SafeWork NSW v HD Projects Pty Ltd

[2021] NSWDC 126

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v HD Projects Pty Ltd [2021] NSWDC 126

Hearing dates:

15 April 2021

Date of orders:

16 April 2021

Decision date:

16 April 2021

Jurisdiction:

Criminal

Before:

Scotting DCJ

Decision:

1   HD Projects Pty Ltd is convicted.

2   I impose a fine of $170,000.

3   The defendant is to pay the prosecutor’s costs of the proceedings as agreed or assessed. The defendant entered a plea of not guilty at an early stage of the proceedings. A number of adjournments were sought by the prosecutor to accommodate delays in the related proceedings against AC. The parties, and if necessary a costs assessor, should reflect these circumstances in arriving at the appropriate quantum of costs.

4 I order pursuant to s 122(2) Fines Act 1996 that 50% of the fine is 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 – workers injured

SENTENCING – deterrence – aggravating factors – mitigating factors – good prospects of rehabilitation – remorse - parity

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999

Work Health and Safety Act 2011

Cases Cited:

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

Green v The Queen (2011) 244 CLR 462

R v Thangavelautham [2016] NSWCCA 141

R v Youkhana [2004] NSWCCA 412

SafeWork NSW v HD Projects Pty Ltd [2020] NSWDC 765

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
H D Projects Pty Ltd (Defendant)

Representation:

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

Solicitors: Legal, Department of Customer Service
(Prosecutor)
Leigh Virtue & Associates (Defendant)

File Number(s):

2019/391940

Publication restriction:

None

Judgment

Introduction

1. HD Projects Pty Ltd (the defendant) appears for sentence after it was found guilty after trial of an offence contrary to s 32 Work Health and Safety Act 2011 (the Act).

2. The Court’s reasons for the finding of guilt are set out in its decision SafeWork NSW v HD Projects Pty Ltd [2020] NSWDC 765 (the verdict judgment).

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

Facts

4. The following relevant matters are extracted from the verdict judgment. [1]

   1. For contextual purpose, to the extent that there is any inconsistency or omissions in this judgment, the findings made in the verdict judgment prevail.

5. The defendant was contracted by Arise Constructions Pty Ltd (Arise) to install AFS Logicwall panels (panels) at a building site in Kellyville (the site). The panels were being lifted by a mobile crane operated by another contracted entity, All Cranes 4 Hire Pty Ltd (AC).

6. On 15 December 2017, a pack of panels were attached onto a Pallet Hook and loaded onto the crane by Marc Dessens, a labour hire employee that had been engaged by the defendant. Mr Dessens was not a qualified dogman. As the panels were lifted, the bottom panel broke through the plastic wrapping and fell. The 76kg panel injured two contracted workers on site, Mr Graff and Mr Sitauti.

Background

7. At all material times the defendant conducted a business or undertaking which involved the installation of permanent formwork systems, including AFS Logicwall Panels. Clyde Daish was a director of the defendant responsible for the management of day to day projects. Richard Hazard was a director of the defendant responsible for securing work. Adam Hamburger and Paul Georges were employed by the defendant as foremen. The defendant from time to time sourced workers through a labour hire firm, Hunter Labour Hire Pty Ltd (HLH), including Mr Dessens.

8. Arise was the principal contractor for the project involving the construction of 58 townhouses at Lot 21, 122 Windsor Road Kellyville (the site).

9. Arise entered into agreements with:

1. The defendant for the supply and installation of the panels;

2. AC to provide the services of a mobile crane at the site; and

3. Erectus Scaffolding Pty Ltd (Erectus) to supply and install scaffolding.

10. Barry Ramm was the sole director of AC. Adam Kerr was employed by AC as a dogman.

11. Erectus employed Fred Naesse as its General Manager and Mr Graff and Mr Sitauti as labourers.

12. Arise commenced work at the site in about September 2017. The project consisted of the erection of nine buildings that were referred to in the project as “stacks”. Stacks 1 and 8 were to contain eight townhouses and the remaining stacks were to contain six townhouses.

