Industrial Court of New South Wales CITATION: Inspector Michael Dall v GPCC Pty Ltd; Inspector Michael Dall v JML Group Pty Ltd [2007] NSWIRComm 103 PROSECUTOR: WorkCover Authority of New South Wales PARTIES: DEFENDANTS: GPCC Pty Ltd JML Group Pty Ltd FILE NUMBER(S): 893; 894 of 2006 CORAM: Marks J Occupational Health and Safety Act - breach of ss8(1) and 8(2) - guilty pleas - penalty - employee directed to use "fall protection" by defendant and by WorkCover Authority inspector - employee failed to comply - objective seriousness of the offence - inadequate supervision of someone known to be disinclined to obey safety directions - obvious danger in working at a height of 20 metres unprotected - breach by defendants regarded as serious but do not warrant imposition of penalty at higher end of scale - misconduct of employee triggered the breaches - deterrent effect of penalty within construction industry. CATCHWORDS: HELD: JML had substantial commitment to OH&S and compliance with obligations under legislation - co-operated with WorkCover - lower end discount for guilty plea - monetary penalty imposed. GPCC - need to balance financial means and objective seriousness of offence - guilty plea at earliest opportunity - commitment to OH&S obligations - expressed contrition and remorse - prior conviction - monetary penalty imposed. LEGISLATION CITED: Occupational Health and Safety Act 2000 Fines Act 1996 s6 Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSWIRComm 339 Manpac Industries Pty Ltd v WorkCover Authority of New South Wales [2001] NSWIRComm 190 CASES CITED: Environment Protection Authority v Coe Drilling Australia Pty Ltd [2005] NSWLEC 719 Nesmatt Pty Ltd v WorkCover (NSW) (1998) 87 IR 312 WorkCover (NSW) v Walco Hoist (2000) 99 IR 163 Wong v Melinda Group Pty Ltd (1998) 82 IR 118 HEARING DATES: 28 March 2007 DATE OF JUDGMENT: 18 May 2007 PROSECUTOR: Mr M Cahill of counsel SOLICITOR: Ms C Bateman Carroll & O'Dea LEGAL REPRESENTATIVES: DEFENDANTS: GPCC Pty Ltd: Unrepresented JML Group Pty Ltd: Mr A Henskens of counsel SOLICITOR: Mr A Harrison Bilbie Dan JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Friday 18 May 2007 Matter No IRC 893 of 2006 Inspector Michael Dall v GPCC Pty Ltd Prosecution pursuant to s 8(1) of the Occupational Health and Safety Act 2000 Matter No IRC 894 of 2006 Inspector Michael Dall v JML Group Pty Ltd Prosecution pursuant to s 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT [2007] NSWIRComm 103 1 Each of these proceedings arises out of the one incident that occurred on a building site in Hunter Street Newcastle on 20 April 2004. The defendant JML Group Pty Ltd ("JML") was the principal building contractor on the site, which comprised a multi-storey apartment building. The defendant GPCC Pty Ltd ("GPCC") was engaged by JML as a sub-contractor to carry out the installation of pre-caste concrete panels at the site. On 20 April 2004 an employee of GPCC was seen carrying out work involving the positioning of a pre-caste concrete panel to form part of the wall on the edge of level 9 of the building. This was about 20 metres above ground level. There was no scaffolding, barrier or other protection installed on level 9 at the time that would have stopped that employee from falling to the ground. More significantly, the employee was not wearing a safety harness that had been provided to him by GPCC and which he had been instructed to wear. The employee was Anthony Roth, the leading hand. One other employee of GPCC was assisting in carrying out the work at the site, Mr Timothy Hyeronimus. He was wearing a safety harness. 2 The defendant GPCC was charged with a breach of s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"), which is in the following terms. 8 Duties of employers (1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. 3 The defendant JML was charged with a breach of s 8(2) of the Act, which is in the following terms: 8 Duties of employers (2) Others at workplace An employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. 4 The allegation with respect to GPCC is that it failed to provide and maintain a system of work, with respect to the installation of pre-caste concrete panels, which was safe and without risks to the health, safety and welfare of its employees and it failed to ensure that adequate fall prevention measures were taken to prevent the employee Mr Roth from being at risk of falling from the leading edge of level 9 of the building under construction. 5 The particulars of the offence with which JML was charged is that it failed to ensure that a system of work with respect to the installation of pre-caste concrete panels at the site was provided and maintained which was safe and without risks to health, safety and welfare of persons who were not its employees and it failed to ensure that adequate fall prevention measures were taken so as to prevent persons not its employees from being at risk of falling from the leading edge of level 9 of that building. 6 GPCC had entered a plea of guilty from an early stage in the proceedings. JML entered a plea of guilty just prior to the time fixed for the hearing of those proceedings. This judgment, accordingly, deals only with the question of penalty. 7 Set out below is the agreed statement of facts tendered in the proceedings against JML. Those facts in all material respects that pertain to the circumstances surrounding the events that occurred on 20 April 2004 were common also to and became evidence in the proceedings against GPCC. "1. The Prosecutor is and was at all material times: (a) an Inspector duly appointed under Division 4 of Part 3 of the Occupational Health and Safety Act 1983 (NSW) ("the 1983 Act"); (b) taken to be appointed as an Inspector under the Occupational Health and Safety Act 2000 ("the 2000 Act") by virtue of Clause 11 of Schedule 3 to the 2000 Act; and (c) empowered under s.106 of the 2000 Act, as extended by Clause 13 of Schedule 3 to that Act to institute proceedings in the within matter. 2. JML Group Pty Ltd (ACN: 003 969 622) ("the Defendant"), is and, at all material times, was a company duly incorporated with a registered office located at Corner Creek and Minmi Roads, Wallsend 2287 in the State of New South Wales. 3. At all material times, the Defendant was the principal contractor with respect to construction of a multi-storey apartment building at 489 Hunter Street, Newcastle in the State of New South Wales ("the site"). 4. The building under construction at the site consisted of concrete floors with pre-cast concrete panels forming the exterior "curtain" walls of the building. 5. At all material times the Defendant's undertaking included the installation of the pre-cast concrete wall panels. 6. At all material times, the site was the Defendant's place of work. 7. At all material times, the Defendant was an employer. 