SafeWork NSW v Form Group NSW Pty Ltd

[2022] NSWDC 176

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Form Group NSW Pty Ltd [2022] NSWDC 176

Hearing dates:

18 May 2022

Date of orders:

25 May 2022

Decision date:

25 May 2022

Jurisdiction:

Criminal

Before:

Scotting DCJ

Decision:

1 Form Group NSW Pty Ltd is convicted.
2 I impose a fine of $75,000.
3 The offender is to pay the prosecutor’s costs of the proceedings, agreed in the sum of $43,000.
4 I order pursuant to s 122(2) 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 – worker injured

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

SENTENCING PRINCIPLES - no record of previous convictions - 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

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

Texts Cited:

Managing the Risks of Falls at Workplaces (April 2016)

Work Health and Safety Consultation, Co-operation and Co-ordination (December 2011)

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
Form Group (NSW) Pty Ltd (Defendant)

Representation:

Counsel:
M Scott (Prosecutor)
B Eurell (Defendant)

Solicitors:
Legal, Department of Customer Service (Prosecutor)
Obsequium Legal & Risk Solutions Pty Ltd (Defendant)

File Number(s):

2020/349356

Publication restriction:

None

Judgment

Introduction

1. Form Group NSW Pty Ltd (the offender) appears for sentence after it pleaded guilty to an offence pursuant to s 32 Work Health and Safety Act 2011 (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 Meor Muhammed Mustaqim to a risk of death or serious injury.

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

Facts

General background

The parties

3. Deicorp Pty Ltd (Deicorp) conducted a business which provided construction services. Deicorp was the principal contractor for the development of a mixed use residential and commercial complex located at 418-426 Canterbury Road, Campsie, New South Wales (the site).

4. The offender conducted a business which involved concrete construction services (formwork). Deicorp engaged the offender as a subcontractor to supply, install and dismantle formwork at the site.

5. Labour Force Group Pty Ltd (Labour Force) conducted a business which involved labour hire to the construction industry, and general and formwork stripping. The offender engaged Labour Force as a subcontractor to carry out stripping and clearing works at the site. Labour Force allocated six workers to Form Group, including Ali Savari, who was the Operations Manager at Labour Force and was engaged as the Team Supervisor at the site, and Mr Mustaqim.

The site

6. The site consisted of two buildings labelled Building A and Building B. The ground floor of Building B was solid concrete and had approximately six penetrations across it. One of these penetrations (the penetration), a ventilation shaft, measured approximately half a metre x 1.5 metres.

Background to the incident

7. Prior to Form Group handing over the ground level of Building B to Deicorp, the penetration was adequately secured and marked. Form Group then ceased working in that area for a period of time until stripping activities were to commence.

8. On 15 January 2019, workers from Dynamic Concrete Pumping Services Pty Ltd (Dynamic) engaged in concrete pumping work on the ground level of Building B. In the course of this work, it was necessary for Dynamic to pass a concrete pump line through the penetration. The penetration cover was removed for this purpose and not adequately replaced.

9. On the afternoon of 15 January 2019, an inspection of the ground floor of Building B was conducted by Deicorp Site Manager, Jason Fitzgerald, Form Group Supervisor, Kamil Daaboul, and a worker from Labour Force. The inspection was undocumented and no report was made of any penetration being uncovered, or being inadequately covered.

The incident

10. At approximately 7.00am on Wednesday 16 January 2019, Mr Mustaqim, along with Mr Savari and four other workers also engaged by Labour Force, arrived at the site. Mr Daaboul directed the workers to strip the formwork and stack the materials on the ground floor of Building B.

11. Throughout the day, Mr Mustaqim cleaned and stacked plywood across the floor as directed. At approximately 1.45pm, he picked up a loose piece of plywood, not realising that it was covering the penetration. He fell approximately 4.5 metres through penetration to a concrete slab below in Basement 1 of the building.

12. The penetration was covered by an unmarked, loose piece of plywood. There were no warning signs placed around the penetration or physical barriers in place to prevent the risk of workers falling through the penetration.

13. Immediately following the incident, Deicorp Work Health and Safety Manager, Jason Farrugia, placed a cover over the penetration and spray painted the word “PENO” on the cover in fluorescent green paint.

