Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Hall v Raydaz Design Pty Ltd [2012] NSWIRComm 81 Hearing dates: 19 July 2012 Decision date: 24 August 2012 Jurisdiction: Industrial Court of NSW Before: Staff J Decision: Matter No IRC 1705 of 2011 1.The offence is proven and a verdict of guilty is entered. 2.The corporate defendant is convicted of the offence, as charged. 3.The corporate defendant is fined an amount of $75,000 with a moiety thereof to the prosecutor. 4.The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed. Matter No IRC 1706 of 2011 1.The offence is proven and a verdict of guilty is entered. 2.The personal defendant is convicted of the offence, as charged. 3.The personal defendant is fined an amount of $8000 with a moiety thereof to the prosecutor. 4.The personal defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - prosecutions under s 8(2) of the Occupational Health and Safety Act 2000 - building industry - residential property - jib fell from boom of crane at construction site controlled by defendants - non-employee injured - general and specific deterrence - pleas of guilty - remorse - capacity to pay - Fines Act 1996 - penalty imposed - costs. Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Fines Act 1996 Occupational Health and Safety Act 2000 Cases Cited: Inspector Beauchamp v J & L Marble Pty Ltd [2009] NSWIRComm 100 Inspector Ken Kumar v David Aylmer Ritchie [2006] NSWIRComm 323 Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363 WorkCover Authority of New South Wales (Inspector Farrell) v Schrader [2002] NSWIRComm 25; (2002) 112 IR 284 Category: Principal judgment Parties: Inspector Craig Hall (Prosecutor) Raydaz Design Pty Ltd (Corporate Defendant) Raymond Anjoul (Personal Defendant) Representation: Counsel: Mr A Tudehope of counsel (Defendant) Solicitors: WorkCover Authority of New South Wales (Prosecutor) Tudehope Partners (Defendants) File Number(s): IRC 1705 and 1706 of 2011 Judgment 1Raydaz Design Pty Ltd ("the corporate defendant") carries on the business of residential building, renovation and repair, principally in Sydney. 2On 18 November 2009, the corporate defendant controlled a construction site located at 227 - 231 Pennant Hills Road Carlingford in the State of New South Wales ("the site"). The corporate defendant had engaged Advanced Carpentry and Constructions Pty Ltd ("Advanced Carpentry") to complete all framework and roofing work at the site. 3At some time prior to 18 November 2009, Mr Charbel Sassine, a director of Advanced Carpentry advised Mr Raymond Anjoul, the sole director, secretary and employee of the corporate defendant ("the personal defendant") that a crane was required to lift metal roof sheets onto the roof. 4The personal defendant called Mr Ameer Hassan, also known as Ali, of Ali's Mobile Crane and requested that a 55 tonne crane attend the site on the morning of 18 November 2009 to carry out the required work. 5After the crane had carried out the work required, that being, the lifting of roofing sheets, Mr Dennis Kew, the owner and operator of an 8 tonne flatbed truck with a Hiab Crane assisted, along with two other persons in packing up the crane so it could leave the site. The fly jib of the crane would not retract, which resulted in the inability to lock the boom of the crane into place. After attempts were made to "jimmy" the fly jib into place with metal bars, the fly jib dislodged from the boom, falling on Mr Kew. As a result of being struck by the fly jib, Mr Kew sustained fractures to his left femur, pelvis and ankle, torn ligaments in his right leg, lacerations to his elbow and head and eviscerated testicles. 6Mr Pierre Anjoul, the brother of the personal defendant who was also assisting in the packing up of the crane, suffered superficial injuries to his arm when the fly jib made contact with him as it fell. Charges 7The corporate defendant in an application for order was charged with a breach of s 8(2) of the Occupational Health and Safety Act 2000 ("OHS Act") by failing to: Ensure, by its acts and omissions as particularised below, that persons not in its employment and in particular Denis Kew and Mr Pierre Anjoul, were not exposed to risks to their health and safety arising from the conduct of the defendant's undertaking while at the defendant's place of work contrary to section 8(2) of the Act. The particulars of the charge were: a)The risk was the risk of the fly jib detaching from the main boom of a yellow Nissan Mobile Crane ("the crane") and striking non-employees, in particular, Denis Kew and Pierre Anjoul, while it was being retracted. b)The defendant failed to ensure there was a safe system of work in place at the remises for retracting the fly jib of the crane at the premises, in circumstances where the fly jib of the crane was or became jammed, in that the defendant failed to: i.Ensure that a site specific Safe Work Method Statement relating to crane works was prepared and implemented at the site by its contractor, Samr Allah; ii.Conduct a risk assessment or ensure that its contractor, Samr Allah, conducted a risk assessment for crane works. c)The defendant failed to ensure that a comprehensive pre operational safety inspection was undertaken, by its contractor, Samr Allah, on the crane provided for use at the site to ensure it was suitable for the task to be undertaken and/or in safe working order, prior to allowing the crane to be operated at the premises. d)The defendant failed to ensure that a Site Safety Management Plan was developed for the premises. e)The defendant allowed the crane to be operated at its premises and failed to ensure: i.that the crane driver was licensed to operate the crane; ii.that the crane was registered; iii.sufficient crane workers including a dogman or rigger were available at the premises for the task to be undertaken safely, including slinging and landing the loads and packing up the crane. f)The defendant failed to ensure that contractors at the premises were properly supervised in that workers were allowed to jimmy the fly jib of the crane into place with metal bars when the fly jib would not retract. g)The defendant failed to ensure that non-employees, in particular Denis Kew and Samr Allah received site induction or tool box talk before allowing them to undertake work at the premises. As a result of the acts and omissions the defendant, Denis Kew and Pierre Anjoul were placed at risk of injury. The risk manifested itself in serious injuries sustained by Denis Kew and minor injuries sustained by Pierre Anjoul. 