8. At all material times, GPCC Pty Ltd (ACN 094 719 785) ("GPCC") was engaged by the Defendant on a subcontract basis, to install pre-cast concrete panels at the site. 9. At all material times, GPCC employed Anthony Roth ("Roth") as a leading hand, and Timothy Hyeronimus ("Hyeronimus") as a labourer, to work at the site. 10. Roth had been working as a construction team co-ordinator organising semi-trailers, cranes, men, erection of panels and "post direction work" for the previous 5 years with Girotto Precast. For 13 years prior to that, he had worked up from a labourer to a supervisor with another company. During these periods Roth had worked principally on single storey warehouse style constructions. 11. At all material times Roth was certified as a rigger (basic and intermediate) and as a crane driver. 12. Roth commenced employment with GPCC on 19 April 2004 and commenced work at the site on the day. 13. Prior to 19 April 2004, Hyeronimous' work involved mainly caulking, grouting and sometimes assisting in the installing of concrete panels. Prior to commencing work at the site, Hyeronimous had not worked on high rise. 14. On 19 April 2004, the GPCC workers were provided with safety harnesses, the eyelets, the block and lanyards to hook onto . 15. On 20 April 2004 ("the incident date"), Roth and Hyeronimus were undertaking tasks relating to the installation of pre-cast concrete panels on the south west corner level 9 of the building at the site. 16. GPCC 's installation procedure required Roth and Hyeronimus to work in close proximity to the leading edge of the building as the pre-cast concrete wall panels were fitted to the outside of the building, sitting one on top of the other. 17. First, the pre-cast concrete wall panels were to be lifted by a crane to the level of the building to which they were to be fitted. Once at the level of the building to which it was to be attached, each panel was to be located, manually, by Roth and Hyeronimus. 18. Secondly, the pre-cast concrete wall panels were cast with holes in the base and in the top of each panel so that the panels could be secured with threaded dowel. Once each panel was manually guided to a point above the position in which it was to be fitted, the holes in the top of the existing panel and the base of the panel were grouted and a threaded dowel was screwed into each of the holes in the base of the panel. Roth and Hyeronimus then manually guided the panel so that the threaded dowel(s) located into the existing pre-cast panel(s) below the panel being fitted. 19. Before a panel could be craned to the level and guided into position for fixing, GPCC's installation procedure called for the removal of perimeter fencing on the leading edge of the building where the panel was to be fitted. 20. On 19 April 2004, the day prior to the incident date, Roth removed the perimeter fencing from across the back and the south west corner of level 9 of the building in order to prepare for the installation of the pre-cast concrete panels. 21. However, no barrier, such as scaffolding or other edge protection was installed prior to the removal of the perimeter fencing; nor were any warning signs installed to alert workers to the risk of falling from the leading edge of level 9 of the building. 22. The fall from the leading edge on level 9 of the building to the ground below was approximately twenty (20) metres. 23. On 19 April 2004 Inspector Sandall attended at the site. Whilst present at the site on 19 April 2004, Inspector Sandall met briefly with JML site staff and GPCC employees on the stairs between level 8 and level 9. In the course of that meeting Inspector Sandall informed Roth and Hyeronimus and JML site staff that fall protection was to be maintained at all times, including the wearing of safety harnesses, and that barricading was to be put in place to stop other workers coming into the GPCC work area. 24. On 20 April 2004 barricading was put in place on level 9 of the site to prevent other workers from entering the area in which Roth and Hyeronimous were installing pre-cast panels. 25. At approximately 3.15pm on the incident date, Roth and Hyeronimus were involved in installing a pre-cast concrete panel to the leading edge on the south western side of level 9 of the building. Roth was working in close proximity to that leading edge of the building on that side of the building fitting the threaded dowel and manually locating a panel prior to it being lowered into place. Roth was not wearing a safety harness whilst performing this task in circumstances where there were no other methods of fall protection in place. 26. When interviewed after the incident both Roth and Hyeronimus stated that on 20 April 2004 they worked 'all day' with their harnesses on until the defendant's site foreman, Zaim Arabelovic, left level 9. Both Roth and Hyeronimus also stated when interviewed after the incident that Roth removed his harness, whilst positioning a pre-cast panel, just shortly before Inspector Sandall arrived on level 9 at about 3.15pm. 27. When interviewed after the event, Zaim Arabelovic stated that: "Well every time I was up there, I was up there basically all day, one of us representatives were there ensuring that they maintained the harness on and the site, the exclusion zone was maintained and no other staff was up there….I can't explain why he took it (the harness) off. He had it on when I left to go downstairs and by the time I got back with Gary (Inspector Sandall) he had it off." 28. Prior to and as at the date of the incident, GPCC had in place a Safe Work Method Statement ("SWMS") for the Installation of Precast Panels. Annexed hereto and marked "A" is a copy of this SWMS. 29. After the incident, GPCC was required to revise their SWMS and to provide training to Roth and Hyeronimus in accordance with the revised SWMS. Annexed hereto and marked "B" is a copy of the revised SWMS. 30. The Defendant's Project Safety Plan, dated 12 December 2003, required GPCC to prepare and submit a work method statement to the Defendant's Project Manager for review prior to work on the installation of the pre-cast panels commenced at the site. Annexed hereto and marked with the letter "C" is a copy of the Defendant's Project Safety Plan for the site. 31. Further, the Defendant's Project Safety Plan included "Guidelines to Producing a Work Method Statement" against which SWMS, including GPCC's initial SMWS, were to be assessed. The initial SWMS did not comply with the Defendant's guidelines with respect to the production of safe work method statements for use on the Defendant's sites in that the initial safe work method statement for the installation of the pre-cast wall panels did not:- · note the name, qualifications and experience of the supervisor required to carry out supervision of the task; · note specific training required by personnel carrying out the task; · detail the methods to be used to isolate the task. 32. Further, after the subject incident the Defendant put in place a "Work Method Statement – Amendment" with respect to its oversight of the installation of the pre-cast concrete wall panels, together with a "Precast Panel Erection Checklist (DRAFT)". Attached marked with the letters "D" and "E", respectively, are copies of the Work Method Statement – Amendment for Concrete Precast Panel Erector Contractor: GPCC and the draft "Precast Panel Erection Checklist". 