Injuries

14. Mr Mustaqim was taken by ambulance to St George Hospital. He sustained multiple pelvic and lumbar fractures including:

1. right iliac fracture extending into the joint space with associated widening of the sacroiliac joint;

2. a longitudinally orientated left sacral ala fracture which extended posteriorly through the left L5-S1 facet joint;

3. right side transverse process of L1, L2 and L4;

4. the spinous process of L5.

15. Mr Mustaqim underwent surgery for his injuries and was discharged from hospital on 11 March 2019. He returned to Malaysia shortly afterwards.

Systems of work in place prior to the incident

Deicorp

Safe Work Method Statements

16. Deicorp had a “Work Health and Safety Site Plan” for the site. This plan contained a section titled “Safe Work Method Statements” (SWMS) which stated the following:

SWMS are developed for all medium to high risk activities identified in the Risk Assessment. Where possible, the SWMS should be produced by the subcontractor undertaking the work, however, where this does not occur, Deicorp will be required to develop a SWMS for them.

Deicorp Project Manager is responsible for reviewing all generic SWMS submitted by subcontractors at tender. Where job steps or site conditions change from those planned, the Project Manager is responsible for ensuring all SWMS are updated prior to work commencing at the site.

17. Prior to commencing on site, Form Group submitted a SWMS to Deicorp’s former Project Manager, Farrokh Farrokhzad. The SWMS did not specifically address the risks and control measures relevant to penetrations while stripping formwork.

18. By accepting and failing to properly review Form Group’s SWMS, Deicorp failed to adhere to its own Safety Management Plan.

Penetrations

19. Deicorp’s Work Health and Safety Plan also contained an addendum titled “Site Safety Rules Addendum: Formwork (Form 3.4)” which stated the following:

Prior to the formwork supervisor granting any access to the incomplete deck, they must first ensure that all safety procedures as per their SWMS have been completed as per the following:

All penetrations must be covered with 19mm ply and nailed off with a nail on each corner.

All penetrations must be signed DANGER PENETRATION…

20. Deicorp did not have a system in place to ensure that the Site Safety Rules were being followed by subcontractors. Instead, Deicorp relied on subcontractors to inspect their work areas for hazards such as open penetrations and to secure and cover any such penetrations.

Induction/training

21. Deicorp’s Work Health and Safety Plan also contained a section titled “WHS Induction” which contained the following:

Deicorp will ensure nobody commences work on premises until the following is confirmed:

1. They have completed the WHS Induction Training Course for Construction Work in NSW or similar courses in other states in accordance with cross border recognition of nationally recognised training;

2. They have received a Work Activity WHS Induction (including understanding and signing off on Safe Work Method Statements); and

3. They complete a Site Specific WHS Induction (including understanding and signing off on the company’s Site Safety Rules).

22. Deicorp had a “Site Induction Form”. Mr Mustaqim and Mr Savari each signed the induction form on 15 January 2019 confirming, amongst other things, that the Site Safety Rules (Form 3.3) had been explained to them and that they had read, understood and signed the relevant SWMS.

23. In response to a s 155 Notice issued by the Regulator (No. 7-373227), Mr Savari stated that Deicorp had asked him to sign off on the SWMS but that they did not go through the whole document. He also stated that the control measures relating to penetrations described in the SWMS were not explained to him. Furthermore, he stated that no one spoke to him about penetrations or explained what they were and that there were no markings or signs for penetrations, including the area where Mr Mustaqim fell.

Form Group

24. As part of its system of work for the site, the offender:

1. ensured workers and contractors completed a site induction and SWMS induction prior to commencing work at the site;

2. allocated a site supervisor and team leaders to supervise workers;

3. required contractors engaged by Form Group to have a dedicated supervisor for their workers;

4. held daily site toolbox talks/prestart meetings with workers prior to starting work which included raising potential risks associated with the day’s tasks and the required control measures.

25. The SWMS relied upon by the offender failed to include adequate information regarding the risks and controls associated with working in the vicinity of penetrations while stripping formwork.