8The personal defendant was charged by virtue of s 26(1) of the OHS Act of a breach of s 8(2) of the OHS Act, in the same terms as the corporate defendant. As I have already observed, the personal defendant is the sole director, secretary and employee of the corporate defendant. The particulars relied upon were identical to those relied upon in respect of the corporate defendant, with the addition of a particular that the personal defendant was a director of the corporation. 9Both defendants pleaded guilty to the offences as charged in the application for order. I am satisfied on the evidence, that the defendants are guilty of the offences as charged, and that it is appropriate for the pleas of guilty to be entered. It follows, therefore, that this judgment is concerned with the question of penalty. Prosecutor's evidence 10Ms S Gul solicitor, who appeared for the prosecutor, tendered an agreed statement of facts which provided: ... 3.Raydaz was a corporation owned and run by Mr Raymond Anjoul ("Raymond Anjoul"), the sole director, secretary and employee. Raydaz undertook the business of residential building, renovation and repair work. 4.At all material times, Raydaz controlled a construction site located at 227 - 231 Pennant Hills Rd, Carlingford ("the site"). 5.At all material times, the site was owned by Trackk as trustee for Veg Family Trust ("Trackk"). Mr Pierre Anjoul ("Pierre Anjoul") was the sole Director and Secretary of Trackk. 6.Pierre Anjoul is Raymond Anjoul's brother. He would attend the site on average 3 to 4 times per week but did not have any supervisory responsibilities. 7.At all material times, the construction work on the site was subcontracted out to various parties. In addition to his role as project manager, Raymond Anjoul acted as site supervisor and foreman. 8.Samr Allah ("Allah"), also known as Hussein Jafar, was a sole trader, operating a business known as "Samir Mobile Crane." No formal company structure had been arranged except the registration of the business name. 9.Allah is Iraqi born and moved to Australia as a refugee. His English is poor. He holds a heavy vehicle license but no crane license. WorkCover records show that in 2008 Allah underwent 11 training sessions in order to gain his crane licence, including some with assistance in written and spoken English. Allah twice failed the assessments and did not get a license as a result. 10.Ameer Hassan ("Hassan"), also known as Ali, operated a business named "Ali's Mobile Crane". Ali's Mobile Crane was not registered in any form and had no ABN or ACN. Hassan owned a small flatbed truck with a "hi ab" attachment on it. 11.At all material times, Ali's Mobile Crane did not possess or operate a crane. Ali's Mobile Crane acted as a tout for "Samir Mobile Crane." Hassan states that he had a number of business cards printed up, and took them to building sites touting for business. If he received a call for mobile crane work, he would attend the site to observe the specifics of the job, and then show Allah where the site was. Allah would then arrive at the site on the organised date with the crane. Hassan's English was superior to Allah's and he therefore communicated with the contractor. 12.At all material times, Advanced Carpentry Pty Ltd ("Advanced Carpentry") was engaged by Raydaz to complete all framework and roofing work at the site. 13.At all material times, Mr Charbel Sassine ("Sassine"), also known as Charlie, was the director for Advanced Carpentry. 14.At all material times, Stratco Pty Ltd ("Stratco") was a corporation which undertook the business of manufacturing and supplying metal building material. It conducted its business from 15 Liberty Road, Huntingwood NSW. 15.At all material times, Dennis Kew ("Kew") was the director and sole employee of Deno Pty Ltd ("Deno"). Deno was the owner and operator of a 1998 UD 8-tonne flat-bed truck with Hiab crane. 16.Deno had a non-exclusive contract with Stratco and on 18 November 2009 had been engaged by Stratco to deliver product to locations around the Sydney metropolitan area. The crane 17.At all material times, Samir Mobile Crane operated a 1981 model yellow Nissan Mobile Crane with a 12 tonne lifting capacity ("the crane"). 18.At all material times the crane was affixed with a registration plate which did not belong to the crane. The crane was not road registered. A partial mobile phone number was scrawled onto the side of the crane in felt marker. There was no other form of identification attached to it. The only reliable indentifying feature was its VIN number, KW30M08243. 19.The crane was in a poor state of repair on the day of the incident. There were various rusty components. The crane did not have plant registration with WorkCover. The incident 20.Prior to the incident, Raymond Anjoul received a business card from Hassan on one of Hassan's cold calling visits to construction sites. Raymond Anjoul called Hassan and instructed Hassan to deliver a load of bricks on his smaller "hi ab" truck. 