33. After the incident, the Defendant had in place a system of supervision that required one of its supervisors to be present whenever GPCC was actually undertaking the installation of pre-cast wall panels. 34. The Defendant, being an employer at 489 Hunter Street, Newcastle in the State of New South Wales on 20 April 2004, DID FAIL, contrary to Section 8(2) of the Occupational Health & Safety Act 2000 (NSW) to ensure that people (other than employees of the Defendant), and in particular Anthony Roth, were not exposed to risks to their health or safety arising from the conduct of the Defendant's undertaking while they were at the Defendant's place of work, in that the Defendant: (a) failed to ensure that a system of work with respect to the installation of pre-cast concrete panels at the site was provided and maintained which was safe and without risks to the health, safety and welfare of its non-employees; (b) failed to ensure that adequate fall prevention measures were taken so as to prevent its non-employees from being at risk of falling from the leading edge of level 9 of the building under construction at the site." 8 A further agreed statement of facts was also tendered in the proceedings against JML and it is set out below: "1. When interviewed by Inspector Dall on 13 May, 2004, Mr Roth gave the following answers to the following questions: Q260. Dall: Okay however you by your own admission had elected to take the harness off? A: That's right yes. Q261. Dall: Okay what then transpired? A: This is when the Workcover guy came over to me and asked me what I was doing and why I was doing it in this manner and I just said I felt safer doing it this way without the lanyard getting caught on starter bars and things on the ground, it is a lot easier to trip when you come to a sudden halt or you lose control of the panel and it hits another panel. I felt safer." 9 In addition to the agreed statement of facts in each matter there was tendered into evidence on behalf of the defendant JML affidavits of Michael Thomas Lavis and Zaim Arabelovic. Mr Arabelovic was cross-examined on his affidavit. The evidence of Mr Arabelovic became evidence in the proceedings against GPCC. Certain of the documentation exhibited to the affidavit of Mr Lavis became evidence in the proceedings against GPCC. 10 For completeness, I set out hereunder the agreed statement of facts tendered in connection with the proceedings against GPCC, and it will be seen that there is a substantial body of overlap with the JML proceedings. "1. At all material times the Prosecutor was: (a) an Inspector duly appointed under Division 4 of Part 3 of the Occupational Health and Safety Act 1983 (NSW) ("the 1983 Act"); (b) taken to be appointed as an Inspector under the Occupational Health and Safety Act 2000 ("the 2000 Act") by virtue of Clause 11 of Schedule 3 to the 2000 Act; and (c) empowered under s.106 of the 2000 Act, as extended by Clause 13 of Schedule 3 to that Act to institute proceedings in the within matter. 2. At all material times, GPCC Pty Ltd (ACN: 094 719 785) ("the Defendant"), was a company duly incorporated with a registered office located at Suite 1, 614 Hawthorne Road, Brighton East 3187 in the State of Victoria. 3. At all material times, JML Group Pty Ltd (ACN: 003 969 622) ("JML") was the principal contractor with respect to construction of a multi-storey apartment building at 489 Hunter Street, Newcastle in the State of New South Wales ("the site"). 4. The building under construction at the site consisted of concrete floors with pre-cast concrete panels forming the exterior walls of the building. 5. At all material times JML's undertaking included the installation of the pre-cast concrete wall panels. 6. At all material times, the Defendant was engaged by JML, on a subcontract basis, to install pre-cast concrete panels at the site. 7. At all material times, the Defendant was an employer. 8. At all material times, the Defendant employed Anthony Roth ("Roth") as a leading hand, and Timothy Hyeronimus ("Hyeronimus") as a labourer, to work at the site. 9. On 20 April 2004 ("the incident date"), Roth and Hyeronimus were undertaking tasks relating to the installation of pre-cast concrete panels on the south west corner level 9 of the building at the site. 10. The Defendant's installation procedure required Roth and Hyeronimus to work in close proximity to the leading edge of the building as the pre-cast concrete wall panels fitted to the outside of the building, sitting one on top of the other. 11. First, the pre-cast concrete wall panels were to be lifted by crane to the level of the building to which they were to be fitted. Once at the level of the building to which it was to be attached, each panel was to be located, manually, by Roth and Hyeronimus. 12. Secondly, the pre-cast concrete wall panels were cast with holes in the base and in the top of each panel so that the panels could be secured with threaded dowel. Once each panel was manually guided to a point above the position in which it was to be fitted, the holes in the top of the existing panel and the base of the panel were grouted and a threaded dowel was screwed into each of the holes in the base of the panel. Roth and Hyeronimus then manually guided the panel so that the threaded dowel(s) located into the existing pre-cast panel(s) below the panel being fitted. 13. Before a panel could be craned to the level and guided into position for fixing, the Defendant's installation procedure called for the removal of perimeter fencing on the leading edge of the building where the panel was to be fitted. 14. On 19 April 2004, the day prior to the incident date, Roth removed the perimeter fencing in the south west corner of level 9 of the building in order to prepare for the installation of the pre-cast concrete panels. 15. However, no barrier, such as scaffolding or other edge protection was installed prior to the removal of the perimeter fencing; nor were any warning signs installed to alert workers to the risk of falling from the leading edge of level 9 of the building. 16. The fall from the leading edge on level 9 of the building to the ground below was approximately twenty (20) metres. 17. At approximately 3.15pm on the incident date, Roth and Hyeronimus were involved in installing a pre-cast concrete panel to the leading edge on the southern side of level 9 of the building. Roth was working in close proximity to that leading edge of the building on that side of the building fitting the threaded dowell and manually locating a panel prior to it being lowered into place. Roth was not wearing a safety harness whilst performing this task in circumstances where there were no other methods of fall protection in place. 18. Prior to and as at the date of the incident, the Defendant had in place a Safe Work Method Statement ("SWMS"), which failed to adequately address the risks associated with working at heights. 