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[2018] VSCA 312
General information, not legal advice.
Court of Appeal (Vic)
2018-11-21
Mr P, In AM, Weinberg JA, Priest JA
Original judgment source is linked above.
DPP v AM Design and Construction Pty Ltd [2018] VCC 373 (Judge Condon)
CRIMINAL LAW - Appeal - Sentence - Appellants each pleaded guilty to offences under Occupational Health and Safety Act 2004 - Failure to ensure that persons other than employees not exposed to risks - Corporate appellant owned and operated by individual appellant, and run as small business - Sentencing judge imposed fines of $100,000 and $380,000 on appellants - Fines manifestly excessive - Appeal allowed - In lieu thereof, fines of $50,000 and $190,000 imposed.
1 On 1 March 2018 the appellants, Aldo Di Tonto and AM Design and Construction Pty Ltd ('AM Design') each pleaded guilty to an offence under the Occupational Health and Safety Act 2004 ('the Act'). In Mr Di Tonto's case, he acknowledged having been an officer of a body corporate that had failed to ensure that persons other than employees were not exposed to risks, that contravention being attributable to his failure to take reasonable care, pursuant to s 144(1) of the Act. In AM Design's case, the appellant pleaded guilty to failing to ensure that persons other than employees were not exposed to risks, contrary to s 23(1).
2 On 23 March 2018 the Mr Di Tonto was sentenced as follows:
Being an officer of a body corporate that failed to ensure that persons other than employees were not exposed to risks where this contravention was attributable to the officer's failure to take reasonable care, pursuant to s.144(1) of the Occupational Health and Safety Act 2004
6AAA Statement: But for the plea of guilty, a fine of $180,000 would have been imposed on charge 2
3 On the same day, AM Design was sentenced as follows:
Failure to ensure persons other than employees were not exposed to risk [s.23(1) of the Occupational Health and Safety Act 2004]
6AAA Statement: But for the plea of guilty, a fine of $700,000 would have been imposed on charge 1
4 On 13 September 2018, Weinberg JA granted leave to appeal in respect of the applications by both Mr Di Tonto and AM Design. His Honour did so on the basis of ground 1 only. That ground, which is in substance the same for the appellants, is in the following terms:
Ground 1 - That the sentence imposed was manifestly excessive.
Particulars
5 These reasons for judgment reflect, in large part, the reasons for leave having been granted by Weinberg JA.
6 Mr Di Tonto was the sole Director and shareholder of AM Design. The company had been engaged as the structural engineer for a mixed commercial and residential development being constructed at 170-174 Highbury Road, Mount Waverly. AM Design was retained, inter alia, to prepare structural drawings for the development. These included drawings for the excavation and construction of the basement.
7 On the southern boundary of the site was a row of commercial buildings, including shops and a café. A laneway separated the southern boundary from those buildings. On the eastern boundary, were two five bedroom townhouses.
8 The development was to include two levels of basement parking. In February 2015, Mr Di Tonto completed structural drawings for the basement excavation works. These structural drawings did not require the concurrent installation of a site-retention scheme, which would prevent the excavation from collapsing in on itself. Instead, they provided for an excavation procedure that included the following instructions:
9 Excavation works commenced on the site in March 2015. Action Master Buildings Pty Ltd was engaged as the builder. None of the instructions provided by the appellants were ever implemented. As a result, the walls of the excavation were nearly vertical, and did not include any stabilising measures.
10 The excavator drivers completed their work around 10 July 2015. By that stage, the excavation was approximately ten metres deep. Not surprisingly, perhaps, during the evening of 13 July 2015, part of the excavation collapsed. Residents of the rear townhouse were advised that they should leave their home. On the evening of 15 July, a further and much larger collapse occurred. Police advised the residents of the front townhouse to evacuate at once.
11 The design prepared by Mr Di Tonto involved a risk to persons other than AM Design employees. Specifically, there was a risk to persons working inside, or working, residing or travelling in the vicinity of the excavation pit, that if the walls collapsed, they could be seriously injured, or even killed.
12 The evidence was that in order to reduce that risk, it would have been reasonably practicable for AM Design to prepare structural drawings that required the concurrent installation of a site retention scheme that involved:
13 The sentencing judge noted that Mr Di Tonto was the secretary, sole director and sole owner of AM Design, and that he had been responsible for the preparation of the structural drawings in question. These drawings did not require the concurrent installation of a site retention system.