21.Prior to the incident, Sassine ordered metal roofing sheets from Stratco and arranged for them to be delivered to the site on 18 November 2009. 22.Some time prior to 18 November 2009, Raymond Anjoul was advised by Sassine that Sassine needed a crane to lift the metal roofing sheets onto the roof. 23.Raymond Anjoul called Ali's Mobile Crane and asked Hassan to organise a 55 tonne crane to attend the site on the morning of 18 November 2009. This arrangement was not recorded. 24.Raydaz arranged for Hassan to be the crane provider and operator and was not aware of Hassan's subcontracting arrangement with Allah. There were no formalised subcontracting arrangements between Raydaz and Hassan nor were there between Hassan and Allah. 25.On 18 November 2009, Raymond Anjoul rang Pierre Anjoul to advise him that he was running late. He asked Pierre Anjoul to open the site. He did not give Pierre Anjoul any detailed instructions regarding the arrangements with Advanced Carpentry and Ali's Mobile Crane that morning, nor did he have any formalised site management systems in place. 26.Kew arrived at the site at about 6.30am in order to deliver metal roofing sheets. Kew was not site inducted and received no instructions at the site. It was a policy of Stratco that a) contractors not work outside their role and responsibilities of simply delivering the load and b) if anything other than delivery was required, the contractor must contact the appropriate supervisor for a determination and c) that contractors report site specific hazards to the site supervisor. 27.The roofing sheets were loaded in 300kg pallets in order that they could be safely lifted. 28.Allah arrived at the site some time after 7am and set up the crane "parking in" Kew's truck. As a result, Kew could not leave the site until the crane was moved. Allah did not bring levelling timbers with him and utilised some off cuts from the site as timbers in order to set up the crane. He did not establish a proper exclusion zone, or conduct any pre operational checks. 29.Allah did not bring a dogman with him and an impromptu "dogging" system was organised on the spot whereby Sassine directed the loads onto the roof. The loads were lifted short of their intended mark as the crane was a 12 tonne crane, not the 55 tonne crane that Raymond Anjoul had been expecting. A fly jib was used to land the loads. 30.Once the loads were landed, Kew needed to leave the site, but his truck remained parked in by the crane. Kew, along with Pierre Anjoul and Allah, assisting in packing up the crane in order to leave the site. 31.The fly jib would not retract. As a result the boom could not be locked into place and the crane could not move out of its position. 32.Various individuals, including Kew, Pierre Anjoul and Allah all tried to jimmy the fly jib into place with metal bars. The pins and springs locking the fly jib to the boom into place were rusted and damaged. 33.The fly jib dislodged from the boom and fell onto Kew crushing his legs. The fly jib also grazed Pierre Anjoul's arm as it fell, causing superficial injuries. 34.As a result of being struck by the boom, Kew sustained fractures to his left femur, pelvis and ankle, torn ligaments in the right leg, lacerations to the elbow and head and eviscerated testicles. 35.An ambulance attended the site and transported Kew to hospital where he underwent surgery to his legs, testicles and pelvis. He has since undergone various other surgeries and was forced to sell his truck due to his ongoing ill health. Systems of Work Prior to the Incident 36.Raydaz did not have a documented Site Safety Management Plan in place at the site. 37.Raydaz did have a documented site induction system for the site. Kew and Allah were not inducted to the site. 38.Raydaz conducted toolbox talks, but did not conduct one on 18 November 2009. 39.It was the policy of Raydaz that all sub contractors provide a Safe Work Method Statement ("Safe Work Method Statement") to it, but Raydaz did not obtain a SWMS from Allah. 40.Raydaz did not complete a risk assessment in relation to the crane. It did not obtain a risk assessment from its contractor, Allah for the use and dismantling of the crane. Raydaz did not make enquiries regarding the working order of the crane. 41.The system of supervision employed by Raydaz was reliant on Raymond Anjoul. If he was not present on site there was no on site supervision. 42.Samr Mobile Crane had no safety systems in place in relation to the crane. There were no Safe Work Procedures in place for the operation or dismantling of the crane and pre-operational checks completed on the crane. 43.The crane was in a poor state of repair with no essential maintenance done for some time. The crane had not undergone its ten year inspection or any other safety inspections. 44.Allah did not hold a crane licence. 45.The crane owned and operated by Samr Mobile Crane was not registered with WorkCover, and it was not road registered 46.Samr Mobile Crane did not use a dogman. The system of work relating to dogman employed by Samr Mobile Crane was to have Allah undertake the role of operator and dogman. 47.Samr Mobile Crane did not complete any SWMS in relation to dismantling of the crane as Allah did not know what a SWMS was. 48.Samr Mobile Crane did not complete any risk assessments in relation to dismantling of the crane. 