District Court New South Wales Medium Neutral Citation: Safe Work (NSW) v JSN Hanna Pty Ltd [2016] NSWDC 117 Hearing dates: 1 July 2016 Date of orders: 04 July 2016 Decision date: 04 July 2016 Jurisdiction: Criminal Before: Judge AC Scotting Decision: 1 The offender is convicted. 2 I impose a fine of $87,500. 3 I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 4 I order that the offender pay the prosecutor's costs as agreed of $70,000 Catchwords: CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – duty of employers – risk of death or serious injury – principal contractor SENTENCE – mitigating factors – aggravating factors – fine – capacity to pay – circumstances – objective seriousness – specific deterrence – general deterrence – appropriate penalty SENTENCE PRINCIPLES – parity – totality – community values – remorse – contrition – onerous penalty COSTS – prosecution costs - agreed costs Legislation Cited: Work Health and Safety Act 2011 ss. 19(1), 32 Crimes (Sentence Procedure) Act 1999 ss. 3A, 21A(2)(l), 21A(3)(2), 21A(3)(e), 21A(3)(f), 21A(3)(g), 21A(3)(i), 21A(3)(k), 21A(3)(m) Fines Act 1996 s.122(2) Work Health and Safety Regulations 2011 cl. 299 Cases Cited: Veen v R (No 2) (1988) 164 CLR 465 R v McNaughton (2006) 66 NSWLR 566 Baumer v R (1988) 166 CLR 51 BW v R [2011] NSWCCA 176 R v Wilkinson (No 5) [2009] NSWSC 432 R v Thomson & Houlton (2000) 49 NSWLR 383 R v Borkowski (2009) 195 A Crim R 1 Environmental Protection Agency v Barnes [2006] NSWCCA 246 Capral Aluminium Limited v Workcover Authority of New South Wales (2000) 49 NSWLR 610 Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 Category: Sentence Parties: Safe Work (NSW) (Prosecutor) JSN Hanna Pty Ltd (Offender) Representation: Counsel: Mr I Taylor SC with Ms E James (Prosecutor) Mr M Shume (Offender) Solicitors: Safe Work (NSW) (Prosecutor) Colin Biggers & Paisley Lawyers (Offender) File Number(s): 2014/00176176 sentence 1. JSN Hanna Pty Limited (the offender) has pleaded guilty to an offence that as a person who had a health and safety duty under section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Taiene Silva to a risk of death or serious injury contrary to section 32 of the Act. 2. The maximum penalty for the offence is a fine of $1.5 million. Facts 1. The parties presented an Agreed Statement of Facts that can be summarised as follows. 2. The offender operated a business providing building services. On 7 December 2012 the offender was the principal contractor for the development of a block of residential units in Lane Cove (the site). 3. The offender sub-contracted the supply and installation of Architectural Framing System (AFS) panels at the site to Ultrafloor Australia Pty Ltd (Ultrafloor). Ultrafloor then engaged Davidson Group Installations Pty Ltd (DGI) to install the AFS walls. DGI engaged Ultra Wall Pty Ltd (Ultra Wall) to assist with the installation of the AFS wall panels. 4. Mr Silva was a labourer employed by Ultra Wall and was 17 years of age at the time of the incident. He had only been working for about 3 months after completing his Higher School Certificate. 5. On 7 December 2012, Mr Silva was working at the site assisting with the installation of AFS panels on the second floor. He had assisted in installing AFS panels at other sites, but had not installed any at the Lane Cove site prior to the date of the incident. 6. Mr Silva was undertaking work on the second floor that required him to stand on a bay extension (or hop-up) scaffold in the lift shaft. The lift shaft extended over four floors, including two basement floors. The edge of the hop-up scaffold was unprotected. Mr Silva was in the process of bracing an AFS panel that was being installed in the lift shaft. In order to balance himself, Mr Silva placed his right foot onto a piece of timber which had been secured to the wall at floor height. The piece of timber was there in order to align the wall and to serve as formwork when the concrete was poured to fill the walls of the floor below. It was not intended to be weight bearing. The piece of timber gave way and Mr Silva fell approximately 12 metres. 7. Mr Silva sustained a head wound requiring 12 stiches, swelling and lacerations to the face, neck pain and bruising. He was absent from work for 8 days and commenced work for another employer on 16 January 2013. 8. There was a crane tower in the lift shaft on the western side. The gap between the crane tower and the scaffold (the gap through which Mr Silva fell) was approximately 500mm. The crane tower was not a working face. The gaps between the edge of the lift shaft and the crane tower on the other three sides were approximately 400mm. Handrails had been erected around the lift shaft, however on the date of the incident handrails had been removed at one side of the lift shaft which allowed access to the hop-up scaffold. 9. Ultra Wall relied on the system of work used by DGI, who relied on the system of work implemented by Ultrafloor. The offender had received a copy of Ultrafloor's safe work method statement (SWMS). 10. The Ultrafloor SWMS identified the risk of falling from height and listed the main control measure as being the use of scaffolding that included handrails and physical guarding along perimeters and voids. 11. Mr Silva was inducted onto the site by both the offender and DGI. He attended toolbox talks with Ultra Wall employees. Mr Silva was placed with more experienced Ultra Wall employees to show him how to carry out work on site. Ultra Wall did not provide its workers with any documented instructions, training or information. 12. Ultrafloor provided its workers with safety equipment, showed them the dangers to be aware of on-site and conducted toolbox talks. DGI documented whether safety gear had been received by workers and whether they had a White Card. DGI also held toolbox talks, however these were not documented. 