SafeWork NSW v Think Tank Building Solutions Pty Ltd

[2023] NSWDC 532

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Think Tank Building Solutions Pty Ltd [2023] NSWDC 532

Hearing dates:

7 November 2023

Date of orders:

01 December 2023

Decision date:

01 December 2023

Jurisdiction:

Criminal

Before:

Strathdee DCJ

Decision:

In the District Court proceedings 2022/334507 (s 19(1) Summons):

(1)   The defendant is convicted.

(2)   The appropriate fine for the offence is $300,000, and that will be reduced by 20% to reflect the plea of guilty.

(3) In exercising my discretion under s 6 of the Fines Act 1996 (NSW), that fine will be reduced by 10%.

(4)   Accordingly, I order the defendant to pay a fine of $216,000.

(5) Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor.

(6) Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor’s costs, as agreed or assessed.
 

In the District Court proceedings 2022/334496 (s 19(2) Summons):

(1)   The defendant is convicted.

(2)   The appropriate fine for the offence is $300,000, and that will be reduced by 20% to reflect the plea of guilty.

(3) In exercising my discretion under s 6 of the Fines Act 1996 (NSW), that fine will be reduced by 10%.

(4)   Accordingly, I order the defendant to pay a fine of $216,000.

(5) Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor.

(6) Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor’s costs, as agreed or assessed.
 

Catchwords:

CRIMINAL LAW – SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – appropriate discount for the utility of the plea – general deterrence – specific deterrence – remorse and contrition – maximum penalties – COSTS – prosecutor’s costs

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW)

Criminal Procedure Act 1986 (NSW)

Fines Act 1996 (NSW)

Work Health and Safety Act 2011 (NSW)

Cases Cited:

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8

Bulga Underground Operations v Nash (2016) 93 NSWLR 338

Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610

Environmental Protection Authority v Barnes [2006] NSWCCA 246

Ferguson v Nelmac Pty Ltd (1999) 92 IR 188

Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384

Haynes v CI & D Manufacturing (No 2), Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455

Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100

Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153

Jahandideh v R [2014] NSWCCA 178

Latoudis v Casey (1990) 170 CLR 534

Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch’ng) (1999) 90 IR 464

Markarian v The Queen (2005) 228 CLR 357

McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310

Morrison v Powercoal Pty Limited and Anor (No 3) (2005) 147 IR 111

Muldrock v The Queen (2011) 244 CLR 120

Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96

Orbit Drilling v The Queen (2012) 35 VR 399

R v Cage [2006] NSWCCA 304

R v MA [2004] NSWCCA 92

R v Miria [2009] NSWCCA 68

R v MMK [2006] NSWCCA 272

R v Thomson & Houlton (2002) 49 NSWLR 383

R v Youkhana [2004] NSWCCA 412

Rahme v R (1989) 43 A Crim R 81

SafeWork NSW v Bennett (No 2) [2022] NSWDC 453

SafeWork NSW v Cosentino Australia Pty Ltd [2018] NSWDC 182

SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398

SafeWork NSW v Harris Holdings NSW Pty Ltd [2017] NSWDC 299

SafeWork NSW v Harry Zizikas [2017] NSWDC 299

SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632

Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266

Veen v R (No 2) (1988) 164 CLR 465

WorkCover Authority (NSW) (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80

WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700

WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
Think Tank Building Solutions Pty Ltd (Defendant)

Representation:

Counsel:
Mr M Scott (for the Prosecutor)
Mr M Baroni (for the Defendant)

Solicitors:
Department of Customer Service (for the Prosecutor)
Longton Legal (for the Defendant)

File Number(s):

2022/334507 and 2022/334496

JUDGMENT

1. On 12 November 2020 at 460 Pacific Highway, St Leonards, in New South Wales, Think Tank Building Solutions Pty Ltd (‘the defendant’) being a person conducting a business or undertaking (‘PCBU’) who had a health and safety duty under s 19(1) of the Work Health and Safety Act 2011 (‘the WHS Act’) to ensure, as far as was reasonably practicable the safety of workers while at work in the business or undertaking, failed to comply with its duty and the failure to comply with that duty exposed workers, in particular Reza Aghakhani, to a risk of death or serious injury contrary to s 32 of the WHS Act.

2. Further, on 12 November 2020 at 460 Pacific Highway, St Leonards, in New South Wales, the defendant being a PCBU who had a health and safety duty under s 19(2) of the WHS Act to ensure, as far as was reasonably practicable the safety of other persons is not put at risk from work carried out as part of the defendant’s business or undertaking, did fail to comply with that duty and thereby exposed other persons, in particular Emmanuel Savalakis to a risk of death or serious injury contrary to s 32 of the WHS Act.