49.Appropriate timbers were not used to level the crane and there was no exclusion zone set up. 50.Samr Mobile Crane allowed Kew and others to assist in the dismantling of the crane without providing any training or instruction. Systems of Work Following the Incident - Raydaz 51.Following the incident, Raydaz: a.engaged the Master Builder's Association and formalised a Site Safety Management Plan; b.formalised a Site Safety Management Plan for the site; c.documented a "site safety walk-through" system; d.implemented systems to ensure that any cranes coming onto the site are crane safe accredited; e.engaged Pace Cranes to undertake an assessment of the crane prior to it being removed from site to ensure it could travel; f.improved the system for obtaining and reviewing SWMS. 52.The defendant has co-operated with the WorkCover investigation of this matter. 11An agreed statement of facts in identical terms was relied upon in respect of the charge brought against the personal defendant. 12The prosecutor also tendered the following documents: 1.ASIC Current and Historical Extract for Raydaz Design Pty Ltd [ACN 079 132 282]. 2.Factual Inspection Report of Inspector Kwok dated 14 December 2009. 3.24 colour photographs taken by Inspector Kwok dated 18 November 2009 showing the construction site, the mobile crane BB.62.GK with the fly jib on the ground and rust surrounding part of the locking pin of the jib. 4.Technical Report of Inspector Terry Fouques, Engineering Team dated 24 December 2009. 5.Samir Mobile Crane business card. 6.WorkCover New South Wales Certificate of Prior Convictions showing no prior convictions for the defendants. 13Mr Terry Fouques, Senior Inspector, Engineering Team, WorkCover in his technical report dated 24 December 2009, relevantly observed: 6.Inspection of the end of the main boom of the mobile crane revealed four location holes drilled in the cat head of the boom for the purpose of accepting the fly jib locking pins to secure the fly jib to the main boom. (see photo #5) 7.Each pin mechanism was fitted with spring loaded pawl type locking arrangement for the purpose of locking the fly jib pins into location holes in the cat head section of the main boom. (see photo #6) 8.Further inspection of the locking pawls revealed the springs were not functional as they were broken and the end of the pawl arm in one case was sheared off. (see photo #7) 9.Further inspection of the entire mobile crane revealed the following at the time of the inspection: No item registration was available for the crane. No maintenance, inspection or servicing records were available for the crane. The electronic load indicator fitted inside the cabin of crane was a retro fit unit and the wiring to the unit appeared to be incomplete. The anti two blocking device was incomplete and not connected. The crane was showing various areas of surface rust throughout the jib, gearbox and wire ropes. The slew ring bolts of the crane were of various lengths with one to two millimetres variation. Defendant's evidence 14Mr A Tudehope of counsel appeared for the defendants and provided to the court a tender bundle of material relied upon by the defendants. It contained the following material: 1.Statement of Agreed Facts - updated version. 2.Statement of Raymond Anjoul dated 11 July 2012. 3.References from Mr Norm Verity, insurance broker, Mr Vincent Shamieh, director BGS Building Services and Mr Charbel Sassine, Advanced Carpentry and Constructions Pty Ltd. 4.Letter from BCS Direction Pty Ltd, Chartered Accountants, dated 11 July 2012. 5.Tax returns for the corporate defendant for the years 2009, 2010, 2011 and 2012. 6.Balance Sheet for the corporate defendant. 7.Australian Taxation Office Portal printouts dated 11 July 2012. 8.Tax returns for the personal defendant for the years 2009, 2010, 2011 and 2012. 15The personal defendant was called to give some further short oral evidence and was cross-examined. 16The personal defendant is 41 years of age, married with three daughters aged 8, 10 and 17 years. He obtained a degree in Structural Engineering from the University of Technology Sydney in 1992. He has worked variously as a labourer on building sites and subsequently as an engineer. In 1995 he started his own construction company with his brother. His first project was the construction of three townhouses at Auburn. Since then he has successfully completed 30 different projects, the largest being the construction of 26 units and townhouses at Northmead, a suburb of Sydney. 17The personal defendant stated that prior to this incident in his 20 years work in the construction industry, he had only received one complaint from the Department of Fair Trading in relation to some minor defects in respect of the units built at Northmead. 18The personal defendant stated that he has always been safety conscious on all his building projects. He has a policy of conducting a daily safety walk through his sites which involved him looking for any safety issues or hazards and addressing them. He also conducts regular talks with individual trades, advising them of any new hazards on site. The personal defendant's evidence was that he was mindful and complied with all safety requirements. He often attended WorkCover seminars and is a member of the Housing Industry Association and the Master Builders Association. He said that he had heard "3rd hand from various peers and colleagues about the effects of lax safety practices and this has caused me to pay particular attention to safety at my sites to ensure a safe work place." 19The personal defendant stated that the corporate defendant commenced the project at Carlingford in approximately July 2008. The project was for the construction of 10 townhouses. He said at the site he maintained his usual practice of conducting daily site walks and briefings with all trades. He described these as "toolbox talks". He had a documented site induction system which he was personally responsible for carrying out with all new trades and visitors to the site. His evidence was that he always made a point of obtaining a Safe Work Method Statement ("SWMS") from his subcontractors. He would inform them that he required it at the time of the initial quote and for the SWMS statement to be presented prior to them commencing work. 20He gave an example of his approach to safety being that on one of his site inspections he noticed a gyprocker had screwed through an electrical cable and though it was not live at the time he told them to immediately cease work. He called an electrician and the defect was fixed. 