SafeWork NSW v 21st Century Building Services Pty Ltd

Case •

[2024] NSWDC 508

•

31 October 2024

No judgment structure available for this case.

District Court


New South Wales

Medium Neutral Citation: SafeWork NSW v 21st Century Building Services Pty Ltd [2024] NSWDC 508
Hearing dates: 22 August 2024, 16 October 2024
Date of orders: 31 October 2024
Decision date: 31 October 2024
Jurisdiction:Criminal
Before: Russell SC DCJ
Decision:

In District Court Proceedings 2022/245096

(1)   21st Century Building Services Pty Ltd is convicted.

(2)   The appropriate fine is $60,000 but that will be reduced by 25% to reflect the early plea of guilty.

(3)   Order 21st Century Building Services Pty Ltd to pay a fine of $45,000.

(4) Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

(5)   Order 21st Century Building Services Pty Ltd to pay the prosecutor’s costs.

In District Court Proceedings 2022/245121

(1)   21st Century Building Services Pty Ltd is convicted.

(2)   The appropriate fine is $240,000 but that will be reduced by 25% to reflect the early plea of guilty.

(3)   Order 21st Century Building Services Pty Ltd to pay a fine of $180,000.

(4) Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

(5)   Order 21st Century Building Services Pty Ltd to pay the prosecutor’s costs.

Catchwords:

CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury

SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence – capacity to pay appropriate penalty

COSTS – prosecution costs

OTHER – scaffold collapse – failure to ensure scaffold was adequately tied to supporting structures – failure to maintain secondary means of stabilising scaffold – failure to have competent person regularly inspect ties – failure to prohibit unauthorised persons altering scaffold

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22

Fines Act 1996 (NSW), ss 6, 122

Work Health and Safety Act 2011 (NSW), ss 3, 19, 32

Cases Cited:

Baumer v R [1988] HCA 67; (1988) 166 CLR 51

Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338

BW v R [2011] NSWCCA 176

Camilleri’s Stock Feeds Pty Ltd v EPA (1993) 32 NSWLR 683

Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610

EPA v Barnes [2006] NSWCCA 246

Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616

Mahdi Jahandideh v The Queen [2014] NSWCCA 178

Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59

Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120

Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96

Pearce v The Queen (1998) 194 CLR 610

R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566

R v Wilkinson (No. 5) [2009] NSWSC 432

Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266

Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465

Texts Cited:

Australian Standard 4576:1995, Guidelines for Scaffolding, 15 June 1995

Australian Standard 4576:2020, Guidelines for Scaffolding, 21 August 2020

SafeWork NSW, Incident Information Release, 6 December 2018

SafeWork NSW, Scaffolding Collapse Safety Alert, 14 September 2018

SafeWork NSW, Scaffold Inspection Checklist, 9 May 2019

SafeWork NSW, Scaffolding Industry Safety Standard, March 2022

Category:Sentence
Parties: SafeWork NSW (Prosecutor)
21st Century Building Services Pty Ltd (Defendant)
Representation:

Counsel:
M Moir (Prosecutor)
M Hawila (Defendant)

Solicitors:
Department of Customer Service (Prosecutor)
Apex Law (Defendant)
File Number(s): 2022/245096
2022/245121

Judgment

  1. 21st Century Building Services Pty Ltd (21st Century Building) provides services including scaffolding to the construction industry. 21st Century Building was engaged by the principal contractor performing demolition works at a site in Gosford to supply, install and dismantle scaffolding. On 19 August 2020 the scaffolding collapsed after a gust of wind.

  2. In District Court Proceedings 2022/245096, 21st Century Building has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19(2) of the Work Health and Safety Act 2011 (NSW) (WHS Act) it failed to comply with that duty and thereby exposed persons, in particular Mr Messrs Jawad Al-Hesany, Mr Norman Gunaseelan, Mr Sahil Sahil, Mr Vinit Kumar, Mr David Pymble, Mr Balvinder Singh and Mr Sachin Chauhan to a risk of death or serious injury contrary to s 32 of the WHS Act.

  3. The maximum penalty for the offence is a fine of $1,766,130.

  4. In District Court Proceedings 2022/245121, 21st Century Building has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19(2) of the WHS Act it failed to comply with that duty and thereby exposed persons, in particular Ms Ping Yang to a risk of death or serious injury contrary to s 32 of the WHS Act.

  5. The maximum penalty for the offence is a fine of $1,766,130.

The Risk

  1. In District Court Proceedings 2022/245096, the risk described in par 12 of Annexure A to the Amended Summons (PX 1, Tab 2) is as follows:

“The risk was the risk of other persons, in particular Messrs Al-Hesany, Gunaseelan, Sahil, Kumar, Pymble, Singh and Chauhan, suffering serious injury or death as a result of being struck and/or crushed and/or otherwise impacted by the scaffold and/or scaffold equipment collapsing.”

  1. In District Court Proceedings 2022/245121, the risk described in par 12 of Annexure A to the Amended Summons (PX 1, Tab 1) is as follows:

“The risk was the risk of other persons, in particular Ms Yang, suffering serious injury or death as a result of being struck and/or crushed and/or otherwise impacted by the scaffold and/or scaffolding collapsing.”

  1. Both charges are brought in relation to a breach of a work health and safety duty imposed pursuant to s 19(2) of the WHS Act. The only difference between the two charges is that in proceedings 2022/245096, the seven persons exposed to the risk were workers on the site, none of whom sustained any injury. In proceedings 2022/245121, Ms Yang was a citizen who happened to be in Mann Street, the main street of Gosford, when the scaffolding collapsed. She suffered some minor injuries.

Reasonably Practicable Measures

  1. In both proceedings, par 13 of Annexure A to the Amended Summons pleads particulars of the defendant’s failure to comply with the duty under s 19(2) of the WHS Act as follows:

“The defendant failed to comply with its duty under section 19(2) of the Act and failed to ensure, so far as is reasonably practicable, the health and safety of other persons … in that it failed to take one or more of the following measures, each of which is alleged to have been reasonably practicable, to eliminate, or alternatively minimise, if it was not reasonably practicable to eliminate, the risk:

(a)   Ensure, so far as reasonably practicable, that the scaffold is adequately tied to its supporting structures at all times, including by implementing corrective actions following the detection of unauthorised removal of ties; and/or

(b)   Provide and maintain secondary means of stabilising the scaffold, such as securely attaching counterweights near the base to increase the dead load, and/or adding back-up buttress bays or back propping to increase the base dimension, to ensure the scaffold is stable at all times as the demolition of the structures advanced; and/or

(c)   Have a competent person who holds the same or higher class of high risk work licence appropriate to the class of scaffolding, regularly inspect the scaffolding ties and other scaffolding equipment, to determine whether they have been modified or altered by unauthorised persons and whether the scaffold remains stable at all times and capable of withstanding anticipated loads, such as strong winds; and/or

(d)   Implement a process to prohibit unauthorised persons, in particular Civil 1 and the workers engaged by Civil 1, from removing scaffolding ties and making alterations to the scaffold and scaffolding equipment, including through regular communication with Civil 1 and a clear method for Civil 1 to request and obtain approved modifications to the scaffold where the structure is impacting their work; and/or

(e)   Revoke any existing scaffold handover certificate provided to Civil 1 in the event that unauthorised persons are removing scaffolding ties or making other alterations to the scaffold, and/or issue a written warning to Civil 1 that the current certificate shall be withdrawn, or any new certificate withheld, unless those unauthorised alterations are immediately ceased; and/or

(f)   Implement and enforce the defendant’s safe work method statement for the site, SWMS No. 3034.”

Background

  1. The parties presented an Agreed Statement of Facts (PX 1, Tab 3) which is summarised below.

  2. Civil 1 Pty Ltd (Civil 1) conducts a business or undertaking which involves demolition, excavation, piling, shoring and civil works.

