Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Hall v H Hassarati & Co Pty Ltd and Hassarati [2011] NSWIRComm 145 Hearing dates: 23 September 2011 Decision date: 02 November 2011 Jurisdiction: Industrial Court of NSW Before: Marks J Decision: 1) The defendant Paul John Hassarati is found guilty of the offence with which he is charged and convicted accordingly. 2) A monetary penalty is imposed on the defendant H Hassarati & Co Pty Ltd of $175,000 and upon Paul John Hassarati of $7,500, with a moiety in each case to the prosecutor. 3) The defendants are to pay the costs of the prosecutor in an amount assessed under the Legal Profession Act in default of agreement, in the proportion that the penalty imposed upon each of them bears to the totality of the costs so assessed or agreed. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(2) of the Occupational Health and Safety Act 2000 by the corporate defendant - personal defendant deemed guilty of the same offence by virtue of s 26(1) - early guilty pleas - regard had to occupational health and safety obligations - objective seriousness - serious breach - general and specific deterrence - contrition and remorse - application under s 10 - ultimate financial burden will be borne by personal defendant - prior conviction - orders made Legislation Cited: Crimes (Sentencing Procedure) Act 1999 - s 10 Occupational Health and Safety Act 2000 - s 8(2), s 26 Cases Cited: Schultz v Tamworth City Council (1995) 58 IR 221 WorkCover Authority v Waugh (1995) 59 IR 89 Category: Principal judgment Parties: Inspector Craig Hall of WorkCover Authority of New South Wales (Prosecutor) H Hassarati & Co Pty Ltd (First defendant) Paul John Hassarati (Second Defendant) Representation: Mr C Magee of counsel (Prosecutor) Mr J Glissan QC (First and second defendants) Legal Group, WorkCover Authority of New South Wales (Prosecutor) Alexanders Lawyers (First and second defendants) File Number(s): IRC 1310 of 2010 IRC 1313 of 2010 Judgment 1The defendants, H Hassarati & Co Pty Ltd ("the company") and Paul John Hassarati have both been charged by the prosecutor, Inspector Craig Hall of the WorkCover Authority of New South Wales, with a breach of s 8(2) of the Occupational Health and Safety Act 2000 ("the Act"). Mr Hassarati is charged with that breach by reason of the provisions of s 26(1) of the Act, he being a director of the company and thereby being taken to have contravened the same provision of the Act as the company. 2Both defendants pleaded guilty and this judgment is concerned only with the question of penalty. 3As is obvious, both proceedings arose out of the same alleged contravention. It is necessary only to reproduce details of the charge as alleged against the company. It is that on 18 December 2008, at a building site in McFarlane Street Merrylands, it was an employer and by its acts or omissions failed to ensure that persons other than its employees, and in particular Kim Pheng Chheou, were not exposed to risks to their health or safety arising from the conduct of its undertaking whilst at its place of work. 4The particulars of the charge as contained in the application for order are as follows: The particulars of Risk are: (a) The 'risk' of non employees of the defendant, and in particular Kim Pheng Chhoeu, falling between six to eight metres from the roof of the old Kmart building at the site, whilst undertaking the task of removing the metal clip-lock roof and/or the removal of the insulation from the roof the old Kmart building. The particulars of the acts of omissions in failing to eliminate the risk are that: (b) The defendant failed to ensure that its subcontractor, BU Hazardous Material Removal And Demolition Pty Ltd (BU Hazardous) complied with its safe system of work with respect to the tasks of the removal of the metal clip-lock roof and insulation in the roof, whilst working at heights of 6-8 metres at the site, in that it failed to undertake measures as follows: (i) ensure that the method of work implemented by its subcontractor, BU Hazardous, was in compliance with the system of work devised in the Safe Work Method Statement ('SWMS') dated 5/12/08 prepared by for the task and submitted to the defendant; (ii) ensure that the method of work utilized by its subcontractor, BU Hazardous, for removing of the metal roof involved proceeding to remove bolts and screws using cordless drill and pinch bar to lift sheets; (iii) preventing its subcontractor, BU Hazardous, from utilizing a system of work for the removal of the metal clip-lock roof that involved BU Hazardous employees standing on a six to eight metre high roof, swinging mattocks at the roof rivets and bolts in order to bash the rivets and bolts off to dislodge the sheet metal roofing from the structural beams/purlins; (iv) ensuring that the BU Hazardous' SWMS dated 5/12/08 addressed the risks/hazards involved in the task of the removal of the insulation in the roof and provided a safe system of work for the performance of that task; (v) ensure that BU Hazardous employees did not perform the task of the removal of the insulation in the roof by walking along the exposed edge of the roof, rolling up the insulation and poking it through the holes in the roof through to the ground with a piece of timber, without wearing harnesses connected to inertia reels or similar fall prevention devices, attached to safe anchor points; (vi) enforce the control measures identified in the BU Hazardous' SWMS to control the risk of BU Hazardous' employees falling whilst working at heights, and in particular to provide and require that all BU Hazardous employees working at heights greater than 2 metres, wear harnesses connected to inertia reels or similar fall prevention devices, attached to safe anchor points. (vii) requiring that all BU Hazardous