13. On 11 September 2017 the defendant provided a lump sum quotation to Arise for the supply and installation of the panels for the project. The Scope of Work stated that:

1. the defendant was responsible for the supply and installation of the panels (item 1.1); and

2. Arise was responsible for:

1. All safety requirements including perimeter scaffolding, edge protection, penetration covering, scaffolding for the lift and stair shafts and installation of bar caps to starter bars (item 2.6);

2. Cranage for installing panels over 3.6m in height (large panels) [2] (item 2.14); and

3. Cranage (vertical and horizontal) for delivery of wall pallets adjacent to applicable wall number (item 2.16).

   2. None of the panels relevant to the determination of the case were large panels.

14. The Qualifications to the document provided that no allowance had been made for cranage (item 3.12). The quotation was accepted by Arise on the basis of the price and the terms and conditions in it.

15. The defendant commenced work at the site on 25 October 2017.

16. The panels were supplied to the defendant by AFS Systems Pty Ltd (AFS). Approximately 15 panels were supplied stacked in a pack and secured with plastic wrapping. Each panel weighed approximately 76kg.

17. The panels were lifted by a crane in the packs with the use of the Pallet Hook. The Pallet Hook was provided by AFS to the defendant along with an instruction manual prepared by the manufacturer dated October 2010 (the Instruction Manual) and the Pallet Lifter Safe Work Method Statement dated August 2013 prepared by AFS (the AFS SWMS).

The incident

18. On 15 December 2017, panels were being lifted by a mobile crane from the ground to the first floor level of stacks 2 and 3 with the use of the Pallet Hook. Stacks 2 and 3 were under construction. No scaffold or edge protection was installed to the first floor level of Stack 2. Mr Ramm was operating the mobile crane and Mr Kerr was working as a dogman.

19. Between about 8.30am and 10.30am the crane was lifting packs of panels from the ground to the first floor level of stack 2. The crane was initially slewing loads to the right over the back of the crane. The crane then began slewing left, lifting the loads over workers. Slewing right involved lifting the loads over another stack, higher and over a longer distance.

20. Mr Kerr was receiving and detaching the loads of panels on the first floor level of stack 2. He was not directing the crane at that time. Sam Elarchi, an employee of the defendant was on level 1 of stack 2 clearing the slab and directing where the packs of panels were to be landed.

21. Mr Graff and Mr Sitauti were in the vicinity of stack 1 on the ground level and were standing near the formwork frames, discussing the work that they were going to perform after lunch.

22. At about 10.45am, Mr Ramm lifted a load of panels that had been attached to the Pallet Hook by Mr Dessens. He slewed the load to the left over where Mr Graff and Mr Sitauti were standing. When the load was above Mr Graff and Mr Sitauti, one of the panels detached from the load fell, striking Mr Graff on the head and shoulder and then striking Mr Sitauti on the head. Both Mr Graff and Mr Sitauti were knocked down.

23. Mr Graff suffered injuries to his left shoulder, left knee and left cheek. Mr Sitauti went to hospital to investigate a potential concussion but suffered no significant injuries.

24. Between about 11.10am and 11.16am, Mr Hamburger completed a document titled “HD Projects Injury Report” for each of the injured men. Under the heading of “description of event” for the form relating to Mr Graff, Mr Hamburger wrote:

Panels being lifted onto slab by crane. Pallet lifter was placed in 2^nd last panel not bottom as being lifted bottom panel slipped out falling onto a scaffolder. Crane only had one dogman he was on slab and Mark was loading them from below.

