Inspector Batty v Hunter Water Corporation and TCK Excavations Pty Ltd

SECOND DEFENDANT TCK Excavations Pty Ltd

CATCHWORDS: Occupational Health and Safety - Prosecutions under section 8(2) of the Occupational Health and Safety Act - Water supply industry - Large pipes left on face of embankment next to roadway - Pipe rolled onto roadway causing serious motor vehicle accident - Failure to erect suitable barricades and warning signs - Possible vandalism - Foreseeability - Pleas of guilty - Penalties imposed.

Evidence Act 1995 LEGISLATION CITED: Occupational Health and Safety Act 2000

Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Department of Mineral Resources of NSW (Chief Inspector Bruce Robert McKensey v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Inspector Gregory Maddaford v Graham Gerard Coleman & Anor (2004) 138 IR 21 Inspector Ian Lancaster v Burnshaw Constructions Pty Ltd [2002] NSWIRComm 319 Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 CASES CITED: Markarian v R [2005] NSWIRComm 25 Warman International Ltd v WorkCover Authority of NSW (1998) 80 IR 326 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Anor (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Larkin) v Rice Growers Co-operative Limited (2002) 120 IR 123 WorkCover Authority of NSW (Inspector Riley) v Broken Hill Proprietary Company Limited (1998) 83 IR 427

PROSECUTOR Solicitor: Mr J C Rodney with Mr G Phillips Carroll & O'Dea

FIRST DEFENDANT LEGAL REPRESENTATIVES: Mr R Warren of counsel Solicitor: Mr A Mina MLJ Lawyers

SECOND DEFENDANT Mr A A Henskens of counsel Solicitor: Mr A Harrison Bilbie Dan

JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

INSPECTOR IAN BATTY v HUNTER WATER CORPORATION AND TCK EXCAVATIONS PTY LTD

Prosecution under section 8(2) of the Occupational Health and Safety Act 2000

1 Hunter Water Corporation ("first defendant") is a State owned corporation and conducts the business of providing water and wastewater services to almost half-a-million people from five local government areas - Newcastle, Lake Macquarie, Maitland, Cessnock and Port Stephens. TCK Excavations Pty Ltd ("second defendant") conducts the business of pipeline construction, cable laying, excavation and civil works. 2 In 2002 the second defendant was contracted by the first defendant to carry out excavation and the installation of approximately nine kilometres of iron cement lined pipes from Bob's Farm to Salamander Bay as part of the Tomago to Tomaree water supply pipeline. The pipes were supplied by the first defendant. Each pipe was approximately 5.6 metres long and weighed approximately 434kgs. 3 On 15 October 2002 a number of pipes were located on the face of an embankment next to a roadway that was Nelson Bay Road, Anna Bay. At approximately 6.55 pm on that day a sedan being driven by John de Waard, accompanied by his wife Mary de Waard, were travelling eastward towards Nelson Bay. The de Waard's car impacted with one of the pipes, which was on the roadway causing the de Waard's vehicle to career head-on into an oncoming vehicle, being a sedan, travelling in a westerly direction on Nelson Bay Road driven by Anne Meguyer accompanied by her husband, Graham Meguyer. 4 John de Waard suffered a fractured left iliac wing, head injuries and lacerations. His wife suffered multiple fractures including a compound fracture to the right wrist and lacerations to the left forearm and face and long-term disabilities. Anne Meguyer suffered multiple fractures including an open fracture to the right knee requiring total replacement and lacerations and her husband suffered multiple fractures and severe injuries requiring emergency surgery for re-sections and lacerations. 5 The first and second defendants were prosecuted by Inspector Ian Batty of the WorkCover Authority of New South Wales for breaches of s 8(2) the Occupational Health and Safety Act 2000. Section 8(2) provides: (2) Others at workplace

An employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. 6 The charge against the first defendant was that: The Defendant, being an employer at RMB 3887 Nelson Bay Road, Anna Bay NSW on 15 October 2002, did fail to ensure that persons other than employees of the employer and, in particular, John de Waard, Mary de Waard, Anne Meguyer and Graham Meguyer were not exposed to risks to their health, safety and welfare arising from the conduct of the employer's undertaking while they were at the employer's place of work and, in particular: (a) the Defendant failed to ensure that its contractors erected suitable barricades and warning signs to properly or adequately isolate the works from the general public and prohibit access to the works, including 300DN DICL ductile iron cement lined pipes, so as to avoid the pipes from coming onto Nelson Bay Road, Anna Bay. (b) the Defendant failed to ensure that its contractors implemented sufficient measures to secure and stabilise the 300DN DICL ductile iron cement lined pipes involved in the stringing and wrapping operations so as to prevent the pipes from coming onto Nelson Bay Road, Anna Bay. 7 The charge against the second defendant was that: The Defendant, being an employer at RMB 3887 Nelson Bay Road, Anna Bay NSW on 15 October 2002, did fail to ensure that persons other than employees of the employer and, in particular, John de Waard, Mary de Waard, Anne Meguyer and Graham Meguyer were not exposed to risks to their health, safety and welfare arising from the conduct of the employer's undertaking while they were at the employer's place of work and, in particular: (a) the Defendant failed to erect suitable barricades and warning signs to properly or adequately isolate the works from the general public and prohibit access to the works, including 300DN DICL ductile iron cement lined pipes so as to avoid the pipes from coming onto Nelson Bay Road, Anna Bay. (b) the Defendant failed to implement sufficient measures to secure and stabilise the 300DN DICL ductile iron cement lined pipes involved in the stringing and wrapping operations so as to prevent the pipes from coming onto Nelson Bay Road, Anna Bay. 8 The first and second defendants pleaded guilty to the charges. Evidence 9 The prosecutor tendered a bundle of documents that included the following: (1) Statements of agreed facts in both matters; (2) A statement of Inspector Batty that recorded his investigation of the incident; (3) A statement of Peter Harman of the NSW Police Crash Investigation Unit, Newcastle including colour photographs of the crash site; (4) A series of 23 colour photographs of the incident scene taken by Inspector Batty on 16 October 2002; (5) A topographical map of Nelson Bay Road in the vicinity of the crash site; (6) Expert certificate under s 177 of the Evidence Act 1995 relating to the injuries sustained by Mary De Waard, John De Waard and Anne Meguyer; (7) A prohibition notice issued to the second defendant by Inspector Batty on 16 October 2002 in relation to unsecured ductile iron pipes; (8) An Induction Record of the second defendant indicating that workers had been inducted into safety procedures; (9) A safety bulletin/instruction issued by the second defendant on 17 October 2002 advising employees of special precautions to be taken when "stringing/wrapping pipes"; (10) Handling and Installation Manual published by Tyco in relation to "Ductile iron pipe systems"; (11) First defendant's written procedure manual for managing contractors' site safety; (12) Second defendant's site safety rules summary; (13) Second defendant's site safety rules for excavation /trenching; (14) Second defendant's occupational health and safety assessment/hazard control/safe work method statement for pipeline construction; (15) Annexure G to contract between first and second defendant for construction of Tomago to Tomaree water supply pipeline - Part B; (16) Second defendant's "OHS&R Management Plan" for Tomago to Tomaree Water supply pipeline; (17) Second defendant's prior convictions of which there was one under s 15(1) of the Occupational Health and Safety Act 1983 in relation to an incident in May 1997; (18) First defendant's prior convictions of which there three: two under the 1983 Act and one under the 2000 Act in relation to incidents in May 1999, May 2001 and November 2001. 10 The prosecutor also tendered a statement of Patricia Jarman, Child Care Assistant, made to NSW Police on 20 December 2002. Ms Jarman witnessed the immediate aftermath of the accident. Ms Jarman had drawn a diagram of where she saw a pipe laying across the road. 11 For the first defendant the affidavit of Brian Joseph Grady was tendered. Mr Grady was the first defendant's Manager, Contracts. Mr Grady was not required for cross-examination. The first defendant also tendered a certified extract from the official meteorological records of the Commonwealth as to the prevailing weather conditions from 9 to 16 October 2002 in the Anna Bay area. 12 Mr Grady was a Chartered Professional Engineer (Civil) in charge of the first defendant's Contracts Group. Mr Grady described the first defendant's continuing commitment to occupational health and safety in the workplace and its policies and procedures for managing occupational health and safety. This included requiring any external contractor to Hunter Water to document, submit and implement a safety management plan which complied with the first defendant's specifications. Hunter Water's superintendent's representatives (who comprise part of the Contracts Group) would review the safety management plan prior to the commencement of work under external contracts. In addition in respect of each contract the contractor was required to submit to Hunter Water's superintendent's representative a safe work method statement(s) for the activities to be undertaken in performance of the contract. This procedure was followed in respect of the contract with the second defendant. Mr Grady deposed to the measures that were taken following the accident, which included the following: (a) During the evening of the Accident sand bags were appropriately placed to secure the pipes which had been placed there by TCK in the vicinity of the scene of the Accident. This was done by Hunter Water and TCK personnel. (b) In the days following the Accident all Hunter Water's contractors were alerted to the fact that a serious accident had occurred as a result of a pipe rolling accidentally or otherwise onto a public road. (c) I ensured