13. The offender conducted regular site-inspections and held toolbox talks, however these were not documented. 14. Following the incident handrails were installed around all sides of the lift shaft. The offender dismissed DGI and Ultra Wall, and engaged HD Projects Pty Ltd (HD Projects). The offender began documenting toolbox talks and required new workers to demonstrate their understanding of information during induction. Standard 1. At the time of the incident there was a relevant standard: AS/NZ Standard 1576:1:2010 Scaffolding General Requirements. The standard identified falling from height as a risk, with edge protection to be provided where a person could fall a distance exceeding 2 metres. Edge protection is not required if the scaffold is less than 225mm from a working face or less than 100mm from a building or structure that is not a working face. The Offender's Evidence 1. The offender read an affidavit of Wadih Hanna, a director and the Project Manager of the offender, sworn 30 June 2016. Mr Hanna was present at the sentencing hearing but was not required for cross-examination. 2. Mr Hanna gave evidence that the offender, and a partnership that conducted an identical business prior to the offender's incorporation, had been in operation for 45 years having been initially run by his father and uncles. Up until the incident, the offender had operated without any serious incidents. Mr Hanna deposed that the offender is a small family business that usually takes on one project at any one time. 3. At the date of the incident the offender had in place a WHS Project Safety Plan (PSP). The PSP included site safety rules which provided that elevated works must be carried out in accordance with regulations, WorkCover directives, Codes of Practice and instructions of the offender. Copies of the site rules were displayed at the entrances to the site, lunch rooms and the site office. 4. Mr Hanna deposed that the offender had previously built a number of other buildings requiring central lift shafts and the use of cranes. There was another building site next to the site which meant that placing the crane anywhere other than inside the lift shaft would affect nearby residents. For this reason the crane was placed in the lift shaft at the site. 5. In around April 2012, the offender engaged Five Star Scaffolding to erect scaffolding on the site. In May 2012, Mr Hanna met with Mark Makari, the General Manager of Five Star Scaffolding, who was designing the scaffolding for the site. Mr Hanna informed Mr Makari that AFS panels would need to be used at the site and be moved via crane. Mr Hanna informed Mr Makari that there would need to be a clearance maintained between the crane tower and the scaffolding to allow for the sway of the crane tower. 6. Mr Hanna deposed that at the time that the scaffolding was erected it was his understanding that it allowed sufficient clearance for the crane, that no person would work on the hop-up and that the hop-up would not be accessible to workers. 7. Mr Hanna discussed with the contractors the manner in which AFS panels would be installed on site. This installation procedure was discussed at a toolbox talk attended by 10-15 workers. It is unknown whether Mr Silva was present at this meeting. 8. It was Mr Hanna's understanding that the contractors would carry out an on-site risk assessment prior to commencing any work. Such risk assessment would include a consideration of the risk of falling from height and ensuring that adequate control measures were in place. 9. On the date of the incident Mr Hanna arrived on site at approximately 5am. Mr Hanna did not observe contractors working around the lift shaft but was available to be consulted if any concerns arose. At approximately 9am Mr Hanna was informed of the incident. 10. Mr Hanna deposed that prior to the incident no person was allowed on-site without being inducted. These inductions included an outline of health and safety procedures, identification of risks specific to the worker's role, and risk-management measures. Mr Silva was inducted into the site on 12 November 2012. 11. Mr Hanna would conduct daily safety walks at the site to ensure that it was safe for workers prior to their arrival. Weekly documented site inspections were also undertaken. 12. Mr Hanna ensured that toolbox talks were conducted to discuss site safety, and spoke to workers to confirm that they understood what work they had to perform and how to perform it. 13. The offender, through Mr Hanna, accepts that it failed to: 1. maintain safe scaffolding in and around the lift shaft; 2. ensure that workers were directed not to work at height where there were inadequate fall protection measures; and 3. ensure that Mr Silva had been instructed in safe work procedures for working at height near an unprotected gap of more than 225mm from an unguarded work face. 1. Following the incident the offender took a number of steps including 1. Installing additional scaffolding in the lift shaft; 2. Commissioning a safety risk audit; 3. Arranging for officers to complete additional WHS training; 4. Conducting spot checks of workers to ensure compliance with safety requirements; 5. Making WHS compliance a fundamental condition of the contract with sub-contractors; 6. Employing a full-time Site Safety Co-Ordinator and Compliance Officer; and 7. Reviewing Work Health and Safety systems and practices. 1. Mr Hanna deposed that the offender has made a number of donations to charities and community events giving over $80,000 between 2010 and 2016 to a range of organisations. The offender also supports MATES in Construction which aims to reduce suicide rates among construction workers. 