved any risk or hazard he identified during this walk. If the problem could not be addressed immediately Mr Pearson would record the issue either on a safety committee form or safety checklist form for follow up action with the relevant subcontractor. The foreman, Mr Smith, would sometimes address minor issues brought to his attention during the course of the construction, but would normally leave hazard identification and rectification work to Mr Pearson. All employees of both Colmerc and its subcontractors were required to sign the site attendance register daily. Not every worker signed the daily attendance register as can be seen from the form from the day of the incident. The name of the injured person, Mr El Gendy, is not recorded on the register. Colmerc was not aware that Mr El Gendy was onsite. Mr El Gendy had received a limited OHS construction induction prior to the incident. The only other training received by the employees of O&H was on the job training. There was no training given to the employees of O&H from REI. There was confusion on the site as to who was the supervisor of the O&H's employees. When Mr Ibrahim engaged Mr Hussein to supply labour to the site, he stated that O&H had to provide a supervisor, and Mr Ibrahim was informed that this would be either Mr Hussein himself or Mr Osman Abdulla. Mr Hussein and Mr Abdulla did supervise the O&H employees when they were at the site. Neither he nor Mr Abdulla were at the site however on the day of the incident nor on the previous three to four days. Mr Abdulmajeed's initial role was to liaise on behalf of REI between the four sets of contractors and the builder, program the works and chase materials and plans, but due to many problems on the site he had to take on the additional role for the formwork. According to Mr Ibrahim, Mr Abdulmajeed was to supervise O&H employees in the absence of Mr Hussein, but according to Mr Abdulmajeed O&H were to provide their own supervisor and he was not their supervisor. Mr El Gendy, Mr Elzaher and Mr Saddick did not know who their supervisor was. On the day of the incident, there was no direct supervision of the O&H workers on the H1 level by either O&H or REI. Mr Abdulmajeed was on site as the supervisor representing REI and Multi-Formwork, but not O&H. Mr Smith was on level H1 west, approximately 10 metres from the incident, but was not concerned with the actions of O&H employees, other than making sure they did not stack formwork on the area he had cleared for the bricklayers on H1. The employees of O&H received some instructions while working on the site prior to the incident relating to three areas of work; stripping formwork; de-nailing, cleaning formwork, and stacking formwork; moving formwork around the site and between floors. The instructions were given by Mr Abdulmajeed, Osman Abdulla and Mr Hussein. No instructions were given to the employees of O&H not to stack formwork frames up against the green block walls. An experienced construction worker from any trade would know not to stand materials against a block wall with wet mortar to the joints, but none of the workers from O&H were experienced. There was no written information given to any of the employees of O&H. None of the employees were shown or told the contents of the only SWMS for formwork on site that was prepared by REI. There were no written procedures for O&H or SWMS. Most of O&H employees could not read English. 26 These matters, all of which formed part of the agreed facts, reveal on one hand that Colmerc (and Mr Mercer) had taken steps to ensure there were safe systems operating at the site. This will be taken into account in Mr Mercer's favour as a factor which mitigates the objective seriousness of the offence. On the other hand, the matters reveal a number of deficiencies in Colmerc's systems of safety which may be summarised as follows: (a) not all workers on the site received site inductions; (b) the sub-contractor meetings conducted by Colmerc every fortnight failed to include on the agenda a number of safety issues which directly concerned the work being undertaken at the time of the offence, including the bracing and securing of walls, inexperienced workers, and the disassembling and transportation of formwork and falsework around the site; (c) the requirements for SWMS which were supposed to be submitted to Colmerc by all sub-contractors prior to commencing work and which were supposed to deal with the items not covered by the fortnightly meeting's agenda, were not met; (d) other than Mr Pearson, the members of the safety committee had not received the compulsory four-day OHS consultation training; (e) not all workers had signed the daily attendance register; (f) matters of safety training, instruction, information and supervision of the workers were not, consistent with Mr Mercer's plea of guilty to the charge, sufficient with regard to preventing the workers from working in the vicinity of the incident wall, in relation to stacking and storing the frames (which were stacked vertically against the wall), and were non-existent in relation to the work of erecting, stripping, stacking, moving and transporting the formwork and falsework around and between the floors. 