Industrial Relations Commission New South Wales

• Medium Neutral Citation: Inspector Duncan v Built NSW Pty Ltd [2012] NSWIRComm 5
• Hearing dates: 15 December 2011, 17 February 2012
• Decision date: 27 February 2012
• Jurisdiction: Industrial Court of NSW
• Before: Marks J

Decision

1) The defendant is found guilty of the offence with which it is charged and convicted accordingly.

2) A monetary penalty of $115,000 is imposed with a moiety to the prosecutor.

3) The defendant is to pay the costs of the prosecutor assessed in default of agreement.

• Catchwords: OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(2) of the Occupational Health and Safety Act 2000 - early guilty plea - appropriate penalty - objective seriousness - reliance on expertise of contractor and subcontractor - failure to detect deficiency in contractors' work - current industry standards - serious commitment to occupational health and safety - general and specific deterrence - remorse and contrition - cooperation with the WorkCover Authority - good corporate citizen - no prior convictions - penalties imposed
• Legislation Cited: Occupational Health and Safety Act 2000 - s 8(2)
• Category: Principal judgment
• Parties: Inspector Michael Duncan of WorkCover Authority of New South Wales (Prosecutor); Built NSW Pty Ltd (Defendant)
• Representation: Mr R Reitano of counsel (Prosecutor); Ms W Thompson of counsel (Defendant); Legal Group, WorkCover Authority of New South Wales (Prosecutor); Norton Rose Australia (Defendant)
• File Number(s): IRC 178 of 2011

Judgment

1 These proceedings are constituted by an amended application for order. The Court was informed of the proposed amendment on 23 August 2011 and a copy of the amended application for order was then filed in the Court. At that stage, the defendant indicated that it would plead guilty to the proceedings as amended. A formal plea of guilty has been entered and this judgment is concerned only with the question of penalty.

2 The prosecutor, Inspector Michael Duncan of the WorkCover Authority of New South Wales, has charged the defendant, Built NSW Pty Ltd, with a breach of s 8(2) of the Occupational Health and Safety Act 2000 ("the Act"). Section 8(2) is in the following terms:

8 Duties of employers

...

(2) Others at workplace

An employer must, so far as is reasonably practicable, ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work.

3 The charge as amended is that the defendant, being an employer on 26 February 2009 at a construction site in Castlereagh Street Sydney, failed to ensure by its acts or omissions that certain persons who were not its employees, and in particular seven named persons, were not exposed to risks to their health and safety arising from the conduct of its undertaking whilst at its place of work, being that construction site.

4 The particulars of the charge are as follows:

(a) The risk was the risk of falling from height and/or being crushed by collapsing scaffolding;

(b) The defendant failed to ensure that there were sufficient number of scaffolding ties (being ties which secure the scaffolding to a secure supporting structure) so as to provide lateral support to the scaffold in order to prevent it from buckling by failing to maintain and implement a safe system that:

(i) ensured that people working on and around the scaffolding did not remove scaffold ties that had been used to secure the scaffold to a supporting structure so as to provide lateral support and maintain the system's integrity, in order to prevent it buckling; and

(ii) identified clearly when scaffolding ties or other parts of the scaffold structure had been removed.

(c) The defendant failed to check, or failed to have its contractor or anyone else check, that the scaffold as erected complied with the design certificate issued for the erection of the scaffolding and in particular failed to check or have its contractor or anyone else check that the scaffolding did not exceed the criteria for maximum height (45 metres), maximum number of installed decks (10) and the maximum number of live working decks (1) for the scaffold;

(d) The defendant failed to implement and maintain a system that ensured that there was only one live working deck of the scaffold in use at any time;

(e) By reason of the defendant's acts and omissions Owen Svanberg, Michael Elsaway, Jason Maljers, Robert Rae, Ambrose Sharp, Yesser Moubayed and Laurie Gauci were placed at risk.

5 For the prosecutor, there was tendered into evidence an agreed statement of facts and supporting documentation. For the defendant, there was tendered into evidence an affidavit of Brett John Mason, together with voluminous supporting documentation. At the request of the Court, the prosecutor tendered into evidence, with the consent of the defendant, a certificate for scaffold design issued by Steve Pratt, structural engineer, dated 17 September 2008. I shall refer to relevant parts of this evidence during the course of these reasons for judgment.

6 I set out hereunder part of the agreed statement of facts:

1. At all material times, the prosecutor was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 (the Act) and empowered under Section 106(1)(c) of the Act to institute proceedings in the within matter.

Built

2. At all material times Built NSW Pty Ltd (ACN 083 928 045) was a corporation whose registered office is situated at Level 1, 140 Myrtle Street, Chippendale in the State of New South Wales (the defendant) and was an employer.

3. Built NSW Pty Ltd (Built) was the principal contractor for a construction project undertaken at a building known as the Grand United Building at 147-153 Castlereagh Street, Sydney in the state of New South Wales (the premises).

4. Built was established by its parent company, Built Holdings Pty Ltd (Built Holdings) on 17 August 1998. Built is a construction company in the business of undertaking commercial construction or refurbishment projects ranging from $2 million to over $60 million.

5. CSRDM Pty Ltd (CSRDM) as trustee for CDS Development Trust No. 1, managed the Grand United Building and had engaged Built to complete construction work at the premises.

6. On 9 July 2007, a contract was entered into between CRSDM and Built which set out two distinct construction stages known as 'Phases' in relation to the construction work to be undertaken at the premises. The first phase was the 'early works' program which involved demolition works. The second phase involved the construction of four additional floors on top of the existing eight floors with a plant room on the roof. The second phase also included the total refurbishment of the building internally and externally.

7. The agreed contract value for the work was over $33 million with work to commence on 9 July 2007.

8. Marco Rossi (Mr Rossi) and Brett John Mason (Mr Mason) are the directors of Built.

9. On 26 February 2009 senior Built employees who were involved in the work at the premises were the Senior Project Manager, Trent Anderson (Mr Anderson), the Site Manager, Anton Obereigner (Mr Obereigner), the Project Engineer, Brad Ruston (Mr Ruston), the Site Foreman, Simon Mak (Mr Mak) and the OHS Site Coordinator, Guy Hicks (Mr Hicks).

10. Built engaged numerous subcontractors to undertake work at the premises, including Skyline Scaffolding Australia Pty Ltd (Skyline) and Sassall Glass & Joinery Pty Ltd (Sassall).

Skyline

11. Skyline was contracted by Built to design, supply, erect and maintain a perimeter scaffolding to entirely surround the whole of the premises up to and including level twelve. The supply and erection of the scaffolding was to be in accordance with the architectural drawings attached to the contract in Appendix B1.

12. The contract value for the scaffolding work was $541,552.00.

13. Skyline's sole director was Mr Jason Younan (Mr Younan). Mr Younan holds an intermediate scaffold ticket. Skyline was registered on 24 November 2006 and was placed in voluntary liquidation on 9 November 2010.

14. Mr Matt Jordan (Mr Jordan) was employed by Skyline as a Scaffold Supervisor and holds an advanced scaffolding ticket. Mr Jordan would attend the premises three times per week to check the scaffold as erected and used for work and issue scaffold handover certificates.