  3. Civil 1 was the principal contractor for demolition works at a site located at 108-118A Mann Street, Gosford NSW (the site).

  4. The site consisted of nine commercial premises which were to be demolished in preparation for a building project known as “The Archibold”. The project involved the construction of two towers which would provide hotel suites and residential apartments.

  5. The demolition works were to be undertaken at the corner of Mann Street and Donnison Street, Gosford. As part of its scope of works at the site, Civil 1 was responsible for erecting suitable perimeter fencing and scaffolding (with plywood protection and mesh) around the demolition work perimeter.

  6. From 1 November 2019 to 15 July 2020, Ms Rana Mustapha was the director of 21st Century Building. On 15 July 2020, Mr Fadi Ayache was re-appointed as the director of 21st Century Building, having previously served as its director from 26 August 2013 to 1 November 2019. Ms Mustapha is the wife of Mr Ayache. Ms Mustapha played no role in 21st Century Building at the date of the incident.

  7. Civil 1 engaged 21st Century Building to supply, install and dismantle the perimeter scaffolding and hoarding at the site. 21st Century Building was contracted to provide scaffold erection and dismantling services at the site for two months.

Workers at the Site

Civil 1

  1. Civil 1 employed the following workers at the site:

  1. Mr Robert Zeait – director. As Civil 1’s director Mr Zeait did not have an active role at the site. He only attended the site once at the commencement of the demolition work.

  2. Mr Mark Giovenali – construction manager. Mr Giovenali commenced employment with Civil 1 in April 2020. He attended the site on most days. The demolition work at the site was under his control.

  3. Mr Marcel Stelio – site foreman. Mr Stelio commenced work for Civil 1 on 17 August 2020, two days before the incident.

  4. Mr Ahmad El-Khurdie – site supervisor and truck driver.

  5. Mr Al-Hesany and Mr Gunaseelan – excavator operators.

  6. Mr Sahil, Mr Kumar, Mr Singh, and Mr Chauhan – labourers.

  7. Mr Pymble – traffic controller.

21st Century Building

  1. 21st Century Building employed the following people at the site:

  1. Ms Mustapha – director. Ms Mustapha did not have an active role at the site.

  2. Mr Ayache – business manager. From 15 July 2020, Mr Ayache was also the director of 21st Century Building. Mr Ayache submitted the quotation to Civil 1 for the scaffolding work at the site and he attended the site on or about 23 July and 24 July 2020 when the scaffold was erected.

  3. Mr Najeed Hussain – site supervisor.

  4. Mr Mohammad Ali – scaffolder.

  5. Mr Ali Sarfaraz – labourer.

  1. 21st Century Building engaged Mr Gian Fungalei of MGF Scaffolding Pty Ltd to assist with the erection and dismantling of the scaffold at the site. Mr Fungalei employed Mr Dennis Ye and Mr Rohan Kumar as labourers.

  2. Mr Ayache, Mr Hussain, Mr Ali and Mr Fungalei held high risk work licences for scaffolding.

The Scaffolding and Hoarding

  1. On or about 1 July 2020, Central Coast Council approved the use of “Type A” hoarding at the site.

  2. The scaffolding and hoarding were required to contain the demolition activities at the site and prevent any materials falling onto a public place. The scaffolding and hoarding were to remain in place until the buildings at the site had been demolished.

  3. The scaffold was also used as a work platform at times.

Installation of the Scaffolding

  1. On 23 July 2020 and 24 July 2020, 21st Century Building installed a three board Kwikstage scaffold system with external “Class A” hoarding around the site perimeter on Mann Street and Donnison Street.

  2. Mr Ayache, Mr Hussain, Mr Ali and Mr Fungalei assisted with the erection of the scaffold at the site.

  3. The scaffold was classified as a medium duty scaffold and consisted of 52 2.4 metre bays, one 0.8 metre bay and one access bay. The scaffold was 1.15 metres wide from the building edge to the outside edge (inclusive of timber hoarding).

  4. The scaffold was covered with demolition specific mesh (known as Unimesh) and encapsulated with external hoarding made from plywood sheeting which was 2.4 metres high.

  5. 21st Century Building secured the scaffold to the existing buildings and other structures at the site with raker ties to provide stability. A raker tie is a connection between the building or structure and the inner standard of the scaffold using a scaffold tube at an angle, to keep the scaffold stable.

Handover Certificate

  1. On 25 July 2020, 21st Century Building provided a Scaffold Handover Certificate to Civil 1 (the Certificate). The Certificate was signed by Mr Hussain.

  2. The Certificate provided:

“Scaffold Details

Handover area description: Perimeter on 108 Donnison St, and Mann street

Intended use of scaffold: Cover the footpath from any falling debris towards the demolition

Additional details: Scaffolding ties through wall brackets where each standards have one roughly and there is also ties through some windows. Demolition is going to be by hand on the top of the existing buildings, scaffold is ready to use from the 2710712020 [sic] with the access stairs from the parking.”    

Removal of Scaffolding and Scaffolding Ties

  1. The demolition works were to occur in tandem with the dismantling of scaffolding to ensure the scaffold was adequately secured to the structure at all times. The demolition works required 21st Century Building and Civil 1 workers to be on site at the same time.

  2. On or about 25 July 2020, Civil 1 contacted Mr Ayache to ask for 21st Century Building workers to attend immediately for demolition to commence. Mr Ayache had reached an understanding with Civil 1 prior to 25 July 2020 that he needed notice of at least two days to have scaffolders on site. At the same time, Mr Ayache and 21st Century Building were aware that when demolition work was occurring scaffolders were needed on site to dismantle the scaffold in tandem.

  3. On or about 25 July 2020, Civil 1 commenced demolition works without 21st Century Building workers present. This was repeated on 29 and 30 July 2020, and 5 and 7 August 2020.

  4. On or about 8 August 2020, 21st Century Building workers, including Mr Hussain, attended the site to start dismantling the upper sections of the scaffold.

  5. Mr Hussain observed that a number of raker ties had been removed from the scaffold and that modifications had been made to the scaffold by persons who were not authorised or competent to do so.

  6. Mr Hussain also observed that Civil 1 workers had demolished a wall while it was still attached to the scaffold and the tie was left hanging to the scaffold. He observed that the scaffold was unstable and “shaking”.

  7. Mr Hussain took photographs of the scaffold and sent them to Mr Ayache. Mr Hussain also sent text messages to Mr Ayache which said:

“The job next to child care is dancing malam” [sic]

“I install again if they move the tie again it’s gonna go Collapse” [sic]

  1. Mr Ayache did not discuss the removal of the raker ties with Civil 1, but instead relied on Mr Hussain to raise the issue with Civil 1 workers at the site.

  2. 21st Century Building workers rendered the scaffold safe by placing additional ties and dismantling the upper sections.

  3. On 9 and 10 August 2020, 21st Century Building workers attended the site again to continue dismantling the scaffold. Mr Hussain again observed that Civil 1 had performed demolition work without 21st Century Building workers on site. More raker ties had been removed by the Civil 1 workers.

  4. 21st Century Building workers again rendered the scaffold safe by placing additional ties and dismantling the upper sections.

  5. On Saturday 15 August 2020, Mr Giovenali sent Mr Ayache a text message which said:

“I need 4 boys Monday as the main walls are down. It’s dangerous to leave it up now little lone [sic] Monday. I know it’s not your fault but Ahmad should have had your boys there today”.

  1. 21st Century Building workers were booked to attend the site on Tuesday 18 August 2020.

  2. On 17 August 2020, Civil 1 workers continued to demolish the structure without 21st Century Building workers onsite. Civil 1 continued to remove ties, and the walls of the structure were demolished with the scaffolding still erected.

  3. On at least one occasion between 8 August 2020 and 18 August 2020, Mr Hussain approached Civil 1 workers, including their foreperson, about the unauthorised removal of ties and tampering with scaffolding. Mr Hussain told the Civil 1 workers that they were not to remove scaffolding or ties.

