Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Hall v Denham Constructions Pty Limited [2011] NSWIRComm 168 Hearing dates: 22 September 2011 Decision date: 16 December 2011 Jurisdiction: Industrial Court of NSW Before: Kavanagh J Decision: The Court makes the following orders: 1. In Matter No IRC1062 of 2010, the offence under s 8(1) of the Act, I find the defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $180,000. with a moiety to WorkCover Authority of New South Wales. 3. In Matter No IRC1063 of 2010, the offence under s 8(2) of the Act, I find the defendant guilty of the offence as charged. 4. The defendant is fined in the sum of $180,000 with a moiety to WorkCover Authority of New South Wales. 5. In the application of the principle of totality, the defendant is fined in the sum of $200,000. 6. Therefore, in Matter No IRC1062 of 2010, the defendant is fined in the sum of $100,000 with a moiety to WorkCover Authority of New South Wales. 7. Therefore, in Matter No IRC1063 of 2010, the defendant is fined in the sum of $100,000 with a moiety to WorkCover Authority of New South Wales. 8. The defendant is to pay the costs of the prosecutor. There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(1) and s 8(2) of the Occupational Health and Safety Act 2000 by defendant - defendant (principal contractor) failed to ensure the health, safety and welfare at work of all its employees - defendant failed to ensure that people (other than employees of the defendant) and members of the public, were not exposed to risks to their health or safety - critical nature of risk defendant - nature of injury - proper propping system in place but failure to communicate with contractors - failure to check placement of crane - failure to ensure safety checks after changing SWMS - the offences most serious - gravity of the potential risk - risk of serious injury and/or a fatality - foreseeability a factor - simple and straightforward steps to remedy the defects in the system available - general and specific deterrence - lateguilty plea - remorse shown and contrition expressed - no prior convictions - mitigating factors - contribution to risk - evidence of ongoing corporate commitment to safe working - penalty Legislation Cited: Occupational Health and Safety Act 2000 Crimes (Sentencing Procedure) Act 1999 Cases Cited: Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Carrington Slipways Pty Ltd v Callaghan (1985) 11 IR 467 Inspector Morgenthal v Houghton [2010] NSWIRComm 192 Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; 239 CLR 531 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR 104 R v Tiddy (1969) SASR 575 WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Limited, unreported decision of Schmidt J dated 25 February 1994 Category: Principal judgment Parties: Inspector Craig Hall (Prosecutor) Denham Constructions Pty Limited (Defendant) Representation: M P Cahill of counsel (Prosecutor) F P Hicks of counsel (Defendant) DLA Phillips Fox, Lawyers (Prosecutor) Crisp Legal (Defendant) File Number(s): IRC1062 of 2010 IRC1063 of 2010 Judgment 1This prosecution is brought by Inspector Craig Hall of the WorkCover Authority of New South Wales ("the prosecutor") against Denham Constructions Pty Limited ("the defendant" or "Denham") under s 8(1) and s 8(2) of the Occupational Health and Safety Act 2000 ("the Act"), by way of an Applications for Order. 2It is alleged the defendant, Denham Constructions Pty Limited, on 25 and 26 September 2008 at 5 Gladstone Road, Castle Hill in the State of New South Wales, contravened s 8(1) of the Act in that it failed to: to ensure the health, safety and welfare at work of all its employees, and in particular Gareth Goronwy, Paul Sinclair and Andrew Gleeson ( the employees ) on 25 and 26 September 2008, at or around a construction site at 5 Gladstone Road, Castle Hill, in the State of New South Wales ( the site ), contrary to section 8(1) of the Act. The particulars of the charge are: 1. The defendant was at all material times an employer; 2. The risk was the risk of the employees being struck or crushed by the crane, its associated lifting components, its load (the concrete panels) it was lifting, the slabs on which it was positioned or adjacent slabs and concrete panels collapsing; 3. The defendant failed to ensure that the outriggers of the 250 tonne mobile crane ( the crane ) being used at the site were positioned in places and in a manner so that the concrete slabs on which the crane was placed could support the crane's weight and would not collapse; 4. The defendant failed to ensure that there was an effective system of communication at the site between the structural engineers, itself as principal contractor and sub-contractors (R&D Panelform and Gillespies Cranes) so as to ensure that the outriggers of the crane were positioned in such a place and in a manner so that the concrete slab on which the crane was placed could support the crane's weight and would not collapse; 5. The defendant failed to check that sub-contractors (R&D Panelform and Gillespies Cranes), after positioning the crane outriggers but before commencing a lift, had in fact placed the outriggers in the position required by the defendant; 6. The defendant failed to ensure that the markings which identified exactly where the outriggers of the crane were to be placed were clear and unequivocal as to where the outriggers were to be placed so that the weight of the crane would be supported and would not collapse; 7. The defendant failed to require sub-contractors (R&D Panelform and Gillespies Cranes) to undertake independent checking of the alignment between the outriggers and the under-props so that the outriggers were placed in a correct position such that the concrete slab on which they were placed could support the weight of the crane and would not collapse; 8. The defendant failed to engage an independent surveyor or independent checker who would be required before the crane being operated to ensure that the outriggers of the crane were placed in the correct position so that the concrete slab on which it was placed did not collapse; 9. The defendant failed to undertake by itself or by an independent person, after the positioning the crane outriggers but before the crane commenced a lift, any checking of the alignment between the outriggers and the under-props so that the outriggers were placed in a correct position such that the