27 These deficiencies in Colmerc's systems of safety serve to illustrate that the offence is objectively serious. Disputed facts 28 During the proceedings, Mr Mercer disputed three matters relied on by the prosecutor. These were: (a) in the absence of loading platforms that could be accessed by a crane or a hoist all the formwork and falsework had to be moved by hand; (b) REI requested a loading deck on the H2 east side three days prior to the incident to allow them to remove their formwork from under the concrete floors but Colmerc had not agreed to this request prior to the incident; (c) Mr El Gendy did provide Mr Pearson with an OHS general construction induction certificate stating he had received five hours of general OHS construction training. Mr Pearson inducted Mr El Gendy on to the site by telling him some things that were translated into Arabic by Mr Hussein. Mr Hussein, however, does not speak English very well. Mr El Gendy recalls being told to wear safety shoes and a helmet and to not stand under the formwork as it was being taken down. 29 Evidence was called by the prosecutor in relation to these matters. At the conclusion of the evidence, the prosecution conceded that it had failed to prove the second matter. The evidence on the issue was that Colmerc had previously arranged for a crane and a loading platform to be delivered to the site on the Monday following the incident (20 November). Mr Mercer, said in his statement that he had spoken to Mr Smith, Mr Pearson and Mr Abdulmajeed and had made them aware that the mobile crane and a loading platform had been organised for Monday, 20 November. He said that it was understood during these conversations that the mobile crane and loading platform would be used to lift the formwork and frames from H1 East to H2 East. Mr Mercer also said that he was aware that the workers had commenced stripping and stacking the formwork, "ready for transportation via the platform". He could not say why they did not wait for the loading platform to be set up. 30 The evidence with regard to the first disputed fact was that the formwork and falsework were dismantled and then transported manually by the workers from H1 East to H1 West. No loading platform was available on 18 November 2006 to facilitate the movement of the items from H1 East to H2 East, although it was anticipated at least three days before the incident by Mr Mercer, and REI, that a loading platform would be made available for the task on the following Monday. There was no, or limited, available storage space for the material on H1 floor. Mr Mercer, in his evidence, said he was aware prior to 18 November 2006 that the formwork and falsework was to be stripped, and that the incident wall was in the process of being constructed in H1 West. With regard to available storage space he said that there were areas on the northern side and the extreme western side of the development for storage, although there were "logistic issues". I would observe, with regard to this evidence, that if this were the case, the workers were not directed to store the materials in those areas. 31 Mr Mercer, in submissions, referred to other means of moving the material beside manual transportation which were available on the day of the incident. The prosecutor, Inspector Patton, gave evidence in which he conceded that there were on site alternative and available means of transporting the materials on the day of the incident, such as pallets, trolleys and forklift trucks. I do not see, however, how these alternative means would have resolved the problem of storage space on H1 floor or prevented the depositing of the materials in H1 West in the vicinity of, and against, the incident wall. 32 I find, based on these matters, that the first disputed fact has been made out by the prosecutor beyond reasonable doubt. 33 With regard to the third disputed fact, it appears to consist largely of exculpatory material. There is an apparent concession that Mr El Gendy provided an OHS general construction induction certificate to Mr Pearson and that Mr Pearson inducted Mr El Gendy to the site. The only inculpatory material that I can identify is that Mr El Gendy's induction was undertaken with the assistance of a translator, Mr Hussein, of whom it was asserted, "does not speak English very well". I am, however, unable to locate any evidence of Mr Hussein's understanding of, or capacity to speak, English. In submissions, the prosecutor contended that it was, "open to ... to find ... it is more likely than not that Mr El Gendy was inducted by way of a method of some translated instruction being given to Mr El Gendy by Mr Pearson". 