21The personal defendant stated that the same contractor was also caught modifying and removing elements of scaffolding creating a potentially hazardous situation. The personal defendant said that when he became aware of this issue on one of his site inspections, the area was immediately cordoned off and the scaffolding contractor was summoned back to the site to re-establish the structural integrity of the scaffolding. The gyprocker was subsequently dismissed for persistent safety breaches amongst other reasons. 22At the time of the incident the personal defendant was not present on the site. He stated that his daughter had taken ill through the night. His wife had attended to her, during which she was constantly vomiting and had a high fever. When he woke at 5:30am to go to work, his wife advised him that his daughter had just fallen asleep and asked him to take his other two daughters to school. As a result, he left later than he normally would have to go to work. His statement annexed a medical certificate dated 28 June 2012 from the Dural Medical Centre. The medical certificate was not attached. 23It was rare for the personal respondent not to be on the site at the commencement of work. He estimated that he would only be away from any of the corporate defendant's sites during working hours on two or three occasions in total and for no more than seven hours in total. 24The personal defendant stated that the incident had made him realise that it was "too much to simply have myself solely responsible for safety on my sites". 25It is clear to him now that as a result of his site supervision being wholly dependent upon himself that if he was not there then certain procedures that he had adopted may not have been followed. He gave an example that it was the corporate defendant's policy that all subcontractors provide a SWMS, but due to the fact that he was absent from the site at the time, a SWMS was not provided by the crane operator, nor did anyone complete, or obtain a risk assessment, in relation to the crane from one from its contractor. 26Following the incident, the personal defendant: a.engaged the Master Builders Association and formalised a Site Safety Management Plan. As part of this process I have now adopted a formal records system for documenting all my safety measures. Previously as I was the sole person responsible for the safety measures I failed to understand how crucial it was to have the measures documented. I assumed that as I was the person with whom the concern was raised I would have dealt with it and that would be an end to the matter. b.formalised a Site Safety Management Plan for the site; c.documented a "site safety walk-through" system; d.implemented systems to ensure that any cranes coming onto any of my sites are crane safe accredited; e.Improved the system for obtaining and reviewing SWMS. I now require all quotes to have the SWMS attached and no quotes are accepted without a SWMS being attached. f.Employed an additional worker who has been undergoing OHS training onsite and through TAFE and he assists me in relation to fulfilling my safety obligations. 27The personal defendant stated that the accident had affected him greatly. Upon attending the site he was shocked at Mr Kew's condition. Following the incident he was unable to sleep and felt personally responsible. As a result, he was prescribed sleeping tablets. 28The personal defendant expressed his profound sorrow for what happened. He stated he visited Mr Kew several times whilst he was recovering in hospital and offered to assist him financially to the best of his ability. He believed that if he had been on site, the incident would not have occurred. As a qualified structural engineer, had he seen the condition of the crane, he stated that there was no way that he would have allowed the job to proceed using that crane. 29During his oral evidence, the personal defendant confirmed that he was the supervisor of the site and that he conducted toolbox talks and ensured that all documentation that was required to be produced by various workers at the site was available. Asked how often during a day he would tour the site in order to ensure that the site was proceeding in a safe manner, his evidence was that he could not give an exact number but it would probably have been every time he was on the site checking on the contractors. He would run his eye over the site and make sure everything was kept safe. He estimated maybe 10 - 15 times a day. It was his usual practice to open and close the site each day. The site normally opened at 7.00am. On the day of the incident, the only work that he expected would have done prior to his arrival at approximately 8.00am was that the crane would have been set up ready to take its first lift. 30He stated that the crane company that the corporate defendant normally used was not available for the work. A company known as Ali's Mobile Crane had provided their business card approximately a month earlier and the personal defendant stated that when his usual crane company was unable to assist, he went through his business card holder and found the card for Ali's Mobile Crane. His evidence was that Ameer Hassan, also known as Ali, operated Ali's Mobile Crane. He came to the site approximately three or four days before the lift. The personal defendant explained to him what was required and the only location where the crane could be set up. He said that Ali brought out a measuring tape and measured from where the crane was going to be set up and where the roof sheets were to be landed on the roof. Ali referred to some load charts and advised the personal defendant of the size of the crane that was required to lift the sheets. He said that before he left the site he made a phone call and arranged for a crane to be available on the required day. He provided the personal defendant with a quote and at that point the personal defendant asked for a SWMS. Ali stated that he did not have one with him in his car at the time but would provide one either prior to, or on the day of the lift. No SWMS was provided prior to the day of the lift or on the day itself. 