concrete slab on which they were placed could support the weight of the crane and would not collapse; 10. The defendant failed to ensure that employees were excluded from the area where the concrete slab and crane had collapsed so that in the event of a further collapse of the concrete slab and crane, those people were not at risk; 11. As a result of the defendant's failures Gareth Goronwy, Paul Sinclair and Andrew Gleeson were exposed to risk; 3It is alleged the defendant, on 25 and 26 September 2008 at 5 Gladstone Road, Castle Hill in the State of New South Wales, contravened s 8(2) of the Act in that it failed to: to ensure that people (other than employees of the defendant), and in particular Mark Seagrott, David Kennedy and John Pearce ( the Gillespies employees ), Arthur Nehme, Charlie Nehme, Joshua Cooper, Carlos Alvarez, Scott De Gail and Paul Pritchard ( the R&D employees ), and members of the public, were not exposed to risks to their health or safety arising from the conduct of the defendant's undertaking while the Gillespies employees, the R&D employees and members of the public were at the defendant's place of work on 25 and 26 September 2008, at or around a construction site at 5 Gladstone Road, Castle Hill, in the State of New South Wales ( the site ), contrary to section 8(2) of the Act. The particulars of the charge are: 1. The defendant was at all material times an employer; 2. The defendant's place of work was at the site, the adjoining area between the site and neighbouring businesses and the neighbouring businesses in so far as it or they was or were affected by work being done at the site; 3. The defendant's undertaking at the site was building and construction, including the role of principal contractor at the site; 4. The people who were at risk and who were at the defendant's place of work were the Gillespies employees, the R&D employees and members of the public; 5. The risk was the risk of people being struck or crushed by the crane, its associated lifting components, its load (the concrete panels) it was lifting, the slabs on which it was positioned or adjacent slabs and concrete panels collapsing; 6. The defendant failed to ensure that the outriggers of the 250 tonne mobile crane ( the crane ) being used at the site were positioned in places and in a manner so that the concrete slabs on which the crane was placed could support the crane's weight and would not collapse; 7. The defendant failed to ensure that there was an effective system of communication at the site between the structural engineers, itself as principal contractor and sub-contractors (R&D Panelform and Gillespies Cranes) so as to ensure that the outriggers of the crane were positioned in such a place and in a manner so that the concrete slab on which the crane was placed could support the crane's weight and would not collapse; 8. The defendant failed to check that sub-contractors (R&D Panelform and Gillespies Cranes), after positioning the crane outriggers but before commencing a lift, had in fact placed the outriggers in the position required by the defendant; 9. The defendant failed to ensure that the markings which identified exactly where the outriggers of the crane were to be placed were clear and unequivocal as to where the outriggers were to be placed so that the weight of the crane would be supported and would not collapse; 10. The defendant failed to require sub-contractors (R&D Panelform and Gillespies Cranes) to undertake independent checking of the alignment between the outriggers and the under-props so that the outriggers were placed in a correct position such that the concrete slab on which they were placed could support the weight of the crane and would not collapse; 11. The defendant failed to engage an independent surveyor or independent checker who would be required before the crane being operated to ensure that the outriggers of the crane were placed in the correct position so that the concrete slab on which it was placed did not collapse; 12. The defendant failed to undertake by itself or by an independent person, after the positioning the crane outriggers but before the crane commenced a lift, any checking of the alignment between the outriggers and the under-props so that the outriggers were placed in a correct position such that the concrete slab on which they were placed could support the weight of the crane and would not collapse; 13. The defendant failed to ensure that people were excluded from the area where the concrete slab and crane had collapsed to that in the event of a further collapse of the concrete slab and crane, those people were not at risk; As a result of the defendant's failures the Gillespies employees, the R&D employees and members of the public were exposed to risk; 4The defendant pleads guilty to the charges. 5Mr M P Cahill of counsel appeared for the prosecutor and Mr F P Hicks of counsel appeared for the defendants. The prosecutor relied upon an Application for Order, an agreed Statement of Facts, a Factual Inspection Report dated 5 November 2008 prepared by Inspector Bronwen Halcroft , 12 colour photographs taken by Inspector Halcroft on 26 September 2008, seven A4 colour photographs hand written annotations , 42 colour photographs of site taken between 26 September 2008 and 10 October 2008, colour photograph taken by mobile telephone with handwritten annotation, Gillespies Crane Services, Safety and Environmental Management Plan for 5 Gladstone Road, Castle Hill, R&D Panelform Limited (NSW) Pty Limited, Safe Work Method Statement for Gladstone Road Castle Hill dated 21 May 2008, Denham Constructions Safe Work Method Statement dated 16 July 2008, Henry & Hymas Panel Layout Plan, RMD Australia back propping plan prepared 8 May 2008, Henry & Hymas Site Inspection Report dated 16 July 2008, three transparent survey overlays prepared by Scott Deveridge, Project Surveyors, hand draw layout plan of 5 Gladstone Road, Castle Hill prepared by Gareth Goronwy and a Prior Conviction Record. 6The defendant relied upon the affidavits of Steven James McGrath, Sole Director of Denham, sworn 20 & 22 September 2011 with 13 annexures; Paul Francis Sinclair, Site Manager at the relevant site, sworn 20 & 21 September 2011 with 21 annexures; Gareth William Goronwy, Site Foreman at the relevant site, sworn 20 September 2011 with five annexures; and Adam Laurence Kearns, Project Manager at the relevant site, sworn 20 September 2011 with four annexures. 