Inspector Alan Jeffrey Broomham v Sebastian Builders & Developers Pty Ltd;... [2007] NSWIRComm 107 | Case summary

3 To assist an understanding of the matters raised for the consideration of the Court it is appropriate to set out the terms of the Agreed Statement of Facts in this matter: that document is annexed to this judgment. 4 It was accepted by the prosecutor that, at the time of this accident in August 2003, this type of crane was new and while there were codes and standards, they dealt with older cranes and did not address the special problems or particular aspects of the new cranes. At the time of the incident, WorkCover was working towards a standard protocol. In August 2002, Mr Leavy, the State Co-ordinator - Plant with the WorkCover Authority, issued a Position Paper concerning self-erecting tower cranes. That paper stated that self-erecting tower cranes were required to comply with the requirements of the Occupational Health and Safety Regulation 2004 including being designed to the appropriate Australian Standard AS 1418.4. A problem arose because a number of these cranes were brought into New South Wales without load indicating devices required under the Standard but addressed the usual cabin operated tower crane. The newer cranes were frequently operated remotely via pendant or remote radio control. As a result of this difficulty, suppliers and users had been striving to retrofit load indicators, some of which were inadequate. WorkCover's position was that a load indicator that could be read at the point of operation even when remote from the crane, was the most appropriate means to address the risks associated with this part of the operation of the crane and fully complied with the intent of the Australian Standards. It was noted that Australian Standards were currently being developed for the design and safe use of self-erecting tower cranes. The background paper to the Position Paper discussed the difficulty of compliance with existing Australian Standards and the risks faced by owners and users of this new type of self-erecting tower crane if they did not have a load indicator fitted that could be read at the point of operation even when remote from the crane. 5 Inspector Leavy gave oral evidence and described his role as including developing statewide policies and giving general advice to the inspectorate and industry which included advice in relation to cranes. He noted that self-erecting cranes had gained popularity in New South Wales in the late 1990s and were very popular by early 2000. His Position Paper and background paper were to be read together and a final version had been issued with additional details. The Paper had been subject to scrutiny and discussion before being issued. The Paper had been sent to the Crane Industry Association, unions, employer organisations and to various industry forums. Mr Leavy accepted that the Australian Standard needed to be more precisely expressed to cover these types of self-erecting cranes and was written for older types of cranes operating with a cabin, a seated operator and readily available readouts. He accepted that the Position Paper was a stop gap until the Australian Standard was altered, which occurred in 2004. The crane involved in this incident required another crane in order to remove its counterweights. Mr Leavy described how the crane in this incident operated, with the whole base rotating with counterweights placed on the base most of which were able to be removed except for the bottom two counterweights which were permanent. Mr Leavy expressed the opinion that, when the non-permanent counterweights were removed, the crane was unstable. This was now addressed by specifications providing that the non-permanent counterweights were not to be removed until the crane was dismantled. 6 In cross-examination, Mr Leavy accepted that, while the Australian Standard was being developed these types of cranes were inspected and issued with compliance notices. These cranes were required to have a read out and load indicator and fitting these items to the crane was dealt with by way of compliance notice. In order to permanently fit these items to the crane, the tower crane had to be lowered to the travelling position with the jib arm folded back before the lower non-permanent counterweights were removed. If ideal conditions were present, the counterweights would not be removed. 7 In relation to the job safety analysis prepared by Mr Maletic for this August 2003 dismantling of the tower crane, it was pointed out that step 5 referred to commencing the dismantling procedure of the crane and step 6 was to fold back stage 1 of the jib section. It was clear from the Users Manual that the order of these steps was to be reversed to safely undertake the task of dismantling the tower crane. Mr Leavy accepted that his 2002 Position Paper represented WorkCover's view of the need for the clarification of the Australian Standard and had been circulated to the crane committee, but that Standards Australia did not issue a similar document. Mr Leavy did not know if his Position Paper had been sent to each person owning a registered crane. He did not recall receiving correspondence from Franco Crane raising certain questions about the operation of this type of crane and seeking assistance and did not recall replying to such a request. 8 George Dugandzija, employed by SB&D as a labourer/truck driver, provided a statement to Inspector Broomham. In that statement, he said he was unaware of the details of the dismantling process of the tower crane on the day of the incident and was not aware if there was a work method statement prepared in relation to the dismantling exercise. He recalled Mr Maletic telling him a few days before the incident that no one would be on site because the crane was being decommissioned. He did recall that, on the day he placed some detour signs at both ends of the laneway near the carpark and that Mr Maletic had asked him to look around to make sure that no one was present. There were not many people on site at the time. He was not aware that a person had driven into the carpark and did not observe any barricades or witches hats in the laneway but did confirm that detour signs were placed in the driveway in the afternoon. 9 Peter Maher gave a statement to Inspector Broomham and also gave oral evidence. He described how he entered the carpark area across the road from the building site on the date of the incident and had finally parked on an apron of the entrance to the carpark across the road from the building site. He did not see any barricades preventing access to the area nor did he see any signs or detour signs indicating that access to the area was denied or restricted. In cross-examination, Mr Maher said he believed that Keira Lane was a two-way street and had been told just before giving his evidence that it was a one-way street. He believed it was a two-way street and had not observed any one-way signs in the laneway. Documents from Wollongong Council initially indicated that no one-way signs or restrictions had ever been placed on Keira Lane although subsequent information showed that, in June 2002, a traffic management plan was lodged requesting that the laneway be temporarily signposted as one way to assist in traffic control past the work site. That request had been approved by Council on 28 June 2002 with the signage being current during the period of development and with the requirement that it be removed on the completion of construction. 