14 Her Honour referred to this Court's decision in Director of Public Prosecutions v Frewstal Pty Ltd[1] as a source of guidance with regard to the relevant sentencing principles in prosecutions brought under the Act. She referred to [127] of that judgment, where the Court said:
First, unlike cases of unlawful homicide the occurrence of death or serious injury is not an element of the offences charged. An accused is punished according to the gravity of the breach of duty owed under [the Act], not according to the result or consequences of the breach.
Secondly, the gravity of the breach is measured by two factors - the seriousness of the breach itself (that is, the extent to which the defendant has departed from its statutory duty); and, the extent of the risk of death or serious injury which might result from the breach.
Thirdly, an assessment of the extent of the risk itself involves consideration of two factors - the likelihood of the occurrence of an event as a result of the breach (such as the event that occurred in the particular case) endangering the safety of employees or others; and the potential gravity of the consequence of such an event (in particular whether there is a risk of death or serious injury).
Fourthly, the fact that the breach in the particular case resulted in death is relevant only in the sense that it might manifest or demonstrate the degree of seriousness of the relevant threat to health or safety resulting from the breach.[2]
15 Her Honour concluded that, in the present case, it had been reasonably practicable for AM Design to prepare structural drawings that required the concurrent installation of a site retention scheme that involved the various elements to which reference has been made at [11] of these reasons.
16 The sentencing judge went on to say that the objective seriousness of the breach in prosecutions of this nature constituted the primary factor in determination of the appropriate penalty. Factors subjective to the accused, including such matters as the plea of guilty, played a subsidiary role. In addition, the gravity of the contravention was not determined by its consequences, but by the extent of the employer's failure to meet their duties under the Act.
17 In the circumstances of this case, her Honour found that the conduct of both appellants involved a very significant departure from acceptable safety standards. This was no mere error of professional judgment. The potential consequences of the appellant's conduct included the possibility of serious injury or death. The site was bordered to the west by a main road, and adjoined residential properties. There could have been fatal consequences for those working in the immediate vicinity, or passing by. Finally, there was significant potential for the excavated faces of the pit to collapse.
18 The sentencing judge accepted evidence from an expert to the effect that the excavation should not have been undertaken without the concurrent installation of a site retention system to the full perimeter of the site. The appellants could take no comfort from the fact that the builder had ignored the protective measures which they had designed. Although their scheme would have reduced the risk of a site collapse, it would not have been sufficient to protect those close by the pit, and would not have satisfied the requirements of s 23(1) of the Act. It was noted that the appellant's design was less expensive than the cost of a full site retention system, and that this had been a factor in the decision to avoid what would clearly have been best practice.
19 In summary, her Honour found that the appellant's conduct constituted 'a very serious example' of a breach of s 23. She added that, as a structural engineer, Mr Di Tonto ought to have been aware, both of the risks and the safety measures that could be adopted to eliminate, or at least reduce, those risks.
20 Finally, the sentencing judge noted that capacity to pay any pecuniary penalty had been raised as an issue. She said that she had had regard to the statement of financial affairs tendered as Exhibit 4 on the plea. Although she did not set out what she drew from that statement, a brief perusal of the document (which consists solely of various bank transactions), indicates that both AM Design and Mr Di Tonto's personal financial positions could properly be described as modest.
21 Having identified the various mitigating factors, including the early entry of pleas of guilty, coupled with remorse, and no previous convictions of any kind, her Honour said that she would give these matters appropriate weight. She also took into account a character reference tendered on the plea that indicated Mr Di Tonto was a person of exemplary character who ordinarily displayed high professional standards, and placed great value on workplace safety.
22 Balancing all of these matters, the sentencing judge concluded that general deterrence had to be given considerable weight, even in the absence of any suggestion that there was a need for specific deterrence in this particular case.
23 In support of the ground of manifest excess, it was submitted on behalf of Mr Di Tonto that the fine of $100,000 (on a maximum of $265,000) imposed on him was the second highest, of a total of seven fines that had previously been imposed on individuals for breaches of s 144 of the Act. It was also $50,000 greater than the third highest. When regard was had to the various mitigating factors, including the plea of guilty, previous good character, remorse, prospects of rehabilitation and limited capacity to pay a fine, the sentence was wholly outside the range reasonably available.