18 August 2020

  1. On 18 August 2020, 21st Century Building workers, including Mr Fungalei, Mr Ali, and Mr Sarfaraz, attended the site to dismantle the scaffold.

  2. When Mr Fungalei arrived at the site he observed that:

  1. The demolition was “way ahead of the scaffold”.

  2. The scaffold “was a mess”.

  3. “There was a lot of scaffold on the floor”.

  4. The scaffold was “wobbly” and there were “missing handrails [and] missing ledgers”.

  5. There was no anchor for the scaffold.

  1. The 21st Century Building workers commenced dismantling the scaffold on the Mann Street side of the site and removed most of the raker ties. The 21st Century Building workers did not put counterweights on the scaffold before the ties were removed. Mr Fungalei thought that the scaffolding was safe at that time as the wall was still up, the scaffolding was low, and he expected that he would be returning to the site the next day.

  2. The 21st Century Building workers then had a break to clear the way for Civil 1 to use an excavator to demolish a wall.

  3. Whilst this demolition was occurring, the excavator operated by a Civil 1 worker hit a powerline. The site was subsequently shut down due to possible electrical risks.

  4. 21st Century Building had intended to dismantle the scaffold on 18 August 2020 however no further work was permitted until Ausgrid could attend to render the site safe.

  5. Mr Ali and Mr Fungalei called Mr Ayache to inform him of the stop-work order. Mr Ayache asked whether the scaffolding was safe. Mr Ali and Mr Fungalei said “yes”, as the wall was still standing.

  6. Mr Stelio told 21st Century Building workers to leave the site for the day after work was shut down due to the stop-work order. 21st Century Building workers did not return to the site that day.

  7. Ausgrid attended the site at 3.00pm and left at 6.00pm.

  8. Civil 1 expected that 21st Century Building would return to the site the next day to finish dismantling the scaffold. Mr Fungalei also expected to return the next morning to finish dismantling the scaffold.

  9. The following day, 19 August 2020, Civil 1 workers removed the remaining ties and demolished the wall along Mann Street, without 21st Century Building workers onsite.

  10. On the morning of 19 August 2020, Mr Stelio contacted Mr Ayache to make arrangements for 21st Century Building to attend on 20 August 2020. Civil 1 called 21st Century Building to render the scaffolding safe as Civil 1 had removed the ties and advanced demolition after the site shut down the previous day.

  1. 21st Century Building workers did not attend the site on 19 August 2020 prior to the scaffolding collapse as they were not provided with sufficient notice and had already commenced work for the day at another site.

The Incident

  1. During the morning on the day of the incident, Mr Giovenali and Mr Stelio instructed a Civil 1 worker to remove the mesh from the scaffold, as they were concerned about the wind and the stability of the scaffold.

  2. At approximately 3.00pm on 19 August 2020, a section of scaffolding surrounding the site was blown over by gusting winds. This is shown in the CCTV of the incident (PX 1, Tab 5). The winds had been predicted by the Bureau of Meteorology.

  3. The scaffold fell onto Mann Street and struck a member of the public, Ms Yang, on the back of her head, while she was waiting to cross the road.

  4. Ms Yang was taken to Gosford Hospital with minor head injuries. Subsequent imaging revealed no long-term injuries.

  5. The scaffold that fell onto Mann Street was approximately 4.2 metres in height and approximately 60 metres (21 bays) in length. The scaffold largely retained its form when it fell.

  6. The scaffolding collapse caused damage to seven cars that were parked adjacent to the scaffold. The scaffold also knocked down a light post, which subsequently struck a utility vehicle that was stopped in traffic, and another parked car on the opposite side of the road. The driver of the utility vehicle was not injured.

  7. The scaffold along Donnison Street remained upright following the scaffold collapse onto Mann Street. However, the Donnison Street side scaffolding was damaged and distorted.

  8. Civil 1 workers took immediate action to secure the Donnison Street scaffolding by attaching load restraint straps from the scaffold to excavators on site.

  9. On the day of the incident, Civil 1 workers, including Mr Al-Hesany, Mr Gunaseelan, Mr Sahil, Mr Kumar, Mr Singh, Mr Chauhan and Mr Pymble were working on the site when the scaffold collapsed.

Inspection Following the Incident

  1. At approximately 3.55pm on 19 August 2020, Inspector Christopher Kearney of SafeWork NSW (SafeWork) attended the site and conducted an inspection.

  2. Inspector Kearney made the following observations:

  1. Scaffolding with plywood attached was lying over the footpath and parked vehicles along Mann Street.

  2. The scaffold along Mann Street had two decks in some sections and one deck in others. The scaffold consisted of bays approximately 2.4 metres long and 0.7 metres (three boards) wide.

  3. The approximate distance from the scaffold top deck to the bottom of the scaffold standards was 4.2 metres.

  4. There were no scaffold ties or counterweights on the scaffold along Mann Street.

  5. The scaffold along Donnison Street had a number of nylon webbing straps tied to the scaffold and to various heavy items on the site (excavator buckets and concrete sections). The webbing straps were 50mm wide transport load restraint type straps.

Guidance Material

Australian Standard 4576:1995, Guidelines for Scaffolding (PX 1, Tab 12)

  1. Australian Standard 4576:1995, Guidelines for Scaffolding (15 June 1995) (AS 4576:1995) provided:

“8.4 Stability

A scaffold needs to have stability to prevent it from overturning. Stability may be achieved by

●   Tying the scaffold to a supporting structure.

●   Guying to a supporting structure.

●   Increasing the dead load by securely attaching counterweights near the base.

●   Adding back-up bays to increase the base dimension.

…

8.10. Containment Sheeting

Scaffolds fitted with containment sheeting have increased dead loads and are exposed to wind and rain loads. The design of such scaffolds and ties should be checked by a competent person such as an engineer experienced in structural design. The design of a sheeted scaffold should consider:

…

●   The wind load on the scaffold and the supporting structure.”

SafeWork Materials

  1. The SafeWork NSW Scaffolding Collapse Safety Alert (14 September 2018) (Safety Alert) (PX 1, Tab 13) highlighted the potential risks of a scaffold collapsing and provided information about preventing collapses.

  2. The Safety Alert provided:

“ACTIONS REQUIRED

●   Ensure the scaffold remains stable and supports the loadings imposed at all times – eg during erection, in situ, during and after any alterations, and when dismantling.

●   Ensure the scaffold can withstand any anticipated loads or forces – eg strong winds.

●   Ensure the scaffold is adequately tied to its supporting structure, in accordance with instructions from a competent person – if this is not possible, consult with the scaffold designer, manufacturer, supplier or an engineer.

●   Develop systems of work that allow construction activities, such as bricklaying, painting, rendering, glazing and cladding installation to be completed without unplanned changes to, or removal of, scaffold ties – eg work down from the top of a building as the scaffolding is progressively dismantled, or tie the scaffold to its supporting structure so that it does not interfere with the work.

●   Ensure only competent persons with a relevant class of high risk work licence for scaffolding undertake scaffolding work, including making alterations to existing scaffolding.

●   Have a competent person who holds the same or higher class of high risk work licence appropriate to the class of scaffolding regularly inspect the scaffolding ties and other scaffolding equipment, to ensure they have not been modified or altered by unauthorised persons.

●   Provide all workers adequate information, instruction, training and supervision regarding the control measures required to prevent the collapse of the scaffold.

●   Display warning signs to prevent unauthorised access to the scaffold when it is incomplete and left unattended.”

  1. In relation to a scaffold collapse in Bronte, NSW, the SafeWork NSW Incident Information Release (6 December 2018) (PX 1, Tab 14) provided:

“Each year SafeWork NSW respond to incidents where the safety of workers, or nearby people, has been at risk from falling scaffolding.

