SafeWork NSW v Calibre Construction Group Pty Ltd

[2020] NSWDC 603

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Calibre Construction Group Pty Ltd [2020] NSWDC 603

Hearing dates:

23 September 2020

Date of orders:

09 October 2020

Decision date:

09 October 2020

Jurisdiction:

Criminal

Before:

Scotting DCJ

Decision:

(1) Calibre Construction Group Pty Ltd is convicted.

(2) For the penalty imposed and consequent orders see [64]-[69].

Catchwords:

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

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

COSTS – prosecution costs

OTHER ORDERS – training order made – work, health and safety undertaking order made

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999

Work Health and Safety Act 2011

Work Health and Safety Regulation 2017

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:

Principal judgment

Parties:

SafeWork NSW (Prosecutor)
Calibre Construction Group Pty Ltd (Defendant)

Representation:

Counsel:
M Cahill (Prosecutor)

Solicitors:
NSW Department of Customer Service (Prosecutor)
One Group Legal Pty Ltd (Defendant)

File Number(s):

2019/70042

Publication restriction:

None

Judgment

Introduction

1. Calibre Construction Group Pty Ltd (the offender) has pleaded guilty to a charge that as a person who had a health and safety duty under section 19(2) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Firas Maarbini to a risk of death or serious injury contrary to section 32 of the Act.

2. The maximum penalty for the offence is a fine of $1.5 million.

Facts

3. The parties tendered an Agreed Statement of Facts that can be summarised as follows.

4. The offender was a builder of commercial, residential and “mixed use” buildings and was the principal contractor in relation to the construction of a 14 storey, plus basement mixed use development comprising of both commercial and residential units at 36-42 Levey Street, Wolli Creek (the primary site).

5. Mr Maarbini was employed by Multiform Structure Pty Ltd and was working in an area located directly beneath an incomplete section of an in-fill wall, at 32-34 Levey Street, Wolli Creek (the adjacent site).

6. At all relevant times, Ali Mohanna was the sole director of the offender and acted as its “Project Manager” and Mahomud Bazzi was employed by the offender as its site foreman.

7. Building Squad Pty Ltd (Building Squad) was a contractor at the primary site, tasked with building in-fill walls. The in-fill walls were constructed of hollow masonry blocks and built between the floor slabs of the concrete framed building. The work completed by Building Squad at the primary site was supervised and directed by Mr Bazzi.

8. The in-fill walls were constructed without structural engineering advice, specific to them. An engineer provided detail to be included in the Construction Certificate obtained from the Council. The engineer did not specify that any of the in-fill walls, in particular the one on the boundary, were required to be constructed using any particular type of reinforcement.

9. On or about 3 February 2017, Mr Bazzi instructed Building Squad to cease work on the in-fill wall along the boundary with the adjacent site (the wall). The wall was about 6m in length and about 2850mm high and had not been secured to the overhead slab. The incomplete wall connected to the two vertical concrete columns with “L” shaped metal brackets. The wall had been constructed without the use of any reinforcement such as starter bars, vertical reinforcing bars or by core-filling the blocks with concrete and it was not braced.

10. At about 9.17am the incomplete section of the wall collapsed into the adjacent site. Mr Maarbini was struck by falling masonry blocks whilst working at the adjacent site. He sustained serious injuries, including lacerations to his head and right leg. The cause of the collapse of the wall could not be established.

11. The offender was issued with improvement notices requiring the demolition of the remaining part of the wall and that the works were certified by a structural engineer.

12. The offender obtained engineering advice to the effect that the wall, when it was rebuilt, should be secured to the floor slabs and the columns with starter bars that were drilled into the concrete and secured with epoxy and that the wall should be core-filled with concrete.

The Offender’s Case on Sentence

13. The offender relied on an affidavit of Mr Mohanna sworn 14 September 2020. Mr Mohanna was called to give evidence and cross-examined at the sentence hearing.

