DPP v AM Design and Construction Pty Ltd

"(a) batter down at 55 degrees until the demarcation between highly weathered mud stone and weathered mud stone typically between three to four metres from surface level.

(b) then excavate at the demarcation down at 85 degrees through the weathered mud stone and maintain the 55 degrees for highly weathered mud stone.

(c) if this batter cannot be maintained in the upper material then steepen the batter to suit and spray 75 millimetres thick reinforced shotcrete on this material; and

(d) builder to immediately notify engineer if excavation reveals any localised loose or fractured rock so rectification works can be carried out generally using rock nails or shotcrete with mesh to stabilise the area."

1. Excavation works commenced on the site in March of 2015. Action Master Builders were engaged as the builder. Jim Nikolaou was the secretary, sole director and part owner of Action Master Builders. Mr Nikolaou, a co-accused in this matter, observed the progress of the excavation works and gave regular instructions to excavator drivers as to how to carry out the excavation.
2. None of the instructions referred to in paragraphs 7-10 were ever implemented. As a result the walls of the excavation were nearly vertical and did not include any stabilising measures. The excavator drivers completed their work around 10 July 2015. The excavation was by then approximately ten metres deep.
3. Sometime during the evening of 13 to 14 July 2015, part of the excavation collapsed in the south-east corner of the site. Residents of the rear townhouse were advised that they should evacuate. On the evening of 15 July 2015, a further and much larger collapse occurred. The police advised the residents of the front townhouse to immediately evacuate.
4. The Court of Appeal decision of Director of Public Prosecutions v Frewstal Pty Ltd [2015] VSCA 266; (2015) 47 VR 660 provides helpful guidance as to the relevant sentencing principles in prosecutions under the Act. At paragraph 127, their Honours said this:
   • "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 OHSA, 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."
5. In assessing the gravity of the breach here, and the extent to which AM has departed from its duty, I must consider the requirement of what steps were reasonably practicable.[1] Here, in order to reduce the risk of collapse, it was reasonably practicable for AM Design to prepare structural drawings that required the concurrent installation of a site retention that involved:

(1) the installation of bored piers around the perimeter of the excavation before excavation commenced;

(3) the progressive installation of sprayed concrete infilled panels until the required depth of excavation was reached.

1. Indeed, by the plea of guilty to Charge 1 on the Indictment, AM Design has accepted that these were reasonably practical steps to take and thus, by its admission of the particulars contained at 7(a) on the Indictment, acknowledged its failure to take such steps.
2. The objective seriousness of the breach in prosecutions of this nature constitutes the primary factor in determination of the appropriate penalty. Factors subjective to the accused such as the plea of guilty play a subsidiary role.
3. Further, the gravity of contravention is not determined by its consequences but by the extent of the employer's failure to meet their duties under the Act. The extent of the accuseds' failure to meet their duties under the Act is itself determined by three factors.
4. Firstly, the extent of the departure of the duty owed, in particular the measure of evidenced disregard concerning safety. Secondly, the extent of the risk to health and safety thereby created, in particular the foreseeable potential consequences of the breach, and, thirdly, the likelihood or risk of potential harm occurring.[2]
5. Here, counsel on behalf of the Director, Mr Palmer, submitted that the conduct of both AM Design and Mr Di Tonto involved a very significant departure from acceptable safety standards. In response Mr Hannebery, counsel for AM and Mr Di Tonto, did not concede that it was a significant departure.
6. Instead, while accepting that the breach was a departure, it was cast by defence counsel as a consequence of an error in professional judgment. In this regard, I accept the submission from the Director that the conduct of both AM and Mr Di Tonto indeed involved a significant departure from safety standards.
7. In relation to the second factor, the foreseeable potential consequence of the accuseds' conduct here included serious injury or death. The site was bordered to the west by a main road, being Huntingdale Road, and residential townhouses to the east. It is clear that your conduct bore potentially fatal consequences for those working at the site or for those in the immediate vicinity.
8. In relation to the third factor, the Director submitted that it was very likely that the excavation would collapse. The defence submitted that this was an overstatement based upon the objective evidence found in the brief. In support of this contention I was referred to the expert report from Russell Nesbitt provided by Nesbitt Consulting Pty Ltd.
9. In particular, counsel for the defence relied upon the opinion expressed at 4.1 of that report wherein Mr Nesbitt referred to the "hazards and risks associated with deep excavation method performed at the site relate to the significant potential for the excavated faces to fail".[3]
10. In the circumstances, and bearing in mind the standard of proof of matters in aggravation of sentence, it is more accurate to adopt the terminology of

Mr Nesbitt being the excavation method meant that there was significant potential for collapse of the site rather than the phrase adopted in the Director's submission of it being "very likely".