3. The offences are recorded in the Summonses filed 8 November 2023. At the time of the offence the maximum penalty for the offences are $1.5 million for each charge. The maximum penalty amount is indicative of the parliamentary conclusion as to the seriousness of the offence: Markarian v The Queen (2005) 228 CLR 357 at 372 [31] (‘Markarian’).

4. The prosecutor tendered the Prosecutor’s Sentence Tender Bundle (‘PTB’) which became A.

5. The defendant read an affidavit of Daniel Hafshejani of 2 November 2023, which became exhibit 1, and a letter from Kelly Partners, Chartered Accountants dated 6 November 2023 which became exhibit 2.

Background

Think Tank Building Solutions Pty Ltd

6. The defendant was a corporation with registered premises in Brookvale, New South Wales. The defendant carried on a business which involved project management for commercial construction projects.

7. Daniel Hafshejani (‘Mr Hafshejani’) was the sole director and secretary of the defendant.

L&N Properties Pty Ltd

8. L&N Properties Pty Ltd (ACN 057 853 264) (‘L&N’) was a corporation with registered premises in Fairfield, New South Wales. L&N carried on a business involving the construction of residential and commercial buildings.

9. Nicholas Tarquinio (‘Mr Tarquinio’) was the sole director and secretary of L&N.

The site and the work

10. L&N was the principal contractor engaged to manage the removal and replacement of external cladding on a five-story building located at 460 Pacific Highway in St Leonards, New South Wales (‘the site’).

11. The building consisted of a series of commercial shops on the ground level and five levels of residential units and office spaces above. The public entrance to the building was a foyer covered by a glass atrium on the ground level (‘the glass atrium roof’). The glass atrium roof was approximately 4.4 metres above the ground.

12. L&N engaged the defendant as a subcontractor to project manage the site, which included the engagement and management of subcontracted trades to perform work at the site.

13. There was no formal or documented agreement between L&N and the defendant in relation to the work to be performed at the site. There was a verbal agreement that the profits made as a result of the project would be shared between them on a ‘fifty-fifty’ basis.

14. L&N engaged Z-Fellinni Faulkner (‘Mr Faulkner’) as the Site Supervisor / Leading Hand for the site.

15. The defendant engaged Mr Hafshejani as the Project Manager of the site. Mr Hafshejani’s duties at the site included ensuring the scope of works was understood by contractors and that they were provided with adequate resources to carry out their work. Mr Hafshejani had 18 years’ experience working in the construction industry.

16. The defendant engaged Reza Aghakhani (‘Mr Aghakhani’) as a subcontractor to work as a labourer at the site. Mr Aghakhani had 15 years’ experience working as a labourer.

17. The defendant engaged Site-Wide Labour Services Pty Ltd (ACN 614 859 960) (‘Site-Wide’) as a subcontractor to supply, install and dismantle scaffolding at the site.

18. L&N started the work of removing and replacing the external cladding at the site on or around 12 August 2020. The work was completed on or around 4 November 2020.

19. On or around 5 November 2020, Mr Hafshejani and Mr Faulkner notified Site-Wide that the scaffolding that had previously been assembled at the site was ready to be dismantled.

20. Removal of the scaffolding commenced on 9 November 2020. It was expected to take five days.

The incident

21. On 12 November 2020, Mr Faulkner instructed Mr Aghakhani that several panels needed to be removed from the glass atrium roof.

22. At around 12:30pm, Mr Aghakhani made his way onto the glass atrium roof in order to clear the panels. The glass atrium roof was not at the time protected by impact protection material and had been removed at some time prior to the incident.

23. Shortly after Mr Aghakhani accessed the glass atrium roof, a 3.2 metre long scaffold fell from four storeys above. It struck the glass atrium roof and shattered the glass on which Mr Aghakhani was standing, causing him to fall approximately 4.4 metres to the ground.

24. At the same time, Emmanuel Savalakis (‘Mr Savalakis’), a courier making a delivery at the premises, was walking through the glass atrium at the ground level. Mr Savalakis was struck by large shards of glass as the 3.2 metre scaffold and Mr Aghakhani fell to the ground.

25. There were scaffolders working several stories above the glass atrium roof at the time of the incident who reported to SafeWork that a vibration caused the scaffolding to fall.

Injuries

26. Following the incident, Mr Aghakhani was admitted to Royal North Shore Hospital where he underwent emergency surgery. He remained at Royal North Shore Hospital until 3 December 2020 at which time he was relocated to Greenwich Hospital for rehabilitation before finally being discharged home on 1 April 2021. Mr Aghakhani suffered the following injuries:

1. Fracture and dislocation of the right hip and acetabulum.

2. Fractured nose and crushed teeth.

3. Dislocated left 4^th finger (plate and screws inserted).

4. Severed nerve below the left 4^th finger.

5. Laceration to the right knee patella and partial laceration to the left patella.

27. Following the incident, Mr Savalakis was admitted to Royal North Shore Hospital. He remained there for one day and was discharged home on 13 November 2020 but could not return to work for three weeks following the incident. Mr Savalakis sustained numerous cuts to his body, requiring stitches to his shoulder, right knee, right index finger and right knuckle.