employees wear fall arrest devices which were secured to an appropriate anchor point, while working in middle of section of the roof; (viii) require its subcontractor, BU Hazardous, to implement other fall control measures instead of, or in conjunction with the use of harnesses and inertia reels, including the use of netting underneath the roof structure, temporary work platforms, mobile scaffolding, elevated work platform or similar equipment, and roof rails on the edge of the roof structure, whilst employees were accessing the roof and/or undertaking the work of demolishing the roof; (c) The defendant failed to provide adequate supervision of its subcontractor, BU Hazardous, in relation to the compliance with risk control measures set out in the SWMS for the tasks of the removal of the metal clip-lock roof and insulation in the roof, whilst working at heights of 6-8 metres, in that it failed to undertake measures as follows: (i) ensuring that all BU Hazardous employees working at heights of greater than two metres on the roof were wearing a harness and inertia reel or similar fall prevention device attached to a safe anchor point; (ii) ensuring that all BU Hazardous employees working at heights of greater than two metres on the roof held the requisite qualifications for working at heights; (d) The defendant failed to provide adequate information, instruction and training to non employees, and in particular Mr Chhoeu, in relation to the tasks of the removal of the metal clip-lock roof and insulation in the roof, whilst working at heights of 6-8 metres, in that it failed to undertake measures as follows: (i) ensure that Mr Chhoeu underwent an induction from the defendant and the Principal Project Contractor, St Hilliers Contracting Pty Ltd (j)[sic] ensure that Mr Chhoeu received a copy of the Safe Work Method Statement, and received training and instruction in its content; (k)[sic] providing Mr Chhoeu with information and instruction that he must wear a harness and inertia reel attached to an appropriate anchor point of the roof when working in the middle section of the roof; As a result of the defendant's acts and omissions, Kim Pheng Chhoeu was exposed to the risk at the site. As a result of the abovementioned failures, Kim Pheng Chhoeu was seriously injured. Kim Pheng Chhoeu's injury was a manifestation of that risk. 5For the prosecutor, an agreed statement of facts was tendered into evidence, which contained a number of annexures. These annexures included a Safe Work Method Statement form prepared by the subcontractor named BU Hazardous in the particulars of the charge, risk assessment forms created by the company, a factual inspection report, photographs, a prior convictions record and improvement, prohibition and penalty notices previously issued to the company. 6For the defendants, there was tendered into evidence an affidavit of Mr Hassarati and two character references, one from Mr Rick Rech and another from Mr Richard Whitehead, who gave oral evidence in the proceedings. 7The agreed statement of facts is in the following terms: 1. At all material times, the prosecutor was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 ("the Act") and empowered under Section 106 of the Act to institute proceedings in the within matter. 2. At all material times H HASSARATI & CO PTY LTD [ACN 000 518 990], a corporation with its registered office located at 35 Wentworth Street, Greenacre in the State of New South Wales ("the first defendant"), was an employer. 3. At all material times PAUL JOHN HASSARATI [date of birth: 17 October 1959] of 44 Highgate Street, Strathfield in the State of New South Wales ("Mr Hassarati") was a director of the first defendant. 4. At all material times the first defendant was a demolition and excavation company. The first defendant is the holder of an unrestricted Demolition license number 200269DEI. The first defendant began operations in 1965 and currently has two directors and approximately fifteen employees. 5. At all material times, Mr Hassarati was the Managing Director of the first defendant and was responsible for the demolition side of the business and occupational health and safety issues. This included responsibility for overseeing and implementing occupational health and safety strategies, and in particular drafting and authorising Safe Work Method Statements. 6. Mr Hassarati shares total control and influence over the first defendant with his two brothers. Background 7. In or about October 2007 Stockland Development Pty Ltd engaged St Hilliers Contracting Pty Ltd [ACN 008 259 563] ("St Hilliers"), a construction company, to redevelop the Stockland Shopping Centre situated at McFarlane Street, Merrylands. 8. On or around 15 October 2007 St Hilliers entered into a subcontract agreement for demolition works with the first defendant ("the Demolition Contract"). 9. In accordance with the Demolition Contract, the first defendant developed an OHS Site Safety Plan and submitted it to St Hilliers. 10. In or around November 2007 the first defendant subcontracted BU Hazardous Material and Demolition Pty Ltd ("BU Hazardous") to remove SMF (Hazardous Material), in particular removal of Klip-Lok roofs of the existing buildings to access the SMF, as well as removal of some asbestos sheeting in the area room of the shopping complex. 11. The first stage of the demolition work commenced in or around late November 2007 and was completed in or around January 2008 without incident. The first defendant and BU Hazardous carried out this work together. 12. Stage 2 of the demolition work involved the demolition and removal of a building complex identified as the old Kmart building and associated areas, including some asbestos removal. 