26. Mr Daaboul, who was responsible for supervising the workers, did not conduct an inspection of the ground floor of Building B on the morning of 16 January 2019 to check that all penetrations had been adequately covered and marked, prior to allowing Labour Force workers to commence working on the floor.

Labour Force

27. Prior to the incident, Labour Force did not:

1. provide any training to Mr Mustaqim, or his supervisor Mr Savari, nor did it warn them of the risk of falling from heights, including the risk of falling through penetrations, or the control measures available to guard against such a risk;

2. conduct a risk assessment of the site before allowing its workers to commence working at the site, nor did it consult with the offender or Deicorp on matters of work, health and safety including their systems of work.

28. In response to a s 155 Notice issued by the Regulator (No. 7-373227), Labour Force advised that it did not have responsibility for work, health and safety and that its workers follow general safety procedures and safety signs on site regarding site hazards and personal safety. In response to a further s 155 Notice issued by the Regulator (No. 7-361643), Labour Force advised that “all subcontractors working for Labour Force Group are expected to handle their own WHS/PPE”.

WHS Regulation

29. Clause 78(1) of the Work Health and Safety Regulation 2017 (WHS Regulation) prescribes that a PCBU at a workplace must manage risks to health and safety associated with a fall by a person from one level to another that is reasonably likely to cause injury to the person or any other person, including in the vicinity of an opening through which a person could fall: cl 78(2)(b) WHS Regulation.

30. Clause 79 of the WHS Regulation applies if it is not reasonably practicable for the PCBU at a workplace to eliminate the risk of a fall to which cl 78 applies. The person must minimise the risk of a fall by providing adequate protection against the risk in accordance with the clause.

Guidance materials

31. The NSW Code of Practice “Managing the Risks of Falls at Workplaces” (April 2016) (the Code) is an approved Code of Practice and applies to all workplaces where there is a risk of a fall by a person from one level to another that is reasonably likely to cause injury.

32. Relevantly, the Code states the following:

At Section 2.1 “How to identify fall hazards”, that you must identify all locations and tasks that could cause injury due to a fall. Tasks that need particular attention are those carried out near a hole, shaft or pit into which a worker could fall.

In Section 3.2 “Work on solid construction”, that holes, penetrations and openings through which a person could fall should be made safe immediately after being formed. If a cover is used as a control measure, it must be made of a material that is strong enough to prevent persons or objects falling through the penetration and must be securely fixed to prevent any dislodgement or accident removal.

33. The NSW Code of Practice “Work Health and Safety Consultation, Co-operation and Co-ordination” (December 2011) (the Consultation Code) is an approved Code of Practice which provides guidance on how to meet the requirements for consultation on work, health and safety matters under the Act. In particular, the Consultation Code provides that duty holders who have a health and safety duty over the same matter should engage in consultation in order to plan and manage health and safety. The consultation should include a determination of any risks in the work environment, which workers will be affected by those risks, and how the risks will be controlled.

Changes to the system of work following the incident

Deicorp

34. On 17 January 2019, the Regulator issued an Improvement Notice (No. 7-345796) to Deicorp. The Notice directed Deicorp to review and revise its control measures for falls through penetrations.

35. Deicorp complied with the Improvement Notice and put in place the following:

1. in consultation with the offender, reviewed and revised the offender’s SWMS;

2. implemented pre-pour permits and strip formwork permits which required documented inspections to be undertaken by Deicorp and the offender’s subcontractor’s supervisor, prior to works proceeding;

3. conducted a toolbox meeting on 17 January 2019 to alert workers to the incident and the control measures to prevent persons from falling through penetrations.

Form Group

36. Following the incident, as stated above, the offender in consultation with Deicorp reviewed and revised its SWMS to specifically address the risks associated with falling through penetrations.

37. The offender also provided training to its workers on the SWMS including how to safely conduct formwork activities including working with penetrations.

Labour Force

38. Labour Force took no action following the incident.

Offender’s case on sentence

39. The offender relied on affidavits sworn by Charbel Taouk (Director and Company Secretary), Richard Makhlouf (Formwork Safety Coordinator), Kamil Daaboul (Formwork Supervisor) and Jason Malkoun (Partner and Director of Malkoun & Associates Pty Ltd, a Sydney-based accounting and consultancy firm). The offender also relied on two character references from Anthony Assaf (Maronites on Mission Australia) and Reverend Father Maroun Youssef (St Charbel’s College).