15. Pyncan Pty Ltd (Pyncan) was Skyline's financial subsidiary. Pyncan had the same director and registered details as Skyline. Pyncan was deregistered on 1 August 2010.

16. Mr Nathan Cook was employed by Pyncan and provided to Skyline as the full time Leading Hand for the site. He had worked for Pyncan for a period of 4 ½ years at the time of the incident. At the relevant time Mr Cook held a basic scaffolding ticket. Mr Cook commenced working at the site in October 2007. He reported to Mr Jordan.

17. Mr Jason Matthews was employed by Pyncan and provided to Skyline as a Leading Hand. Mr Matthews held an advanced certificate in scaffolding.

18. Skyline provided, erected and installed the modular scaffolding for use by Built. The scaffolding used was manufactured by Turbo Scaffolding & Formwork Pty Limited t/as International.

Contract between Built and Skyline

19. Skyline had the contractual responsibility of determining the type of scaffolding required for the operational needs of Built for the site and its design and layout subject to the terms of the 'Trade Specific Scope of Works' contained in the contract. Part 2.12 of the contract required Skyline to make allowance for scaffolding design, engineering and certification of all new areas, including a weekly inspection and sign-off.

20. Part 2.23 of the scope of works required the design and erection of the scaffolding to include: "platforms or five (5) board'; edge boards; and two (2) board hop-up bracket system at every working deck level wherever formwork, concrete, curtain wall, balustrade, brickwork, render, glazing, louvers, painting etc is to occur'.

21. Part 2.24 of the scope of works required a working deck to be installed at each building level or according to Built's requirements and be installed so that there was uninterrupted access to each level around the perimeter of the building. The marked up drawings showed the the elevations required. Part 2.26 of the contract required for the areas where there were balconies to have additional scaffold bays. Under the scope of works Skyline were also required to allow for any 'cantilever situations' and change in scaffold configuration.

22. Part 2.36 required Skyline to provide design drawings indicating the scaffold arrangements and submit them to the necessary authorities for approval. Parts 2.40 and 2.44 required Skyline to conduct regular checks during the construction period of the works and coordinate the position of ties with windows, openings etc and if necessary to relocate the ties. All of the scaffolders used by Skyline were to comply with the relevant Australian Standards for labour requirements at Part 2.45. At Part 2.51 Skyline were to allow for adjustments on the completed scaffold for the installation and removal of loading platforms, including the mesh/shade cloth cover and decks/hop-ups. Under Part 3.8 Skyline were required to have at the site full time a competent and registered foreman.

23. The contract between Built and Skyline also provided for document control. In particular, Part 4 specified that the internet management information system "Project Centre" was to be used for communication. Skyline under Part 4.2 had the responsibility to ensure that they worked from the latest drawings that were loaded onto the system.

24. According to Mr Younan Built had no authority to touch the scaffolding or to move it in any way.

25. Skyline Formwork Australia Pty Ltd was also engaged to work at the premises to undertake formwork. Skyline terminated the contract on 7 January 2009.

Stekiz

26. Skyline contracted Stekiz Engineering Consultants Pty Ltd (Stekiz) to design the perimeter scaffolding at the site. Stekiz provided full time technical support to Skyline. Fifty percent of Stekiz's engineering work related to Jason Younan's companies. Stekiz's sole director Steve Pratt (Mr Pratt) at the relevant time was a qualified structural engineer.

27. Prior to commencing work Skyline was requested by David Ludlow, the site manager for Built from July 2007 to August 2008, to provide a design certificate for the scaffolding for the demolition phase of the project. Skyline provided a design certificate dated 24 July 2007 prepared by Mr Stephen Pratt of Stekiz Engineering Pty Limited (Stekiz).

28. According to Mr Younan Mr Pratt had the responsibility of ensuring the structural capacity of the scaffold structure for the operational requirements of Built. In particular, he had responsibility for determining the capacity and suitability of the cantilevered needle support system used by Skyline for the northern and eastern scaffolding.

29. Mr Pratt prepared seven drawings for the scaffold dated July 2007 for levels 1 to 11. Each had provision for five (5) boards and 3 hop-ups (not two (2) as specified in the scope of works at Part 2.23). Drawing seven (7) depicted levels 10 and 11. The drawings prepared by Mr Pratt did not comply with the number of hop-ups specified in the contract between Skyline and Built.

30. Pratt signed all of the structural engineering design certificates for the demolition and construction scaffold. He provided the design certificates to Jason Younan of Skyline.

31. Mr Pratt did not provide the design certificates to Built and he took no steps at any time to make sure that Built were provided with his design criteria as he regarded that to be the responsibility of Skyline.

32. A further design certificate dated 20.12.07 was issued by Pratt for his design of the scaffold for the construction phase of the project to Level 9 with 10 specified as the maximum number of decks. This certificate was provided to Skyline. At the time the design certificate was issued by Mr Pratt the demolition scaffolding was still in place but the construction scaffolding had not been erected.

33. The construction scaffolding relating to the certificate was essentially the same scaffolding as used for the demolition work. Any changes made to the scaffolding in respect of the construction design were negligible. Mr Pratt stated that he had used the same certificate as for the demolition design and changed the dates by whiteout ink. Mr Pratt stated that for design purposes it was not necessary to physically alter the demolition scaffolding to make it a construction scaffold. Mr Pratt provided the design certificate to Skyline.

34. Mr Pratt did not inspect the construction scaffold for compliance with his design certificate as he was not engaged by Skyline to do so.

35. Mr Pratt also issued the design certificate dated 17.09.08 which was the design certificate for the construction scaffolding up to Level 12. It was provided to Skyline. After the issue of the certificate Pratt could not recall if he inspected the erected scaffolding.

...

The Scaffolding

45. At the time of the incident, work at the site had been underway since May 2007.

46. Another contractor at the site, Delta, had erected the "B" class hoarding and the first deck of the scaffolding. The façade scaffold and all other scaffolding was to be erected by Skyline in accordance with the terms of its contract with Built dated 5 September 2007.

47. Skyline provided, erected and installed the modular scaffolding, as designed by Mr Pratt of Stekiz, for use by Built during the demolition stage, known as phase 1.

48. The scaffolding for the demolition phase was erected and installed by Skyline with the assistance of labour provided by ACS Building Services. By September 2007 the scaffolding had reached level 8 of the building. Skyline then replaced ACS Building Services with Pyncan Pty Ltd for the supply of scaffolding labour,

49. Once the demolition phase was completed, the scaffolding in place up to level 8 was reconfigured from 2 metre lifts to 3 metre lifts at certain levels and erected around the new boundary perimeters to the height of level 12. This was an ongoing process as the building erection moved up to level 12. The scaffold was erected to enable the construction of structural steel and bond deck at 2 floor intervals. The two board hop-ups were reconfigured to three board hop-ups. As the existing building had 'fins' that extended approximately 800mm out from the front of the building the scaffolding was erected hard against the 'fins' and the gaps were filled by 3 board hop-ups. The 'fins' were subsequently found to contain asbestos.