34 Given the unsatisfactory state of the evidence, the Court finds that the prosecutor has failed to prove the third disputed fact beyond reasonable doubt. Other objective factors 35 The agreed facts were that the incident wall had been laid about 48 hours before it collapsed and was "green" at that time, that is, the mortar was still soft and had not reached its full strength. The risk to safety (the risk of the "green" wall collapsing with items stacked against it) was obvious given the workers' inexperience in the construction industry, their lack of adequate supervision and instruction and the absence of safe alternative means of transporting and storing the materials. The risk to safety for the same reasons was also foreseeable. Mr Mercer also knew that the formwork and falsework was being stripped (or to be stripped) at the same time as the incident wall in H1 West was being constructed. Mr Mercer had, however, made arrangements for the transportation of the materials from H1 East to H2 East after they were stripped by the workers. The loading platform and the crane were due to arrive at the site two days after the incident. Mr Mercer had communicated these matters to Mr Abdulmajeed and others. In his statement (about which he was cross examined), Mr Mercer said that he would not have contemplated (or agreed) that the employees of O & H Construction would carry the formwork and frames from H1 East to H1 West. Because of his earlier communication to Mr Abdulmajeed, he did not consider there was any need for him to issue an additional instruction that the formwork was not to be moved (by hand) to H1 West. Mr Mercer also directed the Court's attention to REI's SWMS dated 21 August 2006, which provided under the heading "Management and placement of material to construction levels": All material movements between construction levels are to be facilitated by the builder. The formwork material is to be stacked on loading platforms and the builder will provide mobile cranes. 36 These matters operate to reduce, to some extent, Mr Mercer's culpability in the circumstances of the offence. 37 One further matter which may be considered in Mr Mercer's favour, which should be mentioned, concerns the issuing by WorkCover, prior to the incident, of 35 Improvement, Penalty and Prohibition Notices to Colmerc. The Notices focused principally on the failures of Colmerc to ensure persons working with formwork at the site were "ticketed", or otherwise properly certified or qualified, and failures to ensure site inductions were being undertaken. Mr Mercer said that, following the issue of the Notices, he raised the lack of formwork "tickets" and OHS site inductions with REI and that measures were taken which included the appointment of Mr Abdulmajeed by REI to supervise REI's activities and the labourers on the site. These measures ultimately were not successful in eliminating or obviating the risk to the safety of the O & H Construction employees on 18 November 2006, but they demonstrate that Mr Mercer at least had attempted, prior to the incident, to make some safety improvements, with regard to supervision of the workers at the site. 38 On the other hand, a number of simple and inexpensive steps could have been taken by Colmerc and Mr Mercer, which could have avoided the risk. These included the strict enforcement of the site attendance rules, ensuring that adequate SWMS were submitted by all the sub-contractors and ensuring appropriate barriers and signage were in place to prevent access to hazardous areas at the site, such as the area where the "green" wall was constructed. 39 The offence is also serious by reason of the likely or probable consequences which arose from its commission, realised in the collapse of the wall which caused serious injuries to Mr El Gendy. The injuries to Mr El Gendy could have, in the circumstances, been more serious. 40 General deterrence is also an important consideration. I adopt the observations on this issue made by me in Inspector John Patton v Romeo Elias Ibrahim and Others [2010] NSWIRComm 109 at [63]: General deterrence must also be applied. The present set of circumstances reveals a most unsatisfactory approach to matters of safety at a construction site. Construction sites are, or can be, notoriously dangerous places for workers when they are not the beneficiaries of well-organised and promulgated systems, adequate instruction, information, training and supervision. The present matters are a timely illustration of what can go wrong when safety procedures are not properly addressed, devised or implemented. The importance of safety measures again needs to be emphasised to all employers and contractors who engage workers, particularly inexperienced workers, to perform work at a construction site. 41 Specific deterrence is also applicable. Mr Mercer informed the Court of his intention to continue to work in the construction industry. 42 Mr Mercer faces a maximum penalty of $55,000. Subjective factors 43 The defendant entered a plea of guilty to the charge at the earliest or first reasonable opportunity. I propose, in these circumstances, to assess an appropriate penalty for the utilitarian value of the plea at 25 per cent. 44 As a separate consideration from the utilitarian value of the plea, the defendant is also entitled to leniency in recognition of the remorse shown by the plea of guilty. 