31The personal defendant's evidence was that if he had been on the site, he would have asked him to prepare one and not have allowed him to proceed without doing that. His evidence was they also expected that the crane operator would provide a dogman. He said that the crane operator had actually spoken to him about a dogman when he visited the site. The personal defendant's evidence was that if he had been on site and the crane operator arrived without a dogman, he would have sent him home. 32The personal defendant confirmed that he provided Mr Kew with "a little bit of financial assistance". He visited him in hospital and apologised for what had occurred. 33During cross-examination, the personal defendant confirmed that he was a master builder and aware of the risks associated with crane work. Asked why he had not telephoned his brother and asked him to delay the crane work commencing until he arrived, he said that he did not believe that the work would have commenced before he arrived at approximately 8.00am. Financial evidence 34Mr Tudehope tendered a letter from BCS Direction Pty Ltd, Chartered Accountants, dated 11 July 2012. It relevantly read: I have been a chartered accountant since 1985, member # 77563, and have over 27 years' experience as an accountant. I have acted as the accountant for Raydaz Design Pty Ltd since 1996, Raydaz Design P/L was incorporated on 30 June 1997. Raydaz Design P/L has not been trading profitably for many years. Following is a history of its taxable income (Annexed hereto and marked with the "A" are copies of the following tax returns): 1.2009: -$319447 2.2010:-$847243 3.2011: $0 4.2012:In relation to the 2012 financial year, it is estimated that a reasonable loss will be incurred and no major projects are anticipated going forward. As at 30 June 2011, Raydaz Design P/L had a negative net asset position. The company held minimal assets and had substantial liabilities Annexed hereto and marked with the Letter "B" is a copy of the Balance Sheet for Raydaz Design). From the records that I retain I believe that the net asset position as at current date is very similar to the year ended 30 June 2011. I can confirm that Tax payable to the Australian Taxation Office of $188,531.41 is currently outstanding (annexed hereto and marked with the letter "C" is a printout of the AT0 portal for Raydaz Design P/L). I have also been Mr Anjoul's personal account since 1996. In relation to Mr. Raymond Anjoul, the only asset he owns is a car worth approximately $10,000 and credit card liabilities worth approximately $10,000 and that he receives a moderate salary from Raydaz Design P/L. (Annexed hereto and marked with the "D" are copies of the following tax returns for Mr Ray Anjoul): 1.2009:$24,501 2.2010:$141,757 3.2011:$72,273 4.2012:estimated to be less than prior year subject to completion of income tax return. Relevant principles 35The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the OHS Act. Their Honours stated at [8] - [15]: [8]The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing. [9]In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above 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.' [10]The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474 as follows: '[I]t 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" ... [11]The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) ("Capral") 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows: 'The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27:' 'Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence.' [12]On the issue of foreseeability, the Full Bench in Capral also stated at 646; 62 - 63: '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. So much is clear from the structure and language of the section which is premised on the requirement to 'ensure ... health, safety and welfare at work' and the decided cases which make plain the nature of the obligation.' [13]It is also necessary to consider the damage and injury suffered in the context of the evidence and "in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries which have been suffered, or which may have been suffered, and the gravity of the offence" (Capral at 650; 66). On that point the Full Bench in Capral stated: 'We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5, Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 377 at 378, Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456, Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131, WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and WorkCover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) (at [22]).' [14]The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows: '[B]oth 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, Workcover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 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.' [15]In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]: '[I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c).' Consideration 36The primary consideration, as set out in the above principles, requires a determination of the objective seriousness of the offence. This involves examining the nature and quality of the offence as set out in the agreed statement of facts and the evidence. 