10 A number of affidavits were read for the defendants. Frank Vellar was the managing director of Franco Crane a company incorporated in March 2002. The shareholders in Franco Crane were Mr Vellar and Mr Francisco Sebastian. Mr Vellar was also a director of Vellar Constructions Pty Ltd (Vellar Constructions) a company carrying on business of constructing commercial and residential buildings. Between 1999 and March 2002, Vellar Constructions Pty Ltd trading as Franco Crane owned and used on its own sites and offered for hire a 25 tonne mobile crane. Prior to March 2002, SB&D and Vellar Constructions were hiring cranes from other crane companies to carry out tasks on building sites on which they were engaged. Mr Vellar suggested to Mr Sebastian that they set up a new company to enter commercial arrangements with SB&D and Vellar Constructions, as well as other customers, for the hire of mobile cranes. 11 Mr Vellar described himself as responsible for the day-to-day operations of Franco Crane and, except for the crane involved in the incident, Mr Sebastian had a limited "hands-on" role in relation to the company's operations. In March 2002, Franco Crane employed Wayne Mulholland as the company's crane manager and driver: Mr Mulholland was a fully qualified and experienced crane driver. Franco Crane operated out of the offices of Vellar Constructions and Mr Vellar therefore had regular contact with Mr Mulholland who reported to him on a daily basis in relation to the operation of Franco Crane. Before the accident, Franco Crane acquired two additional 25 tonne cranes, one 30 tonne crane and the self-erecting tower crane involved in the incident. The company also owned specialised lifting equipment used in conjunction with crane activity. 12 Prior to the incident, Franco Crane used risk assessments and safe work method statements and employed appropriately qualified and experienced crane drivers and dogmen to operate its mobile cranes. Mr Vellar placed considerable reliance on the skills of Mr Mulholland and the crane drivers and dogmen employed because of their qualifications and experience. In July 2003, Franco Crane employed Tony Mallon, a certified tower crane driver and dogman. 13 In late 2002, Mr Sebastian told Mr Vellar of his interest in obtaining a self-erecting tower crane for Franco Crane and proposed purchasing such a crane for hiring to building companies for use on sites in the Illawarra region including use by SB&D and Vellar Constructions. Such a self-erecting tower crane was found in Spain and it was agreed that Franco Crane should acquire that crane. He understood that Mr Sebastian travelled to Spain in late 2002, meeting representatives of the manufacturer of the crane and that Mr Sebastian had completed a training course while in Spain in relation to the erection and dismantling of the crane. 14 This crane was ultimately hired to SB&D for use on its construction site at Smith Street, Wollongong but Mr Vellar did not have any direct involvement in the assembly of the crane or in its subsequent disassembly. He was informed that Mr Maletic had developed a JSA and risk management assessment in relation to the erection of the crane at the site on behalf of SB&D as the hirer of the crane, and that he had also developed a JSA and risk assessment in relation to the disassembly of the crane. While Mr Maletic was involved in developing business opportunities for Franco Crane and carried out work on its behalf from time to time, he was employed by SB&D and did not hold any official position with Franco Crane. 15 A number of issues had arisen in 2003 in relation to self-erecting cranes being in their early stage of usage in New South Wales. Issues of manning arose with the union, and some design aspects of the crane were raised by WorkCover, particularly in relation to the fitting of a load indicator. As a consequence of these issues, Mr Vellar requested WorkCover's crane division to clarify its requirements regarding the safe operation of self-erecting tower cranes and he spoke by telephone with Daniel Leavy. Mr Vellar recalled having two telephone conversations with Mr Leavy at some time in February 2003 and then wrote to Mr Leavy on behalf of Franco Crane on 13 February 2003. In that correspondence, Mr Vellar asked whether the tower cranes with remote control were able to be used without an operator in the cabin, the number of dogmen to be used with remote control units and what tickets were required to operate the tower crane and any minimum number of years experience required. In relation to self-erecting cranes queries were raised about the qualifications required for operation of the crane, the process of registration, the number of dogmen operators required and the procedures in relation to erection and pulling down of self-erecting cranes on sites. Mr Vellar did not recall receiving a reply to that correspondence although the crane used at the SB&D site was certified by WorkCover and registered. 16 Mr Vellar was aware that WorkCover had issued improvement notices requiring the installation of a load indicator on the crane. After receiving those notices, Franco Crane sought advice from the manufacturer and subsequently ordered a load indicator from Spain to meet the requirements of the notices. Mr Vellar was informed that the load indicator was imported from Spain and that the crane was to be dismantled to enable the load indicator to be retrofitted by an electrical engineer. 17 On 1 August 2003, Mr Vellar was informed by Mr Maletic that the crane had collapsed. He attended the site and spoke with Mr Sebastian and Mr Maletic as to the causes of the collapse. Some days prior to the incident, Franco Crane had employed Graham Donaldson as a crane manager/operations manager who became responsible for ensuring that the collapsed crane was safely removed from the site. This self-erecting tower crane was the first of its type obtained by Franco Crane. 