that in the days following the Accident all persons responsible for contract management within the Contracts Group and also Hunter Water's Operations Group (which is responsible for all maintenance of Hunter Water's water, wastewater and transportation assets) were made aware of the occurrence of the Accident. (d) Hunter Water's standard tender documents were reviewed insofar as the occupational health and safety clauses thereof were concerned. Following that review and with effect from August 2003 amended occupational health and safety management clauses were adopted and incorporated in Hunter Water's standard tender documents ... (e) With effect from March 2004 Hunter Water's standard tender documents were amended to include specific provisions relating to the storage of materials, plant and equipment. All contracts awarded after March 2004 require all materials, plant and equipment located on site to be positioned and secured so as not to present a hazard to any person(s). Irrespective of the slope of surface and erection of perimeter fencing, pipes are required to be secured to prevent movement. Significantly all pipes not laid at the end of the day are to be secured in stockpile areas. This brings to an end a longstanding practice of contractors performing work under Hunter Water contracts being allowed to (consistent with industry practice) string pipes, ahead of daily requirements, along pipeline routes, which in a number of circumstances included along the route of a public road. (f) Hunter Water's standard tender documents insofar as this documentation relates to occupational health and safety has been further amended... (g) From March 2004 onwards I have alerted Contract Managers to the fact that safety management plans, risk assessments and safe work methods submitted by contractors must show that all pipes not laid at the end of the day are to be secured in stockpiles. (h) All Hunter Water Contract Managers and Contracts Inspectors in the course of reviewing the contractor's performance of a contract, conduct inspections to ensure that materials including pipes are adequately stored and secured. Where deficiencies are found concerning the storage and securing of materials including pipes are identified action is taken... (i) Hunter Water developed a Hazard Profile for the purposes of assisting contractors and Hunter Water staff with the identification of occupational health and safety hazards associated with the laying of pipeline for water and sewer maintenance and construction. This Hazard Profile now forms part of all tender documentation for external contracts involving pipe laying. In addition the Hazard Profile is drawn specifically to the attention of successful contractors during post tender meetings... (j) Hunter Water has adopted the WorkCover Authority Construction Hazard Assessment Implication Review (CHAIR) Design Tool as part of its guidelines for project management... (k) Hunter Water has adopted the NSW Government Occupational Health and Safety Management System Guideline 4th Edition which includes the accreditation of Contractor OH&S Managements Systems for high risk contracts... (l) Hunter Water continues to convene occupational health and safety management meetings at which particular regard is given to raising awareness in respect to risks and hazards including those identified in the Hazard Profile within the Contracts Group as well as the Operations Business Unit. (m) A contractor safety management systems manual has been adopted which draws together and improves upon all phases of Hunter Water's system for managing contractor safety... 13 Mr Grady stated that for the financial year ending 30 June 2005 Hunter Water expended approximately $240,000 net of GST on safety related courses attended by Hunter Water personnel. For the financial year ending 30 June 2006, expenditure relating to the provision of safety related courses for Hunter Water personnel was anticipated to exceed the amount of $240,000 net of GST. 14 Mr Grady stated in his affidavit: Hunter Water sincerely regrets the occurrence of the Accident and injuries sustained by Mr John De Waard, Mrs Mary De Waard, Mr Graham Meguyer and Mrs Anne Meguyer. Mr Smyth, Contract Manager, made frequent enquiries regarding the condition of the De Waards and Meguyers through the Newcastle Police Crash Investigation Unit. 15 For the second defendant the affidavit of David Bernard Paul was tendered. Mr Paul was a director of the second defendant. Mr Paul was not required for cross-examination. 16 Relevantly, Mr Paul deposed: ... The subject pipes were strung or laid out on 12 October, 2002. The sleeving of the pipes was carried out on 15 October, 2002 for TCK by an independent contractor, Martin O'Neill, and an employee, Terry Weatherspoon. Both men were very experienced and competent operators in respect of the laying out, sleeving and installation of the pipes, and have informed me that they did not consider the subject pipes to be in a position of peril when they laid them back down after wrapping them. ... After investigating the accident, I formed the opinion that the pipes came onto the road by human intervention. When laid in site conditions similar to those that existed at Anna Bay near Salamander (ie. a soft sandy base) the characteristics of the pipe referred to above, in particular the heavy weight, mean that the pipes tend to make 'their own bed' when placed in situ. There were no climatic or other factors likely to have caused the pipes to roll onto the road. I have been working in the industry for 18 years. I am aware that the system of work where pipes were left near to the position where they were laid was a common practise in the industry for at least the 18 years prior to the date of the offence. I am not aware of any situation, similar to the present, where pipes have ended up on a public road way causing vehicles to collide. ... Prior to the date of the offence, construction works were and are still carried out by TCK under a formal integrated Management System incorporating Quality Assurance; Occupational Health, Safety & Rehabilitation (OHS&R); Environmental Protection and Industrial Relations modules. The 'primary' procedure developed to implement TCK's OHS&R policy is Procedure No. P-09; Occupational Health Safety and Rehabilitation. Annexed hereto and marked with the letter "A" is a copy of the current Procedure P-09/ Revision 6. P-09 is a comprehensive procedure, covering overall OHS&R requirements / procedures for:

· Personnel / Management Responsibilities; · General Site Safety Rules; · Hazard Identification, Risk Assessment and Design of the Works; · Contract Specific OHS&R Documentation / Safety Management Plans; · OHS&R Document and Data Control; · Subcontracting and Purchasing; · Training / Induction of Personnel; · Material and Product Handling, Storage and Preservation; · Customer Supplied Products; · Product Identification and Traceability; · Inspection Measuring and Test Equipment; · Inspection and Testing; · Inspection and Test Status; · Control of OHS&R Issues / nonconformities; · Corrective and Preventive Action; · OHS&R Audits and Reviews; · Servicing / Operation and Maintenance; · OHS&R Records / filing; · Plant and Equipment Inspections and Maintenance; and · Rehabilitation. ("the Safety System") To implement the Safety System 'in the field' various Contract or Project specific OHS&R documentation was developed by TCK and its OH&S consultant which includes:

· A project OHS&R Management Plan or Site Specific Safety Management Plan (primarily) for use by Site Management and supervisory personnel; · Process based Safe Work Method Statements for use by all Site personnel, which includes employees and contractors; · Location Specific Traffic Control Plans for use by all Site personnel; · Topic Specific Safety Bulletins for use by all Site personnel, particularly employees and contractors, to address specific OHS&R issues arising during the course of the works; · A Contract specific OH&S Inspection and test plan for use by the Project Manager and site Supervisor; · A Contract specific Organisation / Emergency Contacts / Incident Management Plan for use by all Site personnel, issued and explained as part of initial site specific inductions; · A Contract specific Statement of Personnel Roles and responsibilities for use by all Site personnel, issued and explained as part of initial site specific inductions; · A Site Safety Rules Summary is issued and explained as part of the induction. TCK has always maintained an absolute commitment to safety. TCK commenced the implementation of its OHS&R Management System in 1994. The system has evolved continuously since that date. In particular TCK's Management System was accredited for OHS&R by the Sydney Water Corporation (to 2nd Edition Guidelines) in April 1998 and subsequently by the NSW Department of Public Works and Services (to 3rd edition Guidelines) in March 2000. Copies of the abovementioned accreditations are annexed hereto and marked collectively with the letter "B". TCK is currently under final preparations for registration against the 4th Edition Guidelines. ... Copies of the Safety System are provided to each of TCK's main construction sites so that TCK's employees are able to carry out their duties in accordance with the procedures contained within the Safety System. It forms part of the induction process for TCK employees and contractors. ... TCK is committed to OH&S training, particularly for site personnel. The elements of safety training for site personnel with TCK are as follows: (a) new employee induction procedures;

