Consideration
19In a consideration as to penalty, the Court first assesses the objective seriousness of the offence as charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474):
In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ...
And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]:
In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ...
20The charges faced by each defendant arise out of the same incident. The first defendant, R&D Panelform (NSW) Pty Limited, is charged with breaching the provisions of s 8(1) and s 8(2) of the Act in putting at risk both its employees and other sub-contractors's employees and members of the public at its worksite. The second defendant, Denis Charles Vella, the director of the corporation, is also charged with breaching the provisions of s 8(1) and s 8(2) of the Act.
21R&D Panelform was incorporated on 1 November 2006. Mr Vella, the second defendant, while the corporation's sole director is also the company secretary and its sole shareholder. The company was first formed some 25 years ago and its speciality was the casting (in concrete) and erection of tilt-up panels which panels are used in the construction of the walls in commercial and industrial buildings.
22However, a Limited Partnership, known as R&D Panelform Limited Partnership, also was formed between R&D Panelform (NSW) Pty Ltd and Mr Vella on 19 January 2007. R&D Panelform (NSW) Pty Ltd, the first defendant, is named "general partner" in the Partnership Agreement and Mr Vella is named the "limited partner".
23All contracts were written with the limited liability company (that is, through the partnership agreement). The first defendant had been sub-contracted by Denham Constructions Pty Ltd ("Denham"), the principal contractor, to form and erect pre-cast concrete panels. These precast panels were erected as room walls within a complex. The partnership company then sub-contracted Gillespies Cranes Nominees Pty Ltd ("Gillespies") to provide the crane and crane crew required to lift and place the pre-cast concrete panels into place at the site.
24To enable the crane to lift and erect the pre-cast panels the engineers designed the erection of an under-slab propping system which was to be placed under each point on suspended slabs at which the crane was to be set up. The under-slab propping system required a pair of Megashore backing-props to be erected under the point on the suspended slab on which each of the four outriggers of the crane were to be placed so that the weight on each outrigger would be borne directly by the pair of the Megashore backing-props.
25It was essential to the design of the propping system that each outrigger be placed directly over the pair of props as placed under the slab.
26However, Denham Constructions, the principal contractor, discovered that an electrical pit and plumbing pipes under the slab meant the crane would not be placed on the original pin points and yellow markings. A new position was found. New markings were made but in the same yellow colour which was already on the slab.
27R&D was on notice that the "system" for the placement of the crane as planned by Denham Constructions needed amendment. Mr Nehme of R&D was aware the set up marks initially put in place by Denham Constructions at one of the other units were erroneously marked and the markings on that set-up were only corrected after he brought the error to Denham Constructions' attention. However, Mr Vella, who was responsible for communicating with Denham Constructions in relation to the project, received no communication in relation to the new plan for re-location and made no inquiries about that change, although he knew there was to be an amendment to the original plans.
28Mr Goronwy, site foreman for Denham re-marked the slab. The slab, therefore, had two sets of yellow markings with two sets of points (mickey pins). Mr Nehme, the erection supervisor for R&D Panelform was shown the set up points by the site foreman, Mr Goronwy . Mr Nehme then guided the crane onto markings. The points onto which each outrigger was lowered was neither directly aligned with, nor supported by, a set of under-slab backing props.
29No check was undertaken by Denham Constructions or R&D Panelform (NSW) Pty Ltd, nor Mr Vella, that the outriggers were properly placed. No surveyor nor independent engineering report was required although the SWMS of the first defendant and the crane operator required such inspections.
30After set-up, the crane weighing 250 tonne (plus the weight of the outriggers) was used to lift some of the pre-cast concrete panels into place. On 26 September 2008, at approximately 10.08am in beginning a new lift, the crane's right outrigger pierced the concrete slab. The crane front fell to the ground. A second collapse occurred and the rear of the crane fell through the slab.