45 The defendant also co-operated with WorkCover during the investigation and prosecution of the offence. 46 The absence of prior convictions also entitles Mr Mercer to leniency. 47 Mr Mercer also provided assistance to Mr El Gendy after the incident. The details are set out in his statement: In the week following the incident, I made a number of telephone calls to Wollongong Hospital to ascertain how Mr El Gendy was. On Saturday, 25 November 2006, my family and I drove to Wollongong Hospital to see Mr El Gendy. We stayed there for about three quarters of an hour speaking with Mr El Gendy and his friend Atef Nasser. I had not met either of them before. At that time, Mr El Gendy was out of intensive care. Mr wife and I asked if him if there was anything we could do for him and his family. When I saw Mr El Gendy I was very distressed for him. On Wednesday, 29 November 2006, I visited Mr El Gendy at Wollongong Hospital. I stayed with him for about three quarters of an hour. My wife had made up a gift of toiletries, chocolates and flowers which I gave to him. I enquired with the nursing staff about Mr El Gendy's progress. On 6 December 2006, I went to visit Mr El Gendy again to be told that he had been discharged the day before. I spoke with Dr Tarek who gave me an update on Mr El Gendy's progress. I found out Mr El Gendy was staying with his cousin in Punchbowl and on Sunday, 17 December 2006, I visited Mr El Gendy there. I took four of my children with me. We had afternoon tea. I spoke with his cousin Wassim. I stayed for about one hour and then left. On Sunday, 24 December 2006, I visited Mr El Gendy at Punchbowl. I gave him $2,000 towards getting through Christmas. I stayed there for an hour and half speaking with him and his cousin Wassim. 48 Mr Mercer and Colmerc also instituted an impressive number of post-incident safety measures which have been set out in the agreed facts: Immediately after the incident, Mr Mercer called a toolbox talk with every worker on the site to inform them of the incident, WorkCover's investigation and to advise of improvement to procedures on site and to ensure every person signed on the attendance sheet every day. On about 24 November 2006 Colmerc prepared and issued a SWMS for erecting & dismantling formwork near green blockwork/brickwork. Included in this SWMS was a requirement for bracing to be installed to all freestanding walls, and for a barrier to be placed in a 3m radius around the wall with appropriate signage to indicate it was a 'no go zone'. Colmerc attempted to introduce a new system whereby no contractors could work in the immediate vicinity of formwork erection or dismantling. After the incident such areas were also designated as a 'no go zone', and were recorded on the daily attendance register at the front gate of the site for all to read as they signed in each day. Colmerc also enforced the daily signing of the site attendance register. Colmerc engaged an independent auditor, Mel Crook & Associates Pty Ltd trading as MCA Business Education & Training to conduct audits on the site. Initially these were weekly for two months and then monthly after that. Mel Crook & Associates introduced a new OHS management plan for Colmerc, and reviewed the project management plan. Letters were sent by Colmerc to all sub-contractors on the site reinforcing safety as a priority and advising of the incident. Extra labour was employed by Colmerc to attend to urgent safety rectification work. Additional safety inspections and walks through the site were conducted by Colmerc as well as providing more signage directing workers to two entry points, as well as inspecting the perimeter fence to stop workers accessing the site who had not undertaken the site induction. A system of regular identify checks on site to ensure everyone has been inducted was introduced, as well as issuing site induction stickers for all workers to place on their hardhat. Mel Crook & Associates gave extra training to all Colmerc's employees and there was increased supervision by Colmerc of the supervisors of the trades. Following the incident O&H did not develop an SWMS or OHS management plan or safe work procedures for their work. Following the incident REI were guided by the actions on site by Colmerc such as setting up 'no go zones'. After the Improvement Notice No: 254462 was issued on 18 December 2006 to Colmerc the OHS consultation system on site was changed. The OHS safety committee was replaced with an OHS representative (Mr Pearson) and mandatory toolbox talks were required of all sub-contractors on site. At the fortnightly contractors' meeting, OHS issues were raised, and those issues were expected to be disseminated to the employees of the subcontractors in the form of a toolbox meeting, and the records of toolbox talks were to be passed back to Colmerc. 