Inspector John Patton v Orest Peter Sywak

PROSECUTOR: Mr D O'Neil of counsel SOLICITORS: WorkCover Authority of NSW Legal Group LEGAL REPRESENTATIVES: DEFENDANT: Mr P Menzies QC SOLICITORS: Gray & Perkins

JUDGMENT: - 14 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Matter Number IRC 6896 of 2001 INSPECTOR JOHN PATTON v OREST PETER SYWAK Prosecution under section 50(1) of the Occupational Health and Safety Act 1983 JUDGMENT

1 This prosecution was brought under s50(1) of the Occupational Health and Safety Act 1983 ('the Act'). The defendant entered a plea of guilty.

2 The offence charged was: Section 50(1) of the Occupational Health and Safety Act 1983 in such a case made and provided in that: 1. It is alleged that the Defendant, Orest Peter Sywak , being a director of Auburn United Formwork Pty Ltd (ACN 002 187 162) contravened Section 50(1) of the Occupational Health and Safety Ac t 1983 on 25 November 1999 in that Auburn United Formwork Pty Ltd, an employer, breached Section 15(1) of the Occupational Health and Safety Act 1983 on 25 November 1999 at premises located at 4 Alfred Street, Milsons Point in the State of New South Wales ("the premises"), that it failed to ensure the health, safety and welfare at work of its employees in particular Ilija Oroz and Ante Stipic. In particular, it failed to: (a) provide physical fall protection for employees dismantling formwork at the premises;

(b) ensure that there was a safe and suitable fall arrest system for employees dismantling formwork at the premises;

(d) prevent employees accessing the grandstand terrace at the premises via a wooden bridge;

(h) conduct any adequate risk assessment of the work to do be done at the premises.

And it is further alleged that the defendant, Orest Peter Sywak, contravened Section 50(1) of the Occupational Health and Safety Act 1983 on 25 November 1999 at the premises in that he was a director of Auburn United Formwork Pty Ltd and that company further breached Section 15(1) of the Occupational Health and Safety Act 1983 in that it failed to provide such information, instruction, training and supervision as was necessary to ensure the health and safety of Ilija Oroz. In particular, the defendant failed to: (b) provide sufficient instruction to Ilija Oroz about the work he was to undertake at the premises;

(c) provide sufficient training of Ilija Oroz in relation to the work he was to undertake at the premises;

(d) provide adequate supervision of Ilija Oroz on 25 November 1999 at the premises.

3 The agreed statement of facts provided, relevantly: 1. At all material times the Prosecutor was an Inspector appointed by the WorkCover Authority of New South Wales under Division 4 Part 3 and empowered by Section 48 of the Occupational Health & Safety Act 1983 to institute proceedings in this matter.

2. At all material times Orest Peter Sywak of 40 Parramatta Road, Homebush in the State of New South Wales was a director of Auburn United Formwork Pty Limited (ACN 002 187 162) ("AUF"), an incorporated company with its registered office located at 40 Parramatta Road, Homebush in the State of New South Wales.

At all materials times, the defendant was the sole director of AUF, and ultimately responsible for all systems of work and work methods employed on work carried out by AUF.

AUF were, at all relevant times performing the formwork works for the North Sydney Olympic Pool redevelopment as a subcontractor to Hansen Yuncken Pty Limited (ACN 063 384 056) ("Hansen Yuncken"), the head contractor.

As at 25 November 1999, AUF employed Ilija Oroz ("the injured employee") and Ante Stipic.

On 25 November 1999, Ilija Oroz ("the injured worker") and Ante Stipic were stripping a horizontal timber brace supporting framework to a vertical wall. The wall was part of a room known as the "Air Handling Unit Plant Room".

The injured worker was standing on the rear of an area described as the old grandstand terrace, which had an exposed edge. Mr Stipic was standing on top of the wall of the Air Handling Unit.

There was a 5 metre deep and 4.4 metre wide void between the rear of the grandstand terrace area and the Air Handling Unit.

The timber brace which Messrs Oroz and Stipic were removing spanned this void.

As Mr Stipic was stripping the timber brace, his end of the brace fell to the mezzanine level below. The injured worker was then seen to fall 5 meters (sic) from the top of the old grandstand terrace area to the concrete floor of the mezzanine area ("the incident").