50. Skyline always understood that it was to provide the perimeter scaffolding for the levels from 8 to 12 with working decks for each level. The whole of the perimeter scaffolding height was above the building height when completed. It was classified as heavy duty. However some of the elevations started at lower levels according to the adjacent buildings so that the steel needle supports were required. The scaffold ties started at level 1 and were tied every 4 metres both laterally and vertically.

51. The needle support structures were designed by Mr Pratt in consultation with Mr Jordan and after numerous site inspections. The scaffolding plan was also prepared by Mr Pratt in consultation with Mr Jordan. They decided that as 2.4 metre scaffold bays did not work as a typical size given there were no windows, the size of the bays was changed to 1.8 or 1.2 metres.

52. Mr Jordan and Mr Cook understood that all of the scaffold working decks were to be available for work and/or access with the exception of the façade work where part of the scaffold was isolated and had restricted access only.

53. Skyline installed the scaffold ties for the Castlereagh Street façade commencing at Level 1. The methods of tying included tying around existing columns, raker ties and foot ties from the scaffold to the façade affixed with dynabolts.

54. Mr Cook remained at the site 6 days a week to arrange changes to the scaffolding as required on a daily basis. He was assisted from time to time by Mr Matthews and other employees of Pyncan. Mr Cook and Mr Matthews were to carry out tie and board movements and to monitor the scaffolding during the completion of daily tasks. Mr Cook was not present at the site on the day of the incident and Mr Matthews was the senior scaffolder on site at the time of the incident.

55. Skyline had installed the scaffolding and altered the scaffolding as required throughout the construction phase. The scaffolding was raised progressively to level 12 during the construction of the upper levels. The north eastern section of the eastern scaffold on Castlereagh Street had been gradually increased over a period of two months from level 8 to the roof area on level 12, to a height of approximately 50 metres. That work was completed by mid 2008

56. On 26 February 2009, the site was enclosed by modular scaffolding. The northern section of the eastern scaffold reached approximately 50 metres from the ground for a distance of approximately 10 metres. The remainder of the eastern scaffolding followed the height and façade of the building and was erected to allow placement of Preston Decks and external scaffold stairs. The northern and western sections of scaffolding varied in height between 25 and 40 metres and were suspended off a series of cantilevered beams (known as needles).

57. The scaffolding was wrapped in a chain wire mesh and covered in shade cloth to prevent materials from being ejected. The scaffold was generally installed with a five board working deck, which was deemed 'heavy duty' in accordance with the Australian Standard AS 1576:1:1995. On the north-east corner of the eastern scaffold where the incident occurred, there were 23 working, or scaffold, decks. Each deck was extended by a two or three board 'hop up' deck (a bracket attached along the inside vertical standards to bring the work deck closer to the building). Each working deck was either seven or eight scaffold boards in width.

58. Scaffold ties were used to prevent vertical and/or horizontal movement of the scaffold. The scaffold ties consisted of 'column' or 'U' ties, and 'foot' ties. Column ties consist of scaffold tubes or pipes encapsulating a column. U ties have tubes on two sides of a column, parallel to the main scaffold. A 'foot tie' is a length of scaffold tube welded to a flat plate of steel and bolted to the face of the building, usually to the concrete floor or column. Australian Standard AS/NZS 1576.1:1995 specifies that a foot tie should only be used when column or U ties cannot be fitted. Scaffold tube was connected using scaffold couplers.

59. Skyline used a 'raker' tie when neither a column or foot tie was available. A 'raker' tie is a foot tie bolted to the internal slab or floor of the building and affixed to the scaffold with couplers and angled bracing tube.

Manufacturer's specifications

60. The manufacturer of the modular scaffolding, Turbo International, had specifications for the installation of the scaffolding that limited the height to a maximum of 45 metres, with ten working decks and with only one deck 'live.' Turbo International also specified that not more than one level of hop ups was to be used. The manufacturer's specifications stipulated that more then one level of hop ups can be used if the structure is less than 45 metres and a suitably qualified engineer was consulted. This meant that only one deck could be worked on at any one time, meaning the other nine decks would need to be isolated through the installation of physical barriers or strict administrative controls.

Role of Mr Pratt

61. Mr Pratt provided the design certificate for the demolition scaffold dated 24 July 2007 prior to the erection of the perimeter scaffolding.

62. Mr Pratt also prepared seven drawings for the scaffold dated July 2007 for levels 1 to 11. Each had provision for five (5) boards and 3 hop-ups (not two (2) as specified in the scope of works at Part 2.23.

63. Mr Pratt provided Mr Younan with the design certificate dated 20 December 2007 for the construction phase of the project. There were negligible changes between the design certificates issued by him in July and December 2007. Mr Pratt stated to WorkCover that he amended the design certificate issued on 20 December 2007 by using white out to substitute the word 'demolition' with the word 'construction' and also changing the date by white out. Mr Pratt stated that there was no need for him to alter the design of the physical scaffold for the construction phase.

64. On 4 February 2008 Mr Pratt signed alterations to the suspended scaffold certificate to the 'northern face'. He again attended the site on 9 and 16 April 2008 and issued Certificates of Structural Adequacy of Formwork in relation to the formwork.

65. Mr Pratt attended the site on 16 September 2008 and signed a handover certificate which required an inspection of the western scaffold and certification that it complied with the Australian Standards.

66. On 17 September 2008 Mr Pratt issued a design certificate for th e construction phase of the scaffold to level 12. The design certificate complied with the manufacturer's specifications in that it included under the heading 'Design Criteria' the following:

● Max Assembled Height Scaffold - 45 m

● Max number of Installe d Decks - 10

● Max number of Live Working Decks - 1

67. Mr Pratt next attended the site on 2 October 2008 and 27 November 2008 to sign certificates as to the structural adequacy of formwork and confirmed the supporting scaffolding in respect of the formwo rk complied with the relevant Australian Standards.

68. On 17 and 22 December 2008 Mr Pratt signed certificates as to the structural adequacy of formwork and confirmed the supporting scaffolding in respect of the formwork complied with the relevant Australian Standards. On both days he undertook an inspection. On 20 February 2009 he signed a certificate for scaffold construction that confirmed the support scaffold complied with the relevant Australian Standards and was capable of supporting the design loads.

69. At the time of the incident the scaffold was approximately 50 metres high with 23 decks. This significant oversize allowed the scaffold to be grossly overloaded above the manufacturer's recommendations and the design by Stekiz.

70. At the time of the incident, Mr Jordan observed no additional materials loaded on the working decks at or above the buckled section of the scaffold.

The Incident

71. Work at the premises had commenced in May 2007. By 26 February 2009 the building had undergone a significant program of works. Much of the structural work in the construction phase had been completed and refurbishment work internally and externally was underway. The lower level balconies were being readied for concreting with formwork. The premises opened around 6:00am and at around 1.00 pm there were approximately 79 workers at the premises.

