WorkCover Authority of NSW v Diona Pty Ltd
[2014] NSWDC 176
•24 July 2014
District Court
New South Wales
Medium Neutral Citation: WorkCover Authority of NSW v Diona Pty Ltd [2014] NSWDC 176 Hearing dates: 24 July 2014 Decision date: 24 July 2014 Before: Curtis DCJ Decision: I dismiss the charge pursuant to s10 of the Crimes (Sentencing Procedure) Act 1999
Legislation Cited: Occupational Health and Safety Act 2000
Crimes (Sentencing Procedure) Act 1999Cases Cited: Meridian Global Funds Management Pty Ltd v Securities Commission (1953) All ER 918 Category: Sentence Parties: Workcover Authority of NSW (Prosecutor)
Diona Pty Ltd (Def)Representation: P Ginters appeared for the Prosecutor
D Jordan SC appeared for the Defendant
File Number(s): 2012/174991
Judgment
The defendant, Diona Pty Limited, pleads guilty to the charge that on 5 June 2010 at Princes Highway, Kogarah, contrary to the provisions of section 8(2) of the Occupation Health and Safety Act 2000, it failed to ensure that persons other than its employees were not exposed to risks to their health or safety.
On that day Mr Ciaran Fullen, operating a five tonne Komatsu excavator, excavated a trench in the footpath closely abutting premises 688 Princes Highway. This excavation undermined the façade of the building which partially collapsed. In the course of that collapse an occupant, Mr Kevin Farasopoulos, suffered injuries. Other persons were endangered.
The immediate cause of the collapse was the actions of Mr Ciaran Fullen, a principal and employee of Fer-Aim, who excavated the trench. The danger was apparent to anyone on the site, and one would have thought, foreseeable to Mr Fullen.
Diona had contracted to Ausgrid to excavate approximately two kilometres at Kogarah into which Ausgrid was to lay underground conduit and cable. Diona subcontracted with Fer-Aim Pty Limited to perform the works and nominated Mr Fullen as its supervisor.
At the time of the accident Fer-Aim had safely completed the extent of the works contemplated by the contract. Ausgrid however required a connection between the work completed by Fer-Aim for Diona, and other works completed by Bastow Civil Constructions, which company had bored a hole underneath the Princes Highway through which the cable was to pass.
Shortly before the accident Mr Philip Cresnar, Ausgrid's Contract Inspector and representative on site, verbally requested Mr Bastow to extend his trench to connect with the works completed by Fer-Aim for Diona. Mr Bastow refused this request, advising Mr Cresnar there were safety issues because of the age and structural integrity of the building in question. Mr Bastow suggested to Mr Cresnar a safer alternative.
Mr Cresnar did not take Mr Bastow's advice. He instructed Mr Fullen to extend Diona's works to connect with Mr Bastow's works. Mr Fullen questioned Mr Cresnar's instruction because the work was outside Diona's scope of works, but he was overborne by Mr Cresnar who instructed him to continue.
It is necessary in consideration of the appropriate penalty to determine the extent of culpability and fault. As I have said in a recent case, an inquiry into culpability is an inquiry into a reprehensible state of mind, a mind lacking care for the consequences of failing to observe the standards of a reasonable man when acting or failing to act.
The gravity of a corporation's culpable failure to act reasonably is to be found by weighing the culpability of a natural person whose obligation was, as a servant or agent, to know and discharge the legal responsibilities of the corporation in respect of the duty in question (see Meridian Global Funds Management Pty Ltd v Securities Commission (1953) 3 AER 918). In each case a natural person must be identified or postulated, and his personal conduct weighed against the reasonable person with his or her knowledge possessing his or her powers of control.
It is by way of legal fiction that in the event Mr Fullen was the personification of the defendant corporation for the purpose of discharging the responsibility to act safely. As Mr Jordan points out, there are several reasons why it is that Diona, other than through the person of Mr Fullen, could not have foreseen that which occurred.
First, pursuant to the contractual arrangements between Diona and Ausgrid, a notice requiring departure from the scope of works was required to be delivered to Diona in writing. Before the events of the day that practice had become established.
Secondly it was not probable, or even foreseeable, that the will of Mr Fullen should have been overborne, nor that Mr Fullen would fail to independently assess the task.
As recently as 12 May Mr Fullen participated in a tool box talk with officers of the defendant and was told, amongst other things, that it was important for him to complete a daily hazard assessment for each new task.
Thirdly it was not foreseeable that Mr Cresnar would give instructions contrary to the specifications of Ausgrid by whom he was employed, which forbade excavation so close to this building.
It cannot be contended that, in a general sense, Diona did not take all reasonable precautions to prevent injury on this site. I think it unnecessary to review the occupational health and safety procedures of the defendant in circumstances where the Prosecutor points to no failing other than the failing of Mr Fullen.