25. At about 1.45pm on 15 December 2017 Mr Hamburger convened a toolbox meeting with the defendant’s workers on site. The record of the meeting states that the workers were told:

1. Not to hook up loads of panels even with pallet lifters;

2. To leave that task to the crane dogman;

3. To make sure that the head contractor sets up an exclusion zone;

4. To let the dogman and the crane operator determine if the load is safe;

5. Ensure that there is clear communication with all people involved in directing the load.

Available guidance material

26. Australian Standard 2550.1.11 Crane, hoists and winches – safe use (AS 2550) provided general guidance on the use of cranes and included the following statements:

Personnel should not approach a crane when it is operating or travelling as there is a danger that they may be struck by the crane or the load… barricades and guarding shall be provided where necessary (page 18).

When loads have to be handled in the vicinity of persons…the crane operator shall be alert to the possibility of persons being trapped and injured by the movement of the crane or load and exercise caution (page 19).

27. The SafeWork Australia Falling Objects Facts Sheet was published in February 2012 (the FOFS) and it relevantly provided:

Objects have the potential to fall on to or hit people at the workplace or adjoining areas if precautions are not taken … examples include … an object free falling from lifting machinery … including loads being lifted that are not well secured … (page 2).

When moving a load, a safe means of raising and lowering plant, material and debris should be provided. Examples of additional control measures include: … making sure the load is balanced and secure when the load is lifted … enclosing areas that loads are being lifted over, and establishing “isolation” or “no-go” zones with barriers and trained workers to restrict access (page 3).

28. The WorkCover NSW Code of Practice Construction Work published in July 2014 (the Construction Code) was publically available and provided:

Falling objects can pose a significant risk and cause serious injuries to workers at construction work places or members of the public if control measures are not implemented to eliminate or minimise associated risks (page 67).

Control measures that can be implemented to manage the risk of falling objects when undertaking construction work include: closure of the adjoining area to form an exclusion zone … using a spotter on the ground level when loads are being lifted to high levels … using the appropriate equipment to raise and lower objects … load pallets correctly to ensure load stability … (pages 67-68).

29. The Instruction Manual provided:

Do NOT move the Crane/Pallet Hook unless the safety of persons in the vicinity of the crane is assured … while lifting in an area subject to passing traffic, barriers or warning signs shall be used to prevent any interference (page 6).

Means shall be provided to prevent the load from sliding on the tynes, or the load or part of the load of falling … this can be achieved, for example, by … safety chains, straps, wrapping or similar.

30. The AFS SWMS provided:

The task of placement of pallet lifter using crane or lifting device was the responsibility of the crane dogman;

The procedure for safely placing the pallet lifter identified the hazard of personnel contact and specified the control measure being that the dogman was to ensure site personnel in the area were aware of the activity and to ensure that the load is strapped as per the instruction manual;

Prior to the commencement of the lift the panels were to be secured to the pallet lifter using the binding straps provided that are located beside the tynes.

31. Neither the Instruction Manual nor the AFS SWMS were provided to AC by the defendant.

Systems of work in place prior to the incident

32. At the time of the incident, no exclusion zones were in place around the crane. Workers and other persons including Mr Graff and Mr Sitauti were not given any information or a SWMS about working safely near the crane. Mr Naesse was not notified that a crane would be working on that day and was not given any information relating to an exclusion zone, risk assessment or other safety information for the Erectus workers working in the vicinity of a crane.

33. The defendant advised HLH that Mr Dessens’ duties were to be general labouring duties such as keeping the work area clean, moving material and assisting installers where required. Mr Dessens’ experience consisted of four months working as a general labourer. Mr Dessens informed HLH that he had no “tickets” or qualifications, other than a white card.

34. The defendant supplied a site specific Work Health and Safety Plan to Arise dated 10 October 2017 (WHS Plan). The WHS Plan provided that Mr Georges was the defendant’s employee on site with responsibility for the defendant’s Scope of Works and for its safety and that the project supervisor was Mr Hamburger. The Scope of Works was noted to include, “supply and take delivery of AFS panels”. The Risk Register identified the risk of “falling load” and “striking objects” from the tasks of delivery of panels and cranage of panels onto slab. The control measures identified were the setting up of an exclusion zone for the delivery task, using ticketed and licensed personnel, and use of a spotter with a dogman for the cranage task. The WHS Plan included a reference to AS 2550 relating to mobile plant and equipment.