Inspection following the incident

28. Following the incident on 12 November 2020, Inspector Preston attended the site at about 4:20pm. Inspector Preston made the following observations:

1. There were multiple areas that were missing scaffolding components and unsecured scaffold components were stacked at various locations on the site, including on the decks in and around where the scaffold fell.

2. There were no toe boards in place on the scaffolding.

3. There was no perimeter sheeting or shade cloth covering the scaffolding.

4. There was no edge protection on the glass atrium roof and only a single plastic bollard indicating the edge of the roof boarding to the Pacific Highway.

5. There were multiple tools and pieces of aluminium flashing scattered on and around the glass atrium roof.

6. There was no evidence of covering that had been used to protect the glass atrium roof from falling objects.

Guidance material

29. The Construction Work Code of Practice (August 2019) provided:

‘Falling objects can pose a significant risk and cause serious injury to workers at construction workplaces or members of the public if measures are not implemented to eliminate or minimise the associated risks. For example, a person could receive fatal head injuries if building materials or equipment is not secured or prevented from faffing. It is essential to ensure that objects do not faff onto workers or other persons who may be under or adjacent to the area where the work is being performed.’

30. The WorkCover NSW Erecting, Altering and Dismantling Scaffolding – Part 1: Prefabricated Steel Modular Scaffolding (November 2010) (‘WorkCover NSW Scaffolding Guide’) provided guidance on the steps and sequence required to dismantle scaffolding. The general precautions in that document included:

‘Do not leave loose materials on platforms.

Do not overload the scaffold bays – progressively remove scaffolding equipment from platforms and stack it nearly on the ground.’

31. The WorkCover NSW Scaffolding Guide also provided for the requirement that toeboards be installed when scaffolding was being dismantled to prevent objects from falling.

32. The SafeWork Australia General Guide for Scaffolds and Scaffolding Work (July 2014) relevantly provided:

• If there is more than one business or undertaking involved at your workplace you must consult them to find out who is doing what and work together so risks are eliminated or minimised, so far as is reasonably practicable (page 4).

• The scaffolder should consider protection against falls and falling objects (page 5).

• Falling object risk control measures include fall arrest platforms, overhead protective structures, perimeter containment screens and exclusion zones to eliminate or minimise the risk of falling objects (page 16).

33. The SafeWork Australia Falling Objects Facts Sheet (February 2012) relevantly provided:

• Stack items so they cannot slide, fall or collapse when they are stored above ground level (page 2).

• Using netting or restraining bars to keep items in place when they are stored above ground level so they cannot fall easily if they are disturbed (page 3).

• If placing an item on a scaffold or platform, providing a secure physical barrier at the edge of the elevated area, such as toe boards or infill panels that form part of a guardrail system (page 3).

• Keeping tools or other materials away from edges and off railings or sills (page 3).

• Erecting a catch platform with vertical sheeting or perimeter sheeting (page 3).

Systems of work before the incident

34. The defendant did not undertake a risk assessment prior to work commencing on the glass atrium roof. Work was allowed to continue notwithstanding that both the defendant and L&N knew that scaffolding was being dismantled directly above the glass atrium roof.

35. The defendant did not take any steps to have impact protection material replaced on the glass atrium roof that was missing at the time of the incident.

36. The defendant failed to ensure adequate edge protection at the edge of the glass atrium roof which was directly adjacent to the Pacific Highway.

37. Neither Mr Hafshejani nor Mr Faulkner communicated with Site-Wide to tell them that work was being performed below the scaffolding, on or around the glass atrium roof.

38. The defendant relied on Mr Faulkner to fulfil the obligations of a principal contractor, notwithstanding that Mr Faulkner was not provided with any formal training to perform that role. Mr Faulkner described his role as that of a ‘trainee’ working under Mr Hafshejani.

39. Site-Wide had a Safe Work Method Statement (‘SWMS’) in relation to the scaffolding work. However, the SWMS failed to consider exclusion zones and the presence of the glass atrium. Site-Wide did not show the SWMS to its contracted labourers who were dismantling the scaffolding until after the incident. Neither the defendant nor L&N had reviewed the SWMS submitted by Site-Wide.

Systems of work after the incident

40. Following the incident, the defendant engaged an external safety auditor to review its policies and improve safety management across its sites.