19. After the incident, the Defendant revised their SWMS and provided training to Roth and Hyeronimus in accordance with the revised SWMS. 20. It is alleged that the Defendant, on 20 April 2004, being an employer at the site, did fail, contrary to s.8(1) of the 2000 Act, to ensure the health, safety and welfare at work of all of the employees of the Defendant employer, and in particular Anthony Roth, in that the Defendant: (a) failed to provide and maintain a system of work with respect to the installation of pre-cast concrete panels at the site which was safe and without risks to the health, safety and welfare of its employees; (b) failed to ensure that adequate fall prevention measures were taken so as to prevent its employees from being at risk of falling from the leading edge of level 9 of the building under construction at the site." 11 A further agreed statement of facts was also tendered in the proceedings against GPCC and it is set out below: "1. When interviewed by Inspector Dall on 13 May, 2004, Mr Roth gave the following answers to the following questions: Q260. Dall: Okay however you by your own admission had elected to take the harness off? A: That's right yes. Q261. Dall: Okay what then transpired? A: This is when the Workcover guy came over to me and asked me what I was doing and why I was doing it in this manner and I just said I felt safer doing it this way without the lanyard getting caught on starter bars and things on the ground, it is a lot easier to trip when you come to a sudden halt or you lose control of the panel and it hits another panel. I felt safer. 2. Roth had been working as a construction team co-ordinator organising semi-trailers, cranes, men, erection of panels and "post direction work" for the previous 5 years with Girotto Precast. For 13 years prior to that, he had worked up from a labourer to a supervisor with another company. During these periods Roth had worked principally on single storey warehouse style constructions. 3. At all material times Roth was certified as a rigger (basic and intermediate) and as a crane driver. 4. Roth commenced employment with GPCC on 19 April 2004 and commenced work at the site on the day. 5. Prior to 19 April 2004, Hyeronimous' work involved mainly caulking, grouting and sometimes assisting in the installing of concrete panels. Prior to commencing work at the site, Hyeronimous had not worked on high rise. 6. On 19 April 2004, the GPCC workers were provided with safety harnesses, the eyelets, the block and lanyards to hook onto . 7. On 19 April 2004 Inspector Sandall attended at the site. Whilst present at the site on 19 April 2004, Inspector Sandall met briefly with JML site staff and GPCC employees on the stairs between level 8 and level 9. In the course of that meeting Inspector Sandall informed Roth and Hyeronimus and JML site staff that fall protection was to be maintained at all times, including the wearing of safety harnesses, and that barricading was to be put in place to stop other workers coming into the GPCC work area. 8. When interviewed after the incident both Roth and Hyeronimus stated that on 20 April 2004 they worked 'all day' with their harnesses on until the defendant's site foreman, Zaim Arabelovic, left level 9. Both Roth and Hyeronimus also stated when interviewed after the incident that Roth removed his harness, whilst positioning a pre-cast panel, just shortly before Inspector Sandall arrived on level 9 at about 3.15pm. 9. When interviewed after the event, Zaim Arabelovic stated that: 'Well every time I was up there, I was up there basically all day, one of us representatives were there ensuring that they maintained the harness on and the site, the exclusion zone was maintained and no other staff was up there….I can't explain why he took it (the harness) off. He had it on when I left to go downstairs and by the time I got back with Gary (Inspector Sandall) he had it off.'" 12 Prior to the incident occurring, JML as head contractor created a "project safety plan" which dealt, among other things, with occupational health and safety measures to be taken at the site. That document required sub-contractors such as GPCC to prepare "Work Method Statements" which were to be submitted to the JML project manager for review prior to commencement. Those documents were intended to be reviewed regularly by sub-contractors. Furthermore, the project safety plan required the JML foreman to complete a sub-contractor safety performance data record on sub-contractors that the foreman believed "need to improve their safety performance" which was to be forwarded to the project manager. 13 JML documentation included guidelines for the production of work method statements by sub-contractors which sought specificity as to work areas, compliance with safety requirements, provision of personal protection equipment, the training and information to be afforded to persons carrying out the work, step by step procedures and the like. 14 GPCC created an "OHS site management plan" which incorporated a safety policy signed by directors on 1 July 2003. There was included a safety analysis which covered a range of activities. It is possible to read this documentation in such a way that it might not apply to the particular tasks being carried out at the time that this incident occurred. Nevertheless, there is a clear reference in the documentation to a danger being "fall from heights" and the necessity for "riggers to wear safety harness when moving around at heights." However, that documentation issued by GPCC was amended immediately after the incident to apply specifically to the work of installation of pre-caste concrete panels and which dealt in much greater detail with this particular work. That amended documentation was put into operation on 21 April 2004, the day after the incident and was specifically reviewed by Mr Tony Roth. 15 The prosecution in his submissions emphasised the generality of the GPCC documentation prior to the incident and the improvement brought about by the amendment after the incident as being indicative of culpability on the part of both JML and GPCC. I shall return to this aspect of the proceedings later in these reasons for judgment. 16 It is now necessary to refer to some of the other evidentiary material in describing what happened the day before the incident and in describing the events leading up to the incident. 17 The employees of GPCC, Anthony Roth and Timothy Hyeronimus commenced working on the site on 19 April 2004. Mr Roth was a certified rigger and had worked also as a crane driver. He had previously worked as a construction team co-ordinator organising the transport and erection of pre-caste concrete panels for a period of 5 years. For 13 years before that he had worked predominantly on single storey warehouse style constructions both as a labourer and as a supervisor. 