14. Mr Mohanna is the sole director of the offender. He completed a Bachelor of Building and Construction Management at the University of Technology, Sydney in 2001. From 1995 until about 2001 Mr Mohanna worked with his brother who was a licensed builder, mainly constructing apartments, villas and townhouses in the Sydney metropolitan area, before working for his brother as a site manager.

15. Mr Mohanna incorporated the offender in October 2008.

16. The offender’s business is as a building contractor and not a developer. The profits made by the offender on a job varied depending on many factors including cost overruns. There have been projects in the past on which the offender has lost money due to cost overruns.

17. When setting up the offender, Mr Mohanna engaged a professional consultant to set up his work health and safety system. In about 2016 the offender employed a full time work health and safety officer.

18. The offender has also sent its staff to externally run work health and safety courses and training. Mr Mohanna produced a number of Certificates of Attainment in evidence relating to the offender’s staff members.

19. The offender has completed a number of multi-storey projects before and after the incident without any safety issues.

20. Mr Mohanna deposed that in preparation for obtaining a Construction Certificate, the offender briefed a structural engineer to provide structural drawings for any component of the building that required engineering specification or detail. The in-fill block wall that collapsed and ran along the boundary with the adjacent site was not the subject of any consideration by the engineer in the documents obtained by the offender for the purpose of submitting the Construction Certificate. Mr Mohanna did not consider this to be unusual because in-fill walls were quite common and did not usually form a structural element of the building.

21. Mr Mohanna deposed that Mr Bazzi had been appointed the site supervisor on behalf of the offender and that he had responsibility for work health and safety matters.

22. The masonry work on the building was put out to tender and Building Squad was the successful tenderer. Mr Bazzi was responsible for supervising the day-to-day work of Building Squad.

23. Prior to the commencement of the project, the offender’s WHS officer prepared a specific work health and safety site plan. All persons attending the site were required to complete a site induction and documents were created to evidence this. The WHS officer was responsible for completing weekly site safety inspections and those inspections were also documented.

24. In or about November 2016 a new WHS officer was employed by the offender. On commencement of his employment, Mr Fitzgerald conducted a thorough review of the offender’s WHS system.

25. After the wall collapsed Mr Mohanna spoke to Mr Bazzi as part of the offender’s internal investigation into the matter. Mr Mohanna was told by Mr Bazzi that he believed the wall had collapsed because it had been struck by a skip bin being moved by a crane on the adjacent site. Mr Bazzi told Mr Mohanna that Building Squad had used brick ties and power-actuated nails to secure the concrete columns. Mr Bazzi believed that the wall was adequately braced by steel reinforcement bars that where installed on the adjacent site. Mr Bazzi instructed Building Squad to cease construction of the wall at the height that it was because he believed it was unsafe for the wall to be built any higher until the building on the adjacent site had progressed.

26. Building Squad has been deregistered and no information could be obtained from that company.

27. After the incident the offender has introduced a double checking process consisting of the WHS officer and Mr Mohanna attending all sites at least three times per week to inspect the site and identify any risks that need to be addressed. The offender has also implemented regular reviews of safety plans for each project. The offender has purchased a software program (Procore) which has been installed on all staff mobile phones and tablets. The application allows staff members to identify a risk on site, photograph it and allocate a staff member to action the risk. The application creates reminders and notifications to staff about that safety issue. The offender’s WHS officer also conducts weekly safety walks with each contractor on any of the offender’s sites.

28. Mr Mohanna deposed that he instructed the offender’s solicitors to enter a plea of guilty after reviewing the evidence in the brief. Mr Mohanna accepted that the risk arose because of an error of judgment by Mr Bazzi, for which the offender is responsible for.

29. Mr Mohanna gave evidence that the COVID-19 pandemic has had an effect on the offender in that it has experienced difficulty in obtaining new projects. The offender is currently awaiting a retention payment in relation to its last project in the sum of approximately $500,000, subject to any defects that may need to be rectified. Mr Mohanna deposed that there is currently sufficient working capital to keep all of the staff of the offender employed for about six to 12 months if no new work is obtained. The offender does have capacity to pay a fine but a significant fine would place it in a precarious financial position.