Many of these incidents involve scaffolds with containment sheeting (eg shadecloth or mesh) which may place extra weight on a scaffold, particularly in bad weather when wind and rain can place additional live loads [on] the materials.

A scaffold collapse not only puts workers [sic] lives at risk, but puts the public at significant risk of being hit by falling objects.

Businesses are reminded to implement control measures to manage the risk of scaffold collapse, such as ensuring:

●   the design of the scaffold installation considers wind load from the scaffold containment sheeting

●   provision and maintenance of sufficient ties of adequate strength for the loads, including wind load

●   regular inspection of scaffold ties to check they are not modified or altered by unauthorised people (eg finishing trades who may loosen, relocate or remove ties to gain access to walls and openings)

●   scaffolds are not left in a state of weakness when installing or dismantling the scaffolds (eg removing returns as they act like ties, or removing ties in preparation for dismantling)”.

  1. The SafeWork NSW Scaffold Inspection Checklist (9 May 2019) (PX 1, Tab 15) provided guidance to principal contractors and scaffolders in relation to common scaffold hazards.

  2. The Scaffold Inspection Checklist provided:

“Manage your scaffold safety by ensuring:

●   the scaffold is only erected, altered and dismantled by a worker with the appropriate scaffolding high risk work (HRW) licence …

●   site inductions and ongoing toolbox talks should clearly state that unlicenced workers are prohibited from altering or removing components from the scaffold

●   workers, including contractors, need to be consulted about site rules, including the safe use of the scaffold and who to contact if it needs altering or repair

●   the scaffold must be inspected and written confirmation (eg handover certificate) or a record of inspection be provided at the following intervals; - before first use, - prior to use after alterations or repairs, - after adverse weather (eg high winds or storms) or an incident that could affect scaffold integrity or stability, and – at regular intervals not exceeding 30 days

●   the written confirmation (eg handover certificate) should be kept on site until the scaffold has been dismantled

●   the scaffolders or a competent person has provided an adequate safe work method statement (SWMS) before starting any high risk construction work

●   work is undertaken in accordance with that SWMS provided

●   the project is planned and sequenced to minimise trades working above others on the scaffold.”

Systems of Work

Civil 1 Sequence of Works

  1. Civil 1 had a sequence of works in place which stated that:

  1. The scaffold would be fixed to the inside of the buildings as per the Australian/New Zealand Standards and the “Scaffolding Code of Practice”.

  2. As the roof level is demolished downwards to the first floor, the scaffold will follow downwards being dismantled from the inside boundary of the site to one metre above the finished first floor level.

  3. As the building is completely demolished, the remaining scaffolding will be dismantled in iterations of 2.4 metre-long bays with temporary fencing replacing it.

  1. Civil 1 did not adhere to the sequence of works.

  2. The demolition and dismantling works were not conducted in tandem.

  3. There were no 2.4 metre-long bays along the Mann Street scaffold into which the lower sections of the external wall were to be dismantled.

Civil 1 Safe Work Method Statement and Work Health and Safety Management Plan

  1. Civil 1 had a Safe Work Method Statement (SWMS) in place for demolition at the site, as well as a Work Health and Safety (WHS) Management Plan. Neither document referred to the risk of the scaffolding collapsing.

  2. The WHS Management Plan stated:

“Site Safety Inspections

Ongoing Risk Assessments (after the job commences) are to be undertaken by the Site Manager/Project Manager utilising the Site Safety Inspection Form 4.2. Site Safety Inspections should be conducted on a weekly basis by either the Site Manager and/or OHS Committee/Representatives (where they exist)”.

  1. Civil 1 did not undertake, or require 21st Century Building to undertake, any safety inspections of the scaffold.

Alteration of the Scaffold

  1. The Civil 1 workers at the site altered the scaffold and removed ties during the demolition works. These alterations were done so that they could continue the demolition of the walls and other structures to which the ties were attached.

  2. Mr Stelio and Mr El-Khurdie were aware that the Civil 1 workers removed ties throughout the demolition work and directed that they continue to do so.

  3. The Civil 1 workers did not have high risk work licences for scaffolding and were not competent to perform scaffolding work.

21st Century Building SWMS

  1. 21st Century Building had a SWMS (PX 1, Tab 10) for erecting and dismantling scaffolding.

  2. The SWMS identified the risk of injury due to a scaffold collapse for the task of dismantling or altering scaffolding. A control measure included no unauthorised removal of or interference with scaffold components.

  3. The SWMS did not refer to any controls to ensure the stability of the scaffold.

  4. 21st Century Building were aware that Civil 1 workers were altering the scaffold and removing ties.

Systems of Work After the Incident

  1. On 19 August 2020, SafeWork issued a Prohibition Notice to Civil 1, requiring it to repair or alter or dismantle the scaffold.

  2. In compliance with the Prohibition Notice, Civil 1 dismantled the scaffold on 20 August 2020 and erected temporary fencing around the site.

Evidence for the Defendant

First Affidavit of Mr Ayache

  1. Mr Ayache swore an affidavit on 15 August 2024 (DX 1). Mr Ayache is the Managing Director of 21st Century Building.

  2. Mr Ayache annexed to his affidavit an exhibit marked “FAA-1” (Exhibit). References to page numbers in Mr Ayache’s affidavit were references to pages in the Exhibit.

  3. Mr Ayache moved to Australia from Lebanon in 2002 and started working as a factory worker. Mr Ayache’s mother and siblings remain in Lebanon and Mr Ayache provides as much financial assistance to them as he can.

  4. Mr Ayache holds a current High Risk Work Licence and has done so since 2011. Since 2023 Mr Ayache has worked as a builder conducting that business as a sole trader.

21st Century Building Background

  1. Mr Ayache founded 21st Century Building, initially providing bricklaying services, in 2013. Mr Ayache said that he has worked almost every day since then.

  2. Mr Ayache is married to Ms Mustapha, who assisted 21st Century Building by completing administrative tasks. Between 2019 and 2020 Ms Mustapha became the director of 21st Century Building. Before and after those years, Mr Ayache has been the director of 21st Century Building.

  3. 21st Century Building does not have any employees but has “a regular set of subcontractors”. The subcontractors are on 21st Century Building’s sites most days of the week and most weeks in a year.

  4. In 2015, 21st Century Building began offering scaffolding services alongside bricklaying.

  5. 21st Century Building initially rented a warehouse in Rockdale NSW, but on 1 January 2024 it began trading from a small yard in Old Guildford NSW.

  6. Mr Ayache said that despite the usual financial hurdles of starting a new business, since 2013 21st Century Building has created work opportunities for many subcontractors around Sydney. By around 2020, 21st Century Building had approximately five regular subcontractors.

21st Century Building Workers

  1. Mr Ayache said that currently, 21st Century Building uses between 5 and 10 workers per week, depending on how many jobs 21st Century Building is working on. All these workers work as subcontractors.

21st Century Building’s Commitment to Safety

  1. Mr Ayache said that both he and 21st Century Building “are, and always have been, committed to workplace safety”. Mr Ayache understands the importance and obligation to comply with the WHS Act and related legislation and codes and said that he will continue to use his “best efforts to comply”.

  2. Mr Ayache said that 21st Century Building has and always will “properly resource the workers, other persons and worksites to ensure that no further safety incidents occur”.

WHS Systems Prior to the Incident

  1. Mr Ayache listed 21st Century Building’s WHS systems that were used before the incident. These included:

  1. Mr Ayache personally attending work sites to monitor the supply and installation of scaffolding and to ensure compliance with the quotation and WHS obligations, including SWMSs and handover certificates.

  2. Weekly meetings conducted by Mr Ayache with workers. Any worker performing work for 21st Century Building attended these meetings, where a range of WHS matters were raised and discussed. General SafeWork publications including WHS circulars were also discussed at these meetings. The meetings included reminders of WHS obligations such as reporting hazards, eliminating safety risks, maintaining a safe jobsite, and wearing appropriate personal protection equipment.