13. On 27 November 2008 BU Hazardous provided a quotation to the first defendant for the Stage 2 work, in particular the removal of the metal Klip-Lok roof of the old Kmart building. 14. The roof of the old Kmart building was between six to eight metres high. 15. Prior to the second stage demolition work commencing, St Hilliers placed physical and structural barriers, including a series of hoardings, ATF removable fencing and gates, to define the borders and separate the area around the old Kmart building controlled by the first defendant ("the site"). 16. From 6 December 2008 the first defendant had complete control over the site. The first defendant locked the demolition area, erected its own signage and only permitted employees of St Hilliers onto the site who had been inducted and had obtained authorisation. 17. The first defendant and BU Hazardous commenced the Stage 2 work at the site on 6 December 2008. 18. From late November 2007 Mr Hassarati attended the redevelopment site approximately twice a week or on a needed basis. Although Mr Hassarati was in a position to influence the systems of work on the site, he had no direct supervisory responsibility. On the day of the incident Mr Hassarati did not attend the site. 19. At all material times the first defendant employed Goran Novkovic as Site Supervisor. Mr Novkovic was responsible for supervising all work activities undertaken by the first defendant and it's subcontractors BU Hazardous. This included ensuring that BU Hazardous complied with the agreed Safe Work Method Statement ("SWMS"). 20. Although Mr Novkovic's responsibilities included supervising the first defendant's employees and subcontractors, he also did some demolition work depending on the number of people working on the site. 21. On the day of the incident the first defendant had two employees present at the site - Mr Novkovic and Billy Suapopo, Excavator Operator. 22. On the day of the incident, Mr Suapopo's role was to operate an excavator and demolish the Kmart building once the soft strip out had been completed. 23. Kim Pheng Chheou ("the injured person"), commenced work with BU Hazardous on Monday 15 December 2008, three days prior to the incident. 24. The injured person had a licence for asbestos removal and had some experience in asbestos removal work. 25. The injured person has functional but limited command of the English language. The incident 26. At approximately 6:30am on 18 December 2008 the injured person arrived at the site. 27. The injured person started work at 7 am removing the roof sheeting and insulation from the metal roof of the old Kmart building. 28. In order to get onto the roof to commence the work the injured person climbed a ladder through a hole in the roof and then onto the roof. 29. The task of removing the roof was done by three teams of the BU Hazardous' employees with between four and five employees in each team. 30. The method of work adopted by BU Hazardous for the removal of the roof sheeting and insulation from the metal roof of the old Kmart building involved its employees standing on the roof and swinging mattocks at the roof rivets and bolts in order to bash the rivets and bolts off to dislodge the sheet metal roofing from the structural beams. 31. Once the sheet metal roofing was dislodged, the roofing sheets were then lifted and dragged by the BU Hazardous employees and stacked on the edge of the roof structure so that the excavator operated by the first defendant's employee Mr Suapopo could lower them to the ground. 32. Having removed and stacked the roofing, the BU Hazardous employees would then remove the insulation by rolling it up and poking it through the holes in the roof structure to the ground below using a piece of timber. 33. BU Hazardous did not have enough safety harnesses and inertia reels harnesses for all its employees who were required to work on the roof. As a result of this, BU Hazardous did not provide the injured person or other employees who were working on the inner section of the roof with harnesses. BU Hazardous only provided harnesses to its employees who were working on the perimeter of the roof, notwithstanding that all workers on the roof were exposed to the same risk of falling from height given the sheet metal roofing was being removed. 34. On the date of the incident Chunn Vann was the Site Supervisor employed by BU Hazardous. At approximately 3:00pm, Chunn Vann instructed the injured person and the other BU hazardous employees to finish work. 35. Whilst the employees were packing up the equipment the director of BU Hazardous, Bo Ung, attended the site. 36. Bo Ung climbed onto the roof without wearing a harness. Bo Ung then instructed the BU Hazardous employees to continue working as there was only a small amount of sheet metal roofing left to be removed. 37. The injured person and his fellow employees continued the work of removing the metal roof sheeting using the method of work described at paragraphs 29 to 33 above. The injured worker was not provided with a harness and inertia reel by BU Hazardous. 38. A short time later, the injured person fell from the roof to the concrete ground below, striking an air-conditioning duct on the way down. 39. After the injured person fell, Chunn Vann, together with some other BU Hazardous employees, moved him a short distance from where he landed to the loading dock. 40. An ambulance arrived to treat the injured person and he was subsequently transported to Westmead Hospital. 41. The injured worker stated that he was asked by BU Hazardous to and did sign a 'Record of tool box' talk for 18 December 2008 in hospital after the incident. 42. As a result of the incident, the injured person sustained a fractured pelvis, fractured right femur, fractured left humerus, facial fractures, broken jaw and smashed teeth (he only has eight teeth remaining). 43. The injured person cannot walk unassisted and requires ongoing treatment. 