The Risk

41. The risk in Summons 2022/334507 is described in Annexure ‘A’ of the Summons in the following terms:

‘The risk was the risk of workers, in particular Mr Aghakhani, suffering serious injury or death, as a result of being struck by falling parts or components of scaffolding, or falling, as a consequence of working on an exposed glass platform, at height, in an area below where scaffolding was being dismantled.’

42. The risk in Summons 2022/334496 is described in Annexure ‘A’ of the Summons in the following terms:

‘The risk was the risk of other persons, in particular Mr Savalakis, suffering serious injury or death, as a result of being struck, by falling parts of components of scaffolding and/or shards of glass, or persons above them, while exiting or entering the building.’

The Duty

43. With regard to Summons 2022/334507 the defendant had a duty under s 19(1) of the WHS Act, to ensure, so far as was reasonably practicable, the health and safety of workers in particular Mr Agahakhani, while they were at work in the business or undertaking.

44. With regard to Summons 2022/334496 the defendant had a duty under s 19(2) of the WHS Act, to ensure, so far as was reasonably practicable, the health and safety of other persons, including Mr Savalakis, was not put at risk from work being carried out as part of the conduct of the defendant’s business or undertaking.

45. The defendant’s duties are positive, non-delegable and requires it to search for, detect and eliminate, so far as is reasonably practicable, risks to health and safety: WorkCover Authority (NSW) (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 per Hill J at [85].

Sentencing

46. The purpose of sentencing is dealt with in section 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) (‘Sentencing Act’) which provides:

‘3A   Purpose of sentencing

The purposes for which a court may impose a sentence on an offender are as follows-

(a)   to ensure that the offender is adequately punished for the offence,

(b)   to prevent crime by deterring the offender and other persons from committing similar offences,

(c)   to protect the community from the offender,

(d)   to promote rehabilitation of the offender, to make the offender accountable for his or her actions,

(e)   to denounce the conduct of the offender,

(f)   to recognise the harm done to the victim of the crime and the community.’

47. The penalty to be imposed must be one which will give overall effect to the policy of the WHS Act, in particular, ensuring the safety, health and welfare of workers and other persons who may be exposed to the risk.

48. I have had regard to the principle contained within the WHS Act that workers and other persons should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work: s 3 of the WHS Act.

49. The Court is to be guided by the provisions of the Sentencing Act which include:

1. Section 3A which sets out the purpose of sentencing;

2. Section 21A which sets out the aggravating, mitigating and other factors in sentencing; and

3. Section 22 which provides that a guilty plea is to be taken into account on sentence, as is the time when the plea was effectively indicated or entered.

50. The Court is to approach a sentencing exercise on the basis of it being one of ‘instinctive synthesis’: Markarian.

51. The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 at [109] in this way:

‘The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the “instinctive synthesis” approach, involves the making of a global judgement without any attempt to state precisely how any given factor has influenced the judgement.’

Objective seriousness of the offence

52. The primary consideration requires a determination of the objective seriousness of the offence. The High Court made this clear in Muldrock v The Queen (2011) 244 CLR 120 at [27]:

‘…The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of offending.’

53. On offence relating to a breach of s 19 of the WHS Act will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Limited and Anor (No 3) (2005) 147 IR 111; Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch’ng) (1999) 90 IR 464 (‘Lawrenson Diecasting’)

54. Subjective factors play a subsidiary role: Lawrenson Diecasting at 474–5.

55. The duty of the defendant requires that it ensure so far as reasonably practicable, that the health and safety of workers and other persons is not put at risk from the work carried out as part of the conduct of the business or undertaking. This duty is not delegable, and the duty requires the identification of risks in the workplace and an assessment of measures to address such risks.

56. The gravity of the offence is determined by the extent of the duty holder’s failure to ensure, so far as was reasonably practicable, that its workers and other persons were not exposed to risks to their safety: Orbit Drilling v The Queen (2012) 35 VR 399 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No 2) (1988) 164 CLR 465.

57. The objective degree of foreseeability is a matter for the Court to have regard to when considering the gravity of the offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610 (‘Capral Aluminium’) at [81].

58. Subjective factors should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at [31].

59. The Court of Criminal Appeal examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 (‘Nash v Silver City’). His Honour Justice Basten, under the heading ‘Assessment of Risk’ said at [34]:

‘The sentencing judge commenced his consideration with the proposition that ‘[g]reater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely.’ However, the truth of that proposition depends upon other considerations, including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends upon an assessment of all those factors.’

60. His Honour further observed at [42]:

‘The culpability of the respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and a little, if any, cost. That assessment will involve both objective considerations and a consideration of what the respondent’s responsible officers knew or ought to have known.’

61. I accept that s 3A of the Sentencing Act is generally regarded as a codification of the common law principles of sentencing: R v MA [2004] NSWCCA 92. The purposes of punishment in the section are constrained by the sentencing principles that exist under the common law such as the principles of proportionality and totality: R v MMK [2006] NSWCCA 272.