The supervisor of the injured worker and Mr Stipic was Roger Day, an employee of AUF, who was present on the site on 25 November 1999.

At the time of the incident neither the back edge to the rear of the old grandstand terrace nor the Air Handling Unit had any physical fall protection in place.

At the time of the incident neither the injured worker nor Mr Stipic were wearing a safety harness nor any other form of fall arrest.

The injured worker accessed the rear of the grandstand area over a wooden bridge. The bridge had been in place for approximately two weeks prior to 25 November 1999. The bridge was built by representatives of AUF and placed in position by representatives of AUF.

There was in place on site an alternative means and procedure of accessing the rear grandstand terrace area. The procedure involved persons which wanted access having to approach a Hansen Yuncken officer for a key to the gate, at which time that person was also provided with a safety harness. The use of the bridge allowed the avoidance of the proper procedure. The erection of a timber bridge had come to the attention of Hansen Yuncken prior to the incident but the risk of safety thereby created had not been attended to by Hansen Yuncken.

As a result of the fall, the insured worker suffered the following injuries: (a) traumatic brain injury; (b) 35% visual impairment in right eye; (c) 100% visual impairment in left eye; (d) 51% overall permanent impairment of visual system; (e) 100% loss of hearing to the left ear; (f) uncompensated disturbance of the balance system due to a left sided inner ear lesion; (g) fractured bone to the left arm; (h) fractured bone to the left wrist; (i) fractured bone to the right arm; (j) fractured bone to the right wrist; (k) fractured shoulder blade; (l) crack in the bone in the nose; (m) cognitive deficits including short term memory loss; and (n) loss of effective use of his sexual organs.

The injured worker is not expected to be able to perform his normal duties again due to the injuries sustained.

When Hansen Yuncken contracted with AUF, Hansen Yuncken had in place its Project Management Plan.

Pursuant to the Project Management Plan, Hansen Yuncken required sub-contractors to provide Safe Work Method Statements ("SWMS") which as a minimum complied with the requirements of the defendant's SWMS.

AUF provided Hansen Yuncken with a Safety Plan and a SWMS on or about 15 October 1999. A copy of the Safety Plan and SWMS is annexed hereto. The Safety Plan and SWMS refer to the control measures for working in elevated positions and to the requirements for safety belts and lifelines to be provided and used by employees working on elevated surfaces. The Safety Plan contained work method statements, which related to a project by Mirvac Constructions at Double Bay.

Hansen Yuncken failed to ensure that AUF provided fall protection for workers working in a place from which they could be liable to fall a distance of more than 1.8 metres, in breach of Construction Safety Regulation 73(3).

Hansen Yuncken and AUF had actual notice of safety issues in the mezzanine area prior to the incident and the rear area of the grand stand terrace had been specifically identified as an area where there existed a risk of injury from a fall.

Hansen Yuncken had identified structural work as one of the areas requiring detailed SWMS.

It is alleged that the Defendant, Orest Peter Sywak , being a director of Auburn United Formwork Pty Limited (ACN 002 187 162) contravened Section 50(1) of the Occupational Health & Safety Act 1983 on 25 November 1999 at the North Sydney Olympic Pool at 4 Alfred Street, Milsons Point in the State of New South Wales in that Auburn United Formwork Pty Limited, an employer, breached Section 15(1) of the Occupational Health & Safety Act 1983 on 25 November 1999 at premises located at 4 Alfred Street, North Sydney in the State of New South Wales ("the premises") in that it failed to ensure the health, safety and welfare at work of its employees and in particular, Ilija Oroz and Ante Stipic in that it failed to: (a) provide physical fall protection for employees dismantling formwork at the premises;

(b) ensure that there was a safe and suitable fall arrest system for employees dismantling formwork at the premises;

(c) prevent employees accessing the grandstand terrace at the premises via a wooden bridge;

(d) conduct any adequate risk assessment of the work to do be done at the premises.

It is further alleged that the Defendant, Orest Peter Sywak , contravened Section 50(1) of the Occupational Health & Safety Act 1983 on 25 November 1999 in that he was the director of Auburn United Formwork Pty Limited, an employer, when that company breached Section 15(1) of the Occupational Health & Safety Act 1983 in that failed to provide such information, instruction, training and supervision as was necessary to ensure the health and safety of Ilija Oroz. In particular the company failed to: (a) provide sufficient instruction to Ilija Oroz about the work he was to undertake at the premises; (b) provide sufficient training of Ilija Oroz in relation to the work he was to undertake at the premises; (c) provide adequate supervision of Ilija Oroz on 25 November 1999 at the premises.