40. The affidavit of Mr Taouk sworn 5 May 2022 can be summarised as follows. I will not repeat matters already referred to.

41. Mr Taouk is a Director and the Company Secretary of the offender.

History of the offender

42. The offender was established in 2012 by Mr Taouk and Naim Rizkallah, the Directors. Mr Taouk and Mr Rizkallah both had previous experience in the construction industry, including in small-scale formwork and concreting projects.

43. The offender initially employed approximately 15 workers and was engaged predominantly in residential housing type projects. Since this time, the offender’s workforce has grown to include six managers and approximately 110 form workers and labourers including sub-subcontractors. The nature and scale of the offender’s projects have also progressed to include predominantly high-rise mixed residential/commercial projects.

44. Mr Taouk and Mr Rizkallah are actively involved in the day-to-day operations of the business and conduct site visits on a weekly to fortnightly basis to monitor and inspect the work and to meet with relevant personnel to discuss progress and safety matters.

45. Mr Taouk deposed that in his role as Director, he was involved with the business administration aspect of the business. He stated that the offender considered itself a “family business” and that any worker being injured as a result of the offender’s shortcomings was something which Mr Taouk and Mr Rizkallah took personally.

The incident

46. Mr Taouk acknowledged and accepted responsibility for the offences on behalf of the offender. He deposed that the offender had made its best efforts to cooperate with SafeWork NSW throughout the course of the investigation and had responded to Improvement Notices by implementing requirements without delay. Following and as a result of the incident, the offender also engaged third party professionals to help improve its systems of work.

47. Mr Taouk apologised to Mr Mustaqim, the Court and the community for the failures and shortcomings of the offender that led to the incident. He expressed genuine remorse and regret and stated that the offender accepted full responsibility for its actions and omissions.

Support to Mr Mustaqim

48. Following the incident, multiple staff members attended St George Hospital on Mr Taouk’s direction to check on Mr Mustaqim’s welfare and to offer the offender’s support and assistance.

49. Upon finding out that Mr Mustaqim required financial assistance as a result of being unable to work due to the injuries, Mr Taouk and Mr Rizkallah directed that the offender make a number of payments to Mr Mustaqim to help cover his living expenses. These payments were made between 22 January 2019 and 5 April 2019 and totalled $6,700.

Systems of work in place prior to the incident

50. The offender’s systems of work in place prior to the incident are set out above. Mr Taouk deposed that the offender’s understanding about WHS duties and safe work practices prior to the incident was predominantly based on the knowledge and experience that Mr Taouk and Mr Rizkallah had acquired on-the-job and by working in the formwork and construction industry.

51. Mr Taouk acknowledged that the systems of work in place prior to the incident were inadequate in many respects.

52. Mr Taouk deposed that leading up to the incident, it was standard practice of the offender to securely cover and mark penetrations on the Deicorp project site. In accordance with this standard practice, the offender had securely covered and marked the penetration that Mr Mustaqim fell through before handing over that work area to Deicorp. Post-incident inquiries revealed that the offender and its workers were not involved in any decision or action to remove the penetration cover and that the offender’s management and site personnel were not informed or made aware that the penetration cover had been removed and not adequately replaced prior to the offender’s workers recommencing work in the area. Mr Taouk accepted however, that regardless of those matters, checks should have been made to ensure that the penetration cover was still intact prior to recommencing work.