37The risk to health and safety that manifested itself on the day of the incident occurred as a result of the failure of the personal defendant, the supervisor of the site, not being present when work commenced, and no documented Site Safety Management Plan ("SSMP") being in place at the site. 38The defendants made no enquiry in respect of what risks may manifest in respect of the use of the crane on the site and how such risks could have been eliminated or controlled. Neither Mr Kew, nor the crane operator, were inducted onto the site and no risk assessment was conducted by the defendants in relation to the use of the crane. 39The failure to have in place a SSMP resulted in no enquiry being made as to whether the crane operator was licensed, or competent. Such enquiry would have revealed that the crane operator was unlicensed. Furthermore, although the personal defendant had a discussion with the crane operator in respect of the provision of a SWMS in respect of the operation of the crane, no such SWMS was provided. This resulted in the crane operator proceeding to operate the crane without the use of a dogman. 40Further, the available evidence, particularly the various photographs, indicate that the general state of repair of the crane was poor. It is not in dispute that the crane should not have been brought onto the site in its condition on the day of the incident. 41In my view, the risk was easily avoidable, as is demonstrated by the simple remedial steps taken by the defendants after the incident, which I have set out earlier in this judgment. There is also the consideration that Mr Kew sustained serious injuries and perhaps was fortunate to have survived. 42Such considerations manifest the overall objective seriousness of the offence. 43Ms Gul submitted that the offence was subjectively serious and "lies in the mid-range of seriousness of offences of this kind". I agree with this submission. 44The offence was also foreseeable in my view. In the personal defendant's absence, there was no site supervision whatsoever and no contingency or backup system in place. As a result, the measures which could have been taken to control the risk, including site induction, risk assessment and a pre-operational check of the crane and its operator, were not undertaken. 45Mr Tudehope acknowledged that foreseeability was one of the factors that must be considered in the factual matrix, which determines the nature and quality of the offence. Counsel emphasised that the evidence did not disclose that there was an appalling longstanding lack of system and supervision. Rather, counsel submitted, the evidence disclosed, and should be assessed in respect of what occurred on a single morning where an emergency resulted in the personal defendant not being able to attend the site and supervise the operations at the site. The prosecutor acknowledged that this failure would not have normally occurred. 46The culpability of the personal defendant cannot be greater than that of the corporate defendant. The personal defendant neither sought to rely upon the expertise of others, nor could his liability be avoided by a legitimate reliance upon the expertise of others: see Inspector Ken Kumar v David Aylmer Ritchie [2006] NSWIRComm 323. 47I find the culpability of the personal defendant, a director of the corporate defendant and manager of the business, and its supervisor at the site, should be assessed at the same degree as the corporate defendant. General deterrence 48I consider it is appropriate to once again draw attention to the need for employers and contractors in the construction industry, particularly small to medium sized employers and contractors, to be constantly vigilant of the need to ensure that employees and non-employees are not exposed to risks to their health and safety when operating cranes. Such machinery should be the subject of periodic inspections with preventative maintenance systems put in place so that the risk of serious injury and/or death is substantially reduced. Mr Kew was exposed to serious risks to his his health and safety by the failure of the defendants to ensure that an appropriate documented SSMP was in place at the site. I accept that the systems normally in place failed as a result of some causal, rather than systematic negligence, as submitted by Mr Tudehope. However, it is appropriate that I include an element in the penalty for general deterrence. Specific deterrence 49I accept in light of the evidence given by the personal defendant, this is not a case which calls for the imposition of some additional significant punishment aimed at deterring the defendants from further offending against the OHS Act and/or for the purpose of compelling the defendants' attention to occupational health and safety issues, so that persons are not exposed to risks to their health and safety. However, as the defendants are still operating, I include a small component in the penalty for specific deterrence. Subjective factors 50The defendants, according to the evidence of the personal defendant, have been operating for 17 years in the building industry. The defendants have no prior convictions. The personal defendant visited Mr Kew in hospital and provided him with a small amount of financial assistance. The defendants co-operated with the WorkCover Authority of New South Wales throughout the investigation. The prosecutor accepted that there was no aggravating factor present in this matter. Pleas of guilty by the offenders 51The defendants entered formal pleas of guilty at the first opportunity and are therefore entitled to a discount of 25 per cent as a result of the utilitarian benefits offered by the pleas: R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383. Remorse and contrition 52Section 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 provides that "remorse" may be taken into account as a mitigating factor if and only if: (i)the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii)the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both). 