44. The injured person is currently undergoing physiotherapy twice a week and is due to have major surgery on his face and teeth. Work systems before the incident BU Hazardous 45. BU Hazardous had prepared a SWMS for the task of removing of the metal roof. Annexed to this document and marked "Annexure A" is a true copy of BU Hazardous' SWMS. 46. The SWMS provided inter alia that: (a) All personnel who will be working above heights of two metres or more will be inducted on the use of a fall arrest system. (b) The task of removing the bolts and screws from the roofing sheets would be done by using cordless drills and then a pinch bar would be used to lift the metal roofing sheets from the structural beams. (c) Safety harnesses were to be used at all times when on the roof. 47. BU Hazardous' SWMS did not address how its employees were to remove and dispose of the insulation material. 48. BU Hazardous submitted the SWMS for the demolition work on the site to the first defendant for approval. 49. On 15 December 2008 BU Hazardous gave the injured person a basic induction which dealt with the location of amenities, meals and first aid. 50. The injured person did not receive an induction into the use of a fall arrest systems from the BU Hazardous. Nor did the induction include information on what to do in an emergency. 51. BU Hazardous did not ensure that its employees were trained and ticketed to work at heights. 52. The injured person stated that BU Hazardous did not provide him with a copy of the SWMS prior to commencing work at the site. 53. The injured worker said "I was shown no paperwork, I was shown and explained nothing, just sign the tool-box talk." 54. BU Hazardous conducted a toolbox talk on Monday 15 December 2008. 55. The injured person said there was no toolbox talk conducted on 16, 17 or 18 December 2008 (the date of the incident) with BU Hazardous. 56. The system of work for removal of the roof did not comply with that specified in BU Hazardous' SWMS. Rather than use cordless drills and pinch bars to remove the bolts and screws, the system of work adopted involved teams of four to five employees standing at the edge of the six to eight metres high roof, swinging mattocks at the roof rivets and bolts in order to bash the rivets and bolts off to dislodge the sheet metal roofing from the structural beams. 57. Prior to commencing work at the site Bo Ung took Chunn Vann, the BU Hazardous site supervisor, and some employees up to the roof and showed them the system of work for removing the roof with the mattock. Chunn Vann told new employees of BU Hazardous, including the injured person, to do the work the way Bo Ung had shown him and to follow the other workers. 58. The system of work for the removal of the insulation material was unsafe in that it involved BU Hazardous' employees walking along exposed roof edges, rolling up the insulation and poking it through the holes in the roof through to the ground with a piece of timber. 59. Safety harnesses and inertia reels were not used by all workers on the roof because BU Hazardous did not have enough harnesses or reels for each employee. 60. Only employees working on the perimeter of the roof were directed by BU Hazardous to wear harnesses. Employees working on the interior of the roof were told by Bo Ung that they were not required to wear harnesses. 61. Bo Ung was on site at the time of the incident. Both Chunn Vann and Bo Ung observed employees of the first defendant not wearing harnesses immediately prior to the incident. Both Chunn Vann and Bo Ung themselves were observed working at heights without wearing harnesses. 62. At the time of the incident, Chunn Vann was the overall supervisor for BU Hazardous. Vira Khem was the supervisor for the injured worker's team. However, Vira Khem was not present to supervise the injured person's team as he was supervising in another area of the site. 63. Chunn Vann said that whilst he was the supervisor, he did not have authority to tell the other employees what to do as he was younger and they only listened to Bo Ung. The first defendant 64. Prior to commencing work at the site the first defendant developed a Pre-Demolition Assessment, which was dated 8 December 2007. Annexed to this document and marked "Annexure B" is a true copy of the Pre-Demolition Assessment. 65. The Pre-Demolition Assessment provided that: (a) all employees working on roofs will be required to wear safety harnesses and be connected to safety lines or retractor reels at all times when working on the roof. (b) all employees will be inducted on the procedure of the Work Method Statement and the general work procedures outlined in the site induction prior to commencing on the site. 66. The first defendant also prepared a Broad Risk Assessment for Stage 2 and 2A of the Project (undated), which is annexed and marked "Annexure C." This document identified the risk of falling and stated that a control measure was ensuring that workers are fitted with approved safety harnesses when working from heights, and further that that workers were inducted not to lean over railings/stand above deck. 67. The first defendant also prepared a site specific SWMS for Stage 2 and 2A of the Project (undated), which is annexed and marked "Annexure D." This SWMS was prepared by Mr Hassarati. The SWMS identified the risk of falling from heights whilst handling material and provided the control measure as being that fall protection must be worn by all personnel. 68. Prior to commencing work at the site the injured person did not receive any induction or any information from the first defendant. 69. The injured person received no induction in use of a fall arrest system from the first defendant. 