7There was an Agreed Statement of Facts which relevantly reads: Background 3. At all material times, Gillespies Crane Nominees Pty Ltd [ACN 001 802 133] ( Gillespies Cranes ): 3.1 was a duly incorporated company; 3.2 undertook the business of hiring out approximately 19 mobile cranes including operators and dogmen and associated drivers; 3.3 was engaged by R&D Panelform Limited Partnership to provide a crane and a crane crew for work to be undertaken at the site; 3.4 utilised the site as a place of work; and 3.5 was an employer of approximately 50 - 60 employees, and in particular employed Mark Seagrott (crane driver), David Kennedy (dogman), John Pearce (dogman) and Paul Pritchard (workshop manager) to perform work at the site in the course of its undertaking. 4 At all material times, R&D Panelform (NSW) Pty Ltd [ACN 122 483 390] and Denis Vella, being partners of R&D Panelform Limited Partnership (ABN 89 686 480 409) ( R&D ): 4.1 undertook the business of forming, pouring and erecting concrete panels for industrial and commercial business sites; 4.2 were engaged by Denham to form and erect concrete panels at the site; 4.3 utilised the site as a place of work; 4.4 subcontracted Gillespies Cranes to supply a crane and a crane crew to lift concrete panels at the site; and 4.5 employed approximately 25 employees, and in particular employed Arthur Nehme (erection supervisor), Charlie Nehme (labourer), Josh Cooper (labourer), Carlos Alvarez (labourer) and Scott De Gail (labourer) to perform work at the site in the course of the undertaking. 5 At all material times, Denham Constructions Pty Ltd [ACN 086 503 568] ( Denham ): 5.1 was a duly incorporated company; 5.2 undertook the business of building and construction, including the role of principal contractor at the site; 5.3 subcontracted R&D to form and erect concrete panels at the site; 5.4 utilised the site as a place of work; and 5.5 employed approximately 45 employees, including about 6 - 7 employees on site on the date of the incident, and in particular employed Paul Sinclair (site manager), Gareth Goronwy (site foreman) and Andrew Gleeson (site foreman). Background 6 Denham was the principal contractor at the site. Denham's work involved the design and construction of 65 industrial, retail bulk-goods and high-tech units as well as the construction of associated car parking and landscaping. The project comprised a ground floor and a first floor, with each floor also having a mezzanine level. The project mainly involved the use of reinforced concrete slabs and tilt up pre-cast concrete panel construction. The contract period commenced in December 2007 and was essentially completed in June 2009. The contract was valued at approximately $27.7 million and the work was substantially completed by contractors. 7 Denham in turn contracted with R&D. The contract between Denham and R&D required R&D to erect pre-poured concrete panels at the construction site. Denham had previously worked with R&D on about four or five other projects. 8 Gillespies Cranes were contracted by R&D to provide a crane and a crane crew for work to be undertaken at the site in respect of the placement and erection of concrete panels around the site. R&D selected Gillespies Cranes due to a long established working arrangement between them both. 9 H&H Consulting Engineers were engaged by Denham as the structural engineers for the project and were responsible for the construction drawings, the review of the crane travel path and the review and design of the under-slab propping for crane positions. Information prepared by H&H Consulting Engineers was provided to R&D by Denham. 10 The positioning of the crane was vitally important because the concrete floor where the crane was to be set up could not of itself support the weight of the crane and so it was essential that under-slab propping be positioned directly underneath where the outriggers of the crane were to be placed to support the crane's weight. 11 The propping system for the crane outriggers was confirmed by the engineers responsible for the slab, Australian Prestressing Services Pty Ltd. Crane set-ups 12 On or about 17 July 2008, R&D began the tilt-up panel work at the site. The work involved a crane being placed at 12 different set-ups around the site. Prior to the commencement on site, Denham requested and required that R&D provide a Safe Work Method Statement for its works (the SWMS ). The SWMS was provided to Denham by R&D on or about 21 May 2008. At all times, as a matter of contract Denham required and expected that R&D would comply with the SWMS in the performance of its works. 13 Between 17 to 21 July 2008 (visit one), set-ups 1, 2 and 3 were completed. 14 On 7 and 8 August 2008 (visit two) set-up 5 was completed. 15 On Monday, 22 September 2008 the Gillespies 250 tonne Liebherr mobile crane attended the site to complete lifts for visit three. Work continued during the week at set-ups 4, 6, 7 and 8. 16 The system of work for set-ups involved the following: 16.1 R&D were responsible for building the concrete panels and lifting them up by crane; 16.2 Denham were responsible for marking the top of the slab with 'pin points' for the crane set-up, under-propping the slab, and then informing R&D that the set-up was ready for the crane to move into position; 16.3 R&D were responsible for supervising Gillespies Cranes employees to make sure that the crane was correctly set up on the marks. Set up 9 17 On Thursday, 25 September 2008, the crane moved into set-up 9. 18 Before it was moved into position it was discovered by Denham by that it could not be placed in the particular position that had been identified and marked in July 2008 because of the existence of an electrical pit and plumbing pipes underneath the slab where the under-slab props were to be put in place. A new position was then found for the props and new markings were put in place on the top of the slab as to where the outriggers were to be positioned. 19 Gareth Goronwy (site foreman for Denham) marked the new pin-points on 25 September 2008, and had these checked and approved by Paul Sinclair (site manager for Denham, with overall responsibility for the site). 