Industrial Relations Commission New South Wales

• Medium Neutral Citation: Inspector Colin Fraser v Natoli [2011] NSWIRComm 77
• Hearing dates: 3 March 2011; 12 April 2011 (Written Submissions)
• Decision date: 10 June 2011
• Jurisdiction: Industrial Court of NSW
• Before: Backman J

Decision

1. In No IC 1084 of 2008, the defendant is convicted of the offence and fined $8,000 with a moiety to the prosecutor.

2. In No IC 1085 of 2008, the defendant is convicted of the offence and fined $8,000 with a moiety to the prosecutor.

3. In No IC 1086 of 2008, the defendant is convicted of the offence and fined $8,000 with a moiety to the prosecutor.

4. In No IC 1084, 1085 and 1086 of 2008, the defendant is to pay the reasonable costs of the prosecutor as agreed or, in the absence of agreement, as assessed.

• Catchwords: OCCUPATIONAL HEALTH AND SAFETY - offences under s 8(2) by virtue of s 26(1) of the Occupational Health and Safety Act 2000 - pleas of guilty - risk of falling off internal scaffolding - three separate incidents where workers exposed to the same risk on a building and construction site - objective factors - subjective factors - defendant's culpability as a director by reference to culpability of another director of same corporation not prosecuted - defendant's culpability by reference to culpability of other subcontractors prosecuted in relation to the three incidents - capacity to pay a fine considered - totality - orders - penalties imposed
• Legislation Cited: Crimes (Sentencing Procedure) Act 1999; Fines Act 1996; Occupational Health and Safety Act 2000
• Cases Cited: Inspector Colin Fraser v Formcom Holdings Pty Ltd and Another [2010] NSWIRComm 114; Inspector Fraser v Karabelas [2011] NSWIRComm 56; Inspector Colin Fraser v Rocco Natoli [2010] NSWIRComm 180; Inspector Green v Camilleri Properties Pty Ltd [2006] NSWIRComm 90; (2006) 152 IR 156; Inspector Jason Andrew Wall (WorkCover Authority of New South Wales) v Lubo Medich Holdings Pty Ltd [2011] NSWIRComm 18; Inspector Jones v James Denson and Anor [2006] NSWIRComm 234; Kirk v Industrial Court of New South Wales [2010] HCA 1; (2010) 239 CLR 531; McColl v John Watson Building Services Pty Ltd [2004] NSWIRComm 353; (2004) 137 IR 310; Ahmad v Regina [2006] NSWCCA 177; R v Thompson & Houlton (2000) 29 NSWLR 383; Regina v Stambolis [2006] NSWCCA 56; (2006) 160 A Crim R 510; WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363; WorkCover Authority (NSW) (Inspector Mason) v Wild Geese Building and Maintenance Group Pty Ltd [2006] NSWIRComm 350; (2006) 157 IR 313; WorkCover Authority (NSW) (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163
• Category: Sentence
• Parties: Inspector Colin Fraser (Prosecutor); Rocco Natoli (Defendant)
• Representation: Mr C Magee, of counsel (Prosecutor); Criminal Law Practice; Legal Group; WorkCover Authority of New South Wales (Prosecutor); Joanna Natoli (represented Defendant)
• File Number(s): IRC 1084 of 2008; IRC 1085 of 2008; IRC 1086 of 2008

Judgment

1 Rocco Natoli (the defendant) has pleaded guilty to three offences under s 8(2) by virtue of s 26(1) of the Occupational Health and Safety Act 2000. The charges concern three separate incidents which occurred at a construction site in Wollongong, in relation to which Apex Building Services Pty Limited (under external administration) (Apex) was principal contractor. The defendant held the office of director of Apex at the time of the three incidents. George Karam also held the office of director of Apex at that time.

2 Apex undertook the business of supplying services for the construction of commercial and residential premises in the building and construction industry. As principal contractor, Apex entered into a contract with Formcom Holdings Pty Limited (Formcom) for the supply of labour and materials for the provision of formwork and associated works. The contract expressly provided that Apex was to provide the external scaffolding and Formcom the internal scaffolding. The defendant undertook the scheduling of work at the site, as well as the general management of work performed there. George Karam was the site supervisor at the site and the foreman in relation to work performed by Apex and its sub-contractors. Mr Karam's responsibilities included overseeing the workers on site to ensure that they worked safely.

3 The respective roles and culpabilities of the defendant and George Karam at the site was a significant issue during the sentence proceedings which will be addressed later in these reasons.

First incident: 19 July 2006

4 On 19 July 2006, Steve Saad, a labourer employed by Formcom, fell some 7.3 metres from a partially constructed formwork deck through a large gap in temporary catch platform onto a concrete floor. At the time, Mr Saad was not utilising any fall protection system such as a harness and safety line. He suffered very serious injuries which included an extensive skull fracture and associated extradural and subdural haemorrhage, and multiple contusions.

5 The circumstances of the incident have been conveniently set out in an agreed statement of facts tendered by the prosecutor during the sentence proceedings. Those facts disclose the following matters:

On 19 July 2006, Mr Saad was undertaking the construction of a new 1.2 metre wide formwork deck at the premises.

This task involved Mr Saad working at a height of approximately 7 metres above the existing concrete floor at the premises.

A temporary catch platform had been constructed below the new formwork deck that Mr Saad was constructing. However this catch platform was deficient in a number of regards.

First, it was not constructed to an appropriate height to act as an adequate catch platform for employees of the defendant working on the new form work deck, and in particular Mr Saad. it was approximately 3.27 metres below the formwork deck on which Mr Saad was working.

Further, the temporary catch platform had a number of penetrations in it. These included penetrations immediately below the location where Mr Saad was working, as well as others around its western and eastern edges.

Mr Saad was not utilising any other fall protection system, such as a harness and safety line system.

At the time Mr Saad was performing this task the corporation's site supervisor, Tom Karabelas, was at the premises. From the location where Tom Karabelas was working he was able to observe the area on which Mr Saad was working.