18 After the accident, Mr Vellar together with Mr Mallon and Mr Donaldson reviewed the incident on behalf of Franco Crane. It was decided that, if the hiring of cranes, including self-erecting cranes, was to be continued by Franco Crane there needed to be a review of the terms of the hire agreements, and that terms needed to be developed to govern the assembly and disassembly of the equipment. It was decided that Franco Crane should have greater control in relation to these matters and should contract out certain tasks to specialist tower crane rigging companies. Franco Crane thereafter developed new hire contracts designed to specifically deal with tower cranes and self-erectors. Franco Crane also commenced using two companies to provide specialist tower crane rigging services. Mr Mulholland made arrangements where necessary for those companies to provide those services for assembly and disassembly of tower cranes hired out by Franco Crane. Following the review, Mr Vellar delegated to Mr Mallon the task of checking work method statements and job safety analysis documents prepared in respect of work associated with the hire of tower cranes. This task included checking safe work method statements and job safety analysis forms provided to Franco Crane by its contractors including specialist crane rigging contractors. In addition, Franco Crane retained the services of an occupational health and safety consultant to assist in compiling a comprehensive occupational health and safety corporate plan. 19 Since the incorporation of Franco Crane, Mr Vellar and Mr Sebastian had provided money to the company to allow it to carry on business. After the incident, Mr Sebastian expressed a desire to disengage from Franco Crane as well as winding down his involvement in the building industry generally. As a result, Mr Sebastian and Mr Vellar had reached an agreement under which it was proposed that Mr Vellar would purchase the business including the assets of Franco Crane. That process had continued for approximately 12 months and was nearly complete. When completed, Mr Vellar would carry on the business of Franco Crane through a new company that was registered as Franco Crane Hire (NSW) Pty Ltd. Mr Vellar provided a copy of a statement setting out the financial performance of Franco Crane for the years ending 30 June 2005 and 30 June 2006. Those documents indicated that for the year ending June 2005 the revenue from ordinary activities exceeded $1.154 million with total assets amounting to over $637,000 with total liabilities of over $639,000; in the year ending 30 June 2006 revenue had amounted to nearly $600,000 with total assets amounting to $553,000 and total liabilities amounting to $741,000. No oral evidence was given about the financial affairs of Franco Crane and Mr Vellar was not cross-examined. In his capacity as a director of the company, he acknowledged on behalf of the company that the crane collapse was a serious incident. It was acknowledged that the incident involved the potential for persons on the site and members of the public to be injured or killed. He also acknowledged in his capacity as a director, that the incident involved a contravention of the Act. On behalf of the company and as a director, he was authorised to express the company's sincere regret and remorse in relation to its breach of the Act. 20 Wayne Mulholland was employed as the crane manager for Franco Crane and had day-to-day responsibility for managing the hire of mobile cranes and the day-to-day supervision of the crews manning the company's fleet of mobile cranes. He had been employed by Franco Crane since late March 2002 and had a number of licences and certificates including certificates of competency as a tower crane driver, as a crane chaser, a forklift licence and a certificate of occupational health and safety general induction for construction work. Prior to commencing with Franco Crane, he had worked as a driver for 18 years operating mobile cranes both in the building industry and the steel industry. When he commenced work with Franco Hire he was employed as a crane driver at which time the company had one 25 tonne rough terrain mobile crane and he was the only driver employed by the company. At the commencement of his employment until 2003, Franco Crane hired only hydraulic or mobile cranes: the crane that collapsed in this incident was the first self-erecting tower crane hired by Franco Crane. 21 It was estimated that, until the time of this incident, approximately 90 per cent of crane hirings were to Vellar Constructions and SP&D. As crane manager and crane driver, Mr Mulholland's role included carrying out all facets of the hire operation from the creation of a job until its completion. He described how a job would be received together with details and the identification of particular requirements or hazards, such as proximity to electrical power lines or involving the blocking off of a street. This was followed by a preliminary site inspection and the making of a preliminary hazard assessment with the purpose of developing a safe work method statement regarding the work to be carried out. Mr Mulholland would then make an assessment as to the requirement for specialist lifting techniques, additional direct supervision or specialist access, and he would attend the site with the crane and dogman to participate in the development of the JSA and safe work method statements. He also provided additional specialist supervision as required. Where specialist lifting techniques were not required and there were no complications as to access, each crane crew was trained by Franco Crane and was required to take an on site JSA and develop safe work method statements prior to any crane work being undertaken on that site. The company required a copy of each JSA and the work method statement to be signed off by each site manager or site foreman, with a copy of both documents left with the site manager or foreman after being signed. Each day, JSAs and work method statements developed by the company's crane crews including any documents prepared for specialist lifts, specialised access or particular customer requirements, were provided to Mr Mulholland for review. The purpose of this review was to ensure a proper level of compliance in the conduct of risk assessments and the preparation and conduct of lifts. 22 Mr Mulholland stated that on site the dogman generally was responsible for managing the load during the lifting operation and ensuring that the driver was aware of any circumstances that could affect the safe management of the load. Communication took place by way of two-way radio and by recognised hand signals taught as part of standard training. Mr Mulholland, as well as allocating jobs, ensured that routine maintenance was carried out as well as routine inspections of lifting gear. He organised the specialist maintenance required to be carried out by external bodies. It was part of his role to ensure employees had the necessary safety equipment to carry out the work including personal protective equipment. The company provided all crane crews with high visibility shirts, long work pants, steel capped boots, hard hats, safety glasses and gloves. During his employment, Mr Vellar had delegated various responsibilities to Mr Mulholland including managing aspects of the company's occupational health and safety system. This task was performed with the assistance of Mr Mallon. 