(b) ensuring new employees have completed the WorkCover general OH&S induction training;

(f) external training and obtaining operator tickets. ... In summary the following changes have been made as a result of and / or after the incident:- (a) Special precautions for laying out ("stringing") and securing of pipes are now incorporated in all applicable SWMS's;

(b) SWMS's are now formally reviewed and verified or amended by workers during their initial Site induction; (c) Formal daily pre-start hazard / risk assessments by workers are now carried out and recorded on Daily Records Sheets;

(d) Preparation and implementation of formal OHS&R Inspection and Test Plans are now mandatory for all projects, resulting in formal daily inspections by the Site Supervisor and weekly inspections by the Project Manager (rather than weekly and monthly inspections respectively);

(e) A section to cover "Consultation with Workers" has been added to Project OHS&R Management Plans;

(f) A section / matrix to cover compliance against Government OHS&R Guidelines has been added to Plans;

(g) The section on "Accident and Dangerous Reporting" has been made more prescriptive;

(h) A prescriptive induction topics form is now prepared for each contract; and

(i) A weekly records checklist is now prepared for each contract. ... TCK is a small private company and essentially a family operated concern. Myself and the other directors, Tom Kiely, Colin Kiely and Keith Kiely are all related. In terms of the ownership, the company supports the extended Kiely family... TCK at the moment has 6 other permanent employees and the business directly supports those employees and their families. At different times when there is more work on, TCK can have up to a further additional 6 permanent employees. At the present time TCK does not have much significant work in hand by way of successfully tendered for projects on its books for the future. TCK has been actively tendering for work, but has not been successfully securing those tenders. At the present time the only work TCK is carrying out is by way of sub-contract work for one of TCK's competitors. The fact that TCK has been the subject of this prosecution will also negatively impact on our ability to successfully win tenders. There is a section on all tender documents where you are required to nominate any recent WorkCover prosecutions. A fine in these proceedings will have an adverse effect on TCK's ongoing ability to continue to undertake contract work from TCK's regular clients. As can be seen from above these clients are all large government agencies who oversee public works programs and there is a need for TCK to provide large security deposits, between 5-10% of the overall contract value, for contract works by way of bank guarantee. In order for TCK to be able to provide the necessary bank guarantees, the bank requires TCK to have secured the guarantee by way of cash deposit. These bank guarantees can range between $ 50,000 and $ 350,000 in value, and TCK can at any given time have multiple bank guarantees outstanding securing contract works. In addition, on completion of any subject works, only 50% of the bank guarantee is released back with the other 50% remaining held for usually a further 12 months to secure the relevant contractual defects liability period. Myself and the other directors will have to try and take out a loan to meet any fine. This will impact on our respective families and will likely mean that our family homes will need to be mortgaged as security. Myself and my fellow directors of TCK deeply regret the incident and the injuries sustained by Mr & Mrs De Waard and Mr & Mrs Meguyer . I maintained contact with Pat Smyth of HWC to receive regular reports on their condition. The incident is very upsetting and distressful for us all. My motivation to drive the business and continue to 'win' new tenders waned in the aftermath of the accident. Agreed facts