31There was the risk of serious injury and/or a fatality associated with the collapse of a crane through the suspended slab. The risk of this hazard was specifically known to the defendants well prior to the incident. The markings had also been a problem in a prior placement of the crane. No steps had been taken to amend the practices or to introduce any controls prior to the incident.
32The system of work adopted therefore required the first defendant to supply and erect concrete panels and to supervise Gillespies Cranes employees to make sure that the crane was correctly set up on the marks. Denham was responsible for marking the top of the slab with "pin points" and paint to indicate the set-up positions; the under-propping of the slab; ensuring that the position of the props were aligned directly under the pinpoints; painting the marking for the set up points on top of the slab, informing R&D where the set-up positions for each outrigger were and when the set-up was ready for the crane to move into position.
33Denham did not have any system for checking that the crane had been set up on the correct pin-points. It had refused both a check required by R&D for pin holes to be drilled into the slab and it failed to get an engineer's clearance as R&D's SWMS required by the crane operator (who had also wanted to use and was refused larger pads over the prop sites). It also suggested the outrigger be placed on steel plates and Denham and its engineers rejected this proposition.
34The charges cover the risk to not only R&D's employees (s 8(1)), but the risk to all persons on this busy industrial site (s 8(2)).
35Further, given there was prior knowledge held by each defendant that such marking points had caused confusion and in a circumstance where there was a prior practice by the defendant corporation to drill spot holes (a procedure refused by Denham) there was in such a circumstance a foreseeable element to the offence which makes the offence more serious. The Court, having sighted photographs is of the view the risk to safety was obvious. That element also makes each offence more serious in nature.
36The availability of simple and straightforward steps to remedy the defects in the system in place is also relevant to the consideration of the objective seriousness of the offence ( WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Limited, unreported decision of Schmidt J dated 25 February 1994). There were such steps readily available. Remedial activity after the incident is indicative of the fact a safe system of work was readily available and practical.
37The gravity of the potential risk to safety flowing from a breach is relevant as a measure of gravity of the breach and the culpability of the defendants ( Lawrenson Diecasting (at 474)). The potential risk of significant injury or death was not a remote possibility. There was a high risk to the safety of any person at work being required to work near this crane. The fact that no person was injured is good fortune - the risk was significant.
38This was a serious breach of the Act by the corporation and its controlling mind, Mr Vella, and the risk was more than foreseeable, it was obvious.
39I am satisfied the evidence establishes R&D did not have any system for checking the spots on which each of the outriggers of the crane was placed, were actually aligned with the under-slab props. R&D left this to Denham and presumed once the crane outriggers had been placed on the marks on top of the slab, the crane's location was correct, the outriggers were propped and it was safe to commence lifting.
40The second defendant, Mr Vella, was involved in the design of the system of work to be followed at the site and he approved the SWMS for the site in his capacity as Managing Director and was responsible for communication in relation to the site between Denham and the corporation; Mr Vella, knew about the need for the change in location of the props prior to the incident but was neither provided with, nor sought, any information regarding the change.
41However, there was a contribution to the risk by other parties. Denham Corporation was responsible for the site, under-propping the slab and ensuring the alignment of props and outriggers. Denham was present during the placement of the crane, or at the very least shortly thereafter. Denham did not interfere with the placement of the crane.
42The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [71] - [77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]:
... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example , Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40] - [43] ) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.
43The WorkCover Authority concedes that the site was generally well managed and that R&D generally had good occupational health and safety systems and was conscientious in the application of those systems. R&D's occupational health and safety systems have been reviewed and improved by an occupational health and safety consultant subsequent to the accident.
44Further, R&D have worked in a dangerous industry for a long period without recording any conviction under Occupational Health & Safety legislation. R&D had recognised the risk that arose in the unusual event of working on a suspended slab and adopted a procedure to deal with the risk. However, on this site that procedure was rejected by Denham. R&D did not take further steps to ensure the alignment of the props and outriggers.