62. The Court is obliged to make an assessment of where on the scale of criminality the offence lies referable to the maximum penalty prescribed by the legislature: R v Cage [2006] NSWCCA 304 at [17]–[18] (Latham J).

63. Where there was an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible, it will be a serious offence: WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ).

64. The objective seriousness of an offence under s 32 of the WHS Act is considered in the context of the gradation of offences contained in ss 31–32 of the WHS Act: Nash v Silver City at [54]–[56]. The matters relevant to objective seriousness for a s 32 offence include:

1. The potential consequences of the risk. Consequences may range from mild to catastrophic. Offending will be more serious where the potential injuries are severe, regardless of whether they are likely to materialize: Nash v Silver City [34];

2. The availability of steps to eliminate or minimise the risk: Nash v Silver City [34];

3. Whether those steps are complex, burdensome or mildly inconvenient. If mitigating steps could easily have been taken, the offending will be more serious: Nash v Silver City [34] and [53];

4. Whether the risk was known or ought reasonably have been known to or identified by the offender;

5. Whether the risk was an obvious or clear one; and

6. The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 at [55] (Russell SC DCJ).

65. However, I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of it. At [53] in Nash v Silver City, Basten JA dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying:

‘It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of the injury occurring is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialise. The objective seriousness of the conduct will also be affected by the ease with which mitigation steps could have been taken.’

66. The following matters are relevant to determining the culpability of the defendant:

1. The glass atrium roof had no impact protection on it at the time of the impact with the scaffolding, and thus it flows that prior to 12 November 2023, protective materials had been laid upon the roof of the atrium. The height of the roof from the ground was approximately 4.4 metres.

2. The removal of the protective covering from a glass roof whilst scaffolding is being dismantled, piece by piece, directly above that glass roof creates an obvious and easily overcome risk of something falling from the scaffolding onto the glass roof, with the consequences that the roof will shatter on impact.

3. Despite the area where Mr Aghakhani was working being prescribed as an exclusion zone, Mr Aghakhani, with his supervisor, Mr Faulkner, standing beside him, proceeded to carry out work in the glass roof.

4. Following the issue of a Prohibition Notice being given to the principal contractor, L&N, a timber frame and plywood was put across the entire glass area and aluminium guard rails were put along the edge of the roof of the glass atrium.

5. Further the principal contractor created a SWMS for the work to be done to remove the flashing over the glass atrium roof.

6. No steps were taken by the defendant to either restrict or at least warn persons who were seeking to enter the building through the public entrance that they should not enter whilst work was being carried out above the entrance.

7. The defendant is effectively a ‘one man band’ who engages contractors to perform the relevant works. I accept that the defendant had in place some systems with regard to his obligations under the WHS Act. They were however grossly inadequate.

8. The defendant accepts that its systems failed, and rather than satisfying itself that the risk had been eliminated or mitigated, it relied on others.

9. The defendant concedes that its planning for the dismantling of the scaffold did not adequately identify the risk of falling scaffold, nor identify the requirement to put in place an exclusion zone. Moreover the defendant concedes that the area below the glass atrium above the main entrance, was not considered a safety issue, which it now accepts was a failure on its behalf.

10. The defendant relied on Mr Faulkner, who was a supervisor employed by L&N to supervise the project.

11. One wonders how the ‘project manager’ believes that he could rely on others on site to ‘supervise’ or manage the project. The defendant had organised for the scaffold to be removed, and had some discussions with Mr Faulkner about the exclusion zone. It is asserted in the defendant’s written submissions that it was Mr Faulkner and Mr Aghakhani who would be policing the exclusion zone. Clearly they did not.

12. The duty is a non-delegable one, which the defendant clearly breached, in relying on others to supervise or manage the project.

67. The risk as set out for of both the s 19(1) and s 19(2) offences was obvious and easy to overcome. The serious consequences that the manifestation of either and both risks means that there were significant risks of serious injury or death, which indicates that the offending is objectively serious.

Deterrence

68. In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act.

69. General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the Court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that other persons are not exposed to risks to their health and safety by work carried out as part of the conduct of the defendant’s business or undertaking: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J).

70. When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.

71. The Court of Criminal Appeal in Bulga Underground Operations v Nash (2016)  93 NSWLR 338 (‘Bulga’) at [177]–[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a Court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]–[75] which said:

‘[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIR Comm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.

…

[75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.’

72. General deterrence must be a significant feature of the sentence imposed upon the defendants. It can be appropriately used to direct the industry’s attention to the consequences of inattention and the need for greater concentration on the potential risks of death or serious injury associated with project managers contracted to engage and coordinate other contractors.