23 When Mr Mulholland joined the company, the focus of occupational health and safety centred on the driver's responsibility to ensure that work was carried out safely. During training for certificates of competency required for crane driving, the drivers were taught that they were responsible for the safe operation of the crane on site while the dogman also bore responsibility for safety. Prior to the crane collapse, the company had a system of safety in place directed to indicate the risks and to provide safe work methods in relation to the type of cranes used. This involved analysing customer information, recognising site inspection was required and identifying hazards upon inspection. The safe work method statements were prepared either by the driver or in consultation with the dogman. Mr Mulholland's employment with the company brought him into contact with Mr Maletic and Mr Sebastian whom he understood were employees of SB&D and he usually encountered them when carrying out a job for SB&D. 24 In relation to the collapse of this particular self-erecting crane, Mr Mulholland had received a call between 7.00 am and 8.00 am on 1 August 2003 from Mr Maletic requesting a mobile crane at the Smith Street site. Mr Mulholland was familiar with that site and was not aware of any issues that required a further site inspection before allocating a mobile crane to carry out a routine lift at that site. He did not recall Mr Maletic informing him that the crane required any specialised lifting work nor did he recall Mr Maletic raising with him any matters that would have led to the necessity of carrying out a site inspection before allocating a crane. Mr Maletic was asked if he required a dogman. He said that he did not but Mr Mulholland was aware that Mr Maletic was a ticketed dogman and that there was also a ticketed dogman on site. 25 Mr Mulholland arranged for a casual crane driver Harry Ackerman with more than 30 years experience working with cranes to take a 25 tonnes rough terrain crane to the site. He informed Mr Ackerman that, when he arrived on site, he was to take instructions from Mr Maletic. Later in the day, he received a telephone call advising that the tower crane had collapsed and he attended the site to assist in making the site safe. He spoke to Mr Sebastian and Mr Maletic about how the crane collapsed and was present on site when representatives from WorkCover gave approval to remove the crane. Mr Donaldson also came to the site and took responsibility for safely removing the crane by organising for a specialist team of workers from Sydney. Mr Mulholland assisted by driving a mobile crane and loading a section of the collapsed crane onto a truck. He was aware that Mr Donaldson investigated the circumstances of the collapse and was assisted by Mr Mallon. 26 Following the crane collapse, Mr Mulholland was aware that Mr Vellar engaged a consultant in relation to the company's occupational health and safety system and that during 2004 an occupational health and safety corporate plan was developed. That plan was in evidence before the Court and contained processes used to identify safety risks and to carry out work safely. Throughout the time Mr Mulholland had been employed by the company, there was induction for new employees and a process requiring prospective new employees to confirm their qualifications. On employment, qualifications were checked by Mr Mulholland and copies of certificates, licenses and tickets kept on the employee's file and in a separate register. Employees were required to complete a work experience checklist. Basic crane driving and dogman qualifications for crane driving and dogman were usually sufficient to meet the needs of work done by the company. Where particular training was identified, for example, in relation to crane and plant electrical safety Mr Mulholland would consult with Mr Vellar to determine whether it was appropriate to train an employee in the area: if the company employees did not have the necessary training the company did not carry out the work. The company paid for site specific training required by its customers. 27 After the collapse of the crane, Mr Mulholland discussed with Mr Vellar how the company safety system could be changed to prevent a repeat of the incident. As a result of those discussions, it was decided that the company would take greater control and responsibility for the assembly and disassembly of tower cranes and in doing so, would sub-contract the main aspects of assembly and dismantling operations to a properly qualified crane/rigging company. The development of the new system in relation to the erection and dismantling of tower cranes was initially given to Mr Mallon. Work procedures for the supervision of specialist contractors retained were then developed including the assessment of JSAs and work method statements required for the work. After the incident and until December 2006, Mr Mallon carried out supervision of the external contractors employed by the company to assemble and disassemble the tower crane. That type of work took place on an occasional basis because the crane was usually on a site for extended periods of time. Mr Mulholland worked with Mr Mallon on the last disassembly and reassembly of the crane and received training in the processes developed by Mr Mallon and the occupational health and safety consultant. After Mr Mallon's departure from the company in December 2006, Mr Mulholland was given responsibility to oversee and supervise these jobs. Examples were given of outside hiring work: where issues had arisen, the company took steps to make them the subject of toolbox discussions. 28 Francisco Sebastian had been a director of Franco Crane since it was registered in 2002 and was also a director of SB&D since it was registered in October 1997. Mr Sebastian was 62 years old and was born in Spain. 29 SB&D was a construction and property development company, mainly building homes, townhouses and medium density high rise apartment blocks. The other director of SB&D was his wife, who was also the company secretary, and his son Frank Sebastian who was an alternate company secretary. Mr Sebastian and his wife were the sole shareholders in SB&D. 30 Mr Sebastian gave details of his life since coming to Australia in 1967, settling in Wollongong and working at the steelworks at Port Kembla driving cranes and obtaining a crane driver's licence. He then established a pre-fabricated concrete floor business and operated it in partnership for five years and later started his own concreting business engaging a team of approximately 10 concreters. While working in that business he obtained a builder's licence and did some building work in his own name and eventually left the concreting business to concentrate on the building business. He ran the building business in partnership with his wife until 1997 under the business name, "F & C Sebastian" and later under the name, "F & F Sebastian Builders". His son then began to work for him having completed his apprenticeship as a carpenter and receiving training as a clerk of works and estimator. SB&D commenced in 1997 and held a corporate gold builder's licence. Mr Sebastian held a gold builder's licence until the end of November 2005 when he decided not to renew the licence. 