Mr Tom Karabelas did not take any steps to warn Mr Saad about the risk of falling, or require him to wear a harness and safety line system.

Mr Saad was setting a chalk line on the partially constructed formwork deck, so as to be able to install a vertical edge board down the middle of lengths of 1.2 metre wide sheets of formply. Whilst undertaking this task Mr Saad lost his balance and fell off the partially constructed formwork deck. The Defendant had no direct knowledge of, and therefore cannot admit, the matters raised in this paragraph but concedes that Mr Saad did fall.

Mr Saad fall was not stopped by the temporary catch platform as the location at which he fell was directly above a penetration in the temporary catch platform. As a result he fell through the penetration in the temporary catch platform (3.27 metres below) and a further 4.04 metres to the concrete floor below.

As he fell Mr Saad's head impacted on components of the scaffolding adjacent to the new formwork deck and the temporary catch platform.

The concrete floor onto which Mr Saad fell had a number of steel concrete reinforcement starter bars protruding vertically from it. Mr Saad landed on the concrete floor adjacent to the starter bars.

As a result of the fall Mr Saad suffered a severe head injury. His injuries included an extensive skull fracture with associated extradural and subdural haemorrhage, as well as multiple contusions.

Mr Saad was transferred to Wollongong Hospital by ambulance.

Mr Saad underwent surgery, in particular, a trans-temporal craniotomy for evacuation of extradural and subdural haemorrhage.

Mr Saad remained in hospital for 19 days.

As a result of his injuries Mr Saad was off work for more than 6 months.

Second incident: 20 July 2006

6 The second incident, which did not involve actual injury, and was the subject of a separate charge, occurred on 20 July 2006.

7 The agreed statement of facts sets out the details of that incident:

On 20 July 2006, Joseph Karam, was placed at risk of serious injuries from a fall of approximately 3.6 metres from a formwork deck.

On 20 July 2006, Mr Karam, was undertaking work that involved the construction of formwork of a new formwork deck.

Mr Karam was working on and next to the leading edge of the deck.

There was no scaffolding or handrail in place at the leading edge of the formwork deck.

There was an incomplete temporary catch platform below the new formwork deck. It was approximately 3.6 metres below the formwork deck. There was no other form of fall protection system such as a safety line system.

Mr Karam was not wearing a harness attached to a safety line system whilst performing work near the leading edge of the formwork.

On 20 July 2006, George Karam was performing his duties as site foreman, and supervisor on behalf of the corporation at the premises. George Karam took no steps to prevent Joseph Karam from working on the formwork deck.

Third incident: 4 August 2006

8 A third incident which did not involve actual injury and was the subject of a separate charge, occurred at the site on 4 August 2006. Details of that incident are set out in the agreed statement of facts as follows:

On 4 August 2006, (Ryan) Stewart was constructing a formwork column while standing on a work platform supported by formwork frames. The work platform on which he was carrying out formwork was at a height of approximately 4 metres.

There was no form of fall protection in place in relation to the work being performed by Mr Stewart.

The work platform did not have any scaffolding or guard rails on its edge. There was no temporary catch platform immediately below the edge of the work platform. Nor was Mr Stewart wearing a harness or other fall protection equipment.

There was no ladder access to the work platform on which Mr Stewart was working. The defendant was present at the premises at the time the Inspector made his observations of the work platform, but did not observe Mr Stewart working on the work platform.

Mr Stewart was placed at risk of serious injuries from a fall of approximately 4 metres from a work platform to the concrete ground floor below at the premises.

At the time Mr Stewart was performing the work on the work platform, the defendant and Mr Karam were at the premises and were performing work on behalf of the corporation.

As at 4 August 2006, the temporary catch platform that had previously been in place at the southern end of the premises (at the height of approximately 4 metres) had been removed. The temporary catch platform had been removed to provide materials to extend the formwork deck on other parts of the premises.

At the time of this incident the defendant and George Karam were working on the site. Inspector Fraser raised with the defendant and George Karam his concerns regarding the safety of scaffolding on the premises.

Objective factors

9 There are a number of objective factors which compel the conclusion that the offences are objectively very serious.

10 At the time of the first incident, both the defendant and George Karam were on site. Before the incident, the defendant had been put on notice of unsafe systems of work being employed by its sub-contractors at the site, in particular, Formcom. This notice had arisen from several site inspections conducted by the prosecutor prior to the incident, with particular emphasis on the manner in which work was being performed at height. These site inspections, in the order in which they occurred, are considered below.

11 On 10 July 2006, the prosecutor visited the site and observed Formcom's employees including Mr Saad, and other sub-contractors working on formwork catch deck which lacked guard rails. Upon closer inspection, the prosecutor observed numerous gaps in the catch deck and the lack of a safe access to and egress from the catch deck. These safety issues were raised by the prosecutor with the defendant and George Karam.

12 The prosecutor returned to the site the following day, 11 July 2006. He observed Mr Saad working on formwork deck 3.35 metres above ground with no guard rails, no temporary catch platform installed, and no ladder for access to the deck. Nor was Mr Saad wearing a safety harness or other form of fall protection at that time. The prosecutor raised his concerns about the unsafe system of work being utilised by Mr Saad with George Karam. A Prohibition Notice was also issued on that day to Apex's contract manager, Justin Fletcher, prohibiting Apex from, "allowing persons to be at risk of falling off or through formwork decks".

13 Two days later, on 13 July 2006, the prosecutor returned to the site and observed that the catch deck, the subject of the Prohibition Notice issued on 11 July 2006, still had no guard rails on most of its edges and there was no temporary catch platform below the landing edge of the catch deck. These omissions suggested that little, if any, steps had been taken by 13 July 2006 to address the safety matters set out in the Prohibition Notice of 11 July 2006. That Notice expressly referred to an immediate risk to the health and safety of "any person" by, "allowing persons to be at risk of falling off or through formwork decks". The Notice set out the reasons for its issue, namely:

Form work deck on which persons were working lacked edge protection and safe access and had gaps greater than 290mm in width through which persons could fall or trip.