73. The defendant in its written submissions describes its works as follows:

‘4.   Since its establishment, the defendant has performed project management functions on approximately 80 projects which projects involve:

a.   making good of rental spaces, installation of new carpet, and painting of commercial office spaces;

b.   attend to obtaining approvals from council for various commercial projects;

c.   small fits outs for commercial office spaces up to the value of $250,000.00; and

d.   general maintenance work on commercial premises.’

74. In accepting a contract to be the project manager for a job or development, what is the role of the project manager beyond the co-ordination of trades, if there is no supervisory role entailed therein?

75. The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the WHS Act very seriously.

76. General deterrence is a significant factor when safety obligations are breached, save for in exceptional circumstances (see Bulga at [52]). It is to be approached in the context of the industry in which the defendant is engaged, the types of duties, as well as the broader hazards and risks associated with an industry where building works are performed often at height.

77. However, whilst general deterrence is a matter that I must consider in the sentencing process, it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all other factors.

78. In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve the safety of its worksites following a breach of a duty are relevant, as is the propensity for the defendant to reoffend. The defendant needs to keep at the forefront of its mind that there needs to be co-ordination and communication with all contractors on a site, as to the work to be performed and to ensure that proper planning and programming of work is put in place to identify and then overcome the risk of injury to persons working on the site, and also to persons who happen to be in the vicinity of work being performed on the site.

79. However, this is not a defendant who had no systems in place – there were some policies in place, but they were clearly inadequate.

80. Having regard to the affidavit of Mr Hafshejani of 2 November 2023 (exhibit 1), in particular, [46]-[53] I am of the view that this incident has acted as a wake-up call to the defendant and I believe that the systems and mindfulness as to safety within the works performed by the PCBU are now appropriately heightened.

81. The changes and improvements made by the defendant following this incident include the engagement of an experienced consultant to review its systems and procedures at relevant worksites, auditing of the scope of works, induction records, toolbox talks, SWMS and the identification of risks. Mr Hafshejani has undertaken further training and now engages in proper record keeping.

82. I accept that these steps demonstrate an expansion of the safety and training to be provided and demonstrates of the duties under the WHS Act, and a commitment to safety.

83. I accept that the prospects of rehabilitation of the defendant are reasonable, and that there have been improvements made, however the need for an element of specific deterrence is still necessary in these circumstances, as the defendant continues to operate the same business.

Aggravating factors

84. Mr Aghakhani suffered serious injuries as set out at [26] above and Mr Savalakis required hospitalisation for treatment of his injuries.

85. The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) of the Sentencing Act. In order for this 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] (Hidden J, McColl JA and Levine J agreeing). I am so satisfied.

86. The defendant’s offending conduct exposed two persons to a grave risk of serious injury or death: s 21A(2)(i) of the Sentencing Act.

Mitigating factors

87. In Haynes v CI & D Manufacturing (No 2), Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 at 456-457 the Full Bench held the following:

'We think that having regard to the specific nature of the legislation, the past record upon which the both the prosecution and the defendants should rely must be intimately bound to the nature of the offences which the Court is considering, namely industrial safety, health and welfare. We add one comment on the question of the previous record, and that is that the Court should attempt to ensure the accuracy of the record and have objective regard to it in relation to the industrial enterprise and the extent of its operations. We consider that the extent of the operations of the defendant enterprises is to be taken into consideration when coming to conclusions having regard to the past record.

Human experience indicates that the larger the number of industrial transactions a company is involved in the larger the number of industrial accidents which occur as a matter of statistical expectation. The safety record of very large company with some prior convictions may, on analysis, be better than that of a small company with fewer such convictions. However, we again emphasise that in the context of the OHS Act the record is only one of the factors to be taken into account in assessing penalty and the essential inquiry must remain the circumstances of the breach in question.'

88. The defendant has not been subject to any prior convictions under work health and safety law: s 21A(3)(e) of the Sentencing Act. The defendant has been operating in the industry since 2018 with no prior convictions, and its director has been working in the construction industry for a number of years without incident. This is a good record for works performed in high risk circumstances, and this record is a significant mitigating factor.

89. I accept the defendant is unlikely to reoffend: s 21A(3)(g) of the Sentencing Act, and I accept that the defendant has reasonable prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act, for reasons as explained above.

90. I accept that the defendant, through Mr Hafshejani at paragraphs [40]-[45] of his affidavit, has demonstrated that the defendant has accepted responsibility for the offence and has acknowledged the injury, loss and damage caused by the offence, and is genuinely remorseful: s 21A(3)(i) of the Sentencing Act.

91. The defendant co-operated with SafeWork NSW during its investigations: ss 21A(3)(m) of the Sentencing Act.

92. The defendant entered a plea of guilty some time after the matter came before the Court on 13 September 2023, and I accept that defendant is entitled to a deduction for the utilitarian value of the plea in accordance with the principles set out in R v Thomson & Houlton (2002) 49 NSWLR 383, and I will allow that deduction by 20%.