Changes to the system of work following the incident

53. Changes to the offender’s system of work following the incident are also outlined above. In addition to the matters listed there, the offender held a toolbox meeting with workers to highlight the incident and reinforce safe systems of work and control measures. On 8 March 2019, Mr Taouk and Mr Rizkallah also met with WHS lawyer and advisor, Jason Barakat of Obsequium Legal & Risk Solutions (Obsequium), for the purpose of obtaining assistance with improving the offender’s WHS compliance. Since that time, the offender has, with the assistance of Mr Barakat, taken a number of steps to improve safety including:

1. preparing a master Formwork SWMS, used as a basis to train workers in formwork safety, and as a baseline to develop project-specific SWMSs. The master Formwork SWMS has been regularly revised and updated since it was first prepared;

2. developing WHS Due Diligence Awareness Training. This training module was presented to the offender’s supervisors, team leaders, workers and subcontractors and included in-class activities and a knowledge assessment;

3. developing a Formwork Safety Awareness Training module. This training module was presented to the offender’s supervisors, team leaders, workers and sub-contractors and incorporated a SWMS preparation activity, an in-the-field performance assessment and a knowledge assessment. The total cost of implementing the two training modules was approximately $14,000;

4. implementing the use of a “Project Mobilisation Checklist” form to ensure systematic checks and guidance about safety related measures to be completed when preparing to start a project;

5. implementing the use of a “Daily Pre-Start Checklist/Action Items” form for use by Formwork Supervisors to ensure that all safety related matters are addressed before work starts each day on site;

6. implementing the use of a “Pre-Start/Toolbox Meeting Attendance & Minutes” form for use by Form Group’s Site Supervisors. This form was developed with specific agenda items and topics which were included to bring attention to and provide guidance on important matters that impact safety when carrying out formwork;

7. in around November 2020, the offender, in consultation with Mr Barakat, took steps to revise and introduce further WHS processes. As a result, some of the offender’s WHS documents were revised for use on its formwork projects. These documents included, but were not limited to, the offender’s “Formwork Safety Inspection” form and its “Formwork Pre-Stripping Checklist” form;

8. implementing a standard practice of allocating a worker on each project that is solely responsible for attending to all safety requirements that arise on a day-to-day basis. The annual wage for this role is approximately $65,000;

9. in December 2020, the offender engaged a business called “People Safe Australia” to deliver training to its supervisors on WHS risk management. The fee charged for that training was $3,905 and the labour costs for the offender’s workers attending the training was $7,000;

10. in March 2020, the offender employed Joseph Attieh as a “Safety Supervisor”. This is a full-time position whereby Mr Attieh is responsible for travelling to each project to conduct safety checks, ensure safe practices are being adopted and implemented at each site, discuss any safety issues with site supervisors, and assist with implementing the offender’s safe systems of work and operational safety controls. The annual salary for this role is $80,759;

11. in March 2021, the offender created the position of “Safety Coordinator” for the company. This position sits above the Safety Supervisor and is responsible for coordinating and implementing safety within the company and especially at each of its project sites. Responsibilities include, but are not limited to, preparing safety documents and paperwork for each project in consultation with the site supervisor and workers; coordinating safety across each project and investigating safety incidents and issues; reporting to the offender’s directors on safety-related and other project matters; undertaking site observations; and holding regular toolbox meetings at each project to address workers on relevant safety-related matters. From 11 March 2021 to 6 November 2021, this position was performed by Abbas Hussein. In May 2021, the offender enrolled and paid for Mr Hussein to undertake a Certificate IV in WHS with Kinnect Training Pty Ltd at a cost of $1,495. From 25 November 2021 to present, the role of Safety Coordinator has been performed by Mr Makhlouf. The annual wage for the position of Safety Coordinator is approximately $180,000;

12. improving operational safety through the use of safer equipment on its projects. Mr Taouk cited an approximate cost of $144,000 for materials purchased for safer formwork equipment such as scaffold planks to create temporary working platforms/false decks in lieu of using timber bearers or plywood laid across the metal frames.

54. The professional fees incurred by the offender in engaging Obsequium to improve its WHS policies and practices were approximately $17,800.

55. The total cost to the offender of improving its WHS policies and practices since the incident was estimated to be at least $428,864.

56. Mr Taouk acknowledged that despite the actions outlined above, the offender still had a significant way to go in improving its WHS and stated that himself and Mr Rizkallah were committed to continued improvement of WHS within the company.

Community involvement

57. Mr Taouk deposed that the offender had always made efforts to be actively involved in community initiatives and charitable causes.

58. Since 2019, the offender had made monetary donations to the Save Our Sons Duchenne Foundation of approximately $8,000 and the Steps of Hope organisation of approximately $5,000.