72. Built's Site Managers Mr Anderson and Mr Oberigner were off site at Built's Chippendale office meeting with Mr Younan and Mr Jordan of Skyline. Built's Project Engineer, Mr Ruston, was the most senior Built employee at the premises.

73. At about 1:20pm Built Site Foreman, Mr Mak directed BKH formworker Yesser Moubayed (Mr Moubayed) to disregard and not alter or remove a scaffold tie that was interfering with the formwork on a concrete balcony on level 4. Mr Mak told Mr Moubayed to construct formwork around the scaffold tie and that the tie would be cut off after the formwork had been stripped. No other specific instructions were given at that time by Built regarding the scaffold.

74. At approximately 1.45pm workers on the eastern side of the premises heard a loud screeching noise and the northern section of the eastern perimeter scaffold dropped about 300mm in distance. The scaffold then descended slowly down and away from the building's eastern face. Pieces of the scaffold, such as metal planks, tubes, clips and other unsecured components including building materials, fell into the expanding gap between the scaffold and the building to the ground below. The compromised section of the scaffold continued to creep away from the building until it came to rest on an adjacent street light pole on Castlereagh Street. The scaffold had dropped vertically approximately 600 mm and had come away from the building approximately 1.5 metres at its furthest point.

75. At that time Mr Hicks and Mr Mak left the lunchroom area on level 1. Mr Hicks alerted Mr Ruston of the incident and then proceeded to level 12 and commenced evacuating the upper levels of the building. Mr Mak ran to level 3 and saw the partially buckled scaffold. He then went to level 4 and saw that the scaffold tie he had earlier directed to be left in place had been removed. Mr Mak then commenced evaluation of the lower levels of the building.

76. The damage to the scaffolding was significant and extended from level 7 to the ground floor of the eastern scaffold across approximately 6 bays, and between level 7 and level 3 on the northern scaffold across 4 bays. The cantilevered beam and supporting rostrum on level 5 suffered significant twisting as it was pulled downward, toward Castlereagh Street. The compromised scaffold suffered significant structural damage, but remained standing and relatively intact.

77. Several workers, including Owen Svanberg, Michael Elsaway, Jason Maljers, Robert Rae, Ambrose Sharp, Laurie Gauci and Mr Moubayed jumped from the buckling scaffold on to the building.

78. Some workers went onto Castlereagh Street to stop pedestrians and traffic from coming near the buckled scaffold.

79. No one was injured as a result of the incident.

80. The workers from the premises assembled at Hyde Park. Police attended the site and implemented traffic control measures that effectively blocked off Castlereagh Street. Commercial shops in the vicinity of the site were also evacuated. Energy Australia de-energised the light pole against which the scaffold was leaning.

81. Approximately 20 businesses on Castlereagh Street were affected through partial or total closures.

82. Following the incident the scaffolding was stabilised using chain blocks and straps, and by installing scaffolding ties to the entire compromised area up to and including level 12. These interim measures remained in place until Police, Built and structural engineers agreed on a dismantling regime. Steel "I" beams were installed at level 7 as cantilever beams to alleviate the weight on the upper levels of the scaffold between level 7 and level 12.

83. After the dismantling of the scaffold and general clean up of the footpath and roadway, Castlereagh Street was reopened by Police at 7:39pm on Wednesday, 4 March 2009.

Failure of the scaffold

84. After the incident it was found that the buckling of the scaffold was caused by the removal of numerous supporting ties by unknown persons from the north eastern section of the scaffold prior to the buckling. After the incident Mr Wayne Costin, Managing Director, Mr James Disher, Design Engineer and Mr Jay Martin, Draftsman of Costin Roe Consulting Pty Limited (Costin Roe) undertook an inspection of the premises in order to investigate the buckling of the scaffold and determine its cause. In a report dated 27 March 2007 Costin Roe expressed the opinion that:

We advise that based on our visual examination and structural engineering analysis of the scaffold we are of the opinion that the buckling of the lower levels of the scaffold was caused by the absence of ties providing lateral restraint to the scaffolding standards.

We are of the opinion that the lateral ties to the scaffold were installed but were removed during works to the building where cladding of the existing concrete columns was taking place. This opinion is based on our findings that no existing lateral ties were observed at the northern end of Castlereagh Street in the area where the collapse occurred, as indicated on the pre-collapse elevation on drawing C010156.00-SK01.

The absence of ties over more than five levels of the building increased the buckling length of the standards and hence drastically reduced the structural capacity of the scaffold to carry vertical loads. The capacity of the scaffold to carry vertical loads was crucial at the point where the top of the buckle occurred, as load was transferred onto the scaffold standards from the return section of scaffold along the Castlereagh Street elevation at level 3.

...

In summation, the large amount of load carried by the scaffold standards on Castlereagh Street, combined with the increased buckling length induced by the lack of lateral ties for five levels has caused a buckling failure and deformation of the vertical members of the scaffold.

85. On 29 July 2010 Mr Douglas Crawford BE (NSW) ASTC Marron Consultancy expressed the opinion that:

The scaffold as erected on 26 February 2009 [as noted in Inspector Steve Cooper's interview with Steve Pratt in question Q 192 and Q 193 and answers A 192 and A 193] resulted in gravity loads that were approaching the test loads on the system and accordingly grossly exceeded the manufacturer's specifications leaving no margin for error such as removal of ties at the lower levels of the scaffold coupled with the excessive gravity load of the scaffold resulted in the scaffold standards bowing outwards causing the joints between adjacent standards fail resulting in the scaffold deflected outwards in the direction of Castlereagh Street and ultimately deforming the lowest needle on the north façade scaffold.

86. Subsequent engineering calculations undertaken after the incident indicate that the scaffold was grossly overloaded to about 1.8 times the maximum loading stipulated by the manufacturer. When the scaffold was placed in position it was susceptible to any external factors that had the potential to instigate a failure, including excessive loading caused by wind, persons accessing the scaffold or, as in this instance, the removal of ties in an uncontrolled manner.

AS/NZ: 4576 and AS/NZ: 1576

87. The Australian Standards AS/NZ 4576:1995 and AS/NZ 1576.1:1995 applied to the scaffolding erected by Skyline.

88. AS/NZ 4576:1995 provides practical guidance on the safe selection, supply, erection, alteration and inspection of scaffolding among other matters. Part 12 of the standard sets out the factors to be considered before a handover certificate is issued. Part 13 sets out the requirements of the persons conducting the inspections.

89. AS/NZ1576.1:1995 specifies design and operational requirements for scaffolding including prefabricated and tube-and-coupler scaffolding.

90. The handover certificates issued by Mr Jordan did not comply with AS/NZ 4576:1995 in that it did not indicate: (i) the maximum number of platforms that could be loaded or worked from at any one time and (ii) the intended purpose of the scaffold. Further, the method used by Skyline for the ties did not conform with the AS/NZ 4576:1995 recommendation that all scaffold ties were to be secured to both inner and outer standards. Mr Jordan agreed that the handover certificate he had provided to Built on 18 February 2009 was not appropriate in that the scaffolding certified did not comply with the AS/NZ 4576:1995. Mr Jordan regarded the use of modular scaffold ledgers as scaffold ties as an appropriate measure.