  3. Company inductions for all new workers.

  4. Workers receiving training by Mr Ayache on WHS obligations and best scaffolding practices under the SWMS. Mr Ayache was satisfied that scaffolders, contractors and workers were “work-safe aware” and trusted them to work safely.

  5. Regularly purchasing personal protective equipment for workers.

  6. A system of work in relation to SWMSs, including the tying of scaffolding, providing secondary means of stability, conducting regular scaffold inspections, and preventing unauthorised tampering with scaffolding.

  1. Mr Ayache said that 21st Century Building trained workers during weekly “work-safe” meetings and inductions by reference to its SWMSs. Workers were trained and instructed to adopt the following processes on jobsites, particularly on demolition sites:

  1. Ensure all scaffolders held High Risk Work Licences for scaffolding.

  2. Ensure a competent person, including an experienced site supervisor and/or senior scaffolder, was physically on site with scaffolders for all day-to-day operations to monitor works, personal protective equipment, and WHS compliance.

  3. Supply scaffolding and hoarding to the specifications of the quotation, as appropriate for the site and according to the relevant standards.

  4. Install scaffolding and hoarding to the specifications, ensuring the scaffold is stable and tied to the structure.

  5. Provide a handover certificate and apply the appropriate tags to the erected scaffold.

  6. Competent persons are to conduct a visual inspection of the site at the start of the day, including an inspection of the scaffolding and ties. Regular inspections throughout the day are also required to detect safety hazards including unauthorised tampering. A competent person must render the scaffolding safe before leaving the site.

  7. Report any unauthorised tampering to the site supervisor. If such tampering is detected, the site supervisor is to “confront” the site foreman to ensure they prohibit unauthorised persons from modifying scaffolding or demolition occurring in advance of the scaffold being dismantled.

  8. Ensure dismantling of the scaffold occurs in tandem with demolition and in sequence, with adequate ties.

  1. Mr Ayache said that he trained and instructed workers to report details of any work-safe issues, incidents and injuries to him in person. Whenever a report was made, Mr Ayache discussed the subject of the report with workers during a weekly meeting.

  2. Mr Ayache asserted that the above processes show that 21st Century Building “did take some steps to address the risk of dismantling scaffolding” and that they “had control measures to address those risks”.

  3. However, Mr Ayache conceded that both he and 21st Century Building:

“… provided a system that is best described as informal. It operated on an ‘as seen’ basis, and did not involve adequate enforcement for non-compliance”.

  1. Mr Ayache said that 21st Century Building “clearly need to do more if attempted correction action in response to unauthorised tampering is ignored or overlooked by other persons”.

  2. By 21st Century Building’s pleas of guilty, it accepts that it should have, and did not, instruct or arrange compliance with each reasonably practicable measure outlined in each Amended Summons.

The Incident

  1. Mr Ayache set out his understanding of the incident’s sequence of events, as explained to him by SafeWork investigators, and from his involvement with this matter.

  2. On 23 July 2020, 21st Century Building began installing the scaffolding at Civil 1’s jobsite.

  3. The scaffolding was hired for two months, which Mr Ayache understood to be “ample time” for the demolition of the nine buildings on the site.

  4. Civil 1’s demolition works were meant to occur in a set sequence. They were meant to be gradual and staged to ensure that the scaffold could be dismantled in tandem and remain adequately tied to the structure.

  5. It was agreed that 21st Century Building’s scaffolders would not be on site every day for the two months that the scaffold was hired. Rather, Civil 1 would give 21st Century Building two business days’ notice when scaffolders would be required on site to dismantle the scaffold. Civil 1 were to contact Mr Ayache directly on his mobile phone.

  6. On 25 July 2020 the scaffold installation was complete, and the Handover Certificate was given to Civil 1. The scaffolding was adequately tied and safe on this date.

  7. On 25, 29 and 30 July 2020, and 5 and 7 August 2020, Civil 1 commenced demolition works without 21st Century Building’s scaffolders present, in breach of their agreement.

  8. On 8 August 2020, 21st Century Building’s scaffolders returned to the site for the first time since its installation. They immediately noticed that Civil 1 had advanced the demolition, contrary to the agreement.

  9. Mr Hussain, 21st Century Building’s site supervisor and most experienced subcontractor, informed Mr Ayache of the unauthorised tampering with the scaffolding. Mr Hussain said that the scaffolding was unsecured and unstable and that there was damage to the scaffolding and ties. Mr Hussain and other workers rendered the scaffold safe again.

  1. Mr Ayache “trusted Mr Hussain to follow his training and confront Civil 1 about their failure to adhere to the agreement”. Consequently, Mr Ayache did not feel the need to also confront Civil 1 at the time.

  2. On 9 and 10 August 2020, Civil 1 again advanced demolitions without 21st Century Building scaffolders present, tampering with and damaging more scaffolding and ties. Mr Hussain again immediately noticed the breaches and rendered the scaffolding safe.

  3. Based on Mr Ayache’s conversations with Mr Hussain, Mr Ayache understood that Mr Hussain again confronted Civil 1 and became involved in a “heated argument” with a Civil 1 labourer about the unauthorised tampering.

  4. Between 15-17 August 2020, Civil 1 continued advancing the demolition work, including demolishing the main walls of the structure, without 21st Century Building’s scaffolders present.

  5. On 18 August 2020, the day before the incident, 21st Century Building’s workers attended the site and noticed that the demolition had advanced well beyond the dismantling of the scaffolding. Mr Fungalei and other workers started dismantling the scaffold and removing ties. Critically, Mr Ayache understood that the scaffold was still adequately tied to a remaining wall of the structure and tied with raker ties to the concrete on the ground.

  6. After the site was shut down due to the electrical hazard, Civil 1’s foreperson, Mr Stelio, told 21st Century Building’s workers to go home for the day. Before leaving, Mr Ali and Mr Fungalei spoke to Mr Ayache, saying that the scaffolding was safe as the “wall was still up”. Mr Ayache then spoke to Mr Stelio who said that the scaffolders “were good to go”.

  7. Mr Ayache said that on 19 August 2020, “several things transpired”, including:

  1. 21st Century Building’s workers were sent to another jobsite as Civil 1 did not make a prior booking for them to return.

  2. Civil 1’s workers removed all of the remaining ties and demolished the final wall, without any 21st Century Building workers present.

  3. Mr Stelio phoned Mr Ayache, informing him that Civil 1 had advanced demolitions without 21st Century Building workers present after Ausgrid rendered the site safe.

  4. Mr Stelio arranged for 21st Century Building’s scaffolders to attend the site on 20 August 2020.

  5. Mr Stelio did not mention any concern about the scaffold being unsafe, or that a change of weather and gusty wind was affecting the jobsite. Mr Ayache did not suspect at the time that there was a risk of the scaffold not being adequately tied or falling. He only remembered Mr Ali and Mr Fungalei being “adamant” that the site was safe the day before and that they would be returning the next day.

  1. Mr Ayache said that he was shocked when he was told that afternoon that the scaffolding collapsed. Approximately two hours later, 21st Century Building’s scaffolders and Mr Ayache attended the site to render it safe.

  2. Mr Ayache is aware of the details of Mr Hussain’s thoughts and discussions with Civil 1’s workers after discussions with Mr Hussain, from reading Mr Hussain’s interview with SafeWork.

  3. Mr Ayache said:

“I did not grasp how quickly Civil 1 had rushed the demolition until after I ran out of my office to render aid. Even though we were contracted for the scaffolding to remain onsite for two months, they had completed the whole demolition in less than one by advancing as quickly as humanly possible without any regard as to whether the scaffolders were booked or present.”

  1. Having read Mr Stelio’s Record of Interview, Mr Ayache now understands that Civil 1 “was under extraordinary pressure to rush the job”.

Ms Ping Yang

  1. Upon his arrival at the site, Mr Ayache spoke to SafeWork investigators and NSW Police officers. He was informed that Ms Yang was struck by the scaffold and was going to hospital.