24 Reference was made to s 52 of the Sentencing Act 1991 which required the sentencing judge to take into account, as far as practicable, the financial circumstances of the offender and the nature of the burden that payment of a penalty would impose. In that regard, it was submitted that this particular fine of $100,000 was likely to impose a disproportionate burden upon Mr Di Tonto personally, having regard to what was known about his financial situation, and that of his company.
25 As regards AM Design, similar arguments were advanced. It was noted that a fine of $380,000 (on a maximum of $1,328,490) was the highest ever imposed for a single charge pursuant to s 23 of the Act. Reference was made to ten previous fines for s 23 offences, including the fine of $250,000 imposed for that offence alone in Director of Public Prosecutions v Downer EDI Works Pty Ltd[3] in December 2017, and the fine of $250,000 as part of an aggregate fine imposed in Frewstal in June 2015.
26 It was noted that the company was effectively a one man operation, and that Mr Di Tonto depended upon it for his livelihood. A combined $480,000 in fines, in a case which, objectively speaking, was by no means to be regarded as being in the worst category of offending was disproportionate, ignored the principle of parsimony, and could not be justified.
27 It was submitted on behalf of the respondent that the fines imposed in this case, though undoubtedly stern, were within range, or at least could not be shown to be wholly outside the range, for offending of this nature. General deterrence was of primary importance, and subjective factors, such as those required to be taken into account pursuant to s 52, would ordinarily be given far less weight. The design flaws associated with Mr Di Tonto's plans were so serious, and obvious, as to merit severe punishment.
28 In our view, the fines imposed in this case, particularly when considered in the aggregate, were wholly outside the range properly open to the sentencing judge. For these appellants the offending, serious as it undoubtedly was, did not merit fines of this magnitude. We note that Mr Di Tonto's culpability was to be assessed on the basis that he at least did his best to ensure that those potentially close by the excavation for which he prepared structural drawings, were not exposed to risk. He was, in that sense, negligent, rather than reckless. Moreover, when regard is had to current sentencing practice for offences of this type, it can readily be seen that these fines seem to be out of kilter.
29 Finally, although there were two separate offences, one by Mr Di Tonto and one by his company, the fact that it is he who will suffer the financial penalty imposed when the two fines are combined, is not irrelevant. Nor is the fact that it was submitted to the sentencing judge that, unlike some other cases, Mr Di Tonto proposes to meet whatever fines are imposed, and continue to run his business through AM Design. In other words, he does not intend to wind up the company in insolvency, and recommence trading through a phoenix entity. That particular submission appears not to have been challenged by the prosecution, and is very much to his credit.
30 It is true that perhaps more could have been put before the sentencing judge to support the contention that fines of the order that her Honour ultimately fixed would be ruinous, and disproportionate to the financial circumstances of each appellant. Nonetheless, it is tolerably clear that, as a matter of common sense, this was a modestly sized business, and in our opinion, this fact should have weighed more heavily than it appears to have done in the overall sentencing synthesis. The combined figure of $480,000 did not adequately reflect the requirement that this factor be taken into account.
31 In the circumstances, and for the reasons set out above, we would allow the appeal. We were provided, during the course of argument, with an affidavit sworn by Mr Di Tonto setting out in far greater depth than had been placed before her Honour, details of his personal financial position, and that of his company. That affidavit confirms what was obvious in any event, that this small structural engineering business does not have any significant assets, or any realistic capacity to pay a substantial fine of the order imposed below.
32 In these circumstances, we would allow each appeal. In lieu of the fine imposed on Mr Di Tonto, we would order that he pay a fine of $50,000. In lieu of the fine imposed on AM Design, we would order that company to pay a fine of $190,000.
33 Pursuant to s 6AAA of the Sentencing Act 1991, we indicate that had Mr Di Tonto not pleaded guilty, we would have fixed a fine of $75,000. Likewise, had AM Design not pleaded guilty, the fine would have been $250,000.
[1] [2015] VSCA 266; (2015) 47 VR 660 ('Frewstal').
[3] [2017] VCC 2021 (Judge Parrish). That case was later appealed on matters not related to the penalty imposed. See Downer EDI Works Pty Ltd v The Queen (2017) 53 VR 1.
Di Tonto
The Queen [2018] VSCA 312
(2017) 53 VR 1
(2015) 47 VR 660