49 Mr Mercer also demonstrated contrition as reflected in the post-incident remedial measures undertaken by him, and by Colmerc, and in his expressions of remorse for the injuries suffered by Mr El Gendy which are set out in his statement: I was devastated by the occurrence of the incident and the injuries suffered by Mr El Gendy. I recognised from shortly after the incident that it was one which should never have happened for reasons explained later in this letter. I deeply regret that the incident occurred and that Mr El Gendy suffered such serious injuries. Despite the fact that procedures and arrangements were in place which should have avoided the incident, I feel a personal sense of responsibility because the accident happened on a construction site for which I had overall responsibility. I took pride in running a safe site but following the incident, I realised that a lack of supervision of inexperienced workers and the failure by supervisors to comply with site arrangements, work systems and standard construction procedures were the major contributing factors and that it was my responsibility to ensure a higher level of adherence to these matters. 50 Mr Crook, the managing director of the independent auditing firm engaged by Mr Mercer after the incident also attested in a letter provided to the Court to Mr Mercer's, "integrity, excellent work ethic, honesty and commitment". This matter, together with the absence of prior convictions, shows that Mr Mercer is a person of good character. 51 All of these matters will be taken into account by the Court in mitigation of the penalty to be imposed. Exercise of discretion under s 10 52 Mr Mercer made an application that the Court exercise its discretion under s 10 of the Crimes (Sentencing Procedure) Act 1999 (CSPA) and make an order pursuant to s 10(1) to dismiss the charge. 53 A number of factors were relied upon by Mr Mercer in support of the application which include the subjective factors which have already been taken into account in these proceedings in his favour. Mr Mercer also asked the Court to take into account on the application the fact that the incident would not have occurred if the formwork and frames had been moved using a mobile crane, which had been organised by him to be on site on Monday, 20 November 2006. This latter factor has also been taken into account in Mr Mercer's favour in these proceedings. 54 An order under s 10 of the CSPA is only made in exceptional circumstances: see for example WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Ltd (2004) 136 IR 449 at [45] [50]. In my view, the circumstances which gave rise to the offence are such that it would be an inappropriate exercise of the Court's discretion to grant Mr Mercer's application. There can be no doubt that Mr Mercer is a person of good character for reasons earlier stated, but the fact remains that the offence under s 8(1) was objectively serious. The Court has also acknowledged Mr Mercer's sincere expression of regret for the injuries sustained by Mr El Gendy. None of these matters, however, are sufficiently persuasive to attract the Court's discretion in order to grant the application under s 10(1). The finding that an offence is objectively serious, of itself would normally preclude the application being granted. Capacity to pay a fine 55 In the alternative, Mr Mercer submitted that any penalty imposed upon him should be nominal or at the lower end of the scale because he had a limited capacity to pay a fine. 56 The information provided by Mr Mercer in support of the submission was set out by him in his statement: Colmerc was wound up by creditors and a liquidator of it was appointed in September 2008. Colys Developments Pty Ltd, the developer of Kiama Blue, was unable to fund the remaining construction work and owed Colmerc $1,603,201. In turn, Colmerc was unable to pay debts of $726,204 to its sub-contractors and others. The funders of Colys Developments took over the project and engaged another builder to complete it. The winding up of Colmerc was unrelated to the incident and was inevitable as a result of the debts owed by it. As a consequence of the insolvency of Colmerc, I lost my source of income and had a substantial amount of indebtedness. To avoid bankruptcy, I was forced to negotiate with some of my creditors. My current debts are as follows: AMOUNT PAYABLE TO $47,360 Cleary Bros (Bombo) Pty Ltd $15,612 Australian Temporary Fencing Pty Ltd. $57,696 Airspec Pty Ltd $ 1,237 Andrew Hartcher $69,980 Colzeg Pty Ltd $27,790 Kiama Supply Co Pty Ltd $22,345 Sutherland Shire Montessori School $ 7,762 GE Credit Line $ 9,022 HSBC $ 3,171 CBA $ 1,329 ANZ $39,600 HS Creek $50,160 JS Mercer $ 293 State Debt Recovery Office $ 530 AMEX My only assets are household items and a limited number of tools of trade with an approximate value of between $5,000 and $8,000. From late 2008, I worked as a sub-contractor to Sahara Projects Pty Ltd which trades as MCD Projects and is a small company undertaking new construction and property maintenance. Payments I received from MCD Projects were barely sufficient to meet the monthly commitments to my creditors and to make a contribution towards the rent for our accommodation being paid by my wife and housekeeping expenses. In late December 2009, MCD Projects ceased using my services as a sub-contractor. Since mid January 2010, I have been receiving unemployment benefits from Centrelink in the amount of $411 per fortnight. I currently have no other source of income. 