17 I have already referred to the immediate circumstances surrounding the crash on 15 October 2002, such information having been taken from the agreed facts. Whilst there were two statements of agreed facts they do not differ in any material respect in relation to the relevant circumstances that existed prior to the crash. The following additional information I consider relevant is taken from the statement relating to the first defendant: The Defendant was aware that T.C.K. had activity specific site safety rules for excavation/trenching that identified where the general public passed by such work there was a risk of injury or death as a result of being struck or crushed by construction materials. As a minimum requirement the T.C.K. site supervisor was to establish a suitable barricade, warning signs etc, to properly isolate the works from the general public. Particular care to be taken at times when the construction area was unattended to ensure isolation of and to prohibit access to the whole of the works, including machinery and materials. However there was no activity specific site safety rule for the isolation, security and stability of pipes during the "stringing and wrapping" operations. Between 3 and 11 October 2002 pipes were delivered by Tyco Water Pty Ltd ("Tyco") to the T.C.K. stockpile and storage area approximately 100 metres north of RMB 3887 Nelson Bay Road, Anna Bay. A stockpile generally consists of one (1) or two (2) loads of pipes, each load comprising fifty-four (54) pipes. The stockpiles were isolated from the roadway and surrounded by plastic mesh fence supported on star pickets. T.C.K. would then "string" the pipes by taking them individually from the stockpile and placing them end to end along the proposed route of the section of pipeline to be constructed. The pipes were then sleeved/"wrapped" in green polyethelene (sic) to protect the pipes during the excavation and installation process. On 12 October 2002 Martin O'Neil sub-contractor and Terry Weatherspoon, Scott Simons and Colin Kiely employees of T.C.K. were engaged in undertaking "stringing and wrapping" operations. T.C.K. had traffic control measures including stop/go signals and 40klm speed work zone in place on Nelson Bay Road to allow stringing and wrapping operations to proceed. Five (5) pipes were placed together on an embankment in front of RMB 3887 Nelson Bay Road, Anna Bay. The embankment was approximately 25 metres long and 6 metres wide and rising to an approximate height of 1.5 metres above the roadside. On 12 October 2002, Jim Park the Defendant's Contracts Inspector drove past RMB 3887 Nelson Bay Road, Anna Bay but did not undertake an inspection of the work at RMB3887 Nelson Bay Road, Anna Bay where the pipes were situated on the embankment. On 14 October 2002 Pat Smyth the Defendant's Project Manager also drove past the work but did not undertake an inspection. On 15 October 2002 the pipes in front of RMB 3887 Nelson Bay Road, Anna Bay were "wrapped" and repositioned on the face of the embankment. Three (3) of the pipes were positioned behind each other and parallel to the roadway whilst two pipes were situated at the western end of the three pipes at an angle of approximately 45 degrees. T.C.K. had traffic control measures in place again during the operations. On 15 October 2002, subsequent to covering the pipes O'Neil stated that he instructed Weatherspoon to place a half brick under the three (3) pipes on the embankment because it would look good. Mr O'Neil informed the Inspector he put the pipes in a spot that did not need securing. No other measures were employed to prevent access to the works or secure and stabilise the pipes. T.C.K. had available star pickets, portable plastic mesh fencing and gravel or sand bags for that purpose but did not use them. Pursuant to the contract T.C.K. was required to personally superintend or have a competent representative present on site during the work. Colin Kiely was the T.C.K. site supervisor in control of the work on 15 October 2002, ("the day of the accident") but absented himself from site at approximately 4.00pm. O'Neil and Weatherspoon remained on site to about 5.00pm to complete wrapping the five (5) pipes in front of RMB 3887 Nelson Bay Road.