30. Mr Mohanna gave evidence that the offender has eliminated in-fill walls in its later projects, preferring to use the Dincel formwork system to create solid concrete walls with adequate steel reinforcing.

31. In cross-examination Mr Mohanna accepted that the wall should have been braced in accordance with the Masonry Guide. He accepted that this should have been picked up by either himself or the WHS officer during the course of a regular safety inspection. He accepted that Mr Bazzi should have known that the wall needed to be braced. Mr Mohanna accepted that the installation of bracing of the wall was a simple and inexpensive measure that could have been taken.

32. Mr Mohanna presented as an honest and forthright witness. He accepted responsibility on behalf of the company without question and expressed his regret in relation to the incident and the effect that it had on Mr Maarbini. I am satisfied that Mr Mohanna was a witness of truth and that his evidence should be accepted.

Consideration

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

Objective Seriousness

34. The offence is one of some objective gravity.

35. The risk of the wall collapsing if it was not adequately braced was known to the offender. The offender knew of the requirement of the Australian Standard and the Masonry Guide. Mr Bazzi made an error of judgment and the offender should have had in place a cross-checking system to prevent such errors causing a risk to health and safety.

36. The likelihood of the risk occurring was moderate to high because the wall on the boundary was to be built to a considerable height, which in ordinary weather conditions, required bracing of the wall.

37. The risk included a risk of death or personal injury to the workers on the primary site or the adjacent site.

38. The steps that should have been taken to brace the wall were well known in the industry and inexpensive to implement. The bracing of the wall until it was incorporated into the completed structure would not have created any burden or inconvenience to the project.

39. The offence caused serious personal injury to Mr Maarbini.

40. A mitigating factor in this case is that when the engineer provided specifications for the Construction Certificate, it did not require the wall on the boundary to be secured to the floor slabs or core-filled. In that respect the offender acted in accordance with the engineer’s advice and its failure was to adequately brace the wall until it was incorporated into the completed structure. The proximity of the wall to the boundary and the fact that workers were present on the adjacent site are factors that called for the inclusion of an engineering solution to the risk posed by the wall. The failure by the engineer to specify one was a contributing factor to the incident which was outside of the expertise of the offender.

41. I have taken into account the maximum penalty for the offence.

Deterrence

42. 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].

43. 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 offender has demonstrated that it had a commendable attitude to safety before the incident and that it has taken considerable steps since the incident to improve its safety systems.

Aggravating Factors

44. 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. The injuries sustained by Mr Maarbini are sufficient to establish the aggravating factor. I am satisfied beyond reasonable doubt that the injury, harm and loss caused by the offence was substantial.

Mitigating Factors

45. The offender does not have any previous convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender has been in operation since 2008 and has completed many similar projects without incident.

46. The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has demonstrated by its response to the incident that it has good prospects of rehabilitation.

47. The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. Mr Mohanna, on behalf of the offender, has accepted responsibility for the incident and expressed remorse.

48. The offender entered a plea of guilty: 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. An offender is entitled to a discount on penalty that reflects the utilitarian value of that plea. The primary consideration in determining where in the range a particular case should fall is the timing of the plea, so that the earlier the plea the greater the discount: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The offender assessed the prosecution brief for some considerable time before entering a plea and for a time failed to appear, but it did not enter a plea of not guilty. The appropriate discount is 20%.

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

Capacity to Pay a Fine

50. The Court is required to have regard to section 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.

51. The offender did not present sufficient evidence to demonstrate that it had a limited capacity to pay an appropriate fine. The prosecutor accepted that the offender has experienced some difficulty in obtaining new projects as a result of the COVID-19 pandemic.

Other Available Penalties

52. A court may make any of the other orders provided for by Division 2 of Part 13 of the Act, in addition to any other penalty imposed, if the court finds a person guilty or convicts the person of an offence: sections 234 and 235 of the Act.

53. The offender contended that this was an appropriate matter in which the Court should make a training order pursuant to section 241 of the Act. It proposed that each of its employees would undertake five training courses offered by an accredited training provider within the next 12 months. The offender currently has 12 employees. The offender led no evidence of the cost of the courses contemplated, but has provided the cost of its employees undertaking various training courses in the past.

