SafeWork NSW v Austar Construction Pty Ltd

[2023] NSWDC 289

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Austar Construction Pty Ltd [2023] NSWDC 289

Hearing dates:

24 July 2023

Date of orders:

01 August 2023

Decision date:

01 August 2023

Jurisdiction:

Criminal

Before:

Scotting DCJ

Decision:

1   Austar Construction Pty Ltd is convicted.

2   I impose a fine of $150,000.

3   The offender is to pay the prosecutor’s costs as agreed or assessed.

4 I order that pursuant to section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

Catchwords:

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

SENTENCING - objective seriousness - deterrence - aggravating factors - mitigating factors – capacity to pay a fine - appropriate penalty

SENTENCING PRINCIPLES - good prospects of rehabilitation - remorse - plea of guilty - assistance to law enforcement authorities

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999

Fines Act 1996

Work Health and Safety Act 2011 (NSW)

Cases Cited:

Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37

Jahandideh v R [2014] NSWCCA 178

R v Borkowski (2009) 195 A Crim R 1

R v Thomson & Houlton (2000) 49 NSWLR 383

R v Youkhana [2004] NSWCCA 412

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
Austar Construction Pty Ltd (Defendant)

Representation:

Counsel:
E Kerkyasharian (Prosecutor)
W Thompson (Defendant)

Solicitors:
Legal, Department of Customer Service (Prosecutor)
Landa Stewart Lawyers (Defendant)

File Number(s):

2022/156868

Publication restriction:

None

JUDGMENT

1. Austar Construction Pty Ltd (the offender) appears for sentence after pleading guilty to an offence under s 32 of the Work Health and Safety Act 2011 (NSW) (the Act), in that it failed to comply with the health and safety duty it owed pursuant to s 19(1) of the Act and thereby exposed Mishaal Prasad to a risk of death or serious injury.

2. The maximum penalty for the offence is a fine of $1,731,500.

Facts

3. At all material times, the offender conducted a business as a builder of residential homes. At the time of the incident, it employed four workers.

4. The offender was the principal contractor for a construction project at an address in Gladesville (the site). Peter Xie, the sole director of the offender, attended the site approximately every three days and when a specific stage of construction was completed.

5. The offender contracted Stoney Contracting Pty Ltd (Stoney Contracting) to carry out electrical work at the site. Stoney Contracting subcontracted some of the electrical work at the site to Jingxin Gao (Mr Gao), a sole trader electrician who operated a business known as FGP electrical. Stoney Contracting provided the quote for Mr Gao’s work to the offender.

6. Mr Gao’s contract with Stoney Contracting had commenced in approximately June 2019. Mr Gao was paid by Stoney Contracting through invoices he issued to it on completion of particular items of electrical work. Stoney Contracting would forward Mr Gao’s invoices to the offender. When Mr Gao was working at the site, all instructions, supervision and instruction in relation to his work were given to Mr Gao directly by Austar supervisors.

7. The work at the site involved construction of a two-storey house. At the time of the incident, the house under construction was in the process of being built and was yet to have the interior work completed. The electrical work was partially completed but Mr Gao had some work remaining.

8. The offender employed Chaoqun (Mark) Xie as the Site Supervisor. Mr Mark Xie held a Certificate IV and Diploma from TAFE in Building and Construction. He had worked in the role of Site Supervisor for five years prior to the incident. Mr Mark Xie was responsible for supervising work at the site and another site in East Denistone. Depending on the work scheduled for the day, Mr Mark Xie would spend from half a day to a day at each site that he supervised. Mr Mark Xie would ask the sub-contractors working at the site what work was planned for him to be notified when they would be attending the site. For several months prior to the incident, scaffolding and a work platform protecting the exposed edge of the first level mezzanine were dismantled and a temporary handrail installed at the direction of Mr Mark Xie.

The incident – 15 June 2020

9. By 15 June 2020, the work at the site had reached its final stage of fit out. Mr Gao had carried out work at the site at different times over a period of approximately 12 months on an irregular basis, from once a week to once a fortnight.