20 Paul Sinclair approved both the marks and the props by reference to a drawing that showed the coordinates for the set-up. 21 Gareth then showed Arthur Nehme (erection supervisor for R&D) pin-points for the set-up. Gareth showed Arthur both the old marks (and that they were obsolete, given that they were crossed out) and the new marks, which were the marks on which the crane was to be set up (given that they were not crossed out). 22 Arthur then supervised Gillespies Cranes employees in setting up on the pin-points. As part of this process, Arthur notified Gareth that some rio bars were in the way of the set-up, and offered to cut them. Gareth, without consulting with Paul Sinclair, said that was fine, and R&D cut the bars using one of their labourers on site. 23 After the crane had been set-up, it completed approximately 10 to 15 lifts on set-up 9, without incident. 24 The crane remained in its position at set-up 9 overnight, with full 96-tonnes of counterweights fitted. It was not moved, operated or interfered with in any way following work ceasing on 25 September 2008. 25 Work continued at set-up 9 on Friday, 26 September 2008 until the incident occurred at about 10.08am. 26 Although Arthur Nehme (R&D) considered that he was setting up on the pin-points indicated by Gareth Goronwy (Denham), and Mr Goronwy said that he pointed out the new markings (not the old markings), it appears that the crane was placed with the outriggers positioned on the old markings which ultimately resulted in the collapse of the slab because the under slab propping had been positioned where the new markings had been made. Crane accident 27 On Friday, 26 September 2008, at approximately 10.08am, crane operator Mark Seagrott, an employee of Gillespies Cranes, attempted to lift a pre-cast concrete panel from the suspended first floor concrete slab of a construction site at the premises, using a 250 tonne Liebherr truck crane ( crane ). 28 In this attempt, the crane's rear right outrigger punched through the first floor concrete slab, causing the crane to tip and the front of the crane to be raised totally off the ground. The crane's boom came to rest across an erected panel and it remained in that position for approximately one hour. 29 The boom was extended across a number of small business premises situated next to the site. These adjoining businesses, located in 8 units managed by Beaumont Strata Management Pty Ltd, became the subject of prohibition notices which resulted in them closing and losing approximately one week of trade until the overhanging boom was removed on 3 October 2008. 30 The 10 tonne panel and associated lifting components including the spreader bar fell from the crane and crashed over the side of the suspended slab landing in an area between the construction site and the neighbouring businesses ( Adjoining Area ). 31 The Adjoining Area and the neighbouring businesses were a place of work of Gillespies Cranes, R&D and Denham insofar as it/they was/were affected by work being done at the site. 32 Mr Seagrott was able to run away before the collapse, and sustained only minor injuries, in the form a twisted ankle. 33 A second collapse occurred approximately one hour later when the panel that the jib was resting on collapsed and the rear of the crane continued collapsing through the first floor slab. No injuries were sustained as a result of the second collapse except for Charlie Nehme hurting his leg as he ran away from the second collapse. Risk 34 No one was killed or seriously injured as a result of the collapses. There were people in the vicinity of the crane when the two collapses occurred. Those people were working at the site. 35 In addition to the crane driver, the employees in the immediate vicinity of the crane at the time of the first and/or second collapse include: 35.1 David Kennedy (dogman) of Gillespies Cranes, who tripped as he ran away from the first collapse, and who was about 30m away at the time of the second collapse; 35.2 John Pearce (dogman) of Gillespies Cranes who was spinning the panel that was being lifted by the crane when it dropped, and he ran away; 35.3 Paul Pritchard (workshop manager) of Gillespies Cranes who attended the site after the first collapse and got very close to the crane to hit the emergency stop button before the second collapse; 35.4 Arthur Nehme (erection supervisor) of R&D, who was supervising at the time of the first collapse; 35.5 Charlie Nehme (labourer) of R&D who was directly under the crane at the time of the first collapse, and who also ran away from the second collapse, hurting his leg; 35.6 Joshua Cooper (labourer) of R&D who was about 15m from the crane at the time of the first collapse; 35.7 Carlos Alvarez (labourer) of R&D who was about 5m from the crane at the time of the first collapse; and 35.8 Scott De Gail (labourer) of R&D who was about 6m from the crane at the time of the first collapse. 36 The Denham employees on site included Gareth Goronwy (site foreman), Paul Sinclair (site manager) and Andrew Gleeson (site foreman). Mr Goronwy, Mr Sinclair and Mr Gleeson were about 100 - 150m away from the crane at the time of the first collapse, but then proceeded to go to the ground floor to see where the outrigger had punched through the slab. Mr Goronwy and Mr Sinclair had passed by the area in which the crane was situated before the collapse. The hazard posed by the crane collapsing extended beyond the crane's exclusion zone and created a risk to Denham employees at the site. Failures 37 Denham's system for checking that the crane had been set up on the correct pin points was to require R&D to perform this task. 38 Neither Gillespies nor R&D had any system for checking that the pin-points on which the crane were set up were actually aligned with the under-props. Once the crane was on the marks, R&D assumed that it was 'ready to be operated'. R&D, however, had prepared a Safe Work Method Statement which included at clause 12 that R&D was to 'Check propping under suspended slab and engineers certification for crane loads on slab' and clause 14 that 'Crane outriggers to be positioned over positions marked by surveyor in relation to propping'. 39 Prior to the incident Denis Vella suggested to Denham that a pilot hole be drilled through the slab. Denham did not agree with that course because the drilling of a pilot hole would greatly increase the risk of water penetration through the slab and that there were concerns raised about the drill hitting a stressing cable or electrical conduit. 