91. Additionally, the scaffold on all sides of the building did not comply with Australian Standard AS 1576:1995 - Scaffolding - General Requirements in that the scaffold, as inspected before and after the incident, was found to be poorly installed. It had jacks fully extended, a lack of bracing members, sections out of alignment and ladder beams not clamped or properly supported.

92. Mr Cook issued handover certificates for scaffolding completed by Skyline on a regular basis.

93. Mr Jordan was the person who issued the 30 day inspections required under the Australian Standard AS 4576:1995 and clause 58 of the Occupational Health and Safety Regulation 2001. The last 30 day inspection was conducted by Mr Jordan on 18 February 2009 who completed handover certificate number 2375. In addition to Mr Jordan, Mr Pratt was the other person with authority to complete and issue a handover certificate.

Workers at risk

94. There were workers at risk of injury when the scaffold buckled. Seven workers were on the scaffold when it dropped. Other workers were working in and around the scaffold on the day.

95. Ausrise Site Supervisor Owen Svanberg (Mr Svanberg) was working on level 8 installing sub frames for the façade windows when he heard a loud popping or cracking sound and felt the scaffold drop about a foot. Mr Svanberg rode the scaffold down and jumped through the window he had been working on. When Mr Svanberg looked back he saw the scaffold drop another half foot before it stopped.

96. MDS Tiling Director Mick Elsaway (Mr Elsaway) and Supervisors Robert Rae (Mr Rae) and Jason Maljers (Mr Maljers) were on level 5 inspecting where they could install sandstone supplies. Mr Rae was on the southern side of the scaffold when he yelled "run" and he, Mr Elsaway and Mr Maljers ran north toward the entry of the building. Mr Maljers said he noticed a void of approximately 700mm between the building and the scaffold all the way down.

97. Superior Glass employee Laurie Gauci (Mr Gauci) was installing a metal rainscreen and steel "L" brackets on the eastern façade of level 4 or 5. Mr Gauci noticed at approximately 1.30pm that he was unable to reach the wall he had been working on. He felt the scaffold move away from the building and he climbed back into the building at level 5.

98. Becks Workforce welder Ambrose Sharp (Mr Sharp) had been welding from a ladder on level 1 of the scaffold for most of the day. Mr Sharp had just stepped off the ladder and onto the slab when he heard a loud bang, then groaning and crunching like being on a ship, before he turned and saw the scaffold buckle, and the ladder from which he had been working fell away from the building. He immediately turned off the power to his welder as he was concerned the scaffold might be 'live' as some welding leads had fallen when the scaffold buckled.

99. BKH Formworker Mr Moubayed was working on level 4 when he went to an upper floor to retrieve materials. Mr Moubayed returned to the scaffolding on level 4 after the incident had occurred, approximately one bay away from the compromised scaffold. He heard workers shouting at him from the street below to get off the scaffold as it had collapsed. Mr Moubayed looked to his left and saw there was a big sag in the scaffold and that it had pulled away from the building. Mr Moubayed quickly jumped from the scaffold back on to the building.

Previous incidents

100. On 30 July 2008, WorkCover issued Built with Prohibition Notice No. 145805 in relation to unsafe scaffolding with missing components and open penetrations. The Notice ordered Built to cease working from the scaffolding at the site until rectification work was completed to ensure the scaffold complied with the Australian Standard and a handover certificate issued.

101. In response to the Prohibition Notice, Built engaged Grasso Consulting Engineers Pty Ltd (Grasso) and requested that they inspect the scaffolding and prepare a report. The report dated 6 August 2008 provided to Built found that various parts of the scaffold and in particular, the needle beams used in the southern and northern sides of the site did not comply with the Australian Standard although at this time the scaffold was not at the full height. At the time of the report the eastern scaffold, with a deck at every 2 metres with hop-ups did not conform to the design by Stekiz. All of the items identified in the Grasso report had been rectified at the time of the incident and were unrelated to the factors contributing to the movement of the scaffold.

102. Built's engagement of Grasso did not extend to asking Grasso to check compliance with the Stekiz scaffold design.

103. In a letter dated 30 July 2008 Skyline had advised Built that Built employees had removed scaffold components without authorisation to enable a string line to be dropped down on the north eastern corner of the site, and that other tampering with the scaffold had occurred.

SYSTEM OF WORK PRIOR TO THE INCIDENT

Built

104. Built's OHS system consisted of a project management plan, environmental project plan and site safety rules, in addition to a series of policies relating to OH&S, environmental management, industrial relations and drugs & alcohol. The site management plan and other documents relating to Built's OHS system were kept in the site office and managed by means of the intranet document management system. Sections of Built's OHS&E management system relevant to a particular trade were not given to contractors before they started work, although that was required by Built's site safety plan.

105. Built monitored the OHS performance of work sites by reviewing documented safety minutes and reports including tool box talks, safety walks, safety committee minutes, construction meeting minutes and also conducted quarterly internal audits. Built also had consultants audit the performance of the OHS&E management system.

106. Built established a safety committee at the site consisting of a nominated representative of each of the main subcontractors, including Skyline, and meetings were convened weekly at the site. The last safety committee meeting was on 25 February 2009, however Skyline was not included in the distribution list for the minutes although it still had a presence on site supervising at least three other scaffolders. The minutes do not mention discussions of any agenda item relating to unauthorised scaffold movement however the practice was to immediately remedy any scaffolding issues on the weekly walks conducted by the safety committee. It was not until the safety committee meeting on 18 March 2009, after the incident, that the issue of scaffold movement was raised as an OHS issue.

107. Skyline participated in the safety walks conducted by Built. Mr Jordan was on the safety committee and his place was later taken over by Mr Cook. Minuted safety walks were undertaken by the safety committee members on a weekly basis. Built's OHS Site Coordinator, Mr Hick, was on the safety committee and recorded the minutes. It was common practice for scaffolding issues to be rectified during the inspections and not all scaffolding issues were recorded on the safety walk minutes. The last documented safety walk prior to the incident was on 23 February 2009 and scaffold issues were identified including missing hand rails and leads on the ground, however it was not identified that the northern section of the eastern perimeter (where the incident occurred) was missing numerous scaffold ties.

108. Weekly toolbox talks were conducted by subcontractors and attended by a Built staff member when possible. Built required minutes of the toolbox talks to be submitted or progress payments would not be approved. Built required that contractors and subcontractors were to complete the Built site induction before commencing work and included a discussion of the unauthorised movement of scaffolding.

109. Built's OHS&E management system required that subcontractors provided a copy of their OHS management system, including a risk assessment, SWMS, list of persons working on site, roles and responsibilities, scope of works, first aid etc. Skyline provided its basic OHS management system to Built, and Built accepted it as fulfilling the requirements of the management system.

110. Built had a number of changes of management during the course of the works at the premises. However, once Mr Anton Obereigner was appointed as the site manager in August 2008 no further changes to the management structure were made until 10 days prior to the incident when Stephen Boulos, a Project Manager, was replaced by Trent Anderson. Some of the management at the time of the incident when questioned by WorkCover were not fully aware of the previous management actions and decisions in relation to the design certificates issued by Mr Pratt and the erection of the scaffolding during the demolition and construction phases by Skyline.