31 SB&D was involved in residential building including homes, villas and multi-storey unit buildings. At the time of giving his affidavit evidence, SB&D employed his wife, son and his son's wife, a supervisor (Greg Smith), a receptionist/office manager and a leading hand as well as a number of full-time site supervisors. Site supervisors were used on multi-storey unit blocks and were, in turn, supervised by his son and Mr Smith as project managers, with smaller projects being supervised directly by his son and Mr Smith. It was not unusual for them to manage a number of projects between them at any one time. 32 Not long after SB&D commenced, Mr Sebastian's son began to take greater responsibility for the day-to-day operation of the business including involvement in estimating and quoting, organising approval of contracts, co-ordinating employees and contractors and managing occupational health and safety on company sites. In early 2003, his son enquired about engaging safety consultants to assist the company with occupational health and safety. Mr Sebastian and his son engaged in discussions with a consultant - both he and his son were concerned about the company having a safety system in operation which complied with occupational health and safety laws. His son arranged for the consultant to assist in preparing documents to form part of the safety system that the company was to use for all its work. While his son discussed these matters with him much of this work was done through his son, although Mr Sebastian was included in the discussions. 33 Mr Sebastian confirmed Mr Vellar's evidence about the history of Franco Crane and its incorporation in March 2002. Mr Vellar had responsibility for the day-to-day management of the company including the terms and conditions of the hire of the company's cranes. During 2002, Mr Sebastian spoke to Mr Vellar about Franco Crane buying a self-erecting crane that could be hired to SB&D, Vellar Constructions and other building companies in the area. Mr Sebastian went to Spain in late 2002 and inspected a self-erecting crane manufactured by GFS and, after inspecting that crane and assessing its suitability for the purpose, he purchased the crane on behalf of Franco Crane. In late 2002, while in Spain, he received some training from the manufacturer in the assembly and disassembly of the crane and completed that training in May 2003 when he returned to Spain. As a result of that training, he received a certificate issued by the manufacturer confirming the completion of that training. 34 When the crane arrived from Spain, it was taken to the Smith Street site and erected by Mr Sebastian with the assistance of Mr Maletic and in accordance with the training that Mr Sebastian had received in Spain together with the Instruction Manual supplied by the manufacturer. The erection of the crane took approximately two hours and was completed without difficulty. The first Instruction Manual supplied by the manufacturer was written in Spanish although a second copy of the Manual was ultimately supplied, written in English and that was left on site for use with the crane. 35 In March 2003, an improvement notice was issued by WorkCover to Franco Crane in relation to the self-erecting crane, requiring the fitting of a load indicator that was visible to the crane driver. Mr Sebastian made enquiries of the crane manufacturer. He was told no such load indicator existed but such an item could be manufactured to comply with WorkCover's requirements. 36 On 1 August 2003, in order to fit the load indicator in compliance with the improvement notice, Mr Sebastian made arrangements for he and Mr Maletic to disassemble the crane. Mr Maletic was to supervise and project manage for the site and was generally responsible for safety on the site. Because of the relationship between SB&D and Franco Crane, Mr Maletic also worked for Franco Crane. When the crane was erected at the site, Mr Sebastian left the English language version of the manufacturer's Manual at the site. From the time of its erection, Mr Maletic operated the crane on a regular basis under the supervision of a certified crane driver supplied by Franco Crane as part of the hire of the crane. 37 Mr Sebastian believed that, on the morning of 1 August 2003, Mr Maletic arranged for Franco Crane to provide a mobile crane to attend the site to remove the light counterweights from the crane. Mr Sebastian said he did not realise that the light counterweights had been removed from the crane until after the collapse. Mr Sebastian arrived at the site at approximately 1.00 pm and together with Mr Maletic proceeded to work on the jib arm of the crane. At the time they were planning and working on dismantling the crane Mr Sebastian was confident that he and Mr Maletic could do the job safely. Mr Sebastian had been trained in Spain by the manufacturer and had been given a certificate to perform erection and dismantling of the crane: he and Mr Maletic had erected the crane without difficulty. In addition, Mr Maletic had been operating the crane under supervision since it had been erected on site and they had the manufacturer's Instruction Manual with them on the day when performing the dismantling task. The manual used was the English version - Mr Sebastian said he relied on Mr Maletic to read the manual on the day of the incident. 38 While they were working on unfolding the jib arm of the crane, the crane collapsed and Mr Sebastian assisted with efforts to make the site safe. Mr Sebastian stated that he realised that the incident involved serious breaches of the Act and stated to the Court that he was very sorry for those breaches, that he was aware that the crane collapse was a serious incident and that it was fortunate that no one was injured or killed. 39 Mr Sebastian then dealt with his future in the building industry having regard to his age and a medical history dating back to 1980 requiring surgery on more than one occasion. Because of his age, his health and the stress of the present charges, he had decided to retire which was the reason he had not renewed his builder's licence in 2005. Originally, he had hoped to retire from the business, and in particular from SB&D, before the end of these present proceedings but, because of a downturn in the property market in the Wollongong/Illawarra area since 2005, he regarded that it was not in the best financial interest of his wife and family to retire from the company while the property market in the region was in this state. Mr Sebastian and his wife, directly and through SB&D and other investment companies, held interests in a number of properties that had suffered a significant loss in value over the previous two years and, while they had substantial assets, SB&D, himself and his wife had limited cash. SB&D, together with Mr Sebastian and his wife, had large sums invested in continuing projects and he believed that those projects might not be completed without his continued involvement in the company because of his long term relationship with the banks financing those projects. Mr Sebastian was now planning to resign his directorship in the next 6 to 24 months, or sooner if he was able to secure finance for the completion of the major projects and if he was able to sell some of the assets without suffering losses that could not be afforded. 