35. The defendant provided SafeWork with a SWMS No HSE-006 for the work at the site (the defendant’s SWMS). It was an agreed fact that the SWMS was signed by workers including Mr Dessens and that Mr Dessens denies ever seeing or signing the SWMS.

36. The defendant’s SWMS contained, at entry number 7, the task of “Taking delivery of the AFS Panels”. The potential hazards identified included “objects falling from height” and “possible traffic/pedestrian hazards”. The initial risk rating was stated to be “1”. This was the highest risk rating representing a serious risk of death, permanent disability or serious injury that was very likely or likely to happen. The hierarchy of control measure implemented was stated to be the 3^rd priority, being “isolating the hazard from anyone who could be harmed”. The control measures identified were:

1. Set up exclusion zone using traffic controls by the head contractor;

2. Only qualified dogmen to attach and direct load;

3. Pallet Lifter to be used in accordance with crane SWMS and manufacturer’s instructions;

4. AFS lifting gear to be visually checked for certification; and

5. AFS SWMS must be read in conjunction with this SWMS.

37. The residual risk for the task after the control measures were implemented was assessed as “4”, indicating that the task was very unlikely to involve a serious injury. The persons identified with responsibility for implementing the control measures were “Head Contractor, Crane Operator, Dogman, HD employee directing delivery”. This was the only task in the defendant’s SWMS that identified the use of the Pallet Hook.

Systems of work following the incident

38. After the incident the defendant took the following steps:

1. it conducted a toolbox talk on 15 December 2017 to discuss the incident and identify the relevant control measures;

2. it re-inducted its workers into their SWMS;

3. investigated the incident to determine the cause to be “pallet lifter was placed in 2nd last panel not bottom as being lifted bottom panel slipped out falling onto a scaffolder. Crane only had one dogman he was on slab and Mark was loading them from below.”

The investigation

39. On 15 December 2017 Inspector Ball and Inspector Mizzi attended the site to make observations and to record the details necessary for the investigation of the incident to be allocated to a lead investigator.

40. Inspector Ball had a conversation with Mr Hamburger, about which she made notes in her notebook. Mr Hamburger stated that there had been a delivery of 11-12 pallets of panels on that day that were being moved by the crane to level 1 of stack 2. The tynes of the Pallet Hook were intended to pass through the bottom panel, but passed through the second panel. The bottom panel fell when the pack was lifted, because it was only being held in place by the plastic. The panel fell about 5m onto the injured workers who were waiting for the crane to move their equipment to level 1 of stack 2.

41. Inspector Ball had a conversation with Mr Ramm, about which she made notes in her notebook. Mr Ramm was filling in for a crane operator who was sick. He had moved 6-8 packs of panels before the incident. He was unsure of the precise number. The dogman was up on level 1 landing the loads. A HD Projects worker was assisting in loading the panels onto the Pallet Hook. He was not a dogman.

42. On 19 December 2017 Inspector Mizzi issued two Improvement Notices to the defendant relating to eliminating or minimising the risks associated with falling objects during the cranage work.

43. On 22 December 2017 Mr Georges sent an email to Inspector Mizzi relating to the steps taken by the defendant to comply with the Improvement Notices. The email included the following:

Firstly, I’d like to start by saying that on behalf of HD Projects, we would like to thank you and SafeWork NSW for your guidance in this unfortunate matter. We accept both Improvement Notices handed to us and hope that this response, noting our revised control measures implemented, in accordance to the Work Health and Safety Regulation 2017, has shown the improvement required. I have taken your advice and read over clause 38 (review of control measures) of the Work Health and Safety Regulation 2017. I’d like to think that I am more aware of the control measures required to minimise the risk on site, so that our staff can return home every day safely to their loved ones.