45While significant steps have been taken by the corporate defendant under Mr Vella's instruction after the incident, to minimise and attempt to eliminate risk, an element of specific deterrence is factored into penalty against Mr Vella and the corporate defendant. Each continues to operate this most successful business.
46As to general deterrence, this was a serious offence that could have led to a major tragedy. Those handling heavy machinery on a construction site must once more be reminded that every detail of such an operation must not only be planned, but when that plan is amended, the identification of hazards in the new SWMS must also be reviewed. Some of the necessary checks were in place in the original SWMS but they were not reviewed nor enacted. A simple method of spot checking after the placement of the crane would have revealed the potential of a most serious of industrial incidents.
47There was no clear marking of the new alignment points. It is unclear how the confusion between Mr Goronwy and Mr Nehme occurred but it was a failure to properly communicate and that led to disastrous consequences. The industry must again be warned that amendments to SWMS require a review of safety features and the identified safety steps in a work method must be enacted on the work site.
48Pursuant to s 21A(3)(k) of the Crimes (Sentencing Procedure) Act 1999 the defendants are to have their pleas of guilty taken into account in the assessment of penalties as factors in mitigation. T he defendants are entitled to a discount on each penalty flowing from the utilitarian benefit of each plea in accordance with the principles outlined in the guideline judgment of the Court of Criminal Appeal in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR104 . The utilitarian value of the plea is offered in recognition of the practical advantages to the administration of justice. It is not to be exercised on the basis of mitigation of culpability (see Regina v Dib (2003) NSWCCA 117 at [3] - [8]).
49It is conceded by the prosecutor the 25 per cent allowance outlined in R v Thomson ; R v Houlton , whilst not binding on the Court, continues to provide guidance as to the maximum discount that should be allowed for the utilitarian value of a plea of guilty. There is some utilitarian benefit from the pleas in this case, albeit they were not early pleas. The issue is the quantification of that benefit. The benefit gained is not, however, the full benefit that would have flowed from the entering of early pleas. The defendants shall have the benefit of a 10 per cent discount for the entering by each of a plea of guilty but at a late stage in the proceedings and just before the listed hearing date.
50The defendants have no prior convictions and the prosecutor acknowledges that the Court may extend to each of the defendants the leniency normally extended to "first offenders".
51The defendants co-operated with the WorkCover Authority.
52Mr Vella came to Australia as a child of immigrant parents and has worked his way up from his parent's operations as market gardeners. He, through the partnership and the corporation, controls work performed by some 40 tradespersons and labourers and apprentices. The corporation is the major tilt up panel operator in NSW and has expanded its operations into Victoria and Queensland. Effort is made to employ staff from local communities. Local charities, when the corporation has a presence in the area performing major construction work, are supported.
53Both defendants are also fine corporate citizens. Mr Vella, on behalf of the defendant corporation, has expressed his personal remorse and that of the corporation and the amended SWMS are now rigorously adhered to on all sites as a demonstration of their determination to not re-offend.
54As to penalty, the defendants submitted they should be viewed by the Court as one employer for the purposes of penalty. The employer of the employees on site was under the partnership agreement. It was further submitted by the defendants the proper approach is to regard the offences in respect of both defendants as two offences and to apply a penalty as if it was two offences under the Act (s 8(1) and s 8(2)), not four offences. The Court would then impose the penalty on the company alone or on both the company and Mr Vella (by 50/50 division of each penalty) recognising that the penalty should not be imposed twice for the same offence and also recognising that the maximum penalty upon an individual with no prior conviction, is one tenth of the maximum penalty for a corporation.
55However, the prosecutor submitted it is not open on the evidence for the Court to sentence the defendants before the Court as if only one legal entity were before the Court (see Clode v Barnes [1974] 1 WLR 544 ; Linfox Resources Pty Ltd v R [2010] VSCA 319; Inspector Green v Big River Timbers Pty Limited and Inspector Green v Big River Timbers (Veneer) Pty Ltd [2006] NSWIRComm 279).