  2. Later that night Mr Ayache phoned Gosford Police Station to obtain Ms Yang’s details so he could check on her. However, an officer told Mr Ayache that they were not allowed to provide her contact details. Mr Ayache then asked how Ms Yang was feeling, to which the officer said she “was okay”. Mr Ayache asked if he could send Ms Yang flowers, but the officer said it was not possible but that they put it on the record.

  3. Mr Ayache said, “I thank God that she was able to leave hospital without treatment, and that the x-ray came back without any injuries. I recognise it could have been worse, and I am just deeply grateful that she is okay”.

Systems of Work After the Incident

  1. Immediately after the incident, 21st Century Building stopped providing scaffolding services higher than three storeys.

  2. Originally the pause in scaffolding works above three storeys was intended to last until 21st Century Building had completed a review of their processes. However, Mr Ayache came to realise that he was “very traumatised by what happened”. Despite now having full confidence in 21st Century Building’s systems of work after the incident, Mr Ayache said that he is “not mentally ready to engage in large scaffolding jobs”. This has resulted in financial detriment to the business.

Improvements Recommended by SafeWork

  1. With assistance from SafeWork, Mr Ayache personally undertook the following steps:

  1. Read and implemented Australian Standard 4576:2020, Guidelines for Scaffolding, which was published two days after the incident. 21st Century Building has incorporated the latest guidelines in its new, comprehensive and documented WHS framework.

  2. Incorporated the SafeWork NSW Scaffolding Industry Safety Standard (March 2022) into the library of WHS resources available to workers.

  1. 21st Century Building never received a Prohibition or Improvement Notice from SafeWork mandating any specific compliance.

Retained WHS Experts

  1. Mr Simon Lloyd, a safety management expert from the company “Recovery Partners” assisted 21st Century Building to improve their work-safe systems.

  2. Mr Lloyd gave 21st Century Building a quotation on 21 July 2024 to conduct an audit and complete a total review of all safety documentation. Mr Lloyd produced a Safety Audit Report dated 6 August 2024. A copy of the report is at p 12 of the Exhibit.

  3. On 16 August 2024, 21st Century Building paid Recovery Partners to provide four hours of training to all subcontractors to 21st Century Building. These subcontractors will be expected to abide by the “Contractor Safe Work Requirements” and “Employee Induction Booklet”, at pp 218-235 and 121-138 of the Exhibit.

  4. After the training is complete, Mr Ayache will formalise his appointment as 21st Century Building’s work safety officer. In this role, Mr Ayache will implement the safe system of work, providing a full-time and consistent safety resource within the company. Mr Ayache said that 21st Century Building can utilise his experience to complete regular reviews of safety measures implemented by the company and delivered by workers and other persons. Mr Ayache said that he will provide evidence of his completion of training once it is completed on 16 August 2024.

  5. Mr Ayache annexed a copy of 21st Century Building’s Health Safety Representative policy at pp 81-90 of the Exhibit.

Improvements Recommended by WHS Experts

  1. 21st Century Building accepted and implemented all recommendations made by Recovery Partners from the safety audit. 21st Century Building has developed, implemented and continues to maintain a new system of work modelled on the Recovery Partners report.

  2. 21st Century Building’s new system of work involves:

  1. Incorporating each of the proposed amendments to the SWMS, as shown in the updated SWMS at pp 354-368 of the Exhibit.

  2. A new, documented SWMS Policy (Exhibit pp 245-279) to make it clearer about who and when 21st Century Building should be enforcing the SWMS, including by:

  1. Requiring irregular, regular and pre-work Safe Work Observation audits to ensure the SWMS is being complied with and, if a breach is identified, a stop work order issued immediately.

  2. Form 601, “Safe Work Observation Form” to document and record safety observations.

  1. A range of forms to assist in managing safety risks, including forms for “start-up”, “regular activities” and “irregular activities”.

  2. A new, documented “Employee Induction Booklet” (Exhibit p 121) which states precisely who should do what and how often, as preventative controls and corrective controls in the event of breaches of WHS requirements. This includes the power to direct persons to stop work until hazards and risks have been controlled. The Employee Induction Booklet also sets out control measures to minimise the risk of death or injury during scaffold alterations, and various forms and policies regarding handover certificates.

  3. A specific policy requiring 21st Century Building to conduct regular checks on incoming weather events and to conduct a risk assessment and implement relevant controls (Exhibit p 137).

  4. A “Scaffolding Policy” setting out the roles and responsibilities of 21st Century Building’s workers regarding scaffolding and the relevant WHS safety and risk assessments.

  5. Recording hazard reporting on the “Hazard and Non-Conformance Report”. A copy of the Hazard Report and Risk Assessment Form is annexed at pp 107-113 of the Exhibit.

  6. A documented “Training and Induction Policy” for new workers, current workers, and contractors, which is at pp 114-120 of the Exhibit.

  1. As the work safety officer, Mr Ayache will audit and monitor compliance with the work-safe policies and procedures by conducting site inspections on a regular and “spot-check” basis. If Mr Ayache is not on site he will instruct Mr Hussain, or other site supervisors, to forward copies of all toolbox meeting minutes and incident reports to him.

Mr Ayache’s Remorse and Apology

  1. On behalf of 21st Century Building and himself, Mr Ayache accepts responsibility for the failures that gave rise to the incident and risk that Ms Yang and Civil 1’s workers were exposed to at the site.

  2. Mr Ayache acknowledges and deeply regrets the impact that the incident has had on Ms Yang and others.

Personal Statement

  1. Mr Ayache detailed the “profound” impacts that the incident has had on him. He has experienced anxiety and feelings of depression. He has seen numerous doctors and has had “regular spates” of being unwell, some of which have rendered him bedridden. Mr Ayache described “reliving the anxiety and trauma” of the scaffold collapse whenever there is a gust of wind.

  2. Mr Ayache reiterated that he and 21st Century Building have taken and will continue to take steps towards operating a site that is fully compliant with WHS guidelines and regulations. Mr Ayache said that he will:

“… do everything in our capacity to ensure that no safety related incidents ever repeat themselves on our site. I am determined that this incident will be my only failure”.

Cooperation with SafeWork

  1. Mr Ayache and 21st Century Building cooperated and assisted SafeWork’s investigation at all times.

  2. On 22 September 2023, 21st Century Building instructed its lawyers to send a letter to SafeWork requesting consideration for the Enforceable Undertaking programme. However, the application was out of time because 21st Century Building was not legally represented at the beginning of the proceedings and SafeWork did not consider it to have met the “exceptional circumstances” test.

  3. Mr Ayache said that his lawyers told him about an option to complete a “Training Order” and to provide an undertaking to ensure that he undertakes a due diligence training course. Mr Ayache is prepared to undertake any training that the court sees fit as he recognises that 21st Century Building “is in a dire financial position”.

21st Century Building’s Capacity to Pay

  1. In recent years and particularly since the incident, 21st Century Building has been struggling. Mr Ayache believes that the company has lost business because of the incident, citing a particular company that accepted a quotation but subsequently pulled out without explanation. A copy of this quotation was annexed at p 428 of the Exhibit.

  2. 21st Century Building paid approximately $5,000 to arrange scaffolders to attend the site after hours immediately after the incident to render the site safe. It also lost approximately $50,000-$60,000 of work as a direct result of the incident.

  3. Mr Ayache said that Civil 1 still owes 21st Century Building approximately $35,000 for the work at the site. Copies of outstanding invoices were annexed at pp 435 and 436 of the Exhibit.

  4. Mr Ayache has not drawn on 21st Century Building’s income for many years. Instead, he has been personally lending the company as much as he can to keep it afloat. The source of the loan money has been income he derives as sole trader and proceeds from the sale of a house owned by Ms Mustapha in December 2022.