53The prosecutor accepts that the defendants are remorseful for the occurrence of the offence. Capacity to pay 54Mr Tudehope made an application pursuant to s 6 of the Fines Act 1996 ("Fines Act"). 55I have already set out the financial positions of both defendants, contained in a report provided by their chartered accountant. Financial records of substance have been produced to the court, together with the accountant's report. The report discloses that the corporate defendant has not been trading profitably and has a negative net asset position. 56In respect of the pesonal defendant, the accountant's report states that the only asset that he owns is a car worth approximately $10,000. He receives a a relatively modest salary from the corporate defendant. 57The principles to be applied in respect of such an application were discussed by me in Inspector Beauchamp v J & L Marble Pty Ltd [2009] NSWIRComm 100 at [57] - [58]. 58The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader [2002] NSWIRComm 25; (2002) 112 IR 284 are as follows: [83]The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50): 'It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as (2002) 112 IR 284 at 309 far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.' [84]This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82): '... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76). However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed: '... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty. ...... When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ...' [85]I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476: 'Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86.' (See also WorkCover Authority (NSW) (Inspector Hopkins) v Michael Wheritt t/a M J Wherritt Concrete Pumping Services [2002] NSWIRComm 16 at pars 59-60.) 59The Full Bench in WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363 considered various judgments where s 6 of the Fines Act was considered and observed at [35]: [35]The relevant principles in relation to the application of s 6 of the Fines Act have been collected in a number of decisions in this jurisdiction. We adopt those principles in this judgment: Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209; Department of Mineral Resources of NSW (Chief Inspector Terrey) v A M Hoipo & sons Pty Ltd (2000) 99 IR 137 at [48] - [51]; Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of NSW (Inspector Glass) (2001) 106 IR 435 at [56] - [57], [67], [81] - [83]; Inspector Green v Camilleri Properties Pty Limited at [21]. Applying these principles, we do not consider that there is any proper basis for the application of s 6 of the Fines Act in this case. 60The Full Bench in WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd reviewed various judgments where s 6 of the Fines Act was considered and observed at [35]: [35]The relevant principles in relation to the application of s 6 of the Fines Act have been collected in a number of decisions in this jurisdiction. We adopt those principles in this judgment: Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209; Department of Mineral Resources of NSW (Chief Inspector Terrey) v A M Hoipo & sons Pty Ltd (2000) 99 IR 137 at [48] - [51]; Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of NSW (Inspector Glass) (2001) 106 IR 435 at [56] - [57], [67], [81] - [83]; Inspector Green v Camilleri Properties Pty Limited at [21]. Applying these principles, we do not consider that there is any proper basis for the application of s 6 of the Fines Act in this case. 61Having regard to the above authorities, the relevant means of the defendants, and having considered the evidence during cross-examination relied upon, I propose to exercise the discretion conferred upon me by s 6 of the Fines Act. I therefore shall significantly reduce the amount of fine which would have otherwise been ordered to be paid by the defendants. 62The maximum penalty in respect of the corporate defendant is $550,000. The maximum penalty in respect of the personal defendant is $55,000. Taking into account the appropriate seriousness of the offences, the subjective factors referred to earlier and the financial position of the defendants, I impose a fine of $8000 on the personal defendant. I impose a fine of $75,000 on the corporate defendant. 63The prosecutor seeks a moiety and costs, which I propose to grant. Orders 64I make the following orders: Matter No IRC 1705 of 2011 1.The offence is proven and a verdict of guilty is entered. 2.The corporate defendant is convicted of the offence, as charged. 3.The corporate defendant is fined an amount of $75,000 with a moiety thereof to the prosecutor. 4.The corporate defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed. Matter No IRC 1706 of 2011 1.The offence is proven and a verdict of guilty is entered. 2.The personal defendant is convicted of the offence, as charged. 3.The personal defendant is fined an amount of $8000 with a moiety thereof to the prosecutor. 4.The personal defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed, or if agreement cannot be reached, as assessed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 August 2012