40 Mr Sebastian also spoke of his community involvement, sponsoring Spanish dancers in the Illawarra region, supporting the Warilla Wanderers soccer club over many years and assisting the Wollongong Surf Life Saving community. The company had also provided ongoing support to Workplace Learning Illawarra, a government funded work experience programme, by taking high school students for their construction industry work placements while they were doing vocational training at school. 41 Mr Francois Sebastian is Mr Francisco Sebastian's son and was an alternate company secretary for SB&D, having been appointed in October 2004. He was employed by SB&D as a project manager and estimator and was also involved in the general management of the company. He was a licensed builder and began working with his father in the building industry in approximately 1987. In recent years, especially after the recent incident, he had taken a greater role in managing SB&D. Presently, SB&D employed 11 people with Francois Sebasatian and Mr Smith working as project managers. Mr Smith had been employed by SB&D in June 2005. The company might have up to five or six projects in various stages of development at one time, including unit developments, houses and townhouses in the Wollongong and Kiama areas. He also spoke of the use of supervisors, including Mr Maletic, in evidence that supported the evidence given by his father. 42 Mr Francois Sebastian also gave evidence that supported his father's evidence about the development of occupational health and safety systems prior to the accident, the engagement of consultants and the period of four to five months that was required to complete the occupational health and safety system for the company. That work by the consultant was completed by approximately August 2003 and included general occupational health and safety policies and documents and a site specific occupational heath and safety management plan. The management plan was in evidence before the Court. It was noted that the supervisor on each site was responsible for making sure that the site occupational health and safety plan was implemented and that any forms required to be completed as part of that plan were kept in a folder for the relevant sites. 43 At about the time of the incident, Mr Francois Sebastian was re-organising the company's occupational health and safety system. He had arranged an occupational health and safety training seminar for all sub-contractors used by the company and had asked representatives of WorkCover to attend. This exercise took place at a time when other builders and sub-contractors had expressed their concern to him about not fully understanding the legal requirements in relation to occupational health and safety under the new Act and Regulations. At the time of the incident, he was in the process of finalising the new occupational health and safety system and, immediately following the incident, that system was finalised and implemented at all existing sites. 44 Since the incident, the company had undertaken an ongoing programme of external training for its employees and contractors working regularly on the company's sites. SB&D offered its employees and regular sub-contractors the opportunity of attending seminars and training sessions run by organisations such as the Master Builders Association and WorkCover, paying for the cost of attendance of its own employees, including attendance during normal working hours where applicable. In addition to industry and site inductions required for each site, each sub-contractor was required to submit work method statements and those statements were to be reviewed by the relevant site supervisor with copies being filed and maintained at the site. Toolbox meetings were held regularly on each site and safety issues were addressed at those meetings. Every five to six weeks, Mr Francois Sebastian held off-site management review meetings that SB&D site managers were required to attend. At those meetings, a review would take place of the progress of the company's projects and site management issues and matters relevant to occupational health and safety would be discussed. Since the incident, the company had not hired any tower cranes but hired mobile cranes. When that occurred, the crane company provided to SB&D a job safety analysis and safe work method statements. When received, these documents were passed on to the SB&D site supervisor and checked to ensure that their contents were appropriate and that the proposed work methods were safe and took into account all identified risks. Each JSA and work method statement was to be signed by the site supervisor. 45 Mr Francois Sebastian spoke of his father's ongoing health problems and had noted since the incident the effects of stress on his father arising both from the incident and the prosecutions. Since the collapse of the crane, he had discussions with his father about his father's future in the building industry and had been told by his father that he wished to retire. Prior to the incident, his father had started to reduce his involvement in the day-to-day conduct of the company and, after the incident and particularly in the last two years, his father had continued to reduce his involvement in the day-to-day on site operations of SB&D. His father now concentrated on managing the company and, in particular, the financial planning and strategic decision making for the company. While his father's on-site role had been reduced, Mr Francois Sebastian had taken even greater responsibility for those day-to-day operations: in particular, the operation and management of occupational health and safety. He discussed safety matters with his father as part of their discussions regarding the progress of each job. At present, SB&D had some projects awaiting development approval and his father had been involved in that process. He understood his father planned to remove himself from the business and resign his directorship of SB&D once those approvals had been approved. 