SafeWork NSW v Deicorp Pty Ltd

[2020] NSWDC 639

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Deicorp Pty Ltd [2020] NSWDC 639

Hearing dates:

7 October 2020

Date of orders:

23 October 2020

Decision date:

23 October 2020

Jurisdiction:

Criminal

Before:

Scotting DCJ

Decision:

1   Deicorp Pty Ltd is convicted.

2   I impose a fine of $170,000.

3   The offender is to pay the prosecutor’s costs agreed in the sum of $55,000.

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:

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

SENTENCING – objective seriousness – deterrence aggravating factors – mitigating factors – good prospects of rehabilitation – plea of guilty – remorse

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

R v Borkowski (2009) 195 A Crim R1

R v Thomson & Houlton (2000) 49 NSWLR 383

R v Youkhana [2004] NSWCCA 412

Texts Cited:

Managing the Risks of Falls at Workplaces

Construction Work Code of Practice 2105

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
Deicorp Pty Ltd (Defendant)

Representation:

Counsel: M Scott (Prosecutor)
M Baroni (Defendant)

Solicitors: Department of Customer Service (Prosecutor)
Barry.Nilsson Lawyers (Defendant)

File Number(s):

2018/294034

Publication restriction:

None

Judgment

Introduction

1. Deicorp Pty Ltd (the offender) has pleaded guilty to a charge that as a person who had a health and safety duty under section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Christopher Roberts 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 conducted a business providing construction services. It was the principal contractor for the development of a mixed use residential and commercial complex at Kellyville (the site).

5. The offender contracted with Australian Prestressing Services Pty Ltd (APS) to carry out the post-tension concrete reinforcing work at the premises. Mr Roberts was an employee of APS with six years’ experience in the construction industry and had worked at the site since about 1 March 2016.

6. An onsite detention tank (OSD) was to be constructed at the bottom of Building C at the site. Positioned on the top of the OSD were five penetration voids measuring 900mm x 900mm. The OSD was approximately 1.6 metres deep.

7. The offender, as principal contractor, was responsible for ensuring that the risk of falls through penetrations on the OSD was eliminated or minimised as far was reasonably practicable.

8. The offender adopted an undocumented system of work to control the risks that included either the following:

1. placing thick cast-in mesh into the concrete approximately 1000mm square over the penetration that was fixed down and nailed to the ground; or

2. placing marine ply over the penetration with a 200mm overhang and bolting it onto the concrete using dyna bolts and a ratchet.

9. Workers at the premises reported that they were advised of these undocumented systems by the offender.

10. In or about the end of July 2016 a sub-contractor accessed the penetrations to get inside the OSD to remove formwork from the inside of it. This was thought to be the last time that anyone used the penetrations to access the inside of the OSD. On the day of the incident a penetration void on the OSD was covered with unsecured plywood.

11. On Saturday 8 October 2016 at about 6.30am Mr Roberts arrived at the site with other workers from APS. After lunch Mr Roberts was directed to go to the ground level of Building C to find an area to land a grout pump. Mr Roberts had performed this task before. Mr Roberts identified an area that he believed to be suitable in the area of the OSD. The OSD had been used by APS to land items previously.

12. At about 12.10pm Mr Roberts stepped on a piece of plywood and kicked the edge of it with his right boot. He did not realise that it was covering a penetration in the OSD. He fell approximately 1.6 metres into the OSD, through the penetration and was knocked unconscious. When he regained consciousness he began to call for help. It took approximately 20 minutes for someone to find him and call emergency services.

13. The cover on the penetration was unsecured. There were no physical barriers preventing or restricting access to the penetration or onto the OSD. There were no signs identifying the OSD as a restricted area or an exclusion zone.

14. At a tool box meeting held on the day of the incident the offender instructed that there was to be no access to Building B above level 2, but no instruction was given in relation to the OSD in Building C on the ground level. Prior to the incident Mr Roberts was not provided with any information about the risk of falls through accessible penetrations by APS or the offender. He had previously heard a builder tell form workers to make sure they do not leave penetrations uncovered at tool box talks. Prior to the incident Mr Roberts was not notified that penetrations existed at the premises.

15. Mr Roberts was taken by ambulance to hospital. He had a closed head injury and suspected spinal cord injury. He was discharged from hospital at 10pm that night. He has suffered severe back pain and chest pain and two fractured ribs as a consequence of the incident. On 13 December 2016 he underwent an elective C3/4 laminectomy to manage cervical myelopathy secondary to C3/C4 stenosis due to traumatic C3/C4 disc herniation. He was discharged on 19 December 2016 and has returned to work.

16. On 8 October 2016 inspectors from SafeWork NSW observed that the OSD located in Building C measured 4 metres in width by 32 metres in length and it was of solid concrete construction. Four additional penetration voids on the OSD were covered with plywood and three of them were not secured. The fourth plywood cover was bolted into the concrete. One of the covers had the word “PENO” sprayed on it. The OSD in Building B had five penetration voids that were all covered, but only three of the covers were secured.