40 Following the incident, R&D and Gillespies Cranes did not operate cranes on site until a surveyor had marked the pins, and R&D and Denham checked the positioning of the props and crane using grid-line documents. 41 Prior to the incident, there was no system for an engineer or surveyor to routinely check the set-ups. Although this had occurred for set-ups 1 and 2, it did not occur for set up 9. 42 Denham relied on verbal instruction and gestures (pointing) to communicate the correct marks to R&D. Denham did not double-check that the crane had been set up on the correct marks, and R&D and Gillespies Crane did not seek that verification before lifting. 43 The markings for set-up 9 included the following features: 43.1 Yellow paint was used for both the old and new marks; 43.2 The new marks were 1200mm east and 400mm south of the old marks; 43.3 The initial marks were not removed or eliminated by Denham, but rather 'scribbled' over using the same yellow paint (Mr Nehme understood that the crossed-out marks were the old marks); 43.4 R&D had discarded various refuse and building materials directly on top of one of the revised outrigger marks prior to the crane's arrival for set-up. 44 Between the time of the first and second collapse: 44.1 Denham did not prevent its employees from initially 'going underneath' the slab; and 44.2 Neither Denham or Gillespies Cranes prevented Paul Pritchard of Gillespies Cranes from approaching within a close vicinity of the crane to hit the emergency stop button. 45 R&D conducted a toolbox talk with the Gillespies Cranes employees on the day of the incident. R&D provided supervision to Gillespies Cranes' employees. 46 R&D had a safe work method statement that was prepared for the site and dated 21 May 2008 ( SWMS ). The SWMS had been approved by Denham. Page 3 of the SWMS contained an 'erection method statement' which included the following steps: '12. Check propping under suspended slab and engineers certification for crane loads on slab. 13. Erection and crane travel area is to be barricaded off to provide a 20m zone, restricted to erection personal (sic) only. All traffic to be directed with adequate signage/barriers and traffic control/ controller. 14. Crane outriggers to be positioned over positions marked by surveyor as set out in relation to propping.' 47 Page 8 of the SWMS contained a hazard identification assessment for crane set up and panel erection which included control measures for lifting slabs including: .Crane to be set up in positions as per the casting layout drawing. .All instruction as per Panel Supervisor [meaning Arthur Nehme of R&D]. .Mono props are securely positioned ready to receive beam load. .Site to be secure, traffic and pedestrian control to be as per the builders Traffic Control Management Plan. .No access is to be permitted under panels during the lifting process. 48 The SWMS was lacking in detail as to how and when steps such as checking the under-props was to occur. 49 Denis Vella was both a limited partner of R&D and the sole director of R&D Panelform (NSW) Pty Ltd being the general partner of R&D. 50 Mr Vella was involved in the design of the system of work at the site, and signed off on the Safe Work Method Statement. 51 Denis Vella was responsible for communication with Denham via Adam Kearns, Project Manager for Denham. 52 Mr Vella knew about set-up 9 being moved about a week before the incident but did not make any enquiries regarding the revised set-out. Mr Vella was responsible for supervising the forming of concrete panels at the site, however, it was Mr Arthur Nehme who was always responsible for supervising the lift sequence of the panels. Relevant Principles 8In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case ss 8(1) and 8(2) of the Occupational Health and Safety Act 2000 with ss 21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The Court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 9Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 10Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR 104, correctly, given the consideration in Markarian , recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. Proper regard is to be had to express legislative provisions and to the relevant statutory regime ( Markarian at [27]). 11The object of the Act is to protect employees from risk to safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the workplace. In Inspector Morgenthal v Houghton [2010] NSWIRComm 192, the Court observed at [9]: In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act ...are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: '[i]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion.' 12Of relevance particularly is the effect of s 21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing and states, inter alia : . . . (2) Aggravating factors . . . (d) the offender has a record of previous convictions, ... (g) the injury, emotional harm, loss or damage caused by the offence was substantial, . . . (3) Mitigating factors . . . (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, ... (k) a plea of guilty by the offender (as provided by section 22) (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23) . . . Consideration 13In a consideration as to penalty, the Court assesses the objective seriousness of the offence or, as has been said "the nature and quality of the offence". The Full Bench commented in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474): ... in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence"... And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416 ; (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk, In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ... 14The defendant's business was initially set up in the 1970s principally doing construction work in the Sydney metropolitan area for medium to large scale multi-storey commercial and industrial projects, both as a developer/builder or as a contractor. The construction works being undertaken at this site were valued at approximately $27.7 million and the defendant was the principal contractor on site. At the time of the incident, the defendant employed approximately 45 employees, six or seven of whom were working on site on the date on which the incident occurred. Mr Paul Sinclair was Site Manager; Mr Gareth Goronwy and Mr Andrew Gleeson were site foremen. 