70. Mr Hassarati and Mr Novkovic reviewed and approved BU Hazardous' SWMS. 71. The first defendant had no input in the system of work being used by BU Hazardous to remove the roof, other than to ensure the system was documented in the SWMS and that employees of BU Hazardous followed the SWMS. 72. The first defendant required the employees of BU Hazardous to sign a document confirming that they had understood their employer's SWMS. 73. The first defendant did not have a system in place to ensure that BU Hazardous employees working at heights had been inducted in the use of fall arrest systems. 74. The first defendant did not have a system in place for ensuring that all employees of BU Hazardous held tickets for working at heights. 75. The first defendant was responsible for ensuring that the employees of BU Hazardous were undertaking work in accordance with the SWMS. 76. The first defendant did not have a system in place to ensure the BU Hazardous had sufficient harnesses and inertia reels so that all employees working on the roof were provided with one. 77. The first defendant did not have a system of work for checking that the employees of BU Hazardous working on the roof were wearing harnesses. 78. On the days preceding the incident and on the day of the incident Mr Novkovic saw that BU Hazardous employees were not working in accordance with their SWMS in that they were not removing the roofing using cordless drills and pinch bars. Further, Mr Novkovic saw that some employees of BU Hazardous were not wearing harnesses whilst working on the roof. 79. The first defendant failed to ensure that all BU Hazardous' employees who were working at heights wore harnesses. Instead it relied on BU Hazardous to ensure appropriate safety measures were in place. 80. The first defendant failed to properly supervise the work being undertaken at the site, in particular it failed to ensure that all employees of BU Hazardous who were working on the roof were provided with and were wearing harnesses. Mr Hassarati 81. In respect to the work being undertaken at the site Mr Novkovic stated that he reported to Mr Hassarati on a daily basis by either telephone, fax and/or face-to-face. 82. In relation to the enforcement of a safe system of work for BU Hazardous, Mr Novkovic stated that Mr Hassarati: (a) gave him a copy of BU Hazardous' SWMS prior to BU Hazardous commencing work on the site; (b) discussed with him the content of BU Hazardous' SWMS and its adequacy; (c) discussed the risks involved in the work prior to BU Hazardous commencing on the site; (d) discussed as part of a walk around the site what tasks BU Hazardous were required to undertake; (e) discussed the requirement under the SWMS that harnesses needed to be in place and used as per the SWMS; and (f) instructed him that he was to ensure that BU Hazardous complied with their SWMS. 83. Mr Novkovic stated that he did not inspect the anchor points for the use of harnesses and he was unsure as to whether Mr Hassarati had done so. 84. Mr Hassarati inspected the work being undertaken by BU Hazardous employees on one occasion, during a walk around the site. 85. Mr Novkovic stated that he informed Mr Hassarati that BU Hazardous employees were using mattocks instead of cordless drills to remove the roof sheets and that Mr Hassarati indicated that he would speak to BU Hazardous about this change and have their SWMS changed. There was however no change to BU Hazardous' SWMS. 86. Mr Hassarati had not put in place a system to check or ensure that BU Hazardous had a sufficient number of harnesses and inertia reels for the number of employees it had working at heights at the site. 87. In relation to the work being undertaken by BU Hazardous, Mr Hassarati did not check whether there were adequate anchor points for harnesses so that the fall prevention measure specified in the BU Hazardous SWMS could be implemented. 88. In relation to the work being undertaken by BU Hazardous, Mr Hassarati did not direct Mr Novkovic to check whether BU Hazardous had a sufficient number of working reels and harnesses available for all of its workers who were required to work at heights. 89. In relation to the work being undertaken by BU Hazardous, Mr Hassarati did not undertake a thorough inspection of the work being conducted by BU Hazardous employees on the roof to ascertain whether they were wearing harnesses and complying with the SWMS. Instead Mr Hassarati relied on Mr Novkovic, who only undertook spot checks. Investigation 90. Following the incident on 18 December 2007 Inspector Bronwen Halcroft visited the site. Inspector Halcroft undertook an inspection and made observations contained in the Factual inspection Report dated 16 January 2008, which is annexed to this document and marked "Annexure E." 91. Inspector Halcroft took a number of photographs. Annexed to this document and marked "Annexure F" are true copies of coloured photographs taken by Inspector Halcroft dated 18 December 2007. 92. Inspector Halcroft issued the following notices to the first defendant: (i) Prohibition Notice No. 171761 - cease entry to site due to risk of falls from height or being struck by falling objects. (ii) Prohibition Notice No. 171762 - cease work and develop, implement, and maintain a safe system of work for working at heights. (iii) Improvement Notice No. 7-172839 - develop safe system of work at heights due to risk of falls from height. Work systems after the incident 93. At the time of the incident, most of the demolition work had been completed. 94. The first defendant required BU Hazardous to redraft their SWMS. Access to the roof was prevented until this was completed. A SWMS was also provided by BU Hazardous to its employees in the Cambodian language. 95. The first defendant increased its level of supervision. 