2. Mr Jim Hanna and Mr Edward Hanna, officers of the offender, were also present at the sentence hearing. Consideration 1. I have had regard to the objects of the Act set out in section 3 and the purposes of sentencing set out in section 3A Crimes (Sentencing Procedure) Act 1999. Objective Seriousness of the Offence 1. The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v R (No 2) (1988) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton (2006) 66 NSWLR 566 at [15]. 2. The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R (1988) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70]. 3. The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No 5) [2009] NSWSC 432 at [61]. 4. The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relevant to the gravity of the offence: Capral Aluminium Limited v Workcover Authority of New South Wales (2000) 49 NSWLR 610 at [89]. The question of foreseeability of the risk is to be determined objectively. 5. The prosecutor submitted that the offence was not below the mid-range of objective seriousness for 5 reasons. First, the foreseeability of the risk was obvious by reference to the existence and terms of the Standard. There was a 500mm gap between the edge of the hop-up and the crane tower, and Mr Silva was required to work in that area when he fell. Second, the measures to eliminate the risk were simple and readily available. They were the provision of adequate guardrails on the hop-up. Third, the foreseeable risk was a risk of death. The risk was of a fall of 12m in height onto a concrete base with a number of vertical steel structures in that area. Fourth, the failure was a failure to devise a safe system of work rather than a failure to ensure its implementation. Fifth, Mr Silva had only been employed for 3 months and had not previously done this type of work. Although he had been given a general site induction and trained on the content of the SWMS he had not been trained as to the specific risk. 6. In response the offender accepted that the fall from an unprotected edge was obvious and it had been extensively addressed in the SWMS, on which Mr Silva had been trained. Mr Hanna's evidence was that the hop-up was not intended to be a work platform, but was intended to narrow the gap in the lift shaft adjacent to the crane, as was necessary to allow for the safe operation of the crane. The offender accepted that by providing the hop-up, it allowed it to be used as a work platform. The offender also relied on the input of the other professional contractors on the site. The documented safety systems for the site were extensive and overlapping. Ultrafloor had conducted an independent risk assessment that was documented. It was a term of the contract with Ultrafloor that the offender would provide the scaffolding and that Ultrafloor would not commence or continue work if inadequate and/or unsafe scaffolding was provided. The offender engaged a reputable contractor to supply and install the scaffolding. The existence of the hop-up was not thought to present a risk to safety by Ultrafloor, DGI or Ultra Wall before the accident. The offender submitted that the matter was between the low and mid-range of objective seriousness. 7. The risk was obvious if the hop-up was intended to be used as a work platform, but less so in the circumstances of this case. In the absence of guard rails it was objectively foreseeable that it could have been used as a work platform. The provision of guard rails would have gone close to eliminating the risk. The risk was a risk of death or serious injury. The injuries sustained by Mr Silva were not substantial. The offender had introduced layers of safety measures to be implemented by a number of PCBU's on the site. They all failed leading up to the incident and the culpability of the offender was not as high as some of the other entities involved. The implementation of the extensive steps taken by the offender to ensure safety had the effect of reducing its moral culpability for the offence. In my view the offence is below the mid-range of objective seriousness. Deterrence 1. The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180]. 2. There is also a need for specific deterrence in this sentencing exercise because the offender continues to operate a business involving high risk construction work and thereby has responsibility for the safety of its employees, contractors and visitors to its sites. 3. The need for specific deterrence is substantially reduced by reference to the extensive efforts of the offender to comply with the Act. It was engaged in high risk construction work as defined by clause 299 Work Health and Safety Regulations 2011. It had adopted a written SWMS as it was required to do. It also entered into contractual arrangements to require the contractors engaged on the site to provide a comprehensive risk assessment, the provision of a written SWMS and the implementation of training of workers on its content. The effect was a layering of the usual safety measures on the site. I am satisfied on the balance of probabilities that the offender's lack of antecedents was as a result of its attitude and comprehensive approach to safety. I have come to the conclusion, for reasons developed later, that the offender is unlikely to re-offend. However, I do not believe that this is an exceptional case in which specific deterrence can be disregarded: Bulga at [178]. Aggravating factors 1. The prosecutor submitted that Mr Silva was vulnerable by reason of his age and lack of experience in the building industry: section 21A(2)(l) Crimes (Sentencing Procedure) Act 1999. In response, the offender submitted that Mr Silva was required by the SWMS to have undertaken an occupational health and safety general induction for construction work to be eligible to work on the site. That training is general training on the types of dangers present in the construction industry. In addition, he was taken through a site induction on the SWMS that contained multiple references to the risk of falling from height and other dangers. 