56Reliance is placed by the defendants on the reasoning in JT & LC Tippett Pty Limited and RD & LF Tippett Pty Ltd v WorkCover Authority of New South Wales [2008] NSWIRComm 177, where the Full Bench observed at [99]:
Although the defendants have been found guilty of the same offence that was in the same terms and arose out of the same circumstances, their offences relate to corporate co-offenders who are in a partnership that is the employer. There is, therefore, a critical factual difference to that found to exist in Big River Timbers : in this case, the issue of totality does not arise because, as a result of the partnership, there is but one employer entity in law. We propose to proceed to sentence on this basis.
However, it appears from the judgment in Tippett that the Full Bench was not referred to the decision of the High Court in Bishop v Chung Brothers (1907) 4 CLR 1262; [1907] HCA 23 or to Clode . I do not agree with the approach adopted in Tippett (that is, a partnership is a singular legal entity if it is the employer). In Bishop v Chung Brothers (1907) 4 CLR 1262; [1907] HCA 23, the question raised on appeal was whether the defendants both could be lawfully informed against and convicted in their firm's name. The Court convicted "Chung Bros" and gave one fine against "Chung Bros" for a breach of the Factories, Shops and Industries Act 1905. It was held on appeal (by majority) that the court at first instance had to find who "the individuals were that committed the offence" (reliance was placed on the reasoning in R v Littlechild LR6 QB 293). The error found was that the defendants were convicted jointly and should have separately been convicted and fined.
57Clode v Barnes (per Lord Widgery CJ at 547) considered the circumstance where a partner in a car sales business, who did not himself apply the false description to a car the partnership then sold (he being the partner who was working only in administration) was held to be jointly liable through the partnership. He was independently convicted and fined.
58Here the corporate defendant and the individual formed a partnership with limited liability. That partnership purported to be the employer of the employees on this site. WorkCover have not prosecuted the partnership but the two partners within the partnership. They are prosecuted in their respective capacities as an employer of workers employed " on behalf of the partnership" (cl 11.4(a) of the Partnership Agreement). The pleas of guilty, entered on behalf of each of the defendants to the charges constitute an admission of the legal elements of each offence, including employment, and are an acknowledgement by each defendant of their separate roles as an employer of workers who were employed "on behalf of the partnership " pursuant to the terms of cl 11.4 (a) of the Partnership Agreement and working at the site on 25 and 26 September 2008 .
59In Tippett on which reliance is placed by the defendant, the Full Bench held there was only one employer and the corporation and the family trust were but one. However, they were separately convicted of contravening s 8(1) of the Act. The penalty was subjected by the Full Bench first to the "unitary" approach with one overall penalty then allocated 50/50 by the Court as a penalty to be borne by each of the defendants who were trading in partnership.
60The facts and circumstances before this Court gave rise to two charges, each in similar terms, alleging contraventions of ss 8(1) and 8(2) of the Act against each defendant partner. The issue is, given the partnership was the vehicle through which the employment was enacted, can Mr Vella and the corporation through a partnership which was the sub-contractor on site performing the task giving rise to the breach and in a circumstance where each has admitted employment be viewed because of the partnership as one employer. In Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; 239 CLR 531 the "plurality" (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.) state at [10] of their joint judgment that:
... The obligation [imposed] upon the employer [by section 15 (1) of the 1983 Act] is expressed in terms personal to that employer. It is the employer who must ensure the health, safety and welfare of employees at work. The obligation is of the kind of non-delegable duty spoken of in Kondis v State Transport Authority [citation omitted]. It is not expressed in terms of the standard recognised by the common law, to take reasonable care. It is higher. So much is evidenced from the requirement "to ensure" the health, safety and welfare of employees or that persons are not exposed to their health and safety at the place of work [i.e. section 16 (2) of the 2000 Act. Exclusion of the common law standard is confirmed by the terms of the defences provided by s 53 ...