111. Built did not provide adequate supervision to subcontractors working at the site so as to ensure that scaffolding ties were not removed or tampered with or removed. Despite having dedicated full time supervisory staff none of them noticed that approximately 20 scaffold ties had been removed from the north eastern section of the scaffold prior to the incident. No adequate instructions or directions were provided about the need to ensure that scaffold ties were not removed.

112. Built had a system in place that required contractors to inform the Foreman, or Skyline, if they required scaffold ties to be removed. However, this system did not effectively alert Built or anyone else to the fact that so many ties had been removed so as to give rise to the risk. There was no system for identifying clearly that ties had been removed.

113. Built did not check, or have Skyline check that the scaffold erected and installed was in compliance with the design certificates issued, the manufacturer's specifications and complied with Australian Standard AS/NZ 1576.1:1995 - "Scaffolding - General Requirement". Built did not request that Skyline or Stekiz return to the premises in order to certify that the scaffolding as erected complied with the design certificates manufacturer's specifications and the relevant Australian Standards.

114. Built did not have in its employ a structural engineer to review and check the scaffold design certificates issued by Skyline and did not engage anyone else to undertake this task. Built prior to the incident believed that Mr Pratt, who attended the site on an occasional basis, was there to ensure that the scaffold was being built in accordance with the structural advice he had provided. The scaffold was inspected in the week leading up to the incident by the safety committee. Mr Pratt also attended the site that week. However, Mr Pratt understood that he was only engaged by Skyline to design the scaffold that he was instructed to design and was never requested by Skyline to check that the erected scaffold on site complied with the certificate issued.

115. Built was aware the building required an unconventional scaffolding system to accommodate the building façade and surrounding buildings. The scaffolding design allowed for only 10 decks, although there was to be a total of 12 floors in the building. Built did not ensure that Skyline installed the scaffolding in accordance with the Australian Standards, the design specification or the manufacturer's specifications and had given direction to Skyline to design and erect scaffolding that was suitable for the operational needs of the site. Built held regular meetings with Mr Cook and Mr Jordan who were aware of its operational requirements in relation to working decks.

116. Built understood that the scaffolding erected in the north eastern corner was to provide edge protection and to prevent persons from falling from heights as well as provide a means of access. At no time was Built advised by Mr Jordan, Mr Cook or anyone else from Skyline that the scaffolding did not comply either with the manufacturer's specifications and/or the relevant Australian Standards. However, at no time did Built make any inquiry of Mr Jordan, Mr Cook or anyone else from Skyline about whether or not the scaffolding complied with the manufacturer's specifications, the design certificate or relevant Australian Standards.

117. Built did not implement a system that ensured that there was only one live working deck of the scaffold used at any one time.

118. Built did not instruct its employees or contractors that only one deck could be worked on at any one time or implement measures to isolate other decks by either physical barriers or administrative means to prevent access.

119. Built had ensured that the scaffold was signed off every thirty days in accordance with Clause 58(a) of the Occupational Health and Safety Regulation 2001, however it did not implement any other measures to satisfy itself that what was being signed off was compliant with the relevant Australian Standards, the design or the manufacturer's specifications. It relied on the expertise of Skyline to ensure that the scaffolding was compliant.

120. Built supervisors were not aware that approximately 20 scaffold ties had been removed from the north eastern section of the scaffold prior to the incident.

Skyline

121. Skyline provided its OHS documentation to Built as required by Built's OHS&E management system, which included relevant Safe Work Method Statements (SWMS), and risk assessments. Skyline's OHS system required that it was revised every 12 months, however Mr Younan could not confirm when it was last reviewed.

122. Skyline did not have a procedure in place to ensure that SWMS were being adhered to, other than asking the workers to sign the document. There were systems in place to ensure compliance with the SWMS. Mr Younan relied on the skills and experience of the scaffolders and his employed supervisors.

123. Skyline had no systems in place for monitoring or auditing the company's safety performance at the site, other than ensuring that workers signed the SWMS and providing supervisors. There was no use of internal or external auditing, or checklists.

124. Skyline did not have adequate supervision at the site on the date of the incident. Skyline generally had three workers at the site, however there were no supervisors on site on the date of the incident.

125. Skyline relied on the skills and experience of its employees to ensure compliance with Stekiz's structural design certificates. There were no systems in place to ensure that the scaffold was compliant with the structural design, the Australian Standard or the manufacturer's specifications. The scaffold did not comply with Stekiz's design, the Australian Standard or the manufacturer's specifications.

126. Skyline conducted an inspection of the scaffold once a month at the premises. This included an inspection of the scaffold ties. Mr Cook also conducted 'safety walks' once a week or once a fortnight as required by Built. Removal of ties and other components were identified during these safety walks. However, there was no system in place to clearly identify the removal of ties apart from the monthly inspections or safety walks.

127. Skyline did not have a system of work in place to ensure the scaffold was safe for workers to use. It did not implement a system that ensured that there was only one live working deck of the scaffold used at any time.

128. Skyline did not ensure that a competent person checked that the scaffold was installed in accordance with the structural design. Skyline did not have any employees who had engineering qualifications that would have ensured a competent person checked the scaffolding. Skyline did not ask Stekiz to return to the site to check that the scaffolding was installed in accordance with the design, the design certificates, the manufacturer's specifications or the Australian Standard.

129. Skyline used Messrs Jordan and Cook to sign off on the handover certificates for the scaffolding. Neither of them held any relevant engineering qualifications.

130. Skyline did not comply with the manufacturer's specifications for the scaffold when it was at its full height. The manufacturer specified a maximum of 45 metres, with only ten decks, only one of which was to be worked on or 'live' at any one time. The design specified only one hop up deck, however nearly all 23 working decks had hop ups. The scaffold at the time of the incident was approximately 50 metres in height with 23 'live' decks.

131. The Australian Standard AS/NZS 1576:1:1995 Scaffolding - General Requirements does not set out the number of ties required. However, the WorkCover publication Industry Safety Standard "Erecting, Altering and Dismantling Part 1 - Prefabricated Steel Modular Scaffolding" dated August 2008 requires a scaffold tie every 4 metres vertically and horizontally, on scaffolds up to 20 metres in height only. Using these criteria the scaffold was 2.5 times higher and missing six levels of ties over a distance per level of approximately 15 metres per level.

132. Mr Younan stated to WorkCover that he believed that because the scaffold was stepped with a balcony at level 9 the height of the scaffolding erected on the north eastern corner had complied with the design certificate issued by Mr Pratt. Mr Younan could not confirm whether Skyline had advised Built of the placement of excess decks to that specified in the design certificate.

SYSTEM OF WORK FOLLOWING THE INCIDENT

Built

133. Immediately following the incident WorkCover issued Prohibition Notice No. 153624 prohibiting access and egress onto the scaffold. Built complied with this notice.