14 The Notice also directed that certain measures be taken to avert the risk. These were:

Other than is strictly necessary to render the area safe, no person must be allowed on the formwork deck unless and until it has been made safe so that the risk of injury from falling is controlled to the full extent that is reasonably practicable.

15 Apex had also failed to require Formcom to provide it with an adequate Safe Work Method Statement (SWMS) for the construction of formwork at height. Although Formcom had earlier provided to Apex a SWMS, which it had approved, the SWMS failed to require temporary catch platforms and the erection of handrails for the use of workers working at heights in excess of 1.8 metres, and in particular, it failed to provide for temporary catch platforms to be erected not more than 1.8 metres below the formwork deck, and to be free of penetrations.

16 These site inspections, which put the defendant directly on notice of the unsafe practices, and the directions to Apex to remedy those unsafe practices occurring at the site (which were largely ignored) exacerbate the objective seriousness of the conduct. Although the defendant had been put on notice of the risk and of the unsafe system being employed at the site he appeared to have done, or caused to be done, very little to remedy any of the deficiencies in the system at the time of Mr Saad's accident. The conclusion is readily available based on the evidence that if Apex had ensured that appropriate measures were taken, the accident to Mr Saad would not have occurred. The defendant, as a director of Apex, had the authority to implement the measures set out in the Notice.

17 Mr Saad was placed at an obvious and foreseeable risk to his safety at the time of the incident given the defective scaffolding and the absence of fall protection. So much has been conceded by the defendant in written submissions. Indeed, the defendant had prior knowledge of the risk to Mr Saad's safety having previously been put on notice by the prosecutor of a number of safety issues which included the presence of numerous gaps in the catch deck.

18 The dangers of working at height and the importance of implementing appropriate safety measures for the protection of workers are both well-known in the building and construction industry and have been addressed in a number of Full Bench decisions of this jurisdiction: see, for example, Inspector Green v Camilleri Properties Pty Ltd (2006) 152 IR 156; [2006] NSWIRComm 90; WorkCover Authority (NSW) (Inspector Mason) v Wild Geese Building and Maintenance Group Pty Ltd [2006] NSWIRComm 350; (2006) 157 IR 313; WorkCover Authority of New South Wales (Inspector Robert Mayell) v D J Gleeson Pty Ltd [2006] NSWIRComm 363.

19 In Inspector Jones v James Denson and Anor [2006] NSWIRComm 234, Boland J, President, delivered the following comment concerning an incident at a work site involving a fall from height (at [27]):

Given the danger of falling from a height of three metres, let alone six to seven metres, which may easily result in death as too many of the cases that come before this Court demonstrate, it beggars belief that an employer would not take steps nowadays to ensure that employees working at height were secure.

(See also: Inspector Jason Andrew Wall (WorkCover Authority of New South Wales) v Lubo Medich Holdings Pty Ltd [2011] NSWIRComm 18 at [27].)

20 The Court agrees with the prosecution's written submissions that Apex and the defendant ought to have been aware that the task of constructing a new formwork deck at a height of 7.3 metres would have required Mr Saad to work near the leading edge of the deck, at least during the initial stages of the construction. It was, as already indicated, reasonably foreseeable that while constructing the deck Mr Saad was at risk of falling and sustaining serious injury, given the absence of any fall protection. It was also reasonably foreseeable that by reason of the inadequate construction of the temporary catch deck, both in relation to its distance below the formwork deck and because of the presence in it of numerous gaps or penetrations, Mr Saad would be at risk of falling.

21 The potential consequences of the breach were also gravely serious as evidenced by the serious injuries sustained by Mr Saad. Mr Saad fell over seven metres, landing on a concrete floor narrowly avoiding a number of steel and concrete vertical bars. Given the distance through which he fell, and the area into which he fell, his injuries could well have proved fatal.

22 There were also a number of simple, straightforward steps available to the defendant to remedy the defects. The defendant, through Apex, could have, for example, directed the subcontractor, Formcom, to construct a catch platform which was safe for use underneath those areas where persons were required to work at height while constructing the formwork decks. The defendant could also have directed Formcom to cease work on the construction of the decks until it had constructed safe catch platforms, in conformity with the Prohibition Notice issued on 11 July 2006. A further and obvious measure could have been to simply require all workers at the site working at heights in excess of two metres to utilise a fall prevention system such as a harness and line while working near the leading edge of formwork decks.

23 Although conceding the foreseeability of the risk, the defendant contended in written submissions that the risk was less foreseeable when regard is had to the preparation by an external consultant of an inadequate SWMS, which was not complied with by Formcom, the defendant's subcontractor. The submission, however, is not consistent with the evidence. According to the agreed facts, the external consultant (TOSS Systems Pty Ltd) (TOSS) prepared a SWMS for the work to be performed by the employees of Apex at the site. It made no specific reference to the construction of formwork decks or the requirements for temporary catch decks for workers working at height near the leading edges of the formwork. The SWMS relevantly required that subcontractors provide a safety plan and a SWMS for, "... work at height greater than three metres". According to Byron Longstaff, who described himself as the operator of TOSS, he met with the defendant and others and agreed to audit SWMS submitted by subcontractors for a fee of $900 per SWMS. Formcom submitted a SWMS to Apex which, according to the agreed facts, was inadequate because it failed to require the erection of temporary catch platforms and handrails where work was performed at heights in excess of 1.8 metres, and in particular, it failed to require that temporary catch platforms be erected not more than 1.8 metres below the formwork deck and be free of penetrations. Mr Longstaff, however, said, in uncontested evidence, that at no time did he audit or advise Formcom. Nor did he have any record of an invoice issued to Formcom.