Capacity to pay

93. Section 6 of the Fines Act 1996 (NSW) (‘Fines Act’) provides as follows:

‘6   Consideration of an accused’s means to pay

In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider:

(a) Such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and

(b) Such other matters as, in the opinion of the court, are relevant to the fixing of that amount.’

94. The onus is on the offender to satisfy the Court on the balance of probabilities as to the truth of such evidence and its relevance to the fixing of penalty: McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310 (‘McColl’) at [24].

95. The offender’s capacity to pay is relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16] (Rothman J, Hoeben CJ at CL agreeing).

96. In Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100, Staff J said at [57]–[58]:

‘The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 are as follows:

‘[83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50):

'It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.'

[84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82):

'... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76).’

‘However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed:

'... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty …

When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence ...'

[85] I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476:

'Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86.'’

97. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said:

‘First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to ‘the means’ of the defendant, pursuant to s 6 of the Fines Act 1996.’

98. The Full Bench of the Industrial Relations Commission of NSW observed in Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153, citing Rahme v R (1989) 43 A Crim R 81 that:

‘It is well established that a court should first arrive at a penalty and then review it on the basis of any case properly made out by a defendant of a lack of capacity to pay a substantial penalty or any penalty.’

99. It follows that the question of capacity to pay and, hence, the exercise of the discretion under s 6 of the Fines Act should be considered after the Court has determined the appropriate fine(s).

100. I accept that the principles which are then applicable to the exercise of the discretion conferred by s 6 of the Fines Act are as follows:

1. the financial position and means of a defendant should be taken into account when determining the fine to be imposed;

2. the defendant bears both the evidentiary onus and the onus of proof, on the civil standard, in relation to satisfying the Court that he does not have the capacity to meet a fine;

3. it is for the defendant to place detailed financial information that fully discloses his financial circumstances to the Court so that a proper assessment of his capacity to pay can be undertaken;

4. it is for the prosecutor to check the information provided by the defendant and to assist the Court in relation to the assessment of the defendant’s capacity to pay; and

5. in any event, notwithstanding the capacity of a defendant to pay a fine, the penalty to be imposed must reflect the objective seriousness of the offence: Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at [209]–[210]; McColl at [24]–[25]; SafeWork NSW v Harris Holdings NSW Pty Ltd [2017] NSWDC 299; SafeWork NSW v Harry Zizikas [2017] NSWDC 299 at [134]–[141]; SafeWork NSW v Cosentino Australia Pty Ltd [2018] NSWDC 182 at [23]–[24].

101. The defendant has put some evidence before the court (exhibits 1 and 2) to demonstrate that it has a diminished capacity to pay a fine, and that any fine may have a significant impact on its sustainability.

102. The defendant relies on the following matters:

1. It is a ‘one man band’ with limited resources;

2. Its net profit for FY 2021/2022 was $94,391.00;

3. Its net profit for FY 2022/2023 was $94,396.00;

4. The defendant has a debt to the Australian Tax Office (‘ATO’) of $100,586.04 with respect to which the defendant is on a payment plan, and a further anticipated payment to be made to the ATO $134,479.00 for FY 2022/2023; and

5. The defendant’s current ‘cash in the bank’ is approximately $230,000.00.

103. Mr Hafshejani gave evidence before me at the sentence hearing, during which he stated that in 2022 he bought a residential unit to live in with a loan from the defendant in the amount of $709,282.00. In that same financial year, he also paid himself a salary and the defendant still managed to turn a reasonable profit. He gave evidence about receiving franking credits and mistakes in the documents about claiming residential rates in the defendant’s tax returns.

104. When asked by the Prosecutor if he could meet his payments, pay his bills and pay a fine, he answered yes. I accept that Mr Hafshejani was telling the truth, and that he was an honest witness, and I will afford the defendant some leniency, but the objective seriousness of the offending demands that a significant fine be imposed for the two breaches.

105. I will allow the defendant some leniency, and will reduce the fines by 10%.

Costs

106. The issuing of costs against a defendant in both criminal and civil proceedings is not punitive, but rather compensatory to the prosecution: Latoudis v Casey (1990) 170 CLR 534 at 543 (Mason CJ).

107. The Court is entitled to take into account the fact that the defendant will be liable to pay the prosecutor’s costs when considering any monetary penalty to be imposed on the defendants, particularly in circumstances where there is evidence of a limited capacity to pay a fine, and I have done so. Costs payable to the prosecutor are the ‘normal’ rule as the prosecutor has been successful, although there can be exceptions: see for example, Bulga. 