10. On the day of the incident, Mr Gao arrived at the site. Mr Mark Xie had attended the site before 7am that day but had left by the time Mr Gao arrived. Mr Gao had previously informed Mr Xie that he would attend the site during the week of 15 June 2020 but did not specify on which day.

11. On 15 June 2020, Mr Gao was working inside the building under construction at the site. He had been working on the first floor mezzanine level where the temporary timber handrail (the handrail) had been placed to prevent falls from the mezzanine to the ground floor. The handrail was in place at the edge where Mr Gao had been working immediately before his fall.

12. There were no witnesses to the incident and Mr Gao was unable to recall the circumstances leading up to the incident. The handrail was observed in close proximity to where Mr Gao was found by two other workers (Matthew Forrester and Chunhuna Wei) on the ground floor. When Mr Forrester found Mr Gao, he moved the railing away from where it lay near Mr Gao and asked Mr Wei to call an ambulance.

13. Mr Gao suffered the following injuries:

1. multicompartmental intracranial haemorrhage with traumatic brain injury;

2. deep vein thrombosis;

3. closed fracture pelvis;

4. multiple pubic rami;

5. closed fracture axis, spinous process;

6. carotid cavernous fistula; and

7. right petrous calvarial fracture and associated facial nerve palsy.

14. Mr Gao was intubated at the site and taken to hospital. He underwent an emergency craniotomy for evacuation of extradural and subdural hematoma. He remained in hospital for a month and was discharged on 13 July 2020.

15. Mr Gao suffered memory loss as a consequence of his injuries. He has no recollection of his fall. As at February 2021, he had not been able to return to full-time work. He was 36 years of age at the time of the incident.

Systems of work in place at the time of the incident

16. A Work Health and Safety Management Plan (WHSMP) for the site was in place in June 2020. However, it did not address the risk of falls from height from the mezzanine level within the structure being built at the site.

17. There was a Safe Work Method Statement (SWMS) for the site, which referred to certain risks of falling, including falls from scaffold and “uncomplete (formwork) decks”. However, the SWMS did not address risks associated with falling from edges at the mezzanine level.

18. There was no site induction administered, or toolbox talks delivered to Mr Gao, which addressed the risks of falling over adequately guarded edges at the first floor or mezzanine level inside the building under construction.

19. The handrail did not provide adequate edge protection, was not sufficiently complete and did not protect against the risk of falling through the gap between the toe board and the top of the handrail. It was not strong enough or robust enough to guard against a person’s weight being placed against it and causing it to detach from the mezzanine floor edge. The handrail was installed and connected to the floor by nails only. The nails holding the posts of the handrail were installed in the withdrawal orientation, which made it more likely to be pulled out of its position if a load fell against it. It was reasonably practicable for the handrail to be connected to the floor using nails installed in another orientation and/or screws or bolts. Further, the timber posts were oriented in the weaker direction and it was reasonably practicable for the timber posts to be oriented such that the direction of loading is in the same plane as the larger dimension of the rectangular cross-section.

Steps taken after the incident

20. SafeWork NSW issued a Prohibition Notice to the offender requiring it to eliminate the risk of falls internally on the first floor of the site.

21. The offender installed a new timber guardrail at the edge on the first floor by securing the top and mid rails to the walls and attaching the support posts securely to the floor. The new timber guardrail complied with the relevant Australian Standard.

Offender’s Case on Sentence

22. The offender relied upon two affidavits of Zhong Jie (Peter) Xie affirmed on 4 July 2023 and 7 July 2023, respectively. The following is a summary of these affidavits.

23. Mr Xie is the is the sole director and shareholder of the offender.

24. Mr Xie has held a builder’s licence since 5 August 2000. Prior to becoming a builder, Mr Xie had worked as an engineer for high rise buildings since 1987. He holds a Bachelor of Civil and Structural Engineering from Fu Zhou University, where he graduated in 1987. He also has a Diploma of Building Studies from the Sydney Institute of Technology.