15Being constructed on site were 65 industrial, retail "bulk goods" and high-tech units, with an associated car park and landscape works. Relevantly, as to this incident, the defendant contracted R&D Limited Partnership (R&D) to form and erect pre-cast concrete panels (which panels acted as wall room dividers) within the basic construction. R&D then contracted Gillespies Cranes Nominees Pty Ltd (Gillespies) to provide the crane and crane crew required to lift and place the pre-cast concrete panels into place at the site. 16To enable a crane to lift and erect the pre-cast panels the engineers (other sub-contractors) designed the under-slab propping to be placed under each point on the suspended slabs on which the crane and its outriggers were to be set up for the purpose of lifting and putting into place the pre-cast panels. The under slab propping system required a pair of Megashore backing-props erected under the suspended slab at the point on which each of the four outriggers of the crane were placed (so that the weight on each outrigger would be borne directly by a pair of the Megashore backing-props). 17It was therefore central to the design of the propping system that each outrigger be placed directly over the pair of props as placed under the slab as the suspended slabs were not designed to bear the weight of the crane and its load. 18The risk was that the suspended slab would fail unless each outrigger of the crane was located directly over backing-props erected under the slab. On failure of the slab, the risk was persons (mostly employees of the various sub-contractors) on the site could be struck or crushed by the crane, its lifting components, the load (the concrete panels), the slab parts or the collapse of adjacent slabs and/or pre-cast concrete panels. 19Denham determined its planning for the placement of the crane be altered and moved because the ground floor slab was located directly above an electrical pit. Both Mr Nehme from the defendant and Mr Vella of R&D were aware that a change of location was to occur. 20The change in the set-up location for the crane was not marked out on the casting layout drawing or panel lay-out plan. After the erection of under-slab backing props Mr Goronwy, the defendant's site foreman, marked the new set up points for each outrigger, with a point (or mickey pin) and yellow marks. However, that meant there were two sets of yellow markings on the slab: one set of 4 point-pins and yellow paint which is said to correspond to the initial, planned set-up point for set-up No 9; and a second set of 4 point-pins and yellow paint which is said to correspond to the "new" set-up point for set-up No 9 marked by Mr Goronwy on 25 September 2008. 21Mr Goronwy showed Mr Nehme of R&D the new set-up points/markings. Mr Goronwy says he identified to Mr Nehme both the new and the obsolete points which had been crossed out. It is unclear why there was no clear communication between Mr Goronwy and Mr Nehme. Mr Nehme guided the crane into place and supervised the lowering of each outrigger onto the slab. The points onto which each outrigger was lowered was neither directly aligned with, nor supported by the under-slab backing props. 22There was no engineering inspection of the under-slab backing props; no check was undertaken on behalf the defendant, R&D and/or Gillespies, either by a surveyor or otherwise, for the purpose of confirming that the outriggers of the crane, in place on the slab, were aligned with and supported by under-slab backing props before lifting commenced. 23Lifting commenced on the afternoon of 25 September 2008 and continued on the morning of 26 September 2008 and at about 10 am EST, the right rear outrigger of the crane punched through the suspended slab whilst the crane was undertaking the lifting and placement of a pre-cast concrete panel. One hour after the rear right outrigger of the crane punched through the suspended slab, a second slab collapse occurred, when the panel that the boom was resting on collapsed, and the rear of the crane continued collapsing through the first floor slab until the rear of the crane came to rest on the ground. The hazard posed by the crane collapse extended beyond the 20 metre crane exclusion zone which was in place at the time of the incident. 24While no one was killed or sustained serious injury as a consequence of the collapses there were many employees of different corporations working at the site and in the vicinity of the crane at the time of the collapses. They were employees of Denham, the defendant corporation and of Gillespies Cranes and R&D Panelform. The nature of the collapses, including the manner in which the crane's boom, lifting gear and load crashed through the slab to the ground, demonstrates that it was not a matter of good management that no one was either killed or seriously injured. 25The critical nature of the alignment between the crane's outriggers and the under slab backing props was specifically known to the defendant as was the associated risk to safety. 26Further, prior to the commencement of craning works at the site, the defendant was informed of a simple control mechanism previously adopted by R&D at other sites where pre-cast panels were lifted into place by a crane, namely, the drilling of a pilot hole through the slab which enabled a plumb-bob to be used to confirm the alignment of the crane's outriggers on the slab with the under-slab backing props. The defendant had refused to permit this control to be adopted prior to the incident. The defendant contends that it refused because of the risk of drilling through the slab which held stress cables and electrical conduits and, further, such holes would allow water penetration. 27The defendant, however, did put in place a proper propping system. Its error was using yellow paint for both markings and a failure to ensure the crane and outriggers were properly placed on the props and such placement was independently reviewed for safety along with its failure to properly communicate with its sub-contractors. Also of relevance is the fact the defendant did not prevent its employees "going underneath" the suspended first floor slab and neither Denham nor his employees prevented Mr Paul Pritchard of Gillespies Cranes from approaching within a close vicinity of the crane to hit the emergency stop button. 