96. The first defendant required the director of BU Hazardous, Bo Ung, to be present at all times to supervise his employees. Prior convictions 97. The first defendant has been prosecuted previously under sections 15(1) and 16(1) of the Occupational Health & Safety Act 1983. Annexed to this document and marked "Annexure G" is a record of the first defendant's record of prior convictions together with a true copy of the judgment of Chief Industrial Magistrate Miller dated 11 May 1999. 98. Mr Hassarati has no prior convictions. A record of prior convictions is annexed and marked "Annexure H." Prior notices 99. On 5 November 2003 Inspector Denis Macready issued the first defendant Improvement Notice 7-40536. Annexed to this document and marked "Annexure I" is a true copy of the notice. The reason for issue of the Improvement Notice was that employees/persons may be exposed to risk of injury whilst working at heights, i.e. unfenced floor penetrations and doorways. The measure to be taken were that the first defendant must provide a safe system of work for working at heights, ensure that all penetrations in floors and access to falls from heights are effectively fenced off or by other means. Attention was drawn to clause 56 of the Occupational Health & Safety Regulation 2001 as well as ASD1657 - Platforms, walkways, ladders and stairs. 100. On 8 September 2004 Inspector Kylie Mills issued the first defendant Prohibition Notice 147411. Annexed to this document and marked "Annexure J" is a true copy of the notice. The reasons for issue were that persons at immediate risk of fall injury due to no edge protection or fragile handrails. The measures to be taken were to implement and maintain a safe system for working at heights, and attention was drawn to clause 56 of the Occupational Health & safety Regulation 2001. 101. On 16 September 2004 Inspector Kylie Mills issued the first defendant Penalty Notice Number 7450157963 in the amount of $1,000.00 for failing to control OHS risks. Annexed to this document and marked "Annexure K' is a true copy of the notice. The description of the offence was as follows: At the above date, time and place I observed employees of subcontractor HiFlyers Pty Ltd (namely Ahmad Chouk) working on the gable of a two story apartment complex under construction where there was no means of fall protection. At the base of the fall area was uncapped reo bars and scaffolding material. The possible fall distance was approximately 8 metres. 8The starting point for the assessment of penalty is a consideration of the objective seriousness of the offence. It is clear from the evidence given in the proceedings that the company and Mr Hassarati had a long involvement in the demolition industry and a particular regard for occupational health and safety matters. Likewise, on the evidence, BU Hazardous had had a long involvement in demolition work and had worked with the company as a contractor on a number of large projects without any incident. In his affidavit, Mr Hassarati outlined a number of projects dating back to April 2008 and extending to March 2010 that had been completed by BU Hazardous without incident. Before this part of the project had been commenced, BU Hazardous had prepared a Safe Work Method Statement form which it had submitted to the company. This form said that the metal roof sheets would be removed using a cordless drill and pinch bar to lift them, that a safety harness was to be worn at all times while persons performing the work were on the roof and that they would be removed from the roof using a crane under procedures to be provided by the company. A "broad risk assessment" prepared by the company noted that the hand demolition of the roofing materials was to be undertaken in accordance with the Safe Work Method Statement and that the company's supervisor was to ensure, among other things, that workers performing the work were fitted with approved safety harnesses when working at heights. The Safe Work Method Statement ultimately prepared by Mr Hassarati on behalf of the company and which was said to have been reviewed by the company's supervisor, Mr Goran Novkovic, said, relevantly, that "works will commence with the removal of the metal roof sheeting by manual means." In dealing with "material handling" the Statement said, in part, "fall protection must be worn by personnel." The person who was said to be responsible within the company's personnel to make sure that this happened was the supervisor, Mr Novkovic. In these circumstances, it is abundantly clear that the company assumed responsibility for the supervision of the work that was being undertaken by BU Hazardous. If this needs confirmation, it is abundantly referred to in [19], [20] and [21] and in [73] to [80] of the agreed statement of facts. 9There is no doubt that at the time the incident that gave rise to these proceedings occurred, Mr Chheou was not using any fall restraint device. There was, however, some controversy between the parties as to the relevance of the fact that at the time of the incident Mr Chheou was standing on the roof swinging a mattock at the roof rivets and bolts so as to assist in dislodging the sheet metal roofing. The prosecutor submitted that this was heavy work and that it could cause someone to lose balance, a matter of concern when working at heights. 