24 It may have been the case that the SWMS provided by TOSS to Apex was inadequate in failing to properly address all relevant issues at the site, but it was restricted in its application to the employees of Apex. A different arrangement was in place for subcontractors, including Formcom but, for reasons not explained, Formcom did not enter into the arrangement. These circumstances do not combine to mitigate or reduce the factor of foreseeability insofar as the defendant is concerned. Apex had a duty, which it failed to discharge, to ensure that its subcontractors, including Formcom, provided adequate SWMS dealing with the requirements to ensure temporary catch platforms and handrails were erected where workers performed work at height above 1.8 metres and that the temporary catch platforms were erected not more than 1.8 metres below the formwork deck and were free of penetrations. The defendant, by his plea to the charges concerning each of the three incidents, has acknowledged this.

25 Joseph Karam was also placed at an obvious and foreseeable risk to his safety in circumstances similar to those prevailing at the time of Mr Saad's accident (which had occurred only the day before). Like Mr Saad, Mr Karam was working without fall protection. He was also undertaking the construction of formwork at height for a new formwork deck and was located next to the leading edge of the deck where there was no scaffolding or handrail in place. Moreover, a temporary catch platform below the new formwork deck was incomplete and was a distance of 3.6 metres below the deck.

26 This second incident occurred in circumstances where:

(i) the Prohibition Notice issued on 11 July 2006 prohibited Apex from "allowing persons to be at risk of falling off or through formwork decks";

(ii) a serious incident at the site involving Mr Saad's fall from height had occurred only the previous day;

(iii) the terms of the SWMS prepared by TOSS for Apex, and directed towards its employees, dealt with the risk of working at height, at least in part, by requiring compliance with statutory requirements, including the requirement that, "Heights more than 1.8 metres must be secured to prevent persons from falling".

27 By the time of the third incident, Apex (and its directors, including the defendant), despite having been made fully aware of the risk of a fall from height at the site, had done nothing to remedy the very serious deficiencies in its systems of work. Notwithstanding a number of prior warnings which directly addressed the risk of falling from height and notwithstanding two very serious prior incidents involving the risk of a fall, Mr Stewart only days after the second incident was placed at serious risk of falling approximately 4 metres from a work platform. Directly below him was a concrete floor.

28 Like the first incident, the potential consequences of the breaches arising from the second and third incidents were gravely serious. Both Joseph Karam (who faced a risk of falling 3.6 metres) and Mr Stewart (who faced a risk of falling 4 metres), by reason of the absence of any safety systems such as fall protection, were exposed to very serious, even fatal, injuries. Like the first incident, simple and readily available measures could have been implemented by Apex, or the defendant acting through Apex as its director, to avoid the risks arising from the two subsequent incidents. These measures have been earlier referred to in these sentencing remarks, and need no repetition. With regard to the third incident, the temporary catch platform below Mr Stewart had been removed. Mr Stewart therefore was working without the benefit of a catch platform and without the protection of a harness or other form of fall protection equipment. Either of these deficiencies could have been remedied by the defendant at any stage before 4 August 2006.

29 In a recent judgment ( Inspector Fraser v Karabelas [2011] NSWIRComm 56) involving the same three incidents for which Formcom and its sole director, Peter Karabelas, were prosecuted, a Full Bench of this Court made the following observations in the context of a discussion about the application of the principle of totality in the sentencing process (at [35]):

... We would ... note that the three offences committed on the same site were such that, having regard to the surrounding circumstances identified earlier, the first offence was an aggravated offence in view of the two warnings given by Inspector Fraser just days before Mr Saad's serious fall. The second offence was an aggravated offence because, only a day before, the risk of falling from height was dramatically demonstrated to Mr Karabelas and he was therefore aware of the need to have fall protection arrangements, including a catch platform set at the appropriate height. The third incident was also an aggravated offence because of the previous two incidents that had occurred so recently and where Formcom still ignored the same type of safety measure to be taken and indeed, in this case, had removed the catch platform. These offences therefore demonstrated an attitude of deliberate defiance of the safety laws and a conscious refusal to comply with them. The result is that these offences were very serious indeed.

30 To similar effect, in the same judgment (at [40] and [41]) it was said:

The continuing failure of Mr Karabelas, as a working director, to ensure the safety of his workers when working at heights requires the imposition of a penalty that will bring home to him the seriousness of his conduct. Her Honour was correct to describe the first incident as "very serious" where the risk was obvious and foreseeable and where the consequences were "gravely serious." Her Honour was also entitled to note that the second incident had similar deficiencies to those demonstrated in the first incident and were "very serious indeed." The need for the catch scaffold by this time was "abundantly clear" yet nothing had been done by Mr Karabelas to address the risk. Her Honour described the third incident as being one where the safety system deficiencies were "even more pronounced than previously." Her Honour was correct to find that there was a failure to ensure basic protective measures were taken and that all of these matters had particular significance for the issue of specific deterrence. The fines imposed should have more adequately reflected her Honour's observation that the disregard of the health and safety of the workers exhibited by Mr Karabelas meant that there was a real possibility that he would re-offend and that the chances of not re-offending were "low."

Apart from the significance of the first offence again involving a disregard for the safety of employees working at height, these three offences demonstrate a continued refusal to abide by safety laws in this respect. There was a repetition of the same deficiencies over the period from 10 July to 4 August 2006 on what was a large construction site. The catch platform in particular was not set at a proper height or it was not fully available during work at height even after Mr Saad had been so seriously injured. That this occurred after the Inspector had twice warned Mr Karabelas about the risk to employees working at heights and had issued a prohibition notice is difficult to understand but then one day after the second incident, those deficiencies continued and Formcom was issued with an improvement notice. It is truly astounding that in those circumstances Formcom and Mr Karabelas had not addressed these obvious risks.