…

Since the day of the incident (FRIDAY the 15^th of December), we at HD Projects have taken immediate action into bettering ourselves to hopefully avoid the situation from ever happening again. We know we cannot eliminate the risk associated with an object falling on a person, but we know we can minimise the risk by developing, implementing and maintaining a safe system of work. The best safe system of work is our Safe Work Method Statement (SWMS), as you pointed out to me, after reading the section in regards to this matter, on the day of the incident.

44. The email continued to outline the content of task number 7 in the defendant’s SWMS and to state what the relevant control measures were as set out in [35] above.

The defendant’s case on sentence

45. The defendant relied on an affidavit of Clyde Daish affirmed 15 April 2021. Mr Daish was present at the sentence hearing but not required for cross-examination. The contents of his affidavit can be summarised as follows:

46. Mr Daish is a director of the defendant. He is responsible for the oversight and management of the defendant’s projects and its workplace health and safety systems. Mr Daish shares these duties with Mr Hazard. The defendant does not impose any budgetary restrictions in complying with its health and safety obligations.

47. The defendant was incorporated in 2002 and specialises in the installation of the panels. At the time of the incident the defendant had about 180 full time employees and engaged an additional 20 labour hire workers per day during peak periods.

48. In about December 2018 the defendant suffered significant losses as a result of the financial failure of three principal contractors on projects it was involved in, including Arise. The defendant was forced to downsize its business and now employees 60 full time employees.

45. At the time of the incident, the defendant had in place a work health and safety management system (WHSMS) and a work health and safety plan, which were discussed at length in the verdict judgment and I will not repeat reference to the salient features of those documents.

46. The defendant compiled site specific SWMSs and continually trained its employees and labour hire workers.

47. After the incident the defendant has taken a number of steps to improve its safety systems including:

1. Enrolling its supervisors and managers in training courses run by external providers at a cost of $36,000.

2. Employing a full time office-based safety and support co-ordinator at a cost of $75,000 per annum.

3. Implementing an electronic reporting system called SAFEX to electronically record and manage safety based documentation.

4. Introduced a general company induction through SAFEX. The system and on-site hardware was acquired at a cost of more than $70,000.

5. Engaged external auditors to implement quality management systems and obtained relevant certifications at a cost of more than $200,000.

6. Increased the frequency of documented safety meetings.

7. Enrolled 11 employees in a five day dogman qualification course at a cost of $41,000.

8. Engaged with CSR Limited to undertake an overhaul of the safe work instructions concerning the handling and installation of the panels.

52. The defendant operates in New South Wales and the Australian Capital Territory and has no prior convictions and has not been obliged to notify SafeWork of any reportable incidents.

53. In or about December 2017 Mr Daish made enquiries as to the welfare of the injured workers and was informed that they only sustained minor injuries.

54. The defendant has co-operated with SafeWork in its investigation.

55. The defendant has involved itself in a number of community based and charitable endeavours including sponsorship of under privileged children, infrastructure projects in third world countries, infrastructure projects for religious organisations as well as sponsorship of sporting and community based organisations.

56. Mr Daish, on behalf of the defendant, expressed deep remorse for the incident and regret for the injuries sustained by the injured workers. The directors of the defendant acknowledged that the incident was serious and that they intend to regularly review the safety system with a view to avoiding similar incidents in the future.

Consideration

Objective Seriousness

57. The offence is one of considerable objective gravity.

58. The risk of workers being struck by falling objects falling from height during the cranage work was actually known to the defendant. The risk was identified in the defendant’s SWMS and there was considerable guidance material publicly available identifying that risk.

59. The likelihood of the risk occurring was moderate, if the relevant control measures were not implemented.

60. The defendant identified the risk in its SWMS as a risk of death or serious injury. More than one worker was exposed to the risk of death or serious injury.

61. The injuries sustained by the workers were relatively minor. There is no evidence of any long term effect on the injured workers.