2. I am satisfied that the training provided to Mr Silva was sufficient to remove the necessary element of vulnerability required to establish the aggravating factor and I am not satisfied beyond reasonable doubt that it has been established. Mitigating factors 1. The injury and emotional harm caused by the offence was not substantial: section 21A(3)(a) Crimes (Sentencing Procedure) Act 1999. Whilst the risk was one of death, I am satisfied on the balance of probabilities that the actual harm suffered Mr Silva was not substantial. He suffered a head wound requiring 12 stitches, facial lacerations, swelling of the face and pain and bruising to his neck. He returned to work 8 days after the accident and there is no evidence of any ongoing effect on him. 2. The offender does not have any prior convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. This factor should be assessed by reference to the fact that the offender has operated the business since 2006. It is also appropriate to consider that the business was operated by the partnership before that for about 45 years, without incident. The business was one that for most of the relevant period conducted high risk construction work, which was inherently dangerous to the workers engaged. 3. The offender was a person of good character: section 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. The offender is a good corporate citizen. It employs a number of people and has supported charitable causes and works. The statement of Mr Crompton, an employee of Ultrafloor, provided to Safework during the course of the investigation provides evidence that the offender was well regarded in the industry and had a reputation as a safe and responsible entity. 4. The offender is unlikely to re-offend: section 21A(3)(g) Crimes (Sentencing Procedure) Act 1999. The offender took immediate and comprehensive steps to improve its safety systems at the site following the incident. I am satisfied on the balance of probabilities that the occurrence of the accident will encourage the offender to more carefully scrutinise its operations regarding the safety of workers engaged in it and that the offender is unlikely to re-offend. 5. The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender, through the evidence of Mr Hanna, has accepted responsibility for its actions that led to the injury to Mr Silva. The offender has expressed remorse for its failures and breach of the safety laws. The offender has acknowledged the impact the accident would have had on Mr Silva. I am satisfied on the balance of probabilities that the offender has expressed genuine contrition and remorse. 6. The offender entered a plea of guilty: sections 21A(3)(k) and 22 Crimes (Sentencing Procedure) Act 1999. The offender is entitled to a discount on penalty that reflects the utilitarian value of that plea. The extent of that discount should generally be assessed in the range of 10-25%, but that is only a guide. The primary consideration in determining where in the range a particular case should fall, is the timing of the plea so that the earlier the plea the greater the discount: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. I have had regard to the chronology of these proceedings provided by the prosecutor. I accept that some of the delay was occasioned by the financial position of Ultrafloor; it ultimately went into liquidation and the proceedings against it were discontinued. There was also a period in which negotiations relating to the provision of an enforceable undertaking were pursued. However, the matter was listed for trial twice and the plea of guilty was entered after the filing of an amended summons, removing some of the particulars of breach of duty. The appropriate discount is 12.5%. 7. The offender co-operated with the investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. Penalty 1. The offender's subjective case is a compelling one. I am satisfied that it had an impeccable safety record because it paid close attention to providing a safe workplace. The offender had taken extensive steps to comply with the Act and the Regulations. In this respect it was a good example to other PCBU's performing high risk construction work. 2. The provision of the unguarded hop-up was an oversight in the implementation of the safety system. I accept the evidence of Mr Hanna that it was never intended to be a work platform. However, its lack of appropriate guard rails allowed it to become a work platform and that created a substantial risk that manifested in the accident involving Mr Silva. 3. I must impose an appropriate penalty to reflect the objective seriousness of the offence, but the penalty is significantly mitigated by reference to the subjective case of the offender. I have also taken into account the quantum of the prosecutor's costs to be paid by the offender, in setting the amount of the fine: Environmental Protection Agency v Barnes [2006] NSWCCA 246 at [78]. 4. The appropriate fine is one of $100,000 that will be discounted by 12.5% to take into account the plea of guilty. 5. The offender is convicted. 6. I impose a fine of $87,500. 7. I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 8. I order that the offender pay the prosecutor's costs as agreed of $70,000. ********** 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: 04 July 2016