31 These observations apply with equal force to Apex and the defendant. The defendant was present at the site on 10 July 2006 when the prosecutor first observed Mr Saad working on a formwork catch deck with no guard rails, and above the catch deck which had numerous penetrations. Those safety issues, and others, were raised specifically with the defendant and George Karam by the inspector. The inspector returned to the site on two more occasions before Mr Saad's accident where he observed the same or substantially similar unsafe work practices left unremedied which exposed workers at the site to the risk of falling from height. He spoke to representatives of Apex and issued a Prohibition Notice which prohibited Apex from placing persons at risk of falling off or through formwork decks. Although it does not appear that the defendant was present at the site on these two latter occasions, as a director of Apex he must have been made aware of the Prohibition Notice and consequently, that the unsafe systems in place on 10 July 2006, (of which he was made aware), had not been rectified. The defendant was on site on the day of Mr Saad's accident when the same unsafe work practices prevailed. It is clear that at that stage, the defendant, although fully on notice of the dangers to the workers, had done little to remedy the deficiencies. Even after Mr Saad's very serious accident, Apex and the defendant did not take effective action to remedy the risk, as evidenced by the two subsequent incidents involving substantially the same deficiencies in Apex's systems of work, and the same risk.

32 Apex had, however, at an earlier stage taken some steps to implement safe systems at the site. These systems of work demonstrate an attempt by Apex and the defendant, to institute a safety regime at the site. Because of this, the objective seriousness of the offences is mitigated, to some extent.

33 Those systems included the engagement of TOSS to prepare a SWMS for the employees of Apex working at the site and to audit the SWMS submitted by the subcontractors. The auditing process, as earlier noted, was not entered into by Formcom, for reasons not explained. In an affidavit relied upon by the defendant during the sentence proceedings, the defendant said that George Karam was nominated by Apex as the site supervisor, foreman, safety officer and first aid officer and was responsible for ensuring safety and compliance with SWMS developed for work at the site, as well as liaising with the subcontractors in relation to the work to be performed. George Karam, according to the defendant, was also responsible for addressing any safety issues that arose at the site concerning the subcontractors. Apex, the defendant said, also had a policy that it would not sign contracts with subcontractors until such time as TOSS was satisfied that all occupational health and safety matters had been sufficiently addressed by the relevant subcontractor.

34 These matters illustrate that Apex had made some attempts to address safety matters at the site, although in relation to Formcom at least, those attempts do not appear to have been successfully implemented. Nevertheless, they will be taken into account in mitigation of the objective seriousness of the offence.

Deterrence

35 The conduct of Apex (and the defendant as its director) in failing to take any effective measures to ensure workers at the site were not exposed to the risk of falling from height, despite prior notifications of the risk, demonstrates a continuous course of conduct which must be regarded as constituting conduct of the most serious kind. Apex was notified by the prosecutor of the risk prior to the accident involving Mr Saad, on more than one occasion. Given the background, the necessity to apply the principle of general deterrence arises in circumstances similar to those which arose for consideration in Inspector Colin Fraser v Formcom Holdings Pty Ltd and Another [2010] NSWIRComm 114, when I observed (at [28]):

Given Formcom's consistent course of conduct in exposing Formcom's employees to the risk of falling from heights, general deterrence assumes particular significance. Employers cannot continue to ignore the risks to the safety of workers which are often present at construction sites. This is particularly so in circumstances where, as here, a serious accident has occurred by reason of multiple failures of systems which gave rise to a risk to Mr Saad's safety and, within a relatively short period of time, two other employees at the same site, working on the same project, were separately exposed to the same risk. The present circumstances call for a component of the penalties which sufficiently addresses the necessity for employers to take appropriate steps to ensure that their employees are not exposed to a risk of falling from heights because of a failure to ensure basic protective measures (such as catch platforms installed at the right height) have been put in place.

36 I adopt here the observations made in the passage extracted immediately above.

37 In relation to specific deterrence, the defendant's conduct in failing to take any effective steps to improve safety at the site following Mr Saad's accident demonstrates a lack of genuine commitment to occupational health and safety matters. The defendant, on the evidence, played a less direct role at the site in relation to safety matters than did George Karam, also a director of Apex. The defendant, however, was at the site on at least one occasion before Mr Saad's accident and was notified personally at that time by the Inspector of a number of safety issues which needed prompt attention. The defendant also attended the site on a regular basis during the period when the three incidents took place. The defendant also continues to work in the industry as a project manager at various sites, although he says that following the collapse of Apex his involvement in the industry would not be at the same level as it was in 2006. Given these matters, the Court could not be satisfied that the risk of re-offending by the defendant is low. Specific deterrence therefore must be considered as relevant and applied when deciding an appropriate penalty.

Maximum penalty

38 The defendant is not adversely recorded and therefore faces a maximum penalty of $55,000 for each offence.

Subjective factors

39 According to the prosecutor, the defendant entered pleas of guilty to the charges at the fourth directions hearing. Based on this, the prosecutor initially conceded that the pleas were entered "at an early point". On 9 April 2010, the defendant filed a Notice of Motion seeking orders that the pleas of guilty be withdrawn. This application was heard and dismissed: see Inspector Colin Fraser v Rocco Natoli [2010] NSWIRComm 180. The sentence hearing proceeded on the charges without application being made to amend.

40 The benefit of a discount on utilitarian grounds for entering pleas of guilty is generally determined by reference to when the pleas of guilty were entered: see s 22(1) Crimes (Sentencing Procedure) Act 1999; R v Thompson & Houlton (2000) 49 NSWLR 383. A plea of guilty entered at an early stage may attract a discount of 25 per cent, the rationale being that the defendant has, by the early plea, saved the community the time and costs associated with running a defended hearing: Thompson . In Zelko Mile Karacic (2001) 121 A Crim R 7; [2001] NSWCCA 12, the appellant had originally pleaded guilty to a charge but later successfully reversed the plea. The matter was set down for trial but when the trial commenced he pleaded guilty. The sentencing judge found that the plea could not be regarded as having been made at the first available opportunity. This finding was not disturbed on appeal. In the Court of Criminal Appeal, Whealy J (with whom Spigelman CJ and Grove J agreed) said (at [17]):

(I interpolate to say that the sentence pre-dated the guideline judgment in Thomson and Houlton (2000) 49 NSWLR 383; 115 A Crim R 104. The fact that there was a significant degree of what may be described as "chopping and changing" on the applicant's part before, on the very day of trial he decided to adhere to his guilty plea meant that he was entitled to no more than the lower range of discount in respect of the utilitarian benefit of the plea.)