108. The Court can also have regard to the defendant’s own costs that it will have to bear as a consequence of a breach of the WHS Act, and I have done so: Environmental Protection Authority v Barnes [2006] NSWCCA 246 at [78].

Principle of totality

109. The two breaches to which the Defendant has entered a plea of guilty arise from the same factual background and occurred at the same time. There is a commonality and an overlap of causal factors.

110. I accept that when determining an appropriate sentence for each of the two breaches, when determining the aggregate sentence to be imposed, I need to have regard to the totality principle to reflect the overall criminality of the defendant’s actions.

111. The Prosecutor made submissions orally before me as to the principle of totality. By way of further written submissions, the defendant accepted that the approach submitted by the prosecutor is correct.

112. The parties directed my attention to the following authorities: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 and SafeWork NSW v Bennett (No 2) [2022] NSWDC 453 (‘Bennett’). In Bennett, his Honour Judge Russell SC set out at [48] – [52] the applicable principles of totality when imposing a sentence as follows:

‘[48]   Where a court sentences an offender for more than one offence, the aggregate or overall sentence must be “just and appropriate” to the totality of the offending behaviour: Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 at 63. The principle of totality is applicable where the penalty imposed is by way of fine: Camilleri’s Stock Feeds Pty Ltd v EPA (1993) 32 NSWLR 683 at 704.

[49]   In Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616 the High Court expressed a preference for what should be regarded as the orthodox, but not necessarily immutable, practice of fixing a sentence for each offence and aggregating them before taking the next step of determining concurrency. In Pearce v The Queen (1998) 194 CLR 610 the High Court said at [45]:

“A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course, as questions of totality.”

[50]   In EPA v Barnes [2006] NSWCCA 246 at [50] the Court of Criminal Appeal said that if the sentencer believes that the totality principle requires an adjustment to the fines which may otherwise be appropriate, the court should first fix a sentence for each offence and then consider questions of totality.

[51]   A recent example of a case under the Act in which this was done is the decision of Judge Scotting in SafeWork NSW v Elgas Ltd [2021] NSWDC 101. His Honour found that the appropriate fine for breach of the s 19(2) duty was $425,000 and the appropriate fine for breach of the s 19(1) duty was $340,000. Taking into account the principle of totality his Honour imposed a fine of $100,000 for the s 19(1) offence. The total fines payable for the two offences amounted to $525,000.

[52]   At [89] his Honour said:

“I have taken into account the principle of totality. The two offences arise from the same incident. For the breach of the s 19(2) duty, the establishment of an exclusion zone for other persons on the premises was an additional matter that should have been specified in the SOP and the tanker drivers trained on it. In my view, this offence was more serious because there were more people exposed to a risk of death or serious injury. For transparency in the sentencing exercise, I will nominate the appropriate fine for each offence but will reduce the fine for the s 19(1) offence to reflect the just and appropriate measure of the total criminality involved.”’

113. I accept this to be the appropriate assessment of the authorities. In these proceedings the contraventions are part of a single course of conduct. The factual circumstances, which gave rise to the incident, are identical. The only difference is that two different categories of ‘person’ were exposed to the risk, which was the same risk for Mr Aghakhani and Mr Savalakis.

114. I propose to adopt the principles referred to above in sentencing the defendant.

Penalty

115. I am of the view that the appropriate fine for the s 19(1) offence, if there was no capacity to pay issue, would be $600,000. I am also of the view that, but for the capacity to pay, the appropriate fine for the s 19(2) offence would be $600,000 both of which I would reduce to $300,000 having regard to the totality principle. These amounts would then be discounted by 20% for the utility of the plea leaving fines of $240,000.

116. However, having regard to the limited capacity of the defendant to pay any fine, and its current obligation to pay costs, the penalties will be further reduced by 10%, leaving fines of $216,000 for each charge.

Orders

117. I make the following orders:

In the District Court proceedings 2022/334507 (s 19(1) Summons):

1. The defendant is convicted.

2. The appropriate fine for the offence is $300,000, and that will be reduced by 20% to reflect the plea of guilty.

3. In exercising my discretion under s 6 of the Fines Act 1996 (NSW), that fine will be reduced by 10%.

4. Accordingly, I order the defendant to pay a fine of $216,000.

5. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor.

6. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor’s costs, as agreed or assessed.

In the District Court proceedings 2022/334496 (s 19(2) Summons):

1. The defendant is convicted.

2. The appropriate fine for the offence is $300,000, and that will be reduced by 20% to reflect the plea of guilty.

3. In exercising my discretion under s 6 of the Fines Act 1996 (NSW), that fine will be reduced by 10%.

4. Accordingly, I order the defendant to pay a fine of $216,000.

5. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor.

6. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor’s costs, as agreed or assessed.

Decision last updated: 01 December 2023