46 A number of medical reports set out Mr Sebastian's health problems since 1980 and the desirability of further operative treatment, which had been resisted by him. Four personal references were also provided speaking highly of Mr Sebastian's involvement in the building industry in the Wollongong region over a long period of time and attesting to his support of the local community. He was credited with playing a significant role in creating many jobs and advancing the prosperity of the region and it was stated that his strong work ethic had driven him to continue to lead an active working life. DELIBERATION 47 It is firstly necessary to consider the objective seriousness of these offences. The maximum penalty available concerning Franco Crane was $550,000; the maximum penalty available in the SB&D matters was $825,000; in relation to Mr Sebastian, as a director, the maximum penalties available were $82,500. In their affidavit evidence, Mr Vellar for Franco Crane and the defendant Mr Sebastian on his own behalf and on behalf of his company SB&D accepted that these were serious breaches involving the risk of grave injury to those working on the site and those in the public area immediately outside the site into which the jib fell. It might be observed at this point that, in one respect, it was no mere accident that someone had not been injured. Mr Maletic had taken steps to ensure that most of the people working on the site had left before the dismantling work was fully undertaken and had taken steps to isolate traffic from the site during the dismantling of the crane. Ultimately, there were five people in and around the site at various times, including the mobile crane driver who removed the non-permanent counterweights from the self-erecting tower crane. Mr Maletic's steps to isolate the site did not cover the early period when the counterweights were removed. The suggested conflict in evidence about street signage is resolved by acknowledging that signage might not have been as effective as it could have been, it being something less than the use of barricades to isolate the area of possible risk. 48 This crane had a jib of some 32 metres in length: Mr Sebastian and Mr Maletic were in the process of extending the jib in order to fold it back in the disassembly process, but did so when the non-permanent counterweights had been removed. It would appear to be clearly foreseeable that the extension of the jib in those circumstances could lead to instability quite apart from working in windy conditions. No reason was offered as to why the jib could not have been extended and folded back before the counterweights were removed, apart from the fact that Mr Sebastian was unable to get to the site until later in the day and Mr Maletic had already arranged for the attendance of the mobile crane from Franco Crane to remove the lightweight counterweights. The manufacturer's manual in which Mr Sebastian had been trained and only recently (having completed that training in May 2003) stated clearly that the crane was always to be dismantled with the jib folded: it was forbidden to dismantle the crane with the jib unfolded. Further, the crane could not be unfolded with only the two assembly counterweight blocks in place. There was also the general warning about dismantling the crane when it was windy. These were clear and simple warnings appearing in the Users Manual in which Mr Sebastian had been so recently trained. The removal of the counterweights took place while the work was being overseen by a trained dogman (Mr Maletic) and a trained crane driver (Mr Ackerman). Commonsense as much as industry experience should have suggested to them at the time that it was premature to remove the non-permanent counterweights. Although Mr Sebastian was not present when the counterweights were removed, it must have been plainly obvious to him when he arrived that they were no longer present. It is in these circumstances that it is appropriate to find that this was a serious breach of the provisions of the Act by the various defendants. 49 The defendants readily accepted that these offences called for a penalty reflecting an element for general deterrence. However, in relation to all defendants, for varying reasons, it was submitted that there was either no role or little role for specific deterrence. 50 In relation to Franco Crane, that position is said to result from the fact that the company no longer hires self-erecting tower cranes of this type and has confined its operations to mobile cranes of various kinds and has, in any event, put into operation systems involving the use of specialist service providers in circumstances where they are required. Mr Vellar is in the process of acquiring Mr Sebastian's share of the business and proposes to undertake that new business through a recently registered company. No reason is advanced for that step nor why it was not possible for Mr Vellar to continue the business by acquiring Mr Sebastian's shares. It appears, at least, to represent a clean break with the company that was the manifestation of the agreement between Mr Vellar and Mr Sebastian to hire these cranes to their construction companies and to make them available to other builders for profit. In those circumstances, while I am not convinced that specific deterrence should play no role, especially since these arrangements have not yet been finalised, it does seem appropriate that specific deterrence should play a much reduced role in the setting of an appropriate penalty in relation to the breach by Franco Crane. 51 The situation with SB&D and Mr Francisco Sebastian is a little different. It is firstly pointed out that they have taken significant steps to improve the company's occupational health and safety systems and compliance regime, and they appear to have acted quickly in response to this unfortunate incident. The day-to-day operation of SB&D has gradually been transferred to Mr Sebastian's son, the evidence suggesting that transfer of day-to-day management has largely been achieved. The additional considerations are Mr Sebastian's age, his ongoing health problems and the weight of this prosecution that have persuaded him to retire from the business when he is able to do so. For reasons that have been outlined, that final step has not yet been taken and, indeed, may not be taken for up to two years. The evidence also suggests that the venture into the self-erecting tower crane was very much Mr Sebastian's initiative: he made the suggestion to Mr Vellar, sourced an available crane in Spain, travelled to Spain to asseses it and trained in its operation and, on its purchase, had it erected on the SB&D building site clearly regarding it as being of long term utility. The attraction of this type of self-erecting crane appears to have almost disappeared and there is nothing in the evidence suggesting that SB&D under the management of Mr Sebastian's son, would see a role of any kind for such a crane in the future. It is also to be borne in mind that, at the time the crane was purchased and put into operation, the industry was not geared for its appearance, with Mr Leavy's "Position Paper" attempting to address the perceived risks and necessary modifications while, technically, the crane may well have substantially complied with existing Australian Standards. 52 The previous record of Mr Sebastian trading as F & F Sebastian shows three incidents with multiple charges in two of the incidents. Those matters were all dealt with by an Industrial Magistrate (including the Chief Industrial Magistrate) with the highest single fine imposed being $3,000. There were eleven breaches totalling $23,000. The breaches involved the failure to provide handrails for people working at height, the failure to fence stairways and ensure against falling on site, failure to provide safe access and egress to amenities shed, protruding reinforcement bars, use of an unsecured ladder to gain access to a higher floor and uncovered penetrations in floor areas. These offences occurred in 1995 and 1997.