57 The prosecutor contended on the issue that the evidence relied upon by Mr Mercer was insufficient to allow the Court to impose a low fine on the basis of financial incapacity and, in any event, the relevant case law requires that where an offence is objectively serious, the penalty imposed should reflect this. 58 Mr Mercer may not have provided supporting documentation in the form of financial records, but he voluntarily gave evidence and was cross-examined about the contents of his statement in some detail, including matters relevant to his financial position. He confirmed, for example, that a company, Mercer Management Services Pty Ltd, a shareholder of Sahara Projects Pty Limited was not a company in which he had any financial interest. He also explained that Sahara Projects Pty Limited was a company owned by his wife, but that his wife had resigned as a director and they have since separated. He confirmed that he was unemployed and seeking work in the construction industry. 59 I have no reason to doubt the reliability and accuracy of Mr Mercer's evidence. He was impressive when giving his evidence and readily acknowledged his responsibilities as a director of Colmerc for the safety of all the workers at the site, including those workers present at the site on 18 November 2006. 60 I therefore intend to take into account on sentence Mr Mercer's limited capacity to pay a fine, although the fine imposed will not be nominal and will reflect the objective seriousness of the offence. Mr Mercer's role 61 Colmerc (and Mr Mercer as its director) was the principal contractor at the site. It therefore had a number of obligations to ensure safety at the site which included induction training, ensuring that a site-specific occupational health and safety plan was prepared and ensuring that all sub-contractors working at the site provided to Colmerc a SWMS. Colmerc did provide a site-specific OH&S Plan, but otherwise failed in the discharge of its other obligations. 62 The charge to which Mr Mercer pleaded guilty alleged a number of failures which included failures to supervise, train, instruct, and inform the workers who were stripping and transporting, the formwork and falsework between the floors, and failures to ensure that the workers did not work within the vicinity of the incident wall or stack frames vertically against it. In his evidence, Mr Mercer readily accepted responsibilities for these failures. 63 The prosecutor contended that Mr Mercer's culpability was no less than that of O & H Construction, Mr Ibrahim and Mr Hussein. Mr Mercer was a "hands on" manager at the site with designated responsibilities under Colmerc's OH&S Plan as site manager and construction manager. 64 In my view, Mr Mercer's culpability is slightly less than the culpability of the other three co-offenders principally because of the actions taken by him on behalf of Colmerc to organise delivery of the loading platform and a crane on 20 November 2006 for the transportation of the formwork and falsework from H1 East to H2 East. These arrangements had been communicated to Mr Ibrahim's company, REI, through Mr Abdulmajeed, REI's nominated supervisor (through Kajima). For reasons not explained, workers from REI (Mr Saddick) and O & H Construction nevertheless went ahead on 18 November 2006 and manually moved the materials from H1 East to H1 West in order to store them there. Mr Abdulmajeed was the supervisor on site at that time and must have been aware of the activities taking place. 65 The respective roles of Mr Ibrahim, O & H Construction and Mr Hussein have been set out in the earlier judgment of Inspector John Patton v Romeo Elias Ibrahim at [83] to [89], which I adopt and apply in these sentencing reasons. Penalty 66 In determining penalties against the defendant, I have taken into account the objective seriousness of the offence, the maximum penalty, factors in mitigation, the absence of prior convictions and defendant's culpability by reference to the culpability of other co-offenders. These matters have been considered by reference to the CSPA, in particular, s 21A. Orders 67 In Matter No. IC 2081 of 2008, the Court makes the following orders: (1) The defendant, Darren Paul Mercer, is convicted of the offence and fined $10,000 with a moiety to the prosecutor. (2) The defendant is to pay the reasonable costs of the prosecutor as agreed or, in the absence of agreement, as assessed. ___________________ 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.