18 Before commencing work on 19 April 2004, Messrs Roth and Hyeronimus had attended a toolbox meeting for about 15 minutes that was conducted by a director of GPCC. That meeting discussed a number of occupational health and safety matters including, specifically, "fall protection." 19 As a result of a complaint Inspector Sandall of the WorkCover Authority of New South Wales attended the site on 19 April 2004 and specifically told Mr Roth that fall protection was to be maintained at all times including the wearing of safety harnesses. 20 After this occurred Mr Zaim Arabelovic, one of the site supervisors employed by JML, had a conversation with Mr Roth in which he told him that he should wear his harness at all times when he was carrying out work involved in the fixing of the pre-caste panels. He said that Mr Roth remonstrated but that he repeated that safety harnesses had to be worn at all times. Mr Roth told him that he understood this direction. 21 As a result of this incident, JML determined that the GPCC employees would be closely watched whilst pre-caste concrete panels were being installed the next day. This supervision was carried out by Mr Arabelovic who supervised Mr Roth and Mr Hyeronimus substantially all of the working time on the next day, 20 April 2004. The only time when direct supervision did not occur was when Mr Arabelovic had to descend to the ground level to sign off for the delivery of the pre-caste concrete panels and to supervise their loading onto the crane. This occurred six or seven times that day. Mr Arabelovic was also absent briefly for toilet breaks. The evidence is that at all times during the performance of work on 20 April 2004 both Mr Roth and Mr Hyeronimus wore their safety harnesses until about 3pm, when Mr Arabelovic left the area to attend to the loading of the last concrete panel that day. Shortly after he left the site, Mr Roth decided that he would take off his safety harness. The reason for the removal of the safety harness given by Mr Roth was: "I felt safer doing it this way without the lanyard getting caught on starter bars and things on the ground, it is a lot easier to trip when you come to a sudden halt or you lose control of the panel and it hits another panel. I felt safer." 22 Despite this explanation, which Mr Roth gave to a WorkCover inspector when being questioned about the matter on 13 May 2004, Mr Roth did not at any stage on 19 or 20 April 2004 make any comment or complaint to Mr Arabelovic about any difficulty in performing his work whilst wearing the safety harness. 23 It must be concluded from this evidentiary material that the real and effective cause of the fact that Mr Roth was performing work at a height of about 20 metres above ground level near the edge of a building under construction, in circumstances where there was a clear risk that if he fell he would sustain serious injuries, was the blatant failure of Mr Roth to comply with instructions which had been explicitly and specifically given to him by a WorkCover Authority inspector and by the site supervisor, Mr Arabelovic, that he should wear a safety harness at all times whilst carrying out this work and in disregard of the matters discussed on 19 April 2004 at the toolbox meeting conducted by a director of GPCC. Each of JML and GPCC was compelled by the Act to ensure, in the sense of guaranteeing, that Mr Roth was not subjected to any risk of injury whilst performing his work. It was stressed on behalf of the prosecutor during the course of submissions that one way of ensuring that this occurred would have been the more rigid and greater attention to the documentation which was created by both defendants, to which I have earlier referred and which was the subject of amendment after the incident in a manner which I have described. Whether and to what extent the creation of more comprehensive and explicit documentation would have assisted either defendant in ensuring that Mr Roth wore a safety harness on the particular days is a matter of conjecture. Nevertheless, there were deficiencies in the documentation produced by both defendants which the prosecutor submitted should be taken into account in assessing the objective seriousness of this offence. 24 More pertinently, the prosecutor submitted, with respect to the defendant JML, that having been alerted on 19 April 2004 to the predisposition of Mr Roth to fail to adhere to instructions in the wearing of a safety harness, the supervision of Mr Roth, which was conducted on the following day, was inadequate. That is, it was asserted by the WorkCover Authority of New South Wales that Mr Roth should have been supervised by JML in order to comply with its obligations under the Act for all of the time that Mr Roth was carrying out his work. It was submitted that there were deficiencies in the supervisory process because Mr Arabelovic had to leave the particular site on six or seven occasions during the day to attend to the delivery and loading of concrete panels and during toilet breaks. That is, in order to comply with its obligations under the Act, the WorkCover Authority of New South Wales asserted that during such periods as Mr Arabelovic was absent that day, arrangements should have been made for someone else to have conducted the appropriate supervision. 25 It is well established that the Act creates absolute offences. That is, once there is a risk to the safety of a person performing work, this will result automatically in a breach unless the defendant can come within the defences created by s 28. Once Mr Roth had taken off his safety harness a risk to his safety was created and each defendant was in breach. The only means of preventing that breach would have been constant supervision, and in particular supervision at the time that Mr Roth removed his harness. It was this failure that put both JML and GPCC in breach of the Act. 26 In determining the appropriate penalty to be imposed in each case it is necessary to have regard to the objective seriousness of the offence. This requires, in my opinion, a consideration of the total situation which prevailed at the time that the breach occurred, the identification of the various matters by way of cause and effect which were in play at the time and an assessment of the nature and extent of the breach by reference to what occurred. The real and effective cause of what occurred was, in my opinion, the aberrant, deliberate and irresponsible conduct of Mr Roth in removing his harness. This was especially so given the breach by him of clear contrary directions given by a person in obvious supervisory authority, namely Mr Arabelovic, and given by a person with statutory authority, namely a WorkCover inspector. It must be problematic in these circumstances that no amount of attention to detail in the safety documentation of either defendant would have had any impact on Mr Roth and his compliance with directions to wear a safety harness. This is, therefore, a matter of less significance. However, it cannot be denied that constant supervision of Mr Roth by JML would have prevented him from removing his harness, he having worked for all of the time up until when the incident occurred on 20 April 2004 wearing his harness without apparent complaint. 