61In Kondis v State Transport Authority [1984] 154 CLR 672 Mason J (at 687 - 688), with whom Deane and Dawson JJ agreed, observed that the relationship between employer and employee is, beyond serious challenge, a relationship which generates in the employer a 'special responsibility', or duty to see that reasonable care is taken with respect to its employees:
That such an element exists in the relationship of employment is beyond serious challenge. The employer has the exclusive responsibility for the safety of the appliances, the premises and the system of work to which he subjects his employee and the employee has no choice but to accept and rely on the employer's provision and judgment in relation to these matters. The consequence is that in these relevant respects the employee's safety is in the hands of the employer; it is his responsibility. The employee can reasonably expect therefore that reasonable care and skill will be taken. In the case of the employer there is no unfairness imposing on him a non-delegable duty; it is reasonable that he should bear liability for the negligence of his independent contractors in devising a safe system of work. If he requires his employee to work according to an unsafe system he should bear the consequences.
62Here I accept each partner was the employer as admitted and each carries a personal non-delegable duty to ensure a safe work site.
63On the authorities, I accept the criminal liability for breaches of the Act attaches to each of the named defendants both of whom through the partnership were carrying on the business jointly (as partners) and the liability carried by partners is personal and individual to each defendant partner.
64Further, the duties owed under s 8(1) of the Act and the duty owed under s 8(2) of the Act, whilst co-extensive, are duties owed to different classes of person. However, a simple comparison of the particulars as between the s 8(1) charge brought against each defendant discloses an overlap of criminality. The overlap in criminality will be reflected in an adjustment by the Court of the "total penalty" to be imposed on each of the defendants.
65The differing roles of each defendant and therefore the differing levels of criminality are also to be taken into account and properly reflected in the respective penalties to be imposed ( Signanto v The Queen (1998) 194 CLR 656 at 670).
66Therefore, I am of the view in the circumstances each defendant owed a duty both to their employees and others at their worksite. Each defendant was an employer. Each are distinct persons and not one legal entity and are independently liable for each offence committed in the name of the partnership. There will be differences in sentencing outcomes which will reflect the differences in the circumstances between the co-offenders. There is a difference in the maximum penalties applicable in that the corporate defendant is liable to a maximum of $550,000 in relation to each offence and the individual defendant is liable to a maximum of $55,000 in relation to each offence.
67While I accept there are mitigating factors which must be given consideration, penalty must reflect the seriousness of these offences.
68In IRC1060 of 2010 in the charge against R&D Panelform (NSW) Pty Limited under s 8(1), I find the defendant guilty.
69The defendant is fined in the sum of $180,000.
70In IRC1061 of 2010 in the charge against R&D Panelform (NSW) Pty Limited, the charge under s 8(2), I find the defendant guilty.
71The defendant is fined in the sum of $180,000.
72Under the principles of totality, as each charge relies upon similar facts, the totality of the penalty will be reduced to $200,000.
73Therefore, in IRC1060 of 2010, the corporate defendant is fined in the sum of $100,000 with a moiety to the WorkCover Authority of NSW.
74Therefore, in IRC1061 of 2010, the corporate defendant is fined in the sum of $100,000 with a moiety to the WorkCover Authority of NSW.
75In IRC1059 of 2010 in the charge against Denis Charles Vella under s 8(1) of the Act, I find the defendant guilty.
76The defendant is fined in the sum of $35,000.
77In IRC1058 of 2010 in the charge against Denis Charles Vella under s 8(2) of the Act, I find the defendant guilty.
78The defendant is fined in the sum of $35,000.
79In consideration of the totality of the criminality, the individual defendant is fined in the sum of $50,000.
80Therefore, in IRC1059 of 2010, the defendant is fined in the sum of $25,000.
81Therefore, in IRC1058 of 2010, the defendant is fined in the sum of $25,000.