41 The factual background in the present case is of course different from that which occurred in Karacic . Here, there was no reversal of plea, the application being ultimately unsuccessful, and the prosecutor did not have to "marshall resources" (adopting the words of McClellan CJ at CL on the issue in Ahmad v Regina [2006] NSWCCA 177 at ([17]-[18]) in anticipation of prosecuting a defended hearing. Thompson held, however, that the utilitarian value of a plea of guilty was to be measured objectively, that is, in terms of the, "collateral benefits for the efficiency and effectiveness of the criminal justice system as a whole" (at [115]).

42 In supplementary written submissions the prosecutor contended that while the entering of the pleas of guilty resulted in some utilitarian value, the intervening application to withdraw the pleas of guilty and the costs associated with the prosecution preparing to meet that application reduced the extent of the discount that the defendant may have otherwise been entitled to by reason of the early pleas. Regina v Stambolis [2006] NSWCCA 56; (2006) 160 A Crim R 510 per Hulme J at [11]-[13] was relied upon in support of the submission.

43 In Stambolis there was a delay of eight months between the offender's arrest and the entering of a plea of guilty. In the unreported judgment (at [11]) (the reported judgment contains a typographical error omitting the word "not" from the third last line) his Honour said:

Frankly I do not understand how on the established principles it could be determined that the pleas of guilty for the offences for which the respondent was sentenced were early pleas and that they justified a discount of 25 per cent. There is no utility in a plea of guilty that has not been forthcoming. If the accused is not prepared to plead guilty until the Crown takes some course, then so be it. But if by withholding the plea the offender achieved the result he wanted, I do not understand why he should receive further favourable treatment on the basis that the plea of guilty had utilitarian value when it did not. Rarely, if ever, will the reason why the accused has withheld the plea of guilty be a relevant matter in determining the utilitarian discount. Where it has been used as a bargaining tool in order to achieve a favourable outcome from the Crown in respect of some other charge, I do not understand that this circumstance can excuse the delay or provides a basis for asserting that the plea was made at the first reasonable opportunity.

44 In the present circumstances although the pleas of guilty could be said to have been entered at a relatively early stage, the application to reverse those pleas, viewed objectively, had an impact on the progress of the proceedings requiring the utilisation of additional resources prior to the sentence hearing. Moreover, the application was devoid of any merit, relying as it did primarily on the High Court judgment in Kirk v Industrial Court of New South Wales [2010] HCA 1; (2010) 239 CLR 531 in support of a proposition that the charges were defective because they failed to identify the alleged failures of the defendant as a director to exercise due diligence under s 26(1)(b) of the 2000 Act: Natoli at [5] [6].

45 While the Court recognises that the pleas of guilty (which were all entered at the same time) have resulted in some utilitarian value in that the community has been saved the costs associated with prosecuting a defended hearing, the matters referred to above, in particular the requirement upon the prosecution to utilise additional resources are relevant and must be taken into account. The Court therefore assesses a discount of 20 per cent as reflecting the utilitarian value of each plea.

46 The absence of prior convictions entitles the defendant to leniency normally extended to an offender not adversely recorded.

47 As a separate consideration from the utilitarian value of the pleas the defendant is also entitled to leniency in recognition of the remorse shown by the pleas of guilty. Under s 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 (CSPA) a defendant is only entitled to the benefit of a discount for remorse if evidence is provided of an acceptance of responsibility for his actions, and an acknowledgement is forthcoming of any injury, loss or damage caused.

48 The defendant accepted responsibility for the actions of Apex although it is clear that he considers George Karam "didn't do his job" with regard to the circumstances of the Saad accident. Nevertheless, the defendant's acceptance of responsibility is demonstrated in his affidavit sworn on 1 June 2009 where he said:

I acknowledge my responsibility in connection with the accident and the management of the Site generally, and am regretful and apologetic for the injuries suffered by Mr Saad and the impact such injuries have had on him and his family.

49 The defendant's comments with regard to George Karam are found in the transcript of the proceedings on the Notice of Motion which was tendered by consent during the sentence hearing. In the transcript the defendant was questioned about the statement made in his affidavit, reproduced above:

Q. What did you mean by that when you said that in paragraph 57?

A. Well I am regretful and apologetic to Mr Saad for the accident. But I acknowledge my responsibility in connection to the accident and the management of the site. Yeah, I acknowledge that I should have taken more control and responsibility for the people that are employed to take care of these matters. That's where my responsibility in connection to the accident.

Q. That is what you meant when you said those words in paragraph 57?

A. Yes. Very regretful for the whole thing. For Mr Saad's accident, and regretful for the people that I employed, and the director that I had of the company. If you want to elaborate on it. Someone got paid $2,000 a week, and didn't do his job. That's what it's all about. Both of them. $4,000 a week.

50 The defendant also took some preliminary steps (which were not followed through) to improve the safety systems to the site following Mr Saad's accident. These attempts are set out in his affidavit where he said:

Immediately following Mr Saad's accident, I approached Mr Karam with a view to Apex devising a safety control system so as to ensure that all safety procedures were strictly adhered to by all persons/subcontractor undertaking works and or present at the Site. Whilst there had not previously been any incidents which would suggest that Apex's safety standards and or procedures were deficient, given the seriousness of the accident, I believed it was necessary to re-evaluate Apex's procedures and controls so as to ensure that all possible steps were taken to avoid any further accident.

51 These matters in combination suggest that the requirements of s 23A(3)(i) have been met. The prosecutor has not advanced a contention to the contrary. The factor having been established will operate in mitigation of penalty.