28The principle of foreseeability is a factor in determining the objective seriousness of an offence. This was considered and affirmed by the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 . On the issue of foreseeability, the Full Bench in Capral stated at [82]: The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209-210) in these terms: ... reliance on 'hindsight' must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. In the circumstances there was a foreseeable element to the breach which makes it more serious. The defendant accepts there was a foreseeable element to the offence. The risk itself was obvious. This admission is commendable. 29The availability of simple and straightforward steps to remedy the defects in the system is also relevant to the consideration of the objective seriousness of the offence ( WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Limited, unreported decision of Schmidt J dated 25 February 1994). There were known steps that could have been taken which, either singly or in combination, would have eliminated or reduced the risk. These steps have now been implemented by the defendant. Such activity after the incident is indicative of the fact each amendment to the system of work was readily available and practicable. 30The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral at [71]-[77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: ... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. 31As to specific deterrence, the defendant submits it had a pre-existing commitment to occupational health and safety as evidenced through its manuals and the publication of the company's systems. It demanded from its contractors Safe Work Method Statements (SWMS). 32The defendant submits that as a general matter, its breaches of the Occupational Health and Safety Act 2000 are not such as to warrant that the penalty reflects the need for general deterrence. It opines it had sought to obviate the risk associated with the activities involved by putting in place the props, although it accepts that it ought to have done more given its obligation to proactively intervene and overview work on site and to properly communicate with its sub-contractors. 33I accept the defendant did not approach the performance of this work in any off hand or cavalier fashion. However, the need for diligence in the course of construction work to ensure the obligations under the Occupational Health and Safety Act 2000 on projects and on works of this kind is well known and accepted. Once more persons, be they individuals or corporations in the construction industry, must be reminded of the need once there is a re-design of a SWMS and amendments are made to the existing SWMS that all safety measures must be reassessed. Safety is paramount when new tasks are performed. This incident exposes the need for extra caution and awareness of safety when SWMS are amended. 34I accept the defendant has never previously been convicted of any offence under the Occupational Health and Safety Act 2000 although it has been engaged in the construction industry for decades. Further, the defendant has redressed all matters of communication and put in place independent checks to ensure no further breach of this type. Nonetheless it continues to perform work using heavy equipment performing inherently dangerous tasks within the construction industry. 35There will therefore be an element of both specific and general deterrence taken into account in the consideration of penalty. 36Section 3A of the Crimes (Sentencing Procedure) Act 1999 sets out the purposes for which a court may impose a sentence on an offender, being: (a) to ensure that the offender is adequately punished for the offence; (b) to prevent crime by deterring the offender and other persons from committing similar offences; (c) to protect the community from the offender; (d) to promote the rehabilitation of the offender; (e) to make the offender accountable for his or her actions; (f) to denounce the conduct of the offender; (g) to recognise the harm done to the victim of the crime and the community. 37Section 21A of the Crimes (Sentencing Procedure) Act 1999 sets out aggravating and mitigating factors that a court takes into account when determining a sentence. As well as the factors identified in subsections (2) (aggravating factors) and (3) (mitigating factors), the Court is to take into account any other objective or subjective factor that affects the relative seriousness of the offence. 38Pursuant to subsection 21A(2), the defendant submits that the only aggravating factors relevant in determining the appropriate sentence for the offences in this case are : the damage caused by the offence was substantial. However, it is submitted that this factor is not of great significance as the damage was largely caused to the defendant's own works and the plant and equipment of its subcontractors (who were also culpable in respect of the circumstances in which the incident occurred); the offence involved a grave risk of death to another person or persons. 39Pursuant to subsection 21A(3), the defendant submits that there are several mitigating factors for the Court's consideration. It contends the injury or emotional harm caused by the offence was not substantial but also acknowledges the property damage caused was an aggravating factor. It was further submitted the offence was not part of a planned or organised criminal activity. 40The defendant, although having been involved in construction projects since the 1970s, does not have any previous convictions in respect of its occupational, health and safety obligations and work practices. I accept the corporation is a person of good character as demonstrated through its history in the construction industry and has played a significant role as an employer of tradespersons, apprentices, administrative and contract staff and office staff. It s role in the community as a major employer is of consequence. 41I accept the defendant stopped all works immediately and took steps to remedy the breach. It is unlikely to re-offend given the comprehensive review it has conducted of all its existing SWMS and its re-design where review was required. 42Through the defendant's director, Mr Stephen McGrath, it has expressed remorse, accepted responsibility for the actions of the company, and acknowledged the loss or damage caused. It entered an early guilty plea and fully co-operated with both law enforcement authorities and provided all assistance to WorkCover and is entitled to the benefit given its co-operation in the investigation of the circumstances of the incident. 