  5. A copy of 21st Century Building’s bank balance was annexed at p 437 of the Exhibit.

  6. 21st Century Building is in rental arrears. A copy of the company’s lease and rental invoice is at pp 441 and 444 of the Exhibit.

  7. Mr Ayache also outlined expenses and bad debts accrued by 21st Century Building in recent years. Relevant invoices and financial statements were annexed at pp 446–475 of the Exhibit.

  8. In the financial year ending 30 June 2024, 21st Century Building accrued a nett loss. Mr Ayache said that given the company’s current financial position and “its dismal financial forecast for the 2024/2025 financial year”, 21st Century Building’s survival will turn on the penalty imposed.

  9. Mr Ayache stated that the impact of a fine will be detrimental to 21st Century Building and himself, as a fine that the company is not capable of paying will be borne by him. Mr Ayache expressed that this would place him “in significant difficulty” as he has not drawn on the company’s income in many years and the business is currently surviving on personal loans from Mr Ayache.

  10. Mr Ayache reported his personal income to be between $30,000-$50,000 per year, making it difficult for him “to manage as is”.

  11. Mr Ayache said that 21st Century Building is unlikely to be able to pay a fine and that it has been trying to accept smaller jobs to keep afloat. He does not know whether a bank would lend the company or himself money, given the circumstances.

  12. Mr Ayache has never committed another offence, saying that it is not in his nature. Mr Ayache apologised to the court for his company’s failures, saying that he has suffered from the incident and “will not offend again”.

Second Affidavit of Mr Ayache (DX 3)

  1. Mr Ayache swore a second affidavit on 22 August 2024. In August 2024 Mr Ayache and his four main subcontractors attended a work health and safety training course. Mr Ayache said that any fine imposed by the court on the company “will ultimately have to be borne by myself”. Mr Ayache said that he had already given everything that he could to the company for the purposes of paying its legal fees and covering its operating expenses.

  2. Mr Ayache annexed his personal tax returns for financial years 2019, 2020, 2021, 2022 and 2023. He said that his income tax in financial year 2023 was derived entirely from being a sole trader doing building work. He did not draw any income from the company in that year.

  3. Mr Ayache said that the money which he had lent to the company included any income derived as a sole trader builder, as well as money that his wife had lent him from the sale of her house. He has exhausted all of the money which his wife had lent him.

  4. The personal tax returns annexed to the affidavit were the subject of cross-examination by counsel for SafeWork on the first day of the hearing. Attention was drawn to the fact that in some of those personal tax returns Mr Ayache declared income from investment properties. In cross-examination he said that he had none. During closing submissions, counsel for 21st Century Building was given leave to re-open the defendant’s case. This resulted in an adjournment.

Third Affidavit of Mr Ayache (DX 4)

  1. Mr Ayache swore a third affidavit on 12 September 2024. He said that the property at 59 XXX Road, Bexley was owned by his wife Ms Mustapha. He does not hold any interest in the property and does not receive any rental income from the property.

  2. In relation to the declaration in the personal tax returns indicating receipt of rental income, he said that he depended entirely on his accountant’s advice and expertise.

  3. Mr Ayache said that his wife Ms Mustapha had lent him $200,000 from the sale of her property at 61 XXX Road, Bexley. He had lent all of this money to the company to cover its expenses and legal fees. Mr Ayache said that the adjoining property at 59 XXX Road was also owned by his wife, but it had not been rented since 2022. Mr Ayache’s wife had told him that she was unwilling and unable to provide any further financial assistance to him or the company. Mr Ayache said that he had no more money to lend the company.

Affidavit of Mr El-Khaled

  1. Mr Mohamad El-Khaled, accountant, swore an affidavit on 12 September 2024 (DX 5). Mr El-Khaled had prepared all the financial statements and returns for 21st Century Building, as well as the personal tax returns for Mr Ayache. Mr El-Khaled said that he was responsible for the error in the personal tax returns. The rental schedule for the property situated at 59 XXX Road, Bexley was mistakenly attached to Mr Ayache’s personal tax returns, instead of the personal tax returns of Mr Ayache’s wife Ms Mustapha. Amended personal tax returns had been prepared and lodged with the Australian Taxation Office.

Oral Evidence of Mr Ayache

  1. During the first day of the hearing on 22 August 2024 Mr Ayache was cross-examined about his personal tax returns. Mr Ayache disputed that he had received any income from investment properties and said that he could not explain the returns.

  2. I regard the evidence of Mr El-Khaled, the accountant, as a complete explanation for the appearance of rental income in the personal tax returns. I accept that Mr Ayache does not own an investment property and received no rental income from rental properties. The rental properties and the income from them were assets of his wife Ms Mustapha.

  3. On the second day of the hearing, being 16 October 2024, Mr Ayache was cross-examined about an application he made for finance to Bankwest. Mr Ayache accepted that a loan of $722,000 was sought to refinance an existing loan on 59 XXX Road, as well as an additional $254,000 to put towards the purchase of the family home at 40 XXX Street, Bexley.

  4. In addition, Mr Ayache accepted that he and his wife had obtained a second loan for $2,400,000, which together with the smaller amount borrowed from Bankwest, was used to purchase the family home at 40 XXX Street, Bexley for $2,600,000. This was an interest-only loan.

  5. The application to Bankwest was dated 11 October 2022. Mr Ayache declared that he had three sources of income. He declared director’s wages from 21st Century Building, a company profit that year of $603,000 and “extraordinary income” from the company that year of $101,000. In relation to these last amounts, Mr Ayache accepted in cross-examination that the figures were grossly inflated, false and a lie. Mr Ayache said that he provided this information in order to obtain the loan.

  6. The Bankwest loan has recently been refinanced with NAB. It approved a loan for $950,000. Mr Ayache and his wife Ms Mustapha are the borrowers. The Bankwest loan has been paid out.

  7. Counsel for SafeWork tendered the Bankwest loan application (PX 2). It shows two figures which Mr Ayache accepted in cross-examination were correct. Firstly, the large housing loan, which was also from Bankwest, required monthly payments of $10,038.46 in interest. Secondly, the loan which was the subject of PX 2 required monthly payments of interest to $5,201.77. Thus, Mr Ayache and his wife, who were co-borrowers, were required to make monthly payments in excess of $15,000.

  8. There was no evidence that Mr Ayache and his wife had failed to make any of those monthly payments.

  1. In the Bankwest application (PX 2) Mr Ayache and his wife stated that their monthly expenses, over and above interest on loans, amounted to $9,300. This covers such everyday expenses as home maintenance, telephone, groceries and food, entertainment, clothing, children’s education, transport, medical expenses and various types of insurance.

  2. Thus, Mr Ayache and Ms Mustapha are somehow finding $24,000 per month to pay the interest on all of their loans and run the household of two adults and two teenage children. Mr Ayache’s wife is not receiving any income from the rental property at 59 XXX Road, as it has been demolished in preparation for building a new house. There was no evidence where any money would come from to build a new house on that land.

  3. The evidence was that Mr Ayache’s wife is receiving various forms of social security payment. Mr Ayache said in his second affidavit (DX 3) that he had two bank accounts, one with a credit of $821.33 and the second with a credit of $62.91. Mr Ayache’s personal tax return for the 2023 financial year showed a gross income of $49,000 from his occupation as a sole trader builder. Tax withheld from salary and wages was $12,716. Thus, in the financial year 2023 Mr Ayache had earnings of about $3,000 per month. How the family has been paying all of its loans plus its running expenses, totalling over $24,000 per month was not the subject of any explanation.

Consideration

  1. I have had regard to the objects in s 3 of the WHS Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) (CSP Act).

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 The Queen (No. 2) [1988] HCA 14; (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] NSWCCA 242; (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] HCA 67; (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. In Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27] the High Court said:

“The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending.”

  1. 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].

  2. The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.

  3. The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock. This approach to sentencing, known as the “instinctive synthesis” approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.