Dismantling of Crane 26. N/A 27. On receipt of the parts manufactured in Spain Franco Crane made arrangements for to dismantle the crane and to enable the load indicator to be fitted to the crane on or about 1 August 2003.. 28. In preparation for the dismantling of the crane Maletic had prepared a job safety analysis for the work to be conducted ("the JSA"). The JSA is dated on its face, 2 August 2003, but, Mr Maletic stated that he prepared it on 1 August 2003 prior to the work of dismantling of the crane being conducted. 29. The JSA was deficient for reasons including that it failed to properly identify, assess, eliminate or otherwise control the risk of the crane collapsing when it was being dismantled. 30. The JSA called for the folding of the first jib section and then for the removal of the counterweights before the remainder of the jib was folded. The JSA prepared by Maletic was not consistent with the sequence for dismantling as required by the manufacturer's 'User's Instruction Manual', which called for the jib and mast to be completely folded before the counterweights were removed. 31. The JSA nominated one of the builder's employees, George Dugandzija ('Dugandzija'), to place detour signs to Keira Lane and monitor the public thoroughfare for vehicles. The JSA also nominated Dugandzija to be an observer to keep the area clear at all times. 32. On 1 August 2003 Dugandzija, the nominated observer, arrived at the site at approximately 1.00pm. Removal of Counterweights 33. Franco Crane Hire employed Harry Ackerman ('Ackerman") as a casual crane driver. Ackerman had commenced working for Franco Crane Hire a few days prior to 1 August 2003. He was allocated work on an as needs basis. 34. On the morning of 1 August ,2003, Franco Crane Hiredirected its employee Harry Ackerman, crane driver, to attend at the site with a mobile crane. Once Ackerman had arrived at the site, Maletic directed him to remove several light counterweights from the base of the crane and to stack · the counterweights in the basement at the site; · Maletic assisted Ackerman in removing the light counterweights. 35. Ackerman operated the crane and removed between eight and ten of the lightweight counterweights, some or all of which were stacked in the basement of the building site. The removal of the light counterweights from the crane was completed by approximately midday. Ackerman then left the site and returned to Franco Crane Hire's crane yard. 36. After Maletic and Ackerman had removed the light counterweights, two cube shaped counterweights were still in position on the base of the crane. Each of those counterweights complied with the manufacturers design specifications and were marked as weighing 2,650 kilograms each. 37. From the time of the removal of the light counterweights the crane was susceptible to forces including: · wind, including wind gusts; and · any movement on the crane itself. 38. On 1 August 2003 when the counterweights were being removed from the crane: · Ackerman was under Maletic's direction; · Dugandzija was not present at the site; and · Maletic had no previous experience in dismantling cranes, including self-erecting tower cranes. 39. No steps were taken prior to the removal of the counterweights to warn members of the public about the dismantling work, or to prevent people using the road, footpath and car park outside the site, including by installing warning signs or detour signs. 40. However, both sub-contractors and employees working on the site were advised in advance that the crane was to be decommissioned and the site was cleared prior to Maletic and Sebastian commencing work on the folding of the jib arm. Dugandzjiia states that after he arrived at the site at about 1 pm on 1 August 2003 he placed a sign at either end of the lane relating to the crane dismantling. The signs did not prevent access to the lane or car park and a member of the public entered the car park at the time of the crane collapse and did not see the signs. Crane Collapse 41. Sebastian arrived at the site at around 1.00pm on 1 August 2003 in order to assist in the completion of the dismantling process. Both Sebastian and Maletic then referred to the manufacturer's 'User's Instruction Manual' in order to complete the dismantling process. 42. Sebastian was not sufficiently fluent with English to understand the 'User's Instruction Manual' at the site and therefore Maletic interpreted instructions to Sebastian with respect to the dismantling process. 43. At all material times the manufacturer's 'User's Instruction Manual' stipulated inter alia the following: At page 36: ASSEMBLING AND DISMANTLING THE CRANE WHEN IT IS WINDY IS FORBIDDEN . At page 46: The assembly and dismantling of the crane can be only carried out by a professional specialised in assembling and duly qualified with specific knowledge of the crane H-32. In the case that this is not fulfilled, the manufacturer will decline any responsibility. At page 152: WARNING! THE CRANE MUST ALWAYS BE ASSEMBLED AND DISMANTLED WITH THE JIB FOLDED. At page 153: ASSEMBLING OR DISMANTLING THE CRANE WITH THE JIB UNFOLDED IS FORBIDDEN. At page 154: WARNING! THE CRANE CANNOT BE UNFOLDED IF ONLY THE TWO ASSEMBLY COUNTERWEIGHT BLOCKS ARE PLACED 44. Neither Maletic nor Sebastian considered the strength of the wind on 1 August 2003, including any effect of the surrounding buildings on prevailing or forecast wind conditions. 45. The meteorological aviation report observations for Bellambi and Albion Park issued by the Bureau of Meteorology for 1 August 2003 indicates that during the period between 10.00am and 2.30pm on that day there were wind speeds between 15 and 31kph and wind gusts between 24 and 41kph. 46. Shortly prior to 2.10pm on 1 August 2003 Sebastian and Maletic were sitting together on the concrete step next to where the crane was positioned. They were both still referring to the User's Instruction Manual. Maletic was holding the pendant controller, and operated the controller to move the trolley on the crane job to position it in its appropriate location in order for the jib to be folded. As the trolley was positioned in the centre of the extended jib the mast of the crane started to move and the crane over balanced and fell to the ground. 47. N/A 48. The jib of the crane and the mast came to rest on the ground between the buildings on the construction site. The extended jib travelled some 11 metres laterally underneath overhead powerlines, over a footpath and public road, Keira Lane and came to rest in the public car park outside the construction site. 49. At the time the crane collapsed, Peter Maher a member of the public was parking his motor vehicle in the car park, having just driven under the path of the crane jib. 50. At the time Peter Maher drove his vehicle into the public car park, the access to which was immediately opposite the site, there were no barriers or detour signs placed in Keira Lane to prevent his access through it and into the car park. 51. An employee's car was damaged by the crane jib. 52. However, no one was injured. 53. At the time of the crane collapse there were 4 people on-site, namely: · Degandizja · Craig Leggatt · Maletic and · Sebastian Miscellaneous Matters 54. On 3 March 2003 two improvement notices numbered 7-18425 and 7-18423 were issued by WorkCover to Franco Crane Hire notifying it that the crane did not have a load indicator which the driver could observe in order to ensure the safe operation of the crane. Instead the crane had an alarmed mechanical load indicator. The improvement notices drew to Franco Crane Hire's attention, Australian Standard 1418.4, which required that indicating devices on self-erecting tower cranes be easily and simultaneously readable and should be located within the operator's field of vision. 55. Franco Crane Hire had intended to become an importer of the self erecting cranes from Spain. After this incident it did not proceed with that plan and has not owned a self-erecting crane since the incident. 56. Franco Crane Hires, SB&D and Sebastian co-operated with the WorkCover Authority in the course of its investigation of the subject incident.

Inspector Alan Jeffrey Broomham v Sebastian Builders & Developers Pty Ltd; Francisco Sebastian; Franco Crane Hire Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (30 paragraphs)

Parties

Cases Cited (2)

Cited By (2)