17. The offender had a work health and safety site plan in place for the premises. It held tool box talks with all workers every Monday. The site safety manager conducted site safety inspection walks approximately once per week which were documented. He also conducted safety committee walks. If he identified matters requiring rectification he issued work orders to sub-contractors to undertake those works. He then followed up with the sub-contractor to ensure that the work had been completed. The document identifying the defect was signed off by the trade that had rectified it. The document was kept on a noticeboard.

18. Minutes of a Site Safety Committee dated 5 October 2016 identified the need to “fence up all penos all floors all buildings”.

19. The offender had in place a Project Risk Assessment (PRA) that identified the risk of penetrations and provided that penetrations would be covered with a full protection cover that was able to withstand the impact and safely support a person, that did not create a trip hazard, that was securely fixed in place to prevent it being moved or removed accidentally and was marked with the words “Danger Hole Under” or similar painted in a bright colour.

20. The offender did not comply with the requirements of the PRA at the site in relation to a number of penetrations in the OSDs in Buildings B and C.

21. The offender had a Safe Work Method Statement in place that dealt with the risk of fall from height but did not address the risk of a fall through penetration.

22. Workers reported receiving instructions at site inductions in weekly tool box meetings to bolt down plywood over penetrations as required.

23. Clauses 78 and 79 of the Work Health and Safety Regulation 2017 provide for the control of risks associated with a fall by a person from one level to another. The WorkCover New South Wales Code of Practice “Managing the Risks of Falls at Workplaces” April 2016 (the Code) is an approved Code of Practice that was published on 16 December 2011. The Code provides guidance material in respect of the risk posed by open penetrations.

24. The offender had in place covers made of plywood but they were not fastened appropriately and did not comply with the Code or the Regulations as at 8 October 2016.

25. After the incident the offender conducted an Accident Investigation Report and found that the accident was caused by the failure to secure the plywood cover. The proposed corrective action was listed as erecting a 1.2 metre fence around that penetration and all other penetrations.

The Offender’s Case on Sentence

26. The offender relied on an affidavit of Jason Farrugia affirmed 23 September 2020. Mr Farrugia was called to give evidence and cross-examined.

27. Mr Farrugia is the Work Health and Safety Manager of the offender and has held that position since January 2019. Prior to that he has worked at a number of large construction companies as a Work Health and Safety Manager since 2009.

28. Mr Farrugia’s role with the offender is to implement and manage all of its WHS systems across all of its construction sites. This includes facilitating education and training sessions, reviewing and updating the offender’s work, health and safety management systems and procedures, arranging third party audits and system reviews and considering new ways to improve the systems of work. Mr Farrugia works in consultation with the offender’s managing director, senior management, project managers, site managers and site foremen. Mr Farrugia is required to keep up to date with safety issues and to implement industry alerts and lessons learnt from prior incidents. Mr Farrugia does not have any budgetary restrictions in his role.

29. The offender is a family owned business that was established in 1999 and registered as a company on 8 July 2009. It currently has 120 staff and is working on six projects in the planning phase and seven in the construction phase ranging from residential building works to larger commercial and mixed use developments. The offender has been a member of the Master Builders Association for over 21 years. It is also a member of the Formwork Industry Association (FIA).

30. After being appointed by the offender, Mr Farrugia commenced a full company review of the WHS systems and procedures across all of its sites. This resulted in the issue of a revised Work Health and Safety Systems Plan in 2019 that is used on all construction sites. This document has continued to be updated to the 2020 version.

31. Since Mr Farrugia’s employment the offender has implemented 15 new or improved procedures.

32. In relation to penetrations the offender has recently brought in a number of measures to improve safety including:

1. increased focus on safety and design, working more closely with architects to reduce the number and size of penetrations in a building and to develop a penetration register at the start of a project;

2. the deployment of a dedicated site safety co-ordinator on all large sites;

3. covering all penetrations in bright yellow plywood; and

4. conducting a daily penetration audit on each site to confirm that all penetrations are securely protected and recording those inspections.

33. The offender has also considered the use of locking bolts on all penetrations that can only be opened with a special key kept by a designated safety officer and the use of a penetration register to identify each access to a penetration site.

34. The offender has been working closely with the FIA with a view to improving competence and safety across the industry.

35. Mr Farrugia is required to report monthly to management about audits, incidents and any near misses. He also attends a weekly meeting with management team to update them on WHS issues.

36. The offender has been heavily involved in community work including being a contributor to the Biaggio Signorelli Foundation, Achieve Australia, Camp Quality, Kookaburra Kids, Australian Lebanese Chamber of Commerce, Domestic Violence Against Women, Antiochian Orthodox Church, Newtown Jets, St George Dragons, Deicorp Community, Mates in Construction and Beirut disaster relief.

37. Mr Farrugia, on behalf of the company, was authorised to express regret and deep remorse for the hurt that the incident caused Mr Roberts and his family. The offender accepts that it unlawfully allowed Mr Roberts to be exposed to a risk to his health and safety, pleads guilty and offers an unqualified apology.