43It is submitted that the nature of the breaches on the part of the defendant do not reflect any parity or equality with the conduct of the other parties who have been charged over this incident. 44The defendant contends it required SWMS to ensure from all contractors the safe performance of all tasks. In particular, the defendant contends it is not as liable as R&D for the failure to check and ensure and prevent R&D from undertaking the works in breach of its own obligations and its own SWMS. The defendant has accepted liability for its failure to clearly communicate. It therefore submitted that, the appropriate penalty for Denham is in the lower end of the mid range. Maximum Penalty 45The defendant is not previously adversely recorded. It follows that the maximum penalty applicable with respect to the subject breaches of s 8(1) and s 8 (2) of the Act is a fine of $550,000 in relation to each contravention. 46Pursuant to s 21A(3)(k) of the Crimes (Sentencing Procedure) Act the defendant is entitled to have its pleas of guilty taken into account in the assessment of the sentences to be imposed on it by the Court as a factor in mitigation of penalty. The defendant is entitled to a discount on each penalty flowing from the utilitarian benefit of each plea in accordance with the principles outlined in the guideline judgment of the Court of Criminal Appeal in R v Thomson; R v Houlton (2000) 49 NSWLR 383. The defendant shall have a 25 percent discount on the penalty for each breach. 47I accept the defendant co-operated with the WorkCover Authority and assisted in relation to other prosecutions. The defendant comes before the Court as a first offender. Further, the prosecutor acknowledges that: the defendant's business has been in operation since about the 1970s; the defendant had in place detailed occupational health and safety systems prior to the subject incident which applied generally to sites at which performed construction works of the subject type; and the defendant was otherwise conscientious in its management of matters touching upon health and safety at the sites at which the defendant carried out construction works; and the defendant put in place appropriate controls after the event. 48However, the "plurality" in Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; 239 CLR 531 addressed the nature of the obligation created by s 15(1) and s 16(1) of the Occupational Health and Safety Act 1983 (similar to s 8(1) and s 8(2): (a) the overlapping duties imposed by s 8(1) and s 8(2) of the 2000 Act, respectively, are a duty "to ensure" and may be properly characterised as a duty to guarantee or secure health, safety and welfare ( Carrington Slipways Pty Ltd v Callaghan (1985) 11 IR 467 at 470); (b) the duty is higher than the common law duty to take reasonable care; and (c) the duty is non-delegable in nature. 49The duty owed under s 8(1) of the Act and the duty owed under s 8(2) of the Act, whilst co-extensive, are duties owed to different classes of person. 50However, the particulars as between the s 8(1) and the s 8(2) charge brought against each defendant discloses an overlap of criminality. It is proper for the overlap in criminality to be reflected in an adjustment by the Court of the "total penalty" to be imposed on the defendant. 51The principles of "parity in sentencing" apply in respect of a "class of offenders" across the range of a single offence and recognise the need for consistency in the sentencing of offenders charged with the same offence ( R v Tiddy (1969) SASR 575 (at 577)): Where other things are equal persons concerned in the same crime should receive the same punishment, and where other things are not equal a due discrimination should be made. (emphasis added). 52While not on point as to application of the principle of parity, the Court accepts there was a contribution to the risk from R&D Panelform and to a lesser extent Gillespies Cranes. The difference in sentencing outcomes, where the factual matter is the same, will reflect the differing circumstance of each defendant and the differing roles played by each defendant within the factual matrix. 53I accept the defendant failed : (a) to ensure or check, or require that its contractors independently check, that the Crane outriggers were placed on the suspended slab at the points where the slab had been propped so as to bear the weight of the Crane in its operations; (b) to ensure an effective system of communication between the structural engineers, itself and its contractors so as to ensure or check that the Crane outriggers were placed on the slab at the points where the slab had been propped so as to bear the weight of the Crane in its operations; (c) to ensure that the markings identifying the points on the slab where it had been propped so as to bear the weight of the Crane in its operations were "clear and unequivocal" ; (d) to ensure that people were excluded from the area where the concrete slab and the Crane had collapsed so that in the event of further collapse those people were not at risk. 54This was a serious offence but in accepting that this defendant and the prior defendants already facing penalty for this offence R&D Panelform and Mr Vella each had systems of work that allowed the breaches of the Act, even taking into account the differences in their subjective features and those in mitigation, the culpability I find is similar. Orders 55The Court makes the following orders: 1. In Matter No IRC1062 of 2010, the offence under s 8(1) of the Act, I find the defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $180,000. with a moiety to WorkCover Authority of New South Wales. 3. In Matter No IRC1063 of 2010, the offence under s 8(2) of the Act, I find the defendant guilty of the offence as charged. 4. The defendant is fined in the sum of $180,000 with a moiety to WorkCover Authority of New South Wales. 5. In the application of the principle of totality, the defendant is fined in the sum of $200,000. 6. Therefore, in Matter No IRC1062 of 2010, the defendant is fined in the sum of $100,000 with a moiety to WorkCover Authority of New South Wales. 7. Therefore, in Matter No IRC1063 of 2010, the defendant is fined in the sum of $100,000 with a moiety to WorkCover Authority of New South Wales. 8. The defendant is to pay the costs of the prosecutor. There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. 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: 16 December 2011