134. Following the incident Built made some changes to its site safety rules to address the unauthorised movement of scaffolding. Built made it a requirement that scaftags should be affixed to scaffolding and that workers could not use scaffolding if there was not a scaftag in place. Built re-inducted all workers on the site and greater emphasis was placed on the unauthorised movement of scaffolding. Additional signage was installed.

135. Built conducted an investigation of the incident, involving the technical expertise from Grasso. The report identified the cause of the incident as being an under-designed scaffold. Built also arranged for its OHS systems to be externally and internally audited to ensure compliance.

136. In 2009 Built NSW achieved national accreditation for its OHS&E management system that allowed the corporation to undertake federal contracts.

137. The following supporting documentation is annexed:

a. Colour photographs taken by Inspector Sukara on 26 February and 11 March 2009;

b. Colour photographs taken by Inspector Scott on 12 November 2009;

c. Photographs taken by Costin Roe on 1 June 2010;

d. Factual Inspection Reports of Inspector Sukara dated 31 March 2009;

e. Report prepared for WorkCover NSW Collapse of Scaffolding at 149 Castlereagh Street, Sydney, 26 February 2009 by Mr Douglas Crawford BE (NSW) ASTC of the Marron Consultancy 29 July 2010 together with Appendices.

f. Letter from Costin Roe Consulting to Freemans Loss Adjusters dated 27 March 2009.

g. Prohibition Notice 145805 issued to Built on 30 July 2008;

h. Prohibition Notice 153624 issued to Built NSW Pty Ltd dated 26 February 2009;

i. Built Safety Walk Minutes of 23 February 2009;

j. Australian/New Zealand Standard AS/NZS 1576:1:1995 Scaffolding, Part 1, General Requirements;

k. Australian/New Zealand Standard AS/NZS 4576:1995 Guidelines for Scaffolding;

l. WorkCover NSW Industry Safety Standard - Erecting, Altering and Dismantling Scaffolding - Part 1, prefabricated steel modular scaffolding;

m. WorkCover NSW policy statement "The Requirements for Scaffolding in NSW", version 3, May 2004;

n. WorkCover NSW "Spacing of Ties" document;

o. Prior convictions certificate.

7 In essence, the defendant was the principal contractor for the construction of an additional four floors and plant room on the roof of an existing 8-floor commercial building in Castlereagh Street, Sydney. The defendant engaged Skyline Scaffolding Australia Pty Ltd ("Skyline") to design, supply, erect and maintain substantial perimeter scaffolding around the whole of the building. Skyline, in turn, retained Stekiz, structural engineers, to design the scaffolding. The principal of Stekiz was Steve Pratt.

8 On 17 September 2008, Mr Pratt certified that the scaffold design for the site was "considered safe to carry the Design Loads outlined above, and meets the requirements of occupational health and safety regulation 2001." In his certificate, Mr Pratt identified the design criteria, which are referred to in [66] of the agreed statement of facts. If one reads that certificate, these design criteria are clearly shown. As is evident from the agreed statement of facts, neither that certificate nor indeed any of the other detail specifications and drawings concerning the scaffolding were given to the defendant. On the evidence, as at the date of the incident that gave rise to these proceedings, the scaffolding had not been erected in compliance with the design certificate. It exceeded 45 metres in height, it had more than the maximum specified 10 installed decks, namely 23, and all of the decks were live, in the sense that they were being used, whereas the maximum number of live working decks was to be no more than one. As is suggested in the evidence, the scaffolding was overloaded to about 1.8 times its maximum loading at the time of the incident. All of this severely compromised the integrity of the scaffolding which, on the evidence, was at risk of collapse from any number of external forces.

9 The unsatisfactory state of the scaffolding was exacerbated by the fact that as at the date that the incident occurred, namely 26 February 2009, a large number of ties had been removed from the scaffolding over a significant area. On the evidence, it was the absence of these ties that in all likelihood caused the scaffold to collapse in the manner described in the agreed statement of facts.

10 The starting point for the assessment of penalty is a consideration of the objective seriousness of the offence. This requires all of the circumstances to be examined in order to determine the culpability of this defendant.

11 At the date of the incident, there clearly existed a risk to the health and safety of persons who were working on or about the scaffolding structure. The scaffolding structure was not constructed in the manner contemplated and certified by the structural engineer, was significantly overloaded and therefore prone to failure and, furthermore, a significant number of ties had been removed that would otherwise have held the structure in place. The principal contractual responsibility for the design, erection and maintenance of the scaffolding rested with Skyline. Clearly, both contractually and at law Skyline was susceptible to being held responsible for any failings or deficiencies in the work that it was required to undertake.

12 However, the position is somewhat different under the provisions of the Act, which is designed to create a safe work environment for persons performing work, and, relevantly in the case of these proceedings, on constructions sites.

13 The defendant acknowledged by its plea of guilty and further acknowledged in the course of submissions before this Court that, in complying with its obligations under the Act, it should have taken steps to consider for itself the adequacy of the design of the scaffolding, and should have taken steps to ensure that the scaffolding was constructed in accordance with the design criteria. The defendant acknowledged that having failed to do so, it was in breach of the obligations imposed upon it by the Act. Indeed, if the defendant had taken these steps it would have recognised that the design criteria were not consistent with the specifications for the scaffolding. For example, the certificate for scaffold design indicates a required maximum assembled height of the scaffold of 45 metres, whereas in fact the maximum height required for the construction work was 50 metres. In addition, the specification required by Built required that there be a working deck on each level, whereas the design criteria specified a maximum number of live working decks as being one.

14 Furthermore, the defendant acknowledged by its plea of guilty that it failed to identify the fact that the ties had been removed and that this exacerbated the risk to the safety of persons working on or about the scaffold structure.

15 These admitted failures need to be seen, however, in the context of the totality of the circumstances which applied at the construction site, including, in particular, the involvement of Skyline and the fact that some unidentified person or persons appear to have removed the ties in complete disobedience of and disregard for protocols and procedures established at the construction site.

16 In fact, the defendant did have in place a number of systems designed to ensure that scaffold ties were not removed without authorisation. An onsite OHS management plan specified this. Furthermore, it set out the responsibilities for various onsite personnel, including subcontractors, and contained provisions for the carrying out of risk assessments, hazard identification and the like. The defendant ensured that frequent toolbox talks, safety walks and safety committee meetings were conducted. The site manager was given responsibility to ensure that the scaffolding was erected by someone who was competent to do so, that the scaffold was inspected by the structural engineer retained by Skyline, that the scaffolding was inspected at intervals not exceeding 30 days by someone who was competent to do so and that the scaffolding complied with various Australian standards. Furthermore, the defendant created a site management team with overall responsibility for all work to be carried out, engaged a fulltime OH&S officer at the site who reported to the national safety manager and conducted weekly site safety walks involving a number of personnel, including representatives from Skyline. The OH&S committee also conducted weekly site safety walks. The defendant communicated its safety requirements to all persons on site through induction training, weekly toolbox meetings and the ability of the project manager and site manager to deal with any work that was not being carried out in an appropriate manner.