54. The prosecutor submitted that a PCBU in the position of the offender should ordinarily be expected to send its employees to training courses of the kind proposed in order to comply with its duties under the relevant legislation. The prosecutor further contended that all of the courses undertaken should be related to controlling the risks presented by high risk construction work.

55. I am satisfied that this is an appropriate matter in which to make a training order for the reasons that follow.

56. The making of training orders advances the objects of the Act and the purposes of sentencing provided for in section 3A Crimes (Sentencing Procedure) Act 1999. In particular, general deterrence is reflected in a training order because it requires the offender to incur a cost and to divert the productive use of its employees and faces further sanction if it fails to comply with the order. Training orders also provide an important mechanism for rehabilitation of offenders and the protection of the community by the prevention of future risk and/or injury. Training orders are regularly made in other model legislation jurisdictions, in particular, Queensland. If national harmonisation is to be achieved, some attempt must be made to use the other available orders consistently between the relevant jurisdictions.

57. The offender has an established practice of sending its employees to external accredited training courses. The Certificates of Attainment relating to that training were in evidence. A review of that evidence reveals that:

1. In 2015 the offender sent eight of its employees to a one day external training course on overhead power lines and CPR;

2. in 2016 the offender sent 10 of its employees to a five day external training course on compliance with WHS legislation;

3. in 2017 the offender sent 16 of its employees to one day external training courses on first aid (13 employees), confined space training (one employee) and implementing traffic control plans (employee) and traffic control (one employee);

4. in 2020 the offender sent two employees to a one day course on CPR and first aid.

58. The cost of some of the training courses referred to above and a number of other courses were in evidence. The cheapest course was $220 (or $150 if there were 10 or more employees) and the most expensive course was $1,597. The average cost of the courses referred to was about $600 per employee.

58. This analysis demonstrates that the proposal by the defendant represents a significant increase to its present practice of requiring its workers to undertake training with external accredited providers. It represents 60 lost days of labour productivity within one year and will probably cost between $12,000 and $36,000.

59. There is no requirement for any PCBU to require its employees to go to external training, but some qualifications or competencies could not be otherwise obtained. The provision of training by independent and accredited providers should be encouraged. Amongst other things it provides a fresh set of ideas to be applied to internal processes that may improve safety by reducing risk.

60. Consistent with the self-regulation notion of the Act, it is appropriate that the offender should retain control over which courses its employees undertake, because it is in the best position to determine the courses that are most relevant to its operations and to the risks that it encounters and must control.

61. It is appropriate to make an order that the offender enter into a Work, Health and Safety Order as a means of demonstrating that the Training Order has been complied with.

Penalty

63. Calibre Construction Group Pty Ltd is convicted.

64. The appropriate fine is $75,000 that will be reduced by 20% to give effect to the plea of guilty.

65. I impose a fine of $60,000.

66. The offender is to pay the prosecutor’s costs agreed in the sum of $32,000.

67. I order that the offender arrange and pay for 12 of its employees to undertake five courses of training with a SafeWork NSW approved Work, Health and Safety training provider, with at least 40% of those courses to be related to high risk construction work (as defined by clause 291 of the Work Health and Safety Regulation 2017) pursuant to section 271 of the Work Health and Safety Act 2011 on or before 8 October 2021 (the Training Order).

68. I order that the offender enter into a Work Health and Safety Undertaking pursuant to section 239 of the Work Health and Safety Act 2011 for a period of two years on the following conditions:

1. The offender is to appear before the Court if called on to do so during the term of the Undertaking;

2. The offender is not to commit any offence under the Work Health and Safety Act 2011 during the term of the Undertaking;

3. The offender is to comply with the Training Order and to provide affidavit evidence to the prosecutor and to the Court that it has been complied with on or before 5.00pm on 5 November 2021;

4. The offender is to notify the Registrar of the District Court at the Downing Centre of any change of address for service during the term of the Undertaking.

69. 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: 09 October 2020