27 Seen in this way, the breach by JML and, hence, by GPCC, was a failure to adequately supervise a person about whom it was previously known that he was disinclined to obey safety directions given to him by persons in authority. The objective seriousness of each of the offences with which each of the defendants is charged must be assessed in this way. Given that there was obvious danger in working at a height of about 20 metres unprotected and unrestrained in terms of a risk of falling and given that Mr Roth was known to be disobedient in complying with directions concerning his safety, the breach by each of the defendants must be regarded as a serious one. However, given that each defendant was dealing with a person who obviously had little or no regard for his own safety and no seeming intention of obeying directions, I do not regard each of the breaches as warranting the imposition of a penalty at the higher end of the scale. Indeed, the prosecutor so submitted. 28 During the course of submissions, counsel for JML commented that it was regrettable that no prosecution had been instituted by the WorkCover Authority of New South Wales against Mr Roth. I agree. 29 The Act imposes specific obligations on employees. S 20 is in the following terms: 20 Duties of employees (1) An employee must, while at work, take reasonable care for the health and safety of people who are at the employee's place of work and who may be affected by the employee's acts or omissions at work. (2) An employee must, while at work, co-operate with his or her employer or other person so far as is necessary to enable compliance with any requirement under this Act or the regulations that is imposed in the interests of health, safety and welfare on the employer or any other person. Maximum penalty: (a) in the case of a previous offender—45 penalty units, or (b) in any other case—30 penalty units. 30 Presumably, an employee is required under sub-section (1) to take reasonable care for his or her own health and safety being one of the "people" who are at the place of work. In any event, sub-section (2) is clearly applicable in the circumstances of these proceedings. The evidentiary material before the Court in these proceedings, although admittedly not admissible against Mr Roth, clearly indicates that he failed to co-operate with both his employer, GPCC, and with JML to enable those defendants to comply with their requirements under the Act. Indeed, it was his misconduct that triggered the breaches. 31 Whilst, obviously, this is a matter which has limited bearing on the imposition of penalty in these proceedings, the institution of a prosecution against an employee in circumstances of this kind might arguably assist in deterring employees from deliberately and knowingly putting their employers and others in breach of the Act and exposing them to the imposition of monetary penalties accordingly. Without some appropriate sanction being imposed by law on persons such as Mr Roth, employers and others will need to resort to either the cost of intensive full-time supervision of such persons or ensuring that persons of this kind are not engaged to carry out work for them or on their behalf. Either course of action involves cost and inconvenience. The prosecution of employees such as Mr Roth would also avoid any cynical suggestion that the WorkCover Authority of New South Wales is only interested in proceeding against entities that have the ability to pay a monetary penalty and costs, including a moiety of the monetary penalty, which, in my experience, is inevitably sought in every prosecution instituted by that Authority. 32 There is, however, authority for the proposition that the culpability of others is a matter that should be taken into account when considering the objective seriousness of an offence. Indeed, there is Full Bench authority that refers to "a justifiable sense of injustice" where a prosecution has been commenced against a defendant in circumstances where it is apparent that a prosecution should also have been commenced against another person or persons and there has been a failure to do so. (See Nesmatt Pty Ltd v WorkCover (NSW) (1998) 87 IR 312 at 323). I refer also, in general terms, to the judgment of Wright J, President in WorkCover (NSW) v Walco Hoist (2000) 99 IR 163 at [34] and the judgment of Hungerford J in Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131. 33 In assessing penalty with respect to each of the defendants, I shall take into account also the need to accommodate the general deterrent effect that such a penalty will have within the construction industry, as well as the specific deterrent effect on each of the defendants. In this latter regard I note, however, that the evidence is that GPCC has not traded for some time and that there is an intention on the part of directors that the company no longer trade and that it be liquidated. 34 It is now appropriate to deal separately with the assessment of penalty with respect to each of the defendants. JML 35 This company has no prior convictions. It has operated in the building industry since 1990. 36 The evidence of Mr Lavis, a director, was to the effect that the company had a substantial commitment to occupational health and safety matters and to compliance with its obligations under the relevant legislation. After the incident, it reviewed its documentation in a comprehensive manner and, indeed, shut down the project site for 3 days to ensure compliance with WorkCover requirements. 37 In addition, it is a good corporate citizen in that it funds an annual scholarship offered by the University of Newcastle in its Engineering Faculty, and supports a number of charitable institutions. 38 This defendant co-operated fully with the WorkCover Authority in and about its investigations of the incident and I am satisfied has expressed contrition and remorse for what occurred. 39 Although this defendant entered a plea of guilty, it did so just prior to the date fixed for the hearing of defended proceedings. To this extent it is not entitled, in my opinion, to the full discount that would normally be afforded to a defendant who should be given consideration for the utilitarian value of an early plea. I intend applying a discount for this aspect at the lower end of what is generally accepted as being an appropriate percentage to be applied. 40 The prosecutor sought a moiety of the penalty and an order for costs, neither of which was opposed. 41 Having regard to the objective seriousness of the offence in the manner in which I have described it, and having regard to the questions of deterrence as well as the subjective ameliorating factors to which I have referred, I intend fixing a monetary penalty in the sum of $45,000. This is in the context of a maximum penalty applicable of $550,000. GPCC 42 I have already referred to the objective seriousness of the offence committed by this defendant as well as the relevant deterrent factors. 