10Mr Whitehead, who is now retired, was formerly an officer of the Federated Engine Drivers and Firemen's Association and, latterly, the Construction Forestry Mining and Energy Union ("CFMEU"). As such he was intimately involved with the Industry Demolition Contractors' Association of which Mr Hassarati was and remains an executive officer. In addition, Mr Whitehead spent nine years with the WorkCover Authority of New South Wales as a senior construction inspector. It was his evidence that it was not unusual to use a mattock to remove sheet metal roofing material and that this could be used safely. However, he said this in the context of difficulties arising where the screws which held the roofing material could not easily be removed by using a cordless drill. Furthermore, Mr Whitehead conceded in cross-examination that a mattock was a heavy tool and involved some force when swinging it from the waist down. He thought that it would be safe to use on a roof provided the person using it was secured by a safety harness. He conceded, firstly, that a mattock was not designed to knock off the tops of screws and, secondly, that it could cause a person to overbalance. 11The defendants sought to argue that the use of the mattock should be disregarded when considering the circumstances surrounding the incident. Given the state of the evidence, however, I am not persuaded to accede to this submission. The totality of the evidence is to the effect that Mr Chheou was standing between six to eight metres above ground level on roofing material and was using a mattock at the time that the incident occurred. This created a significant risk of falling in circumstances where the consequences of the fall must involve a risk of serious injury, if not death. Furthermore, and most significantly, there were no means made available to Mr Chheou to prevent him from falling. 12All of this occurred in circumstances acknowledged by the defendants where the company had undertaken the task and obligation of supervising the demolition operations and in particular the work being performed by Mr Chheou. As is set out in [78] of the agreed statement of facts, Mr Novkovic was aware on the days preceding the incident and on the day of the incident that the employees of BU Hazardous were using mattocks to remove the roofing material, were not using cordless drills and pinch bars and that some of them were not wearing safety harnesses whilst working on the roof. 13All of this leads me to conclude that the breach of the Act which gave rise to these proceedings was a most serious one and, at the least, at midrange in terms of the defendants' culpability. 14In assessing penalty, I shall also take into account the deterrent effect, both generally and specifically as it will impact upon these defendants. In this latter regard, the evidence is that at all times the company had in place extensive systems and procedures in compliance with its obligations and responsibilities under the Act. Furthermore, the company, through its past and present directors, has been at the forefront of creating safe work systems in the demolition industry and in securing the introduction of a licensing system as a means of regulating the industry. After the incident, the company reviewed its occupational health and safety systems with a view to improving them. 15Unfortunately, this incident demonstrates that even with the best intentions, and even with the formulation and use of extensive occupational health and safety systems and protocols, the failure of an individual can render all of the work associated with these matters of no or limited use. Such was the case here because, on the evidence, it was the persistent failure of the company's supervisor on site to ensure that the subcontractor and its employees complied with the appropriate and proper safe work systems that contributed in part to the incident that occurred. 16Having regard to the company's commitment to its occupational health and safety obligations, I shall ameliorate that part of the penalty that is directed to specific deterrence. Nevertheless, as the company continues to operate in the demolition industry, some allowance must be made for this matter. 17There are a number of subjective factors that the Court must take into account in favour of the defendants when assessing appropriate penalty. They were not the subject of any controversy. The defendants entered pleas of guilty at the earliest appropriate opportunity, they co-operated fully with the prosecutor and the WorkCover Authority of New South Wales in and about its investigations concerning the incident, they have expressed tangible contrition and remorse for the injury sustained by Mr Chheou and the incident itself and they are persons of good character with charitable and community involvement. 18Senior counsel for Mr Hassarati submitted that the Court should accord him the benefit of s 10 of the Crimes (Sentencing Procedure) Act 1999. Section 10 is in the following terms: 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years, (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. (2) An order referred to in subsection (1) (b) may be made if the court is satisfied: (a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or (b) that it is expedient to release the person on a good behaviour bond. (2A) An order referred to in subsection (1) (c) may be made if the court is satisfied that it would reduce the likelihood of the person committing further offences by promoting the treatment or rehabilitation of the person. (2B) Subsection (1) (c) is subject to Part 8C. (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. (4) An order under this section has the same effect as a conviction: (a) for the purposes of any law with respect to the revesting or restoring of stolen property, and (b) for the purpose of enabling a court to give directions for compensation under Part 4 of the Victims Compensation Act 1996, and (c) for the purpose of enabling a court to give orders with respect to the restitution or delivery of property or the payment of money in connection with the restitution or delivery of property. (5) A person with respect to whom an order under this section is made has the same right to appeal on the ground that the person is not guilty of the offence as the person would have had if the person had been convicted of the offence. 