18 The particulars of the charge relating to the first defendant referred to its failure to ensure that its contractors erected suitable barricades and warning signs, etc., and its failure to ensure that its contractors implemented sufficient measures to secure and stabilise iron cement lined pipes, etc. The particulars of the charge against the second defendant referred to the failure to erect the warning signs and barricades and the failure to secure and stabilise the pipes. 19 The pipes on the embankment adjacent to where at least one pipe came to be on the roadway weighed some 434 kgs and were 5.6 metres in length. The grass embankment consisted of soft sandy soil and rose to an approximate height of 1.5 metres above the roadside. The embankment sloped towards the road. Three of the pipes that were on the embankment were held in place by a small half brick. Another pipe on the embankment was not secured by any means. The fifth pipe that caused the crash was on the side of the road but still extending onto the roadway itself. 20 Having looked carefully at Senior Constable Harman's report including the colour photographs, as well as the photographs taken by Inspector Batty the following day, it is evident to me that it was obvious that there was a risk a pipe or pipes could roll down the embankment onto the roadway and become a serious hazard to road users. I note the soil was soft and sandy and the weight of the pipes would have, to an extent, embedded themselves in the soil. Further, that at least three of the pipes were held in place by a small half brick. But in my opinion, it was possible for a pipe to have become dislodged and roll onto the road either unaided or as a result of an act of vandalism. 21 Even if I were to accept that it was an act of vandalism that caused the pipe to be on the roadway - and I am inclined to take that view - it may reduce somewhat the culpability of the two defendants but it does not excuse them. That such vandalism might occur was reasonably foreseeable, especially when there was evidence that other, albeit different, acts of vandalism had already occurred at other locations of the pipe laying operation. Removing a small brick or even a sandbag to allow the pipe to be pushed down the embankment would not have presented an insurmountable physical challenge given the sloping embankment. 22 It is not that the actual injury and its cause need to be foreseeable. The existence of a reasonably foreseeable risk to health or safety will result in the offence being more serious in nature: Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [82]. Five pipes weighing nearly half a tonne each perched on the top of an embankment that sloped towards a roadway without adequate barricades to prevent the pipes rolling forward, presented not only a reasonably foreseeable risk but an obvious risk to health and safety. 23 If there are simple and obvious measures available to avoid a risk to health and safety and the measures are not implemented the failure to do so may increase the seriousness of the offence. It would not have been a simple task of ensuring the pipes in question did not give rise to a risk to health and safety. It would seem from the photographs that the embankment adjacent to the roadway where the pipes were situated was reasonably narrow, being between the roadway and a fence that would appear to enclose private property. Chocking the pipes with sandbags would not have ensured against any risk and even the use of star pickets driven into the ground (which was soft and sandy) to retain the pipes may not have been adequate against acts of vandalism. The solution arrived at by the first defendant was that during the day whilst work is progressing pipes are secured to prevent movement and at the end of each day pipes are returned to the stockpile and fenced off. I note that the stockpile area was only 100 metres north of where the accident occurred. 24 As recently reiterated by the Full Bench in Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17]-[18], although the damage or injury does not, of itself, dictate the seriousness of the offence or the penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences. In such a case, the occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk. 25 In this case the injuries to the occupants of the two vehicles were very serious. They provide a very clear indication of the seriousness of the risk of leaving inadequately secured pipes sitting on an embankment next to a roadway. In my opinion, a moment's consideration directed to the question of risk of a pipe rolling onto the roadway would have alerted any reasonable observer to the seriousness of the risk and of the need to properly secure the pipes. Mr Paul's statement that in 18 years he had not heard of a pipe ending up on a roadway causing vehicles to collide is little comfort to those that suffered injury and detracts not at all from the fact that the location of the pipes on an embankment in front of RMB 3887 Nelson Bay Road, Anna Bay presented an obvious risk to health and safety. 26 The existence and implementation of settled safety procedures and instructions is a factor that mitigates the objective seriousness of the offence: see Warman International Ltd v WorkCover Authority of NSW (1998) 80 IR 326; WorkCover Authority of NSW (Inspector Riley) v Broken Hill Proprietary Company Limited (1998) 83 IR 427; Department of Mineral Resources of NSW (Chief Inspector Bruce Robert McKensey v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8; WorkCover Authority of New South Wales (Inspector Larkin) v Rice Growers Co-operative Limited (2002) 120 IR 123 and WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Anor (2000) 95 IR 383. In this case it is evident from the policies and procedures that both defendants had a high regard for safety. It seems, to me, however, that complacency had, on this occasion, replaced the constant vigilance necessary in relation to the security and stabilisation of pipes strung alongside public roadways. 27 In relation to general deterrence, that is deterring other persons from committing similar offences, it was stated in Inspector Gregory Maddaford v Graham Gerard Coleman & Anor (2004) 138 IR 21 at [80]: [80] Firstly, the Chief Industrial Magistrate underrated the importance of general deterrence in determining the level of penalty. The Court in WorkCover Authority v Schrader held at [69]-[70]:

The purpose of the Act is well known and often referred to in judgments of this Court. In my view, it is important, when considering notions of general deterrence, that the Court be cognisant of the fact that the Act is for the benefit of the public generally and particularly employees at work. The goal is the prevention, deterrence and punishment of breaches of health and safety requirements. The notion of general deterrence is well understood. However, in my view, and in accordance with what was stated by the Full Court in Capral Aluminium (at [72] - [74]), in cases such as this, it should be reiterated that "one of the main purposes of punishment, ... is to protect the public from the commission of such crimes by making it clear to the offender and to other persons with similar impulses that, if they yield to them, they will meet with severe punishment" (emphasis added): R v Rushby [1977] 1 NSWLR 594 at 597 per Street CJ citing R v Radich [1954] NZLR 86 at 87 (adopted by this Court in Capral Aluminium at [72]).