52 The defendant also arranged for a psychologist to attend the site in order to counsel the workers the morning after Mr Saad's accident. He also made a number of telephone calls enquiring after Mr Saad's health and arranged for flowers to be sent to Mr Saad while he was recovering in hospital. The defendant said he co-operated with WorkCover during its investigation of "the incident" (which I take to be a reference to Mr Saad's accident). These matters operate in the defendant's favour and will be taken into account in mitigation of penalty.

Capacity to pay a fine

53 The defendant submitted that he faced financial devastation after Apex went into external administration. He said that he and his family had received little income over the twelve-month period preceding 9 April 2010 (the date of his affidavit accompanying the Notice of Motion) and he had spent the family savings on legal fees. His personal income tax returns were tendered for the years ending 30 June 2006, 2007 and 2008 in support of his application that he had little capacity to pay a fine. These documents were supplemented after the sentence hearing by further financial records. In written submissions received after the sentence hearing had concluded, the defendant explained that he had taken a mortgage over his mother's house to provide working capital for his company, Allied Acquisitions Pty Ltd (Allied). Allied has since gone into external administration. The defendant subsequently established a new building company, Dynabuild Pty Ltd, which has undertaken two jobs, namely, the project management of a renovation in Hunters Hill and a new home construction in Maroubra. According to the defendant, the Hunters Hill renovation was completed in March 2010 and since then the margins from this job have been utilised to provide financial support for his family. He said that no profits were generated from the renovation and no margins were left over to contribute towards savings or to invest in the business. The new home construction is not yet completed and margins from this project have also been utilised to provide financial support for his family. Nor have any profits been generated from the project. The defendant has a wife and two small children, aged 7 and 3, to support.

54 Dynabuild's tax return for the year ending 30 June 2009 shows that it had total assets of $38,500 and shareholders funds after the deduction of liabilities of $35,100. No material was provided to the Court as to the current income, assets and liabilities of Dynabuild, or what level of profit it is likely to make from the new home construction in Maroubra once it is completed. A Statement of Assets and Liabilities dated 16 March 2011, for which there is supporting documentation, discloses assets of $6,000 (a motor vehicle) and income of $10,000 (based on the financial year ending June 2010). The document also discloses that the defendant has current annual expenses, including rent, mortgage payments, childcare fees, electricity, insurance costs and food in the sum of $111,160 per annum. There is no explanation and no supporting documentation as to how the defendant is able to service these expenses on an income of $10,000.

55 The onus is on the defendant under s 6 of the Fines Act 1996 to satisfy the Court as to his financial situation: McColl v John Watson Building Services Pty Ltd [2004] NSWIRComm 353; (2004) 137 IR 310. Although the material provided by the defendant provides some guidance as to his financial means the Court is not satisfied, on the balance of probabilities, that it has all the relevant information which would enable consideration of his financial position with a view to giving the matter appropriate weight on the question of penalty.

Respective roles of culpabilities

56 There can be no doubt that the defendant, as a director of Apex, had a significant level of responsibility and control of the day-to-day operations of Apex at the site. He undertook the scheduling of works, quality control and the monitoring of matters pertinent to the Building Code of Australia, with regard to operations at the site. He had the authority to direct Apex and its employees, including those also responsible for the day-to-day operations of Apex, and for the implementation of occupational health and safety at the premises.

57 The defendant also knew that workers at the site were placed at risk of falling from height as a direct result of the unsafe work practices allowed to prevail there unaddressed. The defendant knew this before and after Mr Saad's accident, but took no effective action to ensure the risk was controlled.

58 George Karam, the other director of Apex, had a more direct role at the site, not only in relation to operational matters, but with regard to matters of safety. He was the site supervisor and foreman in relation to the work performed by both Apex employees and sub-contractors at the site. His responsibilities included ensuring that the workers performed their work safely. Safety issues observed at the site on 10 July 2006 by the prosecutor were raised by him that day with George Karam, as well as with the defendant. The following day, after observing Mr Saad performing work in conditions which were patently unsafe and which had prevailed the day before, the prosecutor spoke to George Karam about his concerns in relation to Mr Saad. On 13 July 2006, the prosecutor, after he observed a lack of guardrails on the catch deck the subject of the Prohibition Notice issued by him on 11 July 2006, again spoke to George Karam.

59 According to the defendant, Formcom submitted its SWMS to George Karam and Justin Fletcher for their initial review and comment.

60 These matters confirm that George Karam had a direct role in the implementation of safety matters at the site. They also indicate that George Karam was directly notified by the prosecutor of safety issues at the site on three occasions prior to the first incident. George Karam was also present at the time of the second incident. According to the agreed facts he did not take any action to prevent Joseph Karam from working on the formwork deck. The defendant's role at the site included the general management of the work undertaken there. The evidence does not suggest that he had no role with regard to safety matters at the site. Apex was the principal contractor. The defendant was a director of Apex and George Karam its other director. The defendant was actively involved in the work being undertaken at the site. He became directly involved in matters of safety at the site when he was first spoken to by the prosecutor prior to the first incident about unsafe work practices involving Mr Saad. Despite this notification, neither the defendant, nor George Karam, appear to have taken any effective steps to remedy the obvious risk to safety, prior to and after the first incident. These circumstances do not facilitate a conclusion that the defendant's culpability was less, or substantially less, than that of George Karam. The better view on the facts is that the culpability of each director is broadly equal.

61 George Karam has not been prosecuted for his role in relation to the three incidents. This fact of itself, however, does not operate to mitigate the objective seriousness of the offences to which the defendant has pleaded guilty: WorkCover Authority (NSW) (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [31] and [34]. Nothing emerges in the comparison of the respective roles which suggests any unfairness in the assessment undertaken by the Court of the defendant's culpability.

62 The defendant also submitted that his culpability was less than that of Formcom and Mr Karabelas, both of whom were prosecuted in relation to the three incidents the subject of the present charges brought against the defendant.