59. Since around 2013, the offender has also provided monetary donations, sponsorship of fundraising events and volunteering of resources for Maronites on Mission Australia (MOM Australia). Since 2017, this has included sponsorship of MOM Australia’s annual fundraising dinner, and between 2017 and 2019, sponsorship monies for this event totalled $34,000.

60. The offender’s directors and their families, and some of its staff, have also been extensively involved in MOM Australia’s charity food run for the homeless.

61. The offender has also supported St Charbel’s Maronite Church and school in Punchbowl since 2012.

62. I have also taken into account the content of the character references on this issue.

The offender’s current financial position

63. Mr Taouk endorsed the affidavit of Mr Malkoun as an accurate statement of the offender’s current financial position, and provided further insights including that:

1. the company currently has bad debts of about $5.2 million, being monies owed from clients which are unlikely to be recovered. These bad debts have placed a significant strain on the offender’s cash flow and the directors had to borrow funds to inject capital to help preserve the company and be able to continue paying workers, suppliers and other creditors;

2. in 2020, Mr Taouk and Mr Rizkallah took out secured business and investment loans to help preserve the company. The balance of the loans currently sits at $4,268,000;

3. the COVID-19 pandemic has had a significant detrimental impact on the offender’s financial position, downturn and its financial viability for several reasons;

4. in 2022, there has been a marked rise in the cost of formwork materials, especially timber, which has impacted on the estimated cost to complete projects which were priced and awarded at a time when such a rise in material costs could not have been reasonably anticipated. This has meant that the profit margins on its current projects will be considerably diminished or that its projects will operate at a loss.

Apology

64. Mr Taouk concluded by reiterating his apology and his remorse for the offender’s failures in WHS and for the injuries and impact to Mr Mustaqim. He confirmed that the offender took full accountability and stated that it had done its best to learn from the incident and make the necessary improvements.

Supporting affidavits

65. The affidavits of Mr Makhlouf and Mr Daaboul both sworn 5 May 2022 broadly confirmed the changes to the offender’s system of work following the incident outlined above. Mr Makhlouf, as Formwork Safety Coordinator for the offender, deposed that although not allocated to work on the project where the incident occurred, he became aware of the incident through toolbox meetings that were held about the incident shortly after it occurred and through training that was provided after the incident, which included protections against open penetrations. Mr Makhlouf confirmed that following the incident, the offender’s Directors took immediate and across-the-board action to improve WHS within the company and at its sites.

66. The affidavit of Mr Daaboul as Formwork Supervisor for the offender, went primarily to his own involvement in and understanding of the incident. He confirmed that it was standard practice for the offender to cover, secure and mark penetrations prior to the incident, and stated that he had adopted this practice on the Deicorp project site back in 2019. Mr Daaboul also confirmed that he had checked the area where the incident occurred, including the penetration that Mr Mustaqim fell through, prior to handing over the ground floor level of Building B to Deicorp. In addition, he stated that during the period between handing the area over to Deicorp and the incident, neither he nor any of the offender’s workers were involved in the decision to, or action of, removing the penetration cover and not adequately replacing it. However, like Mr Taouk, Mr Daaboul accepted that the work area and the penetration should have been checked prior to allowing the offender’s workers to recommence work in the area. Mr Daaboul then stated that following the incident, he took part in each of the safety-related training modules introduced by the offender. Like Mr Makhlouf, he confirmed each of the safety-related changes to the offender’s system of work following the incident as outlined above.

Consideration

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

Objective seriousness

68. The risk of a worker falling through a penetration was known to the offender. It had adopted a practice of securing and marking plywood covers over penetrations to make them safe. The evidence was that this penetration was properly secured and marked when the offender completed its work in the area. At a later time, another person removed the penetration cover to allow Dynamic to pass a concrete pumping line through it. The penetration cover was not properly replaced by the persons who knew of its removal. The site safety rules provided that Deicorp should have been notified of its removal. The penetration was covered with a piece of plywood that was not secured into position or marked to draw attention to the danger posed by the penetration. There was an inspection on the afternoon before the incident by representatives of the relevant PCBUs, including Mr Daaboul, that was not documented which must have missed the presence of the unsecured penetration cover. The risk was present for a relatively short period of time. However, a further inspection should have been carried out on the morning of the incident to ensure that the area was safe for the offender’s workers to commence work in that area.