43 This defendant had been represented by solicitors until just before the sentencing hearing, when it was indicated that they no longer acted for the company. At the initial hearing and at the adjourned hearing on 28 March 2007, there was in attendance before the Court a Mrs Pirotta, the wife of one of the directors of the company. Mrs Pirotta informed the Court that the company had ceased trading on 31 January 2007, consequent upon the death of one of three directors. Its financial difficulties led to the termination of the services of its solicitors. There was indication that the company was to be placed into liquidation. 44 With the consent of the prosecutor, the proceedings were adjourned to allow material to be provided to the Court with respect to the financial circumstances of this defendant for the purpose of considering the application of the provisions of s 6 of the Fines Act 1996 ("the Fines Act"). 45 Ultimately, the prosecutor agreed to the Court receiving informally a copy of the financial statements prepared by a firm of certified practising accountants in Melbourne, unverified in any way. However, the documents purported to be copies of material submitted to the Australian Taxation Office and one might thereby safely assume that the obligations imposed on taxpayers and certified practising accountants representing them to ensure the truthfulness of information furnished to the Australian Taxation Office have been complied with. 46 The financial material consists of profit and loss statements and balance sheets for the financial year ending 30 June 2006 and for the period 1 July 2006 to 31 March 2007. This latter period shows gross income of about $263,000, compared with gross income for the full 2005/6 financial year of about $492,000. However, after allowing for "direct job costs" and other expenses, the accounts disclose nett operating losses for each period of about $11,000 and $40,000 respectively. 47 There is one expense item that far exceeds all of the others in aggregate, being that described as "employment expenses". For the period ending 31 March 2007, it is about $172,000 and for the earlier full financial year about $291,000. The Court has no information, let alone evidence, as to the recipients of the employment expenses and as to whether any of the shareholders or persons related to shareholders were employees and thereby derived some advantage from the overall trading position of the company. The failure to identify the recipients of the payment of employment expenses and to assist the Court in understanding whether any such persons were or may have been related in any way to shareholders does not, in my opinion, assist the Court in understanding to the extent necessary the financial records for the purpose for which they were given to the Court. I shall return to this aspect later in these reasons for judgment. 48 For completeness, I note that the most recent balance sheet shows assets of about $5,000 by way of cash in the bank but a GST liability of about $7,400 and trade creditors of about $800. There is, therefore, a deficiency in shareholder funds. 49 I shall treat the defendant as having submitted that it should be given the benefit of consideration of the provisions of s 6 of the Fines Act, which is in the following terms: 6 Consideration of accused's means to pay In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount. 50 I had occasion to consider these provisions in some detail in Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSWIRComm 339 at [10] and following. I shall not repeat the observations that I then made. However, I refer again to the necessity to differentiate those authorities that deal with the consideration of the application of this provision to a natural person and those that apply to a defendant that is a corporation. The former circumstances would include also the possibility of imprisonment. In both cases, it is necessary to differentiate circumstances such as assets that might include the proceeds of a crime. 51 Taken literally, s 6 of the Fines Act compels a court to take into account information concerning the financial circumstances of a defendant with particular reference to "the means" of a defendant, presumably confined with respect to the ability to meet any pecuniary penalty. Nevertheless, having considered those matters, it would appear that by literal reading the court has a discretion, to be exercised appropriately, as to the extent to which a consideration of those matters is to play a part in the fixing of a penalty. 52 Some brief observations about the manner in which s 6 of the Fines Act should operate is provided in the judgment of the Full Bench of the Industrial Relations Commission of New South Wales in Court Session in Manpac Industries Pty Ltd v WorkCover Authority of New South Wales [2001] NSWIRComm 190. At [82], the Court (Wright J, President, Walton J, Vice-President and Hungerford J) said: "82 As to the treatment of the financial situation of the appellant, we agree with Mr Archer that Kavanagh J misunderstood the evidence - it is plain, contrary to what her Honour found, that the limited documentation available to her Honour showed the appellant's assets at the relevant time were not $3.3 million but only $31,000. As detailed earlier in these reasons, her Honour seems to have read the wrong column of figures in the statement of assets and liabilities. It emerges from par [51] of the judgment at first instance that her Honour was given inappropriately limited assistance by the appellant as to the financial evidence it relied on at the trial. In the result, and even though her Honour indicated that the appellant had "significant financial liabilities", the finding it was "proper in the circumstances to order a significant fine for this offence" must be tempered. As Mr Archer submitted, "the imposition of a fine of $160,000 on a company with net assets of $31,000 is demonstrably oppressive". Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at p 339); WorkCover Authority of New South Wales (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at p 333; and Profab Industries (49 NSWLR at p 714, 100 IR at p 76)." 53 I conclude that what is required is a balancing of the financial means of the defendant and the objective seriousness of the offence, with a clear mandate that the amount of the penalty is not to be circumscribed by the financial means of the defendant. On appeal, the Full Bench imposed a fine of $90,000 where the evidence was to the effect that the financial resources of the defendant corporation were of the order of $30,000. 54 The approach of the Full Bench in Manpac has also been taken by the New South Wales Land and Environment Court. Some of the relevant decisions of that Court were discussed by Preston CJ in Environment Protection Authority v Coe Drilling Australia Pty Ltd [2005] NSWLEC 719. At [189] to [195] his Honour said: "189 Section 6 of the Fines Act 1996 provides: "In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount." 190 The information regarding the means of the defendant as is available to the Court for its consideration, is set out in the affidavit of Mr S Coe as follows: "8. The Defendant has ceased trading and is no longer conducting direct drilling projects in Australia or overseas. 