63 The defective work practices which caused the three workers to be exposed to a risk of falling concerned the internal scaffolding which was the responsibility of Formcom to provide. The external scaffolding was the responsibility of Apex. There is no suggestion that this latter scaffolding was defective.

64 The role of Formcom and its director, Mr Karabelas, in relation to the three incidents has been considered at length in the sentencing reasons at first instance, as well as on appeal. Formcom, as the employer of the three workers at the site, had direct responsibility for their safety. Mr Karabelas was the sole director of Formcom. In considering the respective roles of Formcom and Mr Karabelas, concerning the three incidents, I said in Formcom at [39]:

... The safety issues observed by Inspector Fraser on 10 and 11 July 2006, to which I earlier referred, were brought to the attention of Mr Karabelas by Tom Karabelas. There is no suggestion in the documents that the relevant matters were not accurately brought to his attention. Following the incident involving Mr Saad on 19 July 2006, of which Mr Karabelas was made aware, no steps were taken by Formcom to address the circumstances which gave rise to the risk to Mr Saad's safety. The following day when Inspector Fraser again attended the site, he observed Formcom's employees and sub-contractors working at heights extending formwork decks without any temporary catch platforms at the requisite height below the decks or any other effective risk controls in place. He also observed that nothing was in place to ensure safe access to and egress from the formwork decks. On 21 July, Inspector Fraser issued two Improvement Notices which sought to address the risks. The only measure Formcom appeared to have taken (and Mr Karabelas as its sole director) was to amend the SWMS which had no practical utility because the amendment (a requirement that catch platforms and handrails be erected) was not implemented at the site. It was incumbent upon Mr Karabelas to ensure that effective measures were put in place at the site, particularly after the very serious accident involving Mr Saad. Even after the two further incidents at the site, Formcom and Mr Karabelas had effectively done nothing to address the risk. ...

65 These facts demonstrate a common thread with regard to the conduct of the defendant, Formcom, and Mr Karabelas from the period when the prosecutor first visited the site on 10 July 2006 until the third incident which occurred on 4 August 2006. For the whole of that period all parties had been put on notice of the defective work practices and the risk of falling from height resulting from those unsafe practices. Notwithstanding this, the parties, including the defendant, had done nothing to effectively address the risk even after the first incident during which a serious accident occurred. According to the defendant, he took some preliminary steps (earlier set out in these reasons) following Mr Saad's accident to improve the safety systems of Apex at the site. These steps were not followed through and further incidents occurred.

66 On the other hand, Apex at least had developed safety systems to be employed at the site. These systems have been earlier set out. They were deficient insofar as they concerned the safety of subcontractors at the site. It is clear that Apex did not adhere to its policy that it would not sign contracts with subcontractors, which included Formcom, until such time as TOSS was satisfied that all occupational health and safety matters had been sufficiently addressed by the relevant subcontractor. Adherence to the policy necessarily required that Apex liaise with TOSS with regard to this matter. It will be recalled that TOSS did not audit the SWMS prepared by Formcom. Had the relevant enquiries been made by Apex this would have been determined and steps could have been put in place to ensure compliance with the policy.

67 Formcom also had systems of work in place prior to the incident. These systems which were also deficient are set out in Formcom at [6].

68 Formcom and Mr Karabelas had, and the defendant will have, those prior systems of safety taken into account in mitigation of the objective seriousness of the offences.

69 These matters suggest that there are little appreciable differences between the defendant's culpability and that of Formcom and Mr Karabelas. As previously noted, Apex was the principal contractor at the site with overall control. Formcom may have been responsible for the internal scaffolding, which was defective, but it was incumbent upon Apex as principal contractor, and the defendant as its director in regular attendance at the site, to take positive steps, having had prior notice of the defects and attendant risk, to implement effective measures to avert the risk.

70 In Inspector Fraser v Karabelas the Full Bench found that the penalties imposed upon Formcom and Mr Karabelas were manifestly inadequate: at [38] [39]. The conclusions of the Full Bench on this issue must necessarily be taken into account when imposing penalties upon the defendant.

Totality

71 The principle of totality has application to the three offences. They are closely related in time and concern the same risk of falling. In Inspector Fraser v Karabelas (at [41]) the Full Bench found that all three offences involved a repetition of the same deficiencies occurring within a relatively short timeframe. In combination, the three offences involved a continued disregard for the safety of workers at the site and a continued refusal to abide by safety laws. The formula suggested by the Full Bench (at [42]) for the application of totality, which this Court is bound to follow given that a similar background applies to the present offences, is that a significant penalty should be imposed for the first breach followed by a higher penalty in relation to the second breach with the third breach being regarded as the most serious. The next step requires the penalties to be aggregated and subjected to consideration in the application of the principle.

72 Adopting these steps, I consider that a fine in the sum of $15,000 should be imposed for the first offence; a fine in the sum of $18,000 should be imposed for the second offence, and a fine in the sum of $22,500 for the third offence.

73 In order to properly reflect the criminality of the defendant, taking into account the principle of totality, I consider that a total fine for the three offences should be $24,000.

Orders

74 In No IC 1084 of 2008, the defendant is convicted of the offence and fined $8,000 with a moiety to the prosecutor.

75 In No IC 1085 of 2008, the defendant is convicted of the offence and fined $8,000 with a moiety to the prosecutor.

76 In No IC 1086 of 2008, the defendant is convicted of the offence and fined $8,000 with a moiety to the prosecutor.

77 In No IC 1084, 1085 and 1086 of 2008, the defendant is to pay the reasonable costs of the prosecutor as agreed or, in the absence of agreement, as assessed.

Amendments

15 June 2011 - Catchwords - the word "accidents" changed to "incidents"Representation - "of counsel" to follow "Mr C Magee"Paragraph 15 - Deleted the words "In relation to this incident,"
Amended paragraphs: Coversheet - Catchwords - Representation; Paragraph 15

Decision last updated: 15 June 2011