17 Part of the system operated by the defendant required any contractor who wished to deal in any way with a scaffolding tie to inform the foreman or Skyline. A Skyline representative was present at the site six days a week and Skyline representatives would arrange for any changes to be made to the scaffolding, including the ties.

18 On the evidence, the safety committee had last conducted a weekly site safety walk on 23 February 2009, three days before the incident. A number of scaffold issues were identified and remedied. I am prepared to infer, on the balance of probabilities, that in the circumstances where a number of defects were identified, it is more likely than not that the members of the safety committee would have discovered that a large number of ties had been removed from a significant part of the scaffolding structure. It may be further inferred, therefore, that the ties, or at least a significant number of them, had not been removed as at 23 February 2009. There is also evidence that at about 1.20pm on the day of the incident, the defendant's site foreman had directed a particular subcontractor not to alter or remove any scaffold tie that was interfering with formwork on a concrete balcony on level 4. This was some 25 minutes before the incident.

19 Accordingly, it may be concluded that although the defendant concedes that the comprehensive system that it had in place "did not effectively alert Built or anyone else to the fact that so many ties had been removed so as to give rise to the risk", the fact that the ties were removed is a reflection of aberrant behaviour which could not easily be foreseen and which was contrary to the protocols and systems that the defendant had in place.

20 It is also necessary to make some observations about the state of the evidence as it concerns the failure of the defendant to check or arrange for the checking of the scaffolding design and scaffolding structure. In essence, the defendant relied upon the competency of its experienced subcontractor, Skyline, and the competency of a qualified structural engineer retained by Skyline in and about the design and construction of the scaffold. Whilst the defendant did not examine the design or check the construction for itself, it did receive from time to time scaffold handover certificates as referred to in [14] of the agreed statement of facts. In addition, the defendant received a number of inspection reports issued by Skyline personnel every 30 days, as referred to in [48] of the agreed statement of facts. Although the defendant misunderstood the purpose for Mr Pratt's attendance at the site from time to time, it was aware that he did attend and that he raised no issue with it concerning the integrity of the scaffolding structure. Nor were any concerns raised by Skyline or anyone else about the overall integrity of the structure, including Skyline's non-compliance with the design criteria.

21 Because of its ignorance about the design criteria, the defendant was not in a position to comprehend the risk to health and safety created by the design criteria deficiencies and the use of more than one working deck.

22 Mr Mason is the managing director of the defendant. He has had extensive experience in the construction industry over about 20 years. He is currently the president of the Master Builders' Association, Sydney Division and a committee member of the Property Council of Australia, Commercial Office Committee. It was the evidence of Mr Mason that the retention by a principal contractor of an independent engineer to review documentation such as engineer's scaffold designs prior to the erection of scaffolding and throughout the course of the project "goes above and beyond any legislative requirement and industry practice." It may be arguable that such a requirement is in excess of requirements created by the Act. I accept, however, that it is something that may not be current industry practice. Nevertheless, the defendant has, for the purpose of these proceedings, conceded that it needs to take steps of this kind in order to comply with the requirements imposed upon it by the Act.

23 The culpability of the defendant needs to be assessed, as I have said, in the context of all of the circumstances that prevailed at the time of the incident. In the context of the deficiencies in design and construction, the defendant relied upon the integrity and expertise of Skyline and the qualified structural engineer retained by it. Short of calling for the design documentation itself, it could not reasonably have known that the design was deficient and failed to comply with the specifications that it had given to Skyline. Seen in this way, the culpability of the defendant in this respect can be determined by reference to the failure to check the design criteria and the design for itself. This is a measure that, on the evidence of Mr Mason, exceeds current industry practice.

24 The other significant issue relates to the unauthorised removal of the ties. This is something that should have been recognised. However, a safety committee walk around had failed to detect the removal of the ties three days prior to the incident and no one else working on the construction site has, on the evidence, drawn the attention of the defendant's personnel to their removal. This matter also needs to be assessed against the background that whoever removed the ties did so in breach of the protocols and procedures established by the defendant. The removal of so many ties over such an area must also be regarded as aberrant behaviour, hopefully inconsistent with the conduct of persons generally working within the construction industry.

25 I should emphasise that the characterisation of the culpability of the defendant which I have identified also needs to be seen in the context of conceded breaches by the defendant of its obligations under the Act in the manner recognised by it. Although the defendant's breach must be characterised as serious, particularly when regard is had to the risk of injury created by the collapse of such a large scaffolding structure, I would regard it as being, in all the circumstances, something of the order of midrange.

26 The culpability of the defendant also needs to be assessed in the context of its overall commitment to compliance with its occupational health and safety obligations. This is far from the case of a defendant who has little regard for its occupational health and safety obligations and which has no or inadequate occupational health and safety systems in place. The evidence of Mr Mason is that prior to the incident the defendant gave serious attention to the discharge of its occupational health and safety obligations. A number of personnel were engaged specifically for that purpose. In addition, there were comprehensive protocols and procedures designed to instruct construction workers and instil in them a commitment to the safe performance of their work. The defendant's systems contained a number of checks and balances to ensure that this happened.

27 After the incident, the defendant took even more stringent measures to enhance its occupational health and safety commitment. With respect to this particular site it issued a revised OHS management plan, all persons working at the site were re-inducted and new site safety rules were implemented. Furthermore, since the incident the defendant has completely reviewed its occupational health and safety systems and has improved its induction and supervision procedures. Its subcontractor tender and procurement process has been strengthened with greater emphasis on a commitment by subcontractors to occupational health and safety requirements. Subcontractors are required to provide much greater detail concerning the work to be undertaken and this particularly applies to all scaffolding. There are now greater and more frequent audits and inspections of construction sites and supervisors and project managers have been trained accordingly.

28 I should add for completeness that the evidence of Mr Mason supports a conclusion that the defendant is a good corporate citizen and has expressed contrition and remorse for its breach of the Act.

29 In considering penalty, it is also necessary to take into account both the general and specific deterrent effect that the imposition of a penalty will create. In terms of specific deterrence, this may be ameliorated because of the defendant's enhanced commitment towards its occupational health and safety obligations.

30 There are a number of subjective matters that may be taken into account in favour of the defendant. It co-operated fully with the WorkCover Authority in and about its investigation of the incident, it pleaded guilty at the earliest appropriate time, it has expressed contrition and remorse for what occurred, it is a good corporate citizen and has a good safety record, without any prior convictions under the Act. I shall take all of these matters into account in favour of the defendant to the maximum appropriate extent.

31 The prosecutor sought orders for a moiety and the payment of costs, which were not opposed.

32 In all the circumstances, and having regard to all of the matters which I have discussed, I am of the opinion that an appropriate penalty is the sum of $115,000, having regard to the maximum penalty of $550,000.

Orders

33 I make the following orders:

1) The defendant is found guilty of the offence with which it is charged and convicted accordingly.

2) I impose a monetary penalty of $115,000 with a moiety to the prosecutor.

3) The defendant is to pay the costs of the prosecutor assessed in default of agreement.

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Decision last updated: 27 February 2012