38. In oral evidence Mr Farrugia stated that during his interview for the position with the offender that a big emphasis was placed on safety. The company’s position, as it was described to him, was that they wanted to increase the quality of their safety systems and eliminate any dangers presented by penetrations, falls from heights and any other high risk components of construction work carried out by the offender.

39. In his role as a member of the FIA, Mr Farrugia has contributed to a review of the proposed Formwork Code of Practice by providing comments to SafeWork on behalf of the offender. The industry has been identified as having a high incidence rate of incidents. Mr Farrugia gave evidence that whilst the offender had trialled lock down bolts they found that workers were still using a crow bar to remove the plywood covers. The offender has employed three additional safety personnel and a safety foreman since Mr Farrugia’s employment.

40. The offender also relied on an affidavit of Matthew Skinner affirmed on 30 September 2020. Mr Skinner was the offender’s Human Resources and WHS Manager from 16 November 2015 to 15 October 2018. Mr Skinner was not required for cross-examination.

41. Whilst employed with the offender, Mr Skinner was responsible for implementing its WHS systems across various sites including at the Kellyville site. He attended to conduct site inspections at the site from time to time. The offender implemented its WHS Plan at the site which was modified to suit the site. The WHS Plan required that workers were inducted onto the site, review of the SWMS of contractors, the requirement for risk assessments to be conducted, site inspections and regular communication with management.

42. A PRA was conducted for a number of activities including penetrations on the site. The offender also had a SWMS in place for working at height.

43. The Construction Work Code of Practice 2105 was available in electronic form on the project laptops at each site and a hard copy was provided to contractors.

44. The form work contractor responsible for constructing the OSD had an SWMS in place that identified the risk posed by penetrations in the OSD and specified appropriate control measures. The APS SWMS had similar provisions. Both SWMSs were available on site.

45. After the incident, Mr Skinner attended the site and work was stopped for one day.

46. After the incident on 12 January 2016, Mr Skinner was directed to revise the offender’s WHS practices. As a result the offender took a number of steps including:

1. casting mesh into penetrations and covering them with plywood;

2. directing that a combination of measures were to be used depending on the size and location of a penetration;

3. requiring regular inspection of penetrations;

4. requiring site inductions, including the requirement for workers to sign applicable SWMSs to indicate that the SWMS had been explained to the worker;

5. conducting audits of compliance with (4);

6. implementing daily toolbox talks; and

7. monthly head office safety meetings.

47. Following the Kellyville incident, Mr Skinner implemented further actions including:

1. daily recorded inspections of penetrations by foremen and weekly inspections by project managers;

2. formal hand overs by form workers of the area that they had been working in;

3. fortnightly reports by Mr Skinner to management about safety issues on all sites and a monthly report regarding WHS performance for the month;

4. employment of dedicated WHS officers for each site;

5. review of the WHS Plan.

48. After the Kellyville incident, Mr Skinner was kept up-to-date about Mr Robert’s condition through contact with APS.

Consideration

49. 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

50. The offence is one of some objective gravity.

51. The risk was obvious and known to the offender. The offender had in place written policies intended to control the hazard presented by penetrations, but these policies were not implemented or enforced by adequate supervision.

52. The likelihood of the risk arising was high when the building being constructed included elements such as OSDs.

53. The risk to workers included a risk of death.

54. The steps that could have been taken to eliminate the risk were known to the offender and specified by it as the steps to be taken. The steps were cheap, simple to implement and involved little inconvenience to the offender.

55. The offence caused serious personal injury to Mr Roberts.

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

Deterrence

57. 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].

58. 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 has taken considerable steps since the incident to improve its safety systems with particular emphasis on penetrations, falls from height and the high risk aspects of construction work.

Aggravating Factors

59. 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 Roberts 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

60. 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 two incidents that occurred in 2016, including the employment of five additional dedicated safety workers since 2019. I am satisfied that the offender has demonstrated that it has good prospects of rehabilitation.

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

62. 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 disputed a number of the facts alleged by the prosecutor up to about a week before the matter was listed for sentence. Witnesses had been conferenced in preparation for a disputed facts hearing. The appropriate discount is 15%.

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

Other Matters

64. I have taken into account that the offender has been convicted of the same offence on 14 September 2018. I do not think that is sufficient to establish the aggravating factor provided for by section 21A(2)(d) Crimes (Sentencing Procedure) Act 1999, but it is relevant to where the matter should lie within the boundaries of the objective circumstances.

65. It is appropriate to take into account that the offender had not been charged with the offence that occurred on 12 January 2016 before the offence that is the subject of these proceedings was committed on 8 October 2016. The offender has taken substantial steps since October 2016 to improve its systems particularly in so far as they relate to penetrations. It is relevant to note that the conviction was imposed for the first offence after the second offence was committed.

Penalty

66. Deicorp Pty Ltd is convicted.

67. I have taken into account the Victim Impact Statement prepared by Mr Roberts.

68. The appropriate fine is $200,000 that will be reduced by 15% to give effect to the plea of guilty.

69. I impose a fine of $170,000.

70. The offender is to pay the prosecutor’s costs agreed in the sum of $55,000.

71. 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: 26 October 2020