62. The measures that the defendant failed to take or failed to ensure were in place during the cranage work were each identified in the defendant’s SWMS or other written policies in its possession. The identification of those measures in the policy documents indicates that they were reasonably practicable. Further, they were simple and inexpensive to implement. If the defendant had complied with its own policies, the risk would have been eliminated or minimised.

63. The requirements of the defendant’s SWMS were known to the defendant’s onsite supervisor, who knew or ought to have known that the relevant precautions were not being implemented.

64. The defendant was not responsible for engaging AC or specifying how many dogmen it should supply. Arise was responsible for considering the SWMSs provided by the relevant contractors, coordinating the work and engaging adequate services to implement the necessary control measures. AC was providing specialist services that should have included the provision of an adequate number of qualified dogmen to perform the cranage work and/or the prevention of unqualified persons performing the work of a dogman. On the other hand, the defendant had the management and control of the Pallet Hook and was in possession of the documentation specifying how to use it safely.

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

Deterrence

66. 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].

67. The penalty imposed must also provide for specific deterrence. It is relevant to take into account that the defendant had extensive safety systems in place prior to the incident and that it did respond to the incident, both expeditiously and comprehensively.

Aggravating Factors

68. 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 fact that there was an incident resulting in minor injuries is sufficient to establish the aggravating factor, but the weight to be afforded to it is reduced by reference to the extent of the harm.

Mitigating Factors

69. The defendant does not have any previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender has been operating since 2002 and has no prior convictions and no notifiable incidents.

70. The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has taken multiple steps to improve its safety systems and has incurred significant costs in doing so. I am satisfied that its extensive response to the incident demonstrates that it has good prospects of rehabilitation.

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

72. On behalf of the defendant, Mr Daish has expressed remorse and regret for the incident and acknowledged the effects it had on the injured worker. His evidence is insufficient to establish the mitigating factor provided for by s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999 but is still a matter that can and should be taken into account in mitigation of the appropriate penalty to be imposed.

73. The defendant has demonstrated itself to be a good corporate citizen, by reason of its support of charitable and community groups.

74. The defendant conducted the trial in a manner that reflected a willingness to facilitate the course of justice: R v Thangavelautham [2016] NSWCCA 141 at [58] per Bathurst CJ. The defendant conducted the hearing in a way that saved considerable Court time by making appropriate admissions, restricting the issues to be decided, allowing witnesses to give evidence-in-chief by tender of their statement and not requiring a considerable amount of witnesses for cross-examination. The effect of these actions was to significantly reduce the hearing time required to ordinarily determine a case of this kind and the defendant’s approach should be both lauded and encouraged.

Parity

75. AC pleaded guilty to an offence under section 32 of the Act. It was fined the sum of $150,000 after it was given the benefit of a 25% discount for the plea of guilty. The prosecutor contended that the relative culpability of the defendant and AC were similar. The defendant contended it was less culpable than AC.

76. I have had regard to the parity principle: Green v The Queen (2011) 244 CLR 462 at [28].

77. There are good reasons find AC slightly more culpable than the defendant for the reasons that follow. First, AC was a specialist contractor with the responsibility for providing qualified dogmen. It chose to use the one dogman it provided to land the loads, rather than to attach them to the Pallet Hook. In the circumstances, the latter task was the one best suited for the skills of a dogman. Second, AC was in the best position to require Arise to provide an additional dogman because it had a contractual relationship with Arise concerning the relevant obligations. Third, AC was in the best position to prevent an unqualified person from becoming involved in the cranage work which was high risk construction work.

Penalty

78. HD Projects Pty Ltd is convicted.

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

80. The defendant is to pay the prosecutor’s costs of the proceedings as agreed or assessed. The defendant entered a plea of not guilty at an early stage of the proceedings. A number of adjournments were sought by the prosecutor to accommodate delays in the related proceedings against AC. The parties, and if necessary a costs assessor, should reflect these circumstances in arriving at the appropriate quantum of costs.

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

*********

Endnotes

Decision last updated: 16 April 2021