9. The Defendant is currently involved in litigation in the District Court of NSW in relation to amounts that are outstanding pursuant to contractual works in New South Wales. 10. The Defendant is also currently involved in litigation in India with respect to hydraulic works arising from a contract performed in India. This litigation is substantial; a claim in the order of $2,000,000.00 has been made against the Defendant. The costs of defending this claim have placed strain on the financial capacity of the Defendant. 11. The financial position of the Defendant is that its liabilities substantially outnumber its assets... 12. I say that if the Defendant receives a large fine, it will have difficulty in paying the fine and costs to the applicant imposed by the Court". 191 In Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349 at 353, Stein J considered the significance of the fact that the corporate defendant in that case had ceased to trade. Stein J held: "Whether a person or company's financial circumstances will sound in mitigation of penalty however will very much depend on the particular facts and circumstances... So far as the company is concerned all I know is that it is no longer trading. It is difficult to see how its largely indefinite financial circumstances should mitigate the fine to any appreciable extent. It is not in receivership and could possibly trade again. In any event, the means of the company may not have the same impact on third parties as with an individual defendant." 192 In Environment Protection Authority v Douglass (No 2) [2002] NSWLEC 94, Lloyd J considered the issue of the utility of imposing a substantial penalty upon an impecunious defendant. Lloyd J stated at [16]: "The purpose of a penalty is not only to act as a specific deterrent but to act as a general deterrent, that is, to discourage others who might be minded to commit similar or like offences in the future. I also must have regard to the seriousness of the offence in this instance. Having regard to all of these considerations I am of the view that a penalty being some 75 per cent of the maximum is appropriate. That is a penalty of $45,000." 193 In the Environment Protection Authority v Emerald Peat Pty Ltd (In Liq) [1999] NSWLEC 147, the corporate defendant in that case was a company in liquidation. Talbot J held at [77]: "The evidence discloses that the offence must be regarded, as I have said, as extremely serious, but notwithstanding the present impecunious state of the company's financial affairs and the apparent lack of liquidity in so far as the ability to meet the commitment to a substantial fine is concerned, nevertheless a significant penalty for the offence and a further penalty for each of the 44 days during which the offence continued, is justified". 194 Talbot J ordered the defendant to pay a total fine of $217,000 in that case. 195 Mr Hemmings conceded that because the defendant is a corporation rather than a natural person, the factor of any hardship to the accused is less relevant. However, Mr Hemmings does submit that the defendant's capacity to pay, as disclosed in the evidence that I have quoted above, is of relevance. However, that evidence is not that the defendant cannot pay a fine at all, but rather, as Mr Coe says, that if it the defendant were to receive a large fine it will have difficulty in paying the fine as well as the costs of the prosecutor imposed by the Court. The evidence of the company's financial circumstances is also "largely indefinite": Environment Protection Authority v Capdate Pty Ltd (1993) 78 LGERA 349 at 353. 55 As I have earlier indicated, the means of a corporation are more difficult to evaluate than those of natural persons. Indeed, all corporations are funded by or through the resources of natural persons. Such funding may take the form of direct injection of monies by or on behalf of shareholders either by way of debt or equity or may by obtained through third party borrowings. Even in the case of third party borrowings, they are, in most cases, arranged by or on behalf of individual shareholders. Thus, it is the natural persons who are or represent the controlling mind of the corporation that determine the source and extent of the means by which a corporation may trade and, importantly, meet its financial obligations. 56 Accordingly, where it is said by a corporate defendant that it has ceased trading and intends going into liquidation, this is the result of a decision ultimately by natural persons that they no longer wish to support the corporation financially or otherwise provide for its support to enable it to meet its financial obligations. 57 Although I shall, to some extent, have regard to the lack of financial means of the defendant and the stated intention that it be placed in liquidation I shall nevertheless have regard to the objective seriousness of the offence when quantifying the penalty to be imposed. 58 This defendant entered a plea at the earliest opportunity and it is entitled to appropriate consideration in this regard. The evidence is that it had a commitment to its occupational health and safety obligations and took steps after the incident to improve its documentation and other occupational health and safety procedures. Furthermore, I accept the submissions of the prosecutor that this defendant has expressed contrition and remorse for what occurred and co-operated fully with the WorkCover Authority in connection with its investigation of the incident. 59 This defendant has a prior conviction for a breach of the Act and was fined $8,000 in the Chief Industrial Magistrate's Court on 7 April 2005 with respect to an incident that occurred on 26 September 2002. Accordingly, the maximum applicable penalty is $825,000. 60 In all the circumstances I intend imposing a penalty of $50,000. 61 The prosecutor sought a moiety and an order for costs. I intend acceding to these applications. Orders 62 I make the following orders: 1) Each of the defendants is found guilty of the offence with which it is charged and convicted accordingly. 2) I impose upon the defendant JML Group Pty Ltd a penalty of $45,000 and upon the defendant GPCC Pty Ltd a penalty of $50,000 with a moiety in each case to the prosector. 3) Each of the defendants is to pay the costs of the prosecutor in an amount assessed by the Court in default of agreement. I should add that it will be necessary for the prosecutor to ensure that the quantum of costs is fixed with respect to each of the defendants having regard to a proper assessment of each of the proceedings but avoiding any double counting with respect to work or time expended on the proceedings against each 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.