19There are a number of matters that the Court is required to consider in determining whether to apply the provisions of s 10 of that Act, and these are referred to in subsection 3. 20There can be no doubt, as was submitted on behalf of Mr Hassarati, that he is of good character and has no prior offences for any breach of the Act. However, the offence cannot by any means be regarded as trivial, nor are there any relevant extenuating circumstances save for the apparent dereliction of the supervisor. Although it was submitted that the fault lay solely with the supervisor, this does not detract from the fact that the supervisor's conduct created the circumstances by which the culpability of the company arose. By reason of s 26(1) of the Act, Mr Hassarati is deemed to be guilty of the same offence as that of the company. Under the legislation, his culpability is concurrent with that of the company. Accordingly, notwithstanding the lack of involvement of Mr Hassarati in the actual circumstances leading up to and pervading the incident itself, his culpability is to be assessed prima facie in the same way as that of the company. 21In other circumstances, the lack of direct involvement on the part of Mr Hassarati in the incident itself against a background of his undoubted commitment to supporting the prosecution of good occupational health and safety standards within the demolition industry generally and in the company in particular, would count in his favour. However, the structure of this legislation does not appear to me to allow these matters to be taken into account in isolation and without considering the serious nature of the offence and the fact that there are limited extenuating circumstances available to the company. Once the company's culpability is assessed as serious, it follows that by reason the provisions of s 26(1), Mr Hassarati's culpability must be assessed in the same way. 22In all the circumstances, I am not persuaded to exercise the discretion of the Court in favour of Mr Hassarati under this Act. In doing so I am mindful of observations at Full Bench level in this Court to the effect that the provisions of s 10 will be available only in rare, extraordinary and highly exceptional circumstances where there has been a serious breach. See Schultz v Tamworth City Council (1995) 58 IR 221 and WorkCover Authority v Waugh (1995) 59 IR 89. 23Being satisfied on the basis of the factual material and by reference to the entry of his plea of guilty that Mr Hassarati is guilty of the offence with which he is charged, I propose to convict him accordingly. 24I confirm that at the hearing of this matter on 23 September 2011 I formally found the company guilty of the offence and convicted it. This then allowed me to receive, for the purpose of the proceedings against the company, a Victim Impact Statement from Kim Pheng Chheou, the employee of BU Hazardous. Mr Chheou was present in Court and I acknowledged the receipt of the Statement and the consideration to be given to it pursuant to the provisions of the Crimes (Sentencing Procedure) Act 1999. The serious injuries suffered by Mr Chheou and the impact that it has had on his life are referred to in the agreed statement of facts. 25The prosecutor sought orders for the payment of a moiety and costs, which were not opposed by the defendants. 26I now come to the assessment of penalty. The company has a prior conviction for an offence under the previous Occupational Health And Safety Act 1983 arising from an incident that occurred on 18 October 1996. There were two prosecutions arising out of the same incident. A fine of $4,000 was imposed in the Chief Industrial Magistrate's Court for one of the offences and the other was dismissed under the then equivalent of s 10 of the Crimes (Sentencing Procedure) Act . 27In all the circumstances, I do not regard the fact of this prior conviction as detracting from the corporate defendant's good safety record given the nature of the industry in which it operates. However, the fact of the prior conviction renders the maximum penalty that may be imposed on the company at $825,000. The maximum penalty that may be imposed in the case of Mr Hassarati, who has no relevant convictions, is $55,000. 28Having regard to all of the matters to which I have referred, including the objective seriousness of the offences, which I have found, the need to accommodate deterrence, but taking into account also all of the subjective matters, I am of the opinion that an appropriate penalty to be imposed upon the company is the sum of $175,000. In imposing a penalty upon Mr Hassarati, I proceed on the basis that, together with his two brothers, he has, as is said in the agreed statement of facts, "total control and influence" over the company. It may be assumed in these circumstances that the monetary penalty imposed will be borne in part upon him because it will, obviously, deplete the assets of the company. Having regard to all the matters to which I have referred, I am of the opinion that an appropriate penalty to be imposed upon Mr Hassarati is the sum of $7,500. Orders 29I make the following orders: 1) The defendant Paul John Hassarati is found guilty of the offence with which he is charged and convicted accordingly. 2) I impose a monetary penalty on the defendant H Hassarati & Co Pty Ltd of $175,000 and upon Paul John Hassarati of $7,500, with a moiety in each case to the prosecutor. 3) The defendants are to pay the costs of the prosecutor in an amount assessed under the Legal Profession Act in default of agreement, in the proportion that the penalty imposed upon each of them bears to the totality of the costs so assessed or agreed. ********** 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. Decision last updated: 02 November 2011