25. The offender was registered with ASIC on 27 April 2005.

26. Mr Xie controls the day-to-day operations of the offender. Since its incorporation, Mr Xie has been the primary employee of the offender. Prior to 2018, the offender employed 4 employees, including Mr Mark Xie. By the end of 2018, the only employees remaining in the company were Mr Xie and Mr Mark Xie, who has a Diploma in Building Studies from the Sydney Institute of Technology. He conducted his training as site supervisor with the offender in 2016.

27. In or about February 2019, the offender was contracted to build and construct a two-storey house at the site (the project). Mr Mark Xie was the site supervisor for the project. A number of contractors were engaged to undertake work on the project site in relation to plumbing, kitchen installation and electrical work, among other things. One of the contractors for the project was Stoney Contracting, which was contracted to do the electrical work.

Systems of work for the site

28. The offender had a WHSMP and SWMS for the site.

29. In relation to falls from heights, the WHSMP provided the following:

1. “where practicable”, work that involved the risk of a fall be undertaken on the ground or on a solid construction like an elevated work platform;

2. where this was not practicable, use of a fall prevention device such as secure fencing, edge protection, working platforms and/or covers was required;

3. if fall prevention devices were not practicable, a “work positioning system” such as plant or a structure that enables the person to be positioned or safely supported was to be used; and

4. if fall prevention devices were not practicable, a fall arrest system with safety harnesses and training in emergency procedures for fall arrests were to be implemented.

30. When undertaking work involving the risk of a fall from height, workers were required to follow instructions, work with a buddy when using a ladder and only use approved work platforms. The WHSMP did not specifically address the risk of falling from the mezzanine floor.

31. The SWMS addressed specific procedures which had associated risks of falling from height, such as use of ladders and scaffolding, working around open pile holes, and accessing uncompleted formwork. The risk of falling from the mezzanine floor was not specifically addressed.

32. Prior to the incident, Mr Mark Xie had provided information and conducted safety talks with the workers including Mr Gao, about working on the mezzanine level and to be careful with the edge overlooking the ground floor area when moving things or doing work around the area. The toolbox meetings were held at about 7am in the morning before commencing work on the site. Mr Gao always attended the site after 9am, but Mr Mark Xie would talk to Mr Gao about safety when he did see Mr Gao on the site.

33. The handrail was installed several months prior to the incident. Although the handrail was temporary, Mr Mark Xie made sure that the handrail was over 1 metre high so that it would meet Australian Standard 1657 and was secured to the floor which was flushed against one side of the wall.

The incident

34. In the six months prior to the incident, there was scaffolding installed to cover the whole of the ground floor up to and above the mezzanine level. The scaffolding had been used by Mr Gao to pre-cut the holes and wire the holes for the later installation of downlights.

35. Prior to the incident, this scaffolding had to be removed so that the contractors could lay tiles throughout the ground floor area. At the same time, a temporary timber handrail was fitted to the edge of the void area to prevent falls.

36. The scaffolding around the stair void area on the mezzanine level remained to prevent against falls in the stair void area.

37. On and prior to the day of the incident, Mr Gao did not report to Mr Mark Xie and did not inform him that he would be attending the site.

38. Mr Gao usually brought his own tools and equipment to complete his work.

Steps taken after the incident

39. After the incident, the offender fitted a timber handrail to the edge of the mezzanine which was more secure and complied with Australian Standard 4994.1.2009.

40. The offender also adopted the following safety documentation:

1. Managing the Risk of Falls in Housing Construction;

2. Managing the Risk of Falls at Workplaces; and

3. Construction Work.

41. A harness with anchorage was supplied to any worker performing work near an edge or any other place where there was a risk of falling from height.

42. After the incident, Mr Xie was regularly in contact with Xuefeng Zhu, the director of Stoney Contracting, and Mr Mark Xie, to ascertain Mr Gao’s condition.

Remorse

43. On behalf of the offender, Mr Xie expressed contrition and remorse for the incident, and acknowledged that it failed to provide a sufficiently strong handrail.

Capacity to pay and impact on the offender

44. After the incident, the offender did not receive any offers for jobs. The company did not complete any further construction work after completing the project.

45. Further, the stress of the incident has led to Mr Xie not personally having the capacity to accept or find jobs. He has a daughter with diffuse pachygyria, who suffers from severe developmental delay and seizures and Mr Xie spends significant time caring for her. As a result, the offender is only able to accept small jobs.