11. Be that as it may, it is clear from Mr Nesbitt's report that in his opinion the excavation should not have been undertaken without the concurrent installation of a site retention system to the full perimeter of the site. He states that the most appropriate form of site retention would have been the use of bored piers, ground anchors and sprayed infill concrete panels constructed on a progressive basis to match the progressive excavation of the site.[4]
12. As to the reason for the failure to take reasonable steps, it was submitted by defence that when assessing the individual culpability of you, Mr Di Tonto, I should take account of the fact that this was a case wherein there were two options in relation to the excavation design and you chose option two over option one.[5] It was submitted option two was cheaper than option one and it was conceded by your counsel that cost was a factor in your decision making.
13. However, it was submitted to me that it was not a question of trade off of costs versus risk. It was argued that you believed that there was a choice between two equally viable options, one of which was cheaper and did not involve using a retention system and therefore you pursued the cheaper one.
14. In response, as was rightly pointed out by the prosecution, that if it was a case where there was a trade-off of cost versus risk and you consciously made a decision to opt for the riskier option, you would have been charged with reckless conduct under s32 of the Act.
15. The failure to take reasonable steps and comply with the obligations under s32 of the Act seems explicable by reference to some perceived cost cutting measure. To the extent, if any, that that was a factor in the decision-making process, it was the consequence of entirely flawed logic.
16. Adopting the assessment made by Mr Nesbitt in his report, "the methodology used clearly did not provide a workplace that was safe to the extent practicable and clearly was a decision that endangered the surrounding properties and public".[6]
17. Bearing in mind that the touchstone for sentencing here is the gravity of the breach of the Act, not the gravity of the consequence, I am of the view that this conduct constitutes a very serious example of a breach of s23 of the Act. As a structural engineer, Mr Di Tonto, you ought to have been aware both of the risk and the safety measures that could be adopted to eliminate or reduce the risk.
18. Safety measures as set out in the particulars to the charges were available and would have reduced or eliminated the risk of the excavation collapsing. It was submitted to me by your defence counsel that insofar as the question of risk is concerned, there would always be some measure of risk in an excavation.
19. In response, counsel for the Director refuted that contention. In the course of the plea I was provided with what I termed a model plan of a building site and a properly executed excavation. The submission made on behalf of the Director was that if you followed the model system you would at best eliminate the risk of a wall collapse and at worst make the risk miniscule.
20. In support of this contention reliance was placed upon the statement of Chris Haberfield, a principal geotechnical engineer with Golder Associates, wherein he expressed his "disbelief that an excavation of that size was being done without any retention system in place".[7]
21. While there was no objective evidence before me as to the cost of eliminating or reducing the risk, I accept the prosecution's submission that the means were available to you to, at best, eliminate the risk, and at worst make it miniscule.
22. Here, capacity to pay any pecuniary penalty was raised as an issue. Given I am dealing with a corporate entity of AM and you as the individual, I must make a separate assessment of the capacity of AM Design and you, Mr Di Tonto, to meet the financial penalty imposed upon you. In this vein I have had regard to the statement of financial affairs tendered as Exhibit 4 on the plea.
23. I turn now to the factors advanced in mitigation. I accept that this was a plea of guilty entered at the earliest opportunity. This matter proceeded by way of a straight hand up brief at committal on 9 October 2017 and pleas of guilty were entered at that time.
24. In the circumstances, I also accept that it is a plea of guilty designed to facilitate the administration of justice and consistent with remorse. It was also submitted that the plea should be given additional weight because it was made despite the existence of a plausible avenue of defence.
25. In this vein I accept that the plea has avoided a potentially complex and protracted trial. In this regard counsel for the defence reminded me that the co-accused, being the builder and Mr Fernando, were proceeding to trial.
26. Neither AM Design nor you, Mr Di Tonto, have any prior, subsequent or pending matters. The character reference material tendered on the plea as Exhibit 3 makes clear to me that you, Mr Di Tonto, are a person of exemplary character, and with the exception of this matter usually a person of high professional standards who places a high value on workplace safety.
27. It was submitted that in all the circumstances of the case little weight need be placed on specific deterrence. I accept that submission. Overall it was submitted by defence that this case sat at the lowest end of the range for offences under the Act, and further, that the assessment of a low level of culpability should be reflected in the pecuniary penalty imposed upon both AM Design and you, Mr Di Tonto.
28. In my view, it is an overly benign construction to characterise the decision taken by AM Design and you, Mr Di Tonto, as merely an error of professional misjudgement. Your conduct amounts to a serious breach of your obligations pursuant to the Act.
29. Furthermore, in cases where the potential risks of the breach include the possibility that someone could be killed or seriously injured, general deterrence will normally assume considerable significance. As the Court of Appeal has observed in Director of Public Prosecution v Vibro-Pile (Aust) Pty Ltd [2016] VSCA 55, general deterrence is of particular importance in offending of this kind. The sentences imposed need to draw attention to the importance of workplace safety and to send a message to employers that failure to eliminate or mitigate safety risks will attract significant punishment.
30. Thus the sentencing principle of general deterrence is to be given considerable weight even in the absence of factors pointing to the need for specific deterrence, as is the case here. Would you please stand, Mr Di Tonto?
31. You and AM Design are convicted of the offences to which you have pleaded guilty. The company is fined $380,000 and you are fined $100,000. Pursuant to s6AAA of the Sentencing Act 1991, if not for the plea of guilty I would have fined the company $700,000 and you $180,000. Those are my reasons for sentence. Are there any applications sought for stay, Mr Hannebery, for the fines?
32. MR HANNEBERY: Your Honour, perhaps if I could ask for an initial three month stay?
33. HER HONOUR: Yes.
34. MR HANNEBERY: Then he can sort whatever out in that time, thank you.
35. HER HONOUR: Yes, that will be granted. Are there any other matters, counsel?
36. MR HANNEBERY: No, Your Honour.
37. MR PALMER: No, Your Honour.
38. HER HONOUR: Yes, you may be seated, Mr Di Tonto.

[1] The requirement of reasonable practicability is to be interpreted in light of s20(1) which provides a duty to ensure, so far as is reasonably practicable, health and safety requires the duty holder to eliminate risks to health and safety, so far as reasonably practicable: and if it is not possible to eliminate the risks, to reduce them as far as is reasonably practicable. This is an objective test.

[2] Director of Public Prosecutions v Frewstal Pty Ltd [2015] VSCA 266; (2015) 47 VR 660

[3] Nisbet Consulting Report, 17 February 2016

[5] Ibid 4.2.1 wherein it appears that the installation of a bored pier perimeter retention system was dismissed as an option at an early stage of the design and documentation process

[7] Chris Haberfield, 17 September 2015, paragraph 70