69. The risk was likely to result in harm if adequate precautions were not taken. The offender accepts by its plea, that adequate precautions were not taken including, ensuring that the penetration was securely covered or installing edge protection, inspecting the site, prohibiting work in the area until all penetrations were securely covered, having an adequate SWMS addressing the risks posed by penetrations and providing workers with adequate information and training as to the risk.

70. The consequences of the risk included a risk of death and serious personal injury.

71. The available steps to eliminate and/or minimise the risk were well known in the industry and had been the subject of SafeWork guidance material that was publicly available.

72. The steps that could have been taken were relatively simple and involved little inconvenience or expense.

73. The serious injuries sustained by Mr Mustaqim are an aggravating factor.

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

Deterrence

75. 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].

76. The penalty imposed must also provide for specific deterrence. The offender continues to operate a business that poses significant risks to workers. The need for specific deterrence is reduced by reference to the offender's previous good record and its comprehensive response to the incident.

Aggravating factors

77. The injury, harm and loss caused by the s 32 offences was substantial: s 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 serious injuries sustained by Mr Mustaqim are sufficient to establish the aggravating factor.

Mitigating factors

78. The offender does not have any previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender has operated since 2012 without any prior safety breaches.

79. The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender had taken some steps prior to the incident to respond to the risk and it took more comprehensive steps after the incident at a significant cost to it. I am satisfied on the balance of probabilities that the offender has demonstrated that it has good prospects of rehabilitation.

80. The offender has demonstrated remorse: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. Mr Taouk, on behalf of the offender, has accepted responsibility for the offence and has expressed remorse. The offender also made financial contributions to Mr Mustaqim to assist him after the incident. I am satisfied that the offender has expressed genuine remorse and contrition.

81. The offender entered a plea of guilty: s 21A(3)(k) and s 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%.

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

83. The offender has demonstrated by its financial and other contributions to the community and to charitable works, that it is a good corporate citizen.

Capacity to pay a fine

84. 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.

85. In addition to the evidence of Mr Taouk, the offender relied on an affidavit of its accountant, Jason Malkoun sworn 26 April 2022. Mr Malkoun was not required for cross-examination.

86. Mr Malkoun’s evidence was that the offender had a taxable income of $27,351 in the 2020 financial year, $1,564,282 in the 2021 financial year, but was projected to have a loss of $6,727,413 in the 2022 financial year.

87. Mr Malkoun projected figures for the 2022 financial year, by doubling the half year of figures that he had available to him for the period 1 July 2021 to 31 December 2021. In that period, the offender recorded bad debts in the sum of about $3.3 million, that were projected to reach $6.6 million for the full financial year. In my view, Mr Makloun’s analysis on the bad debts issue was overly simplistic and I do not accept it. However. Mr Taouk’s evidence was that the bad debts figure had risen at the time of the sentence hearing to about $5.2 million.

88. The offender is presently operating a substantial business with a projected annual turnover of about $33 million for the 2022 financial year. Putting bad debts to one side, it is still expected to have a gross profit in excess of $2 million for the 2022 financial year.

89. I accept that there has been a marked increase in the cost of building materials and that it is likely that the profit made on jobs costed some time ago will be less than expected. I note that the directors are personally liable for a large proportion of the company’s debt.

90. I am satisfied on the evidence that the offender has demonstrated that it has a limited capacity to pay a fine. However, by reference to the appropriate fine based on the objective seriousness of the offence, the need for general deterrence and the quantum of the costs order, the corresponding reduction of fine to be imposed is relatively small.

Penalty

91. Form Group NSW Pty Ltd is convicted.

92. The appropriate fine taking into consideration the offender’s limited capacity to pay is one of $100,000, that will be reduced by 25% to give effect to the plea of guilty.

93. I impose a fine of $75,000.

94. The offender is to pay the prosecutor’s costs of the proceedings, agreed in the sum of $43,000.

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

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Decision last updated: 25 May 2022