46. Mr Mark Xie ceased to be an employee of the company after he completed work on the site.

47. The offender has experienced a significant decline in its total income and profit since 2020. In the financial year ending on 30 June 2021, the offender reported a total income of $2,202,846.80 and a profit before tax of $50,064.88. In the financial year ending 30 June 2022, the offender had a total income of $2,505,637.96 and a total profit before tax of $17,908.18. In the financial year ending 30 June 2023, the offender had a total income of $704,629.18 and a total loss of $236,219.75. As at 13 June 2023, the balance in the offender’s business account was $447.83.

Consideration

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

Objective seriousness

49. The risk of a worker falling from the mezzanine level was obvious and known to the offender. It had erected the temporary handrail at the time when the scaffold was removed. Whilst the scaffold provided effective protection, the temporary handrail was seriously inadequate. It was improperly attached and did not have a mid-rail. It is apparent from what occurred in the incident that it was not sturdy enough to prevent a person falling from the mezzanine level.

50. The chances of the risk coming home if appropriate measures were not taken was moderate.

51. The consequences of the risk coming home included a risk of death.

52. The steps that could have been taken to control the risk were simple, inexpensive and well known. The offender had tried to install a temporary handrail which was the appropriate control measure but had done so ineffectively.

53. The injuries sustained by Mr Gao are an aggravating feature of the offence. He was 36 years of age. He suffered a traumatic brain injury, fractures and other serious injuries. He has been unable to return to full-time work.

54. I have taken into account the maximum penalty for the offence and that the maximum fine increased substantially at about the time of the offence which reflects the seriousness of these types of offences.

Deterrence

55. 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].

56. There is some need for specific deterrence because the offender continues to operate in an industry that poses considerable risk to workers and other persons. However, the volume of the offender’s work has significantly decreased. It is presently only conducting maintenance work. The offender took some appropriate steps to address what occurred in the incident, but I would not describe its response as comprehensive.

Aggravating factors

57. The injury, harm and loss caused by the section 32 offences was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. In order for the aggravating factor to be established, I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. The offence does not require an injury to be sustained but only the creation of a risk. In this case the injury sustained was extremely serious and has led to Mr Gao experiencing ongoing disabilities including an inability to work.

Mitigating factors

58. The offender does not a significant record of previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender has one prior conviction for which it was fined $50,000 for an offence carrying a maximum penalty of $550,000. That incident was similar to this matter in that it related to a fall through an inadequately guarded penetration, but in circumstances where the offender had less control over the work. The offender has been operating since 2005 and is entitled to some leniency by reference to its record.

59. The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender had in place a WHS system prior to the incident. The offender has demonstrated by the steps it has taken after the incident that it has good prospects for rehabilitation.

60. The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. Peter Xie on behalf of the offender accepted responsibility for its actions and has expressed contrition and remorse.

61. The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. It is entitled to a discount on penalty that reflects the utilitarian value of that plea: 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]. The appropriate discount is 25%.

62. The offender co-operated with the SafeWork investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.

63. The Court is required to have regard to s 6 Fines Act 1996 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: Jahandideh v R [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.

58. The offender has demonstrated that it has a limited capacity to pay a fine. On the most recent set of accounts, it appears that the offender has almost no capacity to pay and any fine imposed will cause the offender to become insolvent. I note that in the past Peter Xie has funded the company from his own funds when that was required. On the other hand, the offender has not ceased trading and it is possible that the last year is an anomaly and the business will recover.

59. The offence does involve significant objective gravity. Balancing the competing positions, I will reduce the fine imposed to some extent to take into account the offender’s limited capacity to pay a fine.

Penalty

66. Austar Construction Pty Ltd is convicted.

67. The appropriate fine is one of $320,000 which will be reduced by 25% to reflect the plea of guilty and by a further amount to cater for the limited capacity to pay a fine.

68. I impose a fine of $150,000.

69. The offender is to pay the prosecutor’s costs as agreed or assessed.

70. I order that pursuant to section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

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Decision last updated: 02 August 2023