Further, I would note that it has been described as "the fundamental duty of this Court" to ensure that any penalty imposed is severe enough to "compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace": Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 adopted in Capral Aluminium (at [74]). See also the Full Bench decision in Inspector Ian Lancaster v Burnshaw Constructions Pty Ltd [2002] NSWIRComm 319. 28 It is appropriate that the Court includes an element in the penalties for general deterrence. 29 In relation to specific deterrence I do not consider the risk of either defendant re-offending is very high. Both defendants have a strong commitment to occupational health and safety and both have taken appropriate measures, especially the first defendant, to ensure there is no re-occurrence of the risk. 30 There are a number of relevant subjective considerations. In relation to the first defendant an early plea of guilty was entered which should attract a discount of 25 per cent for its utilitarian value. The first defendant also cooperated with WorkCover in its investigation of the accident. 31 The first defendant has a number of prior convictions but I do not regard this latest offence as indicating a propensity to continue to re-offend. As Mr Warren of counsel for the first defendant submitted, the prior offences occurred in quite different circumstances to the latest breach and display no pattern of disregard by the first defendant for its obligations under the Act. The first defendant has also gone to very commendable lengths following the accident to improve its occupational health and safety systems. 32 The first defendant also expressed its regret for the accident and the injuries suffered by those in the motor vehicles. I accept the expression of regret as sincere.

33 In relation to the second defendant it, also, entered an early plea of guilty and is entitled to a 25 per cent reduction on any penalty. The second defendant also cooperated with WorkCover and took appropriate steps to improve its systems and procedures relating to occupational health and safety following the accident. The second defendant has one prior conviction and whilst that means the maximum penalty is increased, the prior offence does not, in my opinion, indicate a propensity to re-offend. 34 I also accept Mr Paul's expression of deep regret for the accident and the injuries sustained as sincere. 35 The second defendant is a small family owned and operated firm and I accept that a substantial fine will have an adverse effect on its ability to undertake work. Mr Paul's evidence was that the directors of the second defendant would need to take out a loan to meet any fine and this, in turn, could mean an adverse impact on the directors' families. I have taken these matters into consideration in determining an appropriate penalty. 36 The principle of parity arises for consideration. In making an assessment as to penalty, the Court must consider the respective contributions of the two defendants to the creation of the risk: McDonalds at 437. In the present case, the prosecutor contended that the second defendant was more culpable than the first defendant. Not surprisingly, the first defendant agreed. 37 The charges against the two defendants were very similar. Nonetheless, I consider there is substance in the proposition that the objective seriousness of the offence committed by the second defendant was greater than that committed by the first defendant. It was the second defendant's direct responsibility, at the end of the working day on 15 October 2002, to ensure that the pipes were properly secured so that there was no chance they might roll down the embankment, aided or unaided, and create a risk to health and safety on the roadway. There was evidence that managers of the first defendant had driven past the pipes at RMB 3887 Nelson Bay Road, Anna Bay on 12 and 14 October 2002 and took no action in relation to the location of the pipes. Nevertheless, the second defendant may be regarded as having a greater responsibility in relation to the security of the pipes on 15 October. 38 However, having regard to all of the factors - objective and subjective - I am required to take into consideration, which is the approach dictated by the decision in Markarian v R [2005] NSWIRComm 25, I consider the same amount of penalty should be imposed on both defendants. 39 The maximum penalties in respect of the two defendants are $825,000. I consider an appropriate penalty in both cases is $120,000. Orders

40 The Court makes the following orders: Matter No IRC 6120 of 2004 - TCK Excavations Pty Ltd (1) The offence is proven and a verdict of guilty is entered. (2) The defendant is convicted of the offence as charged. (3) The defendant is fined an amount of $120,000 with a moiety thereof to the prosecutor. (4) The defendant shall pay the prosecutor's costs and disbursements of the proceedings in an amount of $13,005. Matter No IRC 6121 of 2004 - Hunter Water Corporation (1) The offence is proven and a verdict of guilty is entered. (2) The defendant is convicted of the offence as charged. (3) The defendant is fined an amount of $120,000 with a moiety thereof to the prosecutor. (4) The defendant shall pay the prosecutor's costs and disbursements of the proceedings in an amount of $13,005.

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