  4. The Court of Criminal Appeal has examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96. Justice Basten at [34], under the heading “Assessment of Risk” said:

“The sentencing judge commenced his consideration with the proposition that ‘greater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely’. However the truth of that proposition depends upon other considerations including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk, and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors.”

  1. Further at [42] his Honour continued:

“The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step‑by‑step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the [event] which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs.”

  1. At [53] his Honour dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying:

“It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken.”

  1. My findings about the defendant’s level of culpability, in relation to both offences, are based upon the following:

  1. The risk was eminently foreseeable. Further, the offender should have known of the risk by reason of guidance material.

  2. Given the predicted weather conditions, there was a significant likelihood of the risk occurring.

  3. The potential consequences of the risk were death or serious injury. Given that 60 metres of scaffolding which was blown over, onto a busy street with pedestrians and cars, it was only good luck that no-one was more seriously injured.

  4. There were readily available steps to eliminate or minimise the risk. The pleas of guilty are an acknowledgment that the reasonably practicable measures pleaded could, and should, have been taken.

  5. There was no particular burden or inconvenience of those steps being implemented.

  6. The maximum penalty for each offence is a fine of $1,766,130, which reflects the legislature’s view of the seriousness of the offence.

  1. I find that the level of culpability of 21st Century Building is in the upper half of the mid range.

Deterrence

  1. The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the WHS 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 Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180].

  2. The penalty must reflect the need for specific deterrence. 21st Century Building is still conducting a business. Its operations involve the provision of services, including scaffolding, to the construction industry and the continuing engagement of workers.

Mitigating Factors

  1. 21st Century Building has no previous convictions: s 21A(3)(e) CSP Act.

  2. 21st Century Building is otherwise of good character: s 21A(3)(f) CSP Act. The steps which it took after the incident demonstrate this. 21st Century Building has been incorporated since 2013.

  3. 21st Century Building is unlikely to re-offend: s 21A(3)(g) CSP Act.

  4. 21st Century Building has good prospects of rehabilitation: s 21A(3)(h) CSP Act. It has taken positive steps to guard against the risk of an incident such as this ever happening again. It has brought its documentation and its procedures into line with those which, on all the evidence, should have been in place before this incident occurred.

  5. 21st Century Building has shown remorse for the offence: s 21A(3)(i) CSP. It has provided evidence that it has accepted responsibility for its actions and has acknowledged that the injuries to Ms Yang were caused by its actions.

  6. 21st Century Building entered a plea of guilty: s 21A(3)(k) CSP Act. The court must take into account the fact that the offender has pleaded guilty, when the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) CSP Act. It is appropriate to give 21st Century Building a 25% discount for an early plea.

  7. 21st Century Building gave assistance to law enforcement authorities: s 21A(3)(m) CSP Act. It cooperated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to Pay a Fine

  1. I am required to have regard to s 6 of the Fines Act 1996 (NSW) before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the court that it should exercise its discretion to limit the amount of the fine. The offender’s capacity to pay is relevant but not decisive: Mahdi Jahandideh v The Queen [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.

  2. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said:

“First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to ‘the means’ of the defendant, pursuant to s 6 of the Fines Act 1996.”

  1. I find that the evidence shows that 21st Century Building is no longer a successful company and that it now has a very modest income. I also find that Mr Ayache, in his personal capacity as a builder, is submitting tax returns showing earnings of approximately $30,000 per annum, nett of tax. How the family has been paying all of its loans, plus its running expenses, from such modest sources of income, is a mystery. Money is coming from somewhere, but 21st Century Building has not seen fit to explain how the gap is bridged between what Mr Ayache says both he and the company are earning, and the $24,000 per month which the family is somehow finding to cover loan interest and family running expenses.

  2. The financial evidence called by 21st Century Building raises many more questions than answers. In this regard I refer to the oral evidence of Mr Ayache, summarised at pars 175-185 above. I have come to the view that Mr Ayache has not put all of the material before the court which he could, to explain just how $24,000 per month is being regularly met. While it may be the case that 21st Century Building does not have the business income to pay a large fine, it would seem to have potential access to an unknown source of funds. Furthermore, Mr Ayache seems to have the ability to borrow millions of dollars from banks, based upon verbal falsehoods, and without the burden of producing any documentation to establish his true financial position. Once he has obtained loans, significant monthly payments have been kept up, but the evidence does not explain the source of the repayments.

  3. Towards the conclusion of oral submissions on the second day of the hearing, I pointed out to counsel for 21st Century Building that the company was either insolvent or close to insolvent. It has an excess of liabilities over assets. It has unpaid debts. It has little or no income to service its existing liabilities. On the evidence, it appears that the company is unable to pay its debts as and when they fall due. I asked counsel for 21st Century Building why there was any point in the company continuing to exist. Counsel was granted a short adjournment, and then explained to the court that his instructions were that Mr Ayache, in his capacity as a sole trader builder, somehow used the home warranty insurance which had been taken out by 21st Century Building. There was no evidence to this effect, but I most certainly accept that counsel had been given those instructions. It is hard to understand why Mr Ayache personally can have access to the home warranty insurance of 21st Century Building. It is also hard to hard to understand why he does not take out his own home warranty insurance. If Mr Ayache is personally using the company’s home warranty insurance, that does not seem a valid reason for extending any leniency to the company in relation to the fine for the offences committed.

  4. I am not satisfied that 21st Century Building has discharged its onus in relation to its capacity to pay. However, I will take into account the modest size of the business.

Costs

  1. There will be an order that the defendant is to pay the prosecutor’s costs.

Totality

  1. The charges in the two Summonses arise out the same set of facts. The failure by 21st Century Building to take reasonably practicable steps to guard against the risk is the same in both charges. I must therefore have regard to the principle of totality when imposing sentence. Where a court sentences an offender for more than one offence, the aggregate or overall sentence must be “just and appropriate” to the totality of the offending behaviour: Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 at 63. The principle of totality is applicable where the penalty imposed is by way of fine: Camilleri’s Stock Feeds Pty Ltd v EPA (1993) 32 NSWLR 683 at 704.

  2. In Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616 the High Court expressed a preference for what should be regarded as the orthodox, but not necessarily immutable, practice of fixing a sentence for each offence and aggregating them before taking the next step of determining concurrency. In Pearce v The Queen (1998) 194 CLR 610 the High Court said at [45]:

“A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course, as questions of totality.”

  1. In EPA v Barnes [2006] NSWCCA 246 at [50] the Court of Criminal Appeal said that if the sentencer believes that the totality principle requires an adjustment to the fines which may otherwise be appropriate, the court should first fix a sentence for each offence and then consider questions of totality.

  2. I find that the appropriate fine for each offence, considered separately, is a fine of $240,000. Having regard to the principles of totality, I will reduce the fine for the offence involving workers on the site from $240,000 to $60,000. There will then be a 25% reduction of each fine for the guilty pleas.

Penalty

  1. In District Court Proceedings 2022/245096 my orders are:

  1. 21st Century Building Services Pty Ltd is convicted.

  2. The appropriate fine is $60,000 but that will be reduced by 25% to reflect the early plea of guilty.

  3. Order 21st Century Building Services Pty Ltd to pay a fine of $45,000.

  4. Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

  5. Order 21st Century Building Services Pty Ltd to pay the prosecutor’s costs.

  1. In District Court Proceedings 2022/245121 my orders are:

  1. 21st Century Building Services Pty Ltd is convicted.

  2. The appropriate fine is $240,000 but that will be reduced by 25% to reflect the early plea of guilty.

  3. Order 21st Century Building Services Pty Ltd to pay a fine of $180,000.

  4. Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

  5. Order 21st Century Building Services Pty Ltd to pay the prosecutor’s costs.

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Decision last updated: 31 October 2024

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Baumer v R [1988] HCA 67
Baumer v R [1988] HCA 67
Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37