Diona had documented training systems for its employees, it employed occupational health and safety experts, inducted employees into safe systems of works, provided refresher training for its employees, provided site specific training and required daily hazard assessments to be identified and signed off every morning.
I cannot identify any culpability on the part of the company other than that for which they are liable, that is the culpability of Mr Fullen.
It is significant to here repeat the agreed fact that before this incident Diona had completed the works contemplated by the contract. Mr Fullen was not authorised to agree to the additional works requested by Mr Cresnar. It may have been arguable that the risk created by the additional works did not arise from the conduct of the defendant's undertaking.
Mr Fullen's culpability, it seems to me, was not great. He objected to that which he was required to do. He was overborne by an inspector in circumstances where Diona was contractually obliged to comply with directions of that inspector. Mr Fullen was not a trained engineer, and had reason to suppose that Mr Cresnar had sufficient skill to assess the risks associated with the course which he proposed.
The gravity of the offence is a synthesis between the objective consequence of the failures and the measure of culpability. The objective consequences were quite serious but I find the culpability to be low.
SUBJECTIVE FACTORS
Diona reacted quickly to make this site safe. It readdressed its safety procedures; not to create any new measure but to reinforce the need for its employees to resist the importunities of others who seek to influence their work.
There has been a four year delay in bringing this matter to trial, and during that time Diona has demonstrated that it has continued to be of good character.
It is not irrelevant that Diona has had the prospect of a maximum fine of $550,000 hanging in the air. This no doubt has created certain tension in the company in so much as it may have been felt by senior management. Diona, as is demonstrated in the affidavit of Mr Paul Lyndon, has demonstrated exceptionally good character in the course of operations, in a high risk environment, since 1980.
It is notable that in June 2014 it received first prize from Civil Contractors Federation in recognition of a delivery of a major project valued at $126,000,000 for Transgrid, where the project was concluded without a loss of time injury occurring to any of approximately 100 workers involving 230,000 man hours. It achieved no lost time injury for workers in the period 1 July 2011 to date against the background of the industry average of 18.7 serious injuries per 1000 workers.
Diona contributes to the community. It facilitates trench and confined space rescue training on one day a year for rescue paramedics. It recently established a competition for which non-management personnel and some contractors are encouraged to identify situations in which a risk has been recognised and steps taken to minimise hazards.
It is eminent in the community in relation to charitable work. In 2012 the Diona team raised $32,000 for the Chris O'Brien Lighthouse. It established a team of 100 riders comprising personnel from all levels up to Board level and expects to raise $250,000 for the charity this year. It has raised $41,000 for Cancer Australia, $70,000 for the O'Sullivan Family Benefit, $45,000 for Motor Neurone Disease research and various other works referred to in the affidavit. It is unnecessary to list them all.
Diona co-operated with the WorkCover Authority during its investigation and pleaded guilty at the first available opportunity. Diona, through the person of Mr Paul Lyndon has expressed remorse and contrition.
A conviction will adversely affect the ability of Diona to secure future contracts.
Section 10(1) of the Crimes (Sentencing Procedure) Act1999 provides that without proceeding to conviction a court that finds a person committed an offence may order that the relevant charge be dismissed.
Subsection 3 provides that:
In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors:
(a) the person's character, antecedents, age, health and mental condition,
(b) the trivial nature of the offence,
(c) the extenuating circumstances in which the offence was committed,
(d) any other matter that the court thinks proper to consider.
If Diona were a natural person it seems to me that the application of section 10 would be unremarkable. In the present case given the defendant's character, the extenuating circumstances in which the offence was committed, and the effect of a conviction upon the defendant's future operations it is appropriate that I dismiss the charge without proceeding to conviction.
The Prosecution points out that because of the policy underlying the Occupation Health and Safety Act 2000 I ought reserve the dismissal pursuant to section 10 to a most exceptional case. I do not disagree with that. I think this is a most exceptional case.
I should also refer to the fact that the defendant has agreed to pay the Prosecutor's costs. This constitutes an aspect of the punishment and to that extent, were it necessary, deterrence.
I note that I have received a written statement from Mr Kevin Farasopoulous, who conducted a business at the premises which were destroyed. He suffered gravely physically, emotionally and financially. I extend my sympathy to Mr Farasopoulos, but his suffering was not foreseeable by the principals of this defendant. The officers of the defendant company, insofar as they discharged their obligations pursuant to the contract discharged those obligations safely.
ORDERS
I dismiss the charge pursuant to s10 of the Crimes (Sentencing Procedure) Act.
I order that the defendant pay to the prosecutor the costs in the sum of $20,300 not including GST.
Decision last updated: 23 October 2014
0
0
2