Annexed hereto are nine photographs reference numbered 4, 7, 13, 14, 23, 24, 25, 26 and 31.

4 Evidence was given by the defendant and a number of documents were tendered. Mr Sywak's evidence was that he was a director and the financial controller of Auburn United Formwork Pty Limited (in liquidation) ('AUF'). His day-to-day responsibilities were concerned with clerical and administrative functions, looking after AUF's financial affairs. Another employee, Brian Stewart, was responsible for negotiating contracts, which Mr Sywak executed on behalf of AUF. Mr Stewart was experienced in the building industry. AUF was engaged on various large projects as a subcontractor. Mr Stewart was responsible for those construction sites, including the site at North Sydney, where this accident occurred.

5 AUF employed others to deal with material supply and to act as site foreman. At the North Sydney site, two foremen were engaged, Mr Day and Mr Kusic. Mr Stewart attended the site day to day. It was his responsibility to delegate tasks at the site to others. He reported to Mr Sywak in relation to any material issues which arose at the site, or any unusual circumstances. Mr Sywak relied on Mr Stewart. He had never attended the site, prior to the accident.

6 AUF had various procedures in place in relation to safety. They included AUF employees attending accredited quality training courses for the building and construction industry, if not already accredited, before attending any construction site. Employees were then issued with a 'green card' which authorised their entry. All AUF employees at the North Sydney site had this accreditation. The main contractor conducted a site specific training course, for those working at the site. AUF had provided a work method statement for each task to be performed on the site. AUF employees were required to wear basic safety equipment such as gloves, ear muffs, helmets and boots. Mr Sywak also understood from Mr Stewart that "where workers were engaged in a dangerous situation they would wear appropriate safety equipment such as a harness." Mr Stewart conducted meetings for AUF employees, at which safety issues were raised.

7 Mr Sywak relied upon Mr Stewart and delegated responsibility to him on site, because of his background and experience. Mr Sywak understood from Mr Stewart that the head contractor at the site, Hansen Yuncken, was ultimately responsible for safety at the site and monitored the site to prevent dangerous situations arising.

8 After the accident Mr Sywak attended the site to obtain a proper understanding of what had occurred. A Union had submitted a list of safety requirements, which he also wished to understand. Safety issues were not dealt with to his satisfaction and AUF employees were taken from the site and did not return.

9 Mr Sywak's knowledge of safety issues had resulted from his discussions with Mr Stewart and his reading of literature provided by the Master Builders Association. He had no reason to doubt Mr Stewart's ability in relation to safety matters and the ability of AUF's staff to adhere to safety procedures and to follow safe work methods.

10 Mr Sywak, a certified practising accountant, was no longer involved as a director, employee or secretary to companies engaged in the building industry, except for his work as an accountant to some companies operating in the industry. Mr Sywak had a background as a financial administrator for various companies, over a period of 25 years. He was, or had been, a director of many companies. Neither he, nor they, had any convictions under the Act.

11 The case advanced for the prosecutor by Mr O'Neil of counsel was that the factual matters relevant to assessing the objective seriousness of the offence included that the defendant's breach was multifaceted, including a failure to instruct or train; to provide adequate supervision; to provide suitable fall protection; to prevent employees' accessing the rear of the grandstand terrace area, or to conduct any adequate risk assessment. It was AUF employees who had actually built the wooden bridge, which circumvented the safety procedures in place at the site; that bridge had been in place for about 2 weeks prior to the accident; the workers had no fall protection when working at a height of more than 1.8metres, as required by the Construction Safety Regulation 73(3); AUF had provided no site specific safe working method statement and the defendant had actual notice that form workers were working in an unsafe method, as revealed by the safety committee meetings which occurred on the day of the accident, prior to it occurring.

12 It was submitted that the detriment to safety lay in the employees working at a height of about 5 metres, without fall protection, via access which defeated the safe systems in place and in the case of Mr Oroz, on an exposed edge. There was a real risk of very serious injury, which was readily foreseeable. Simple measures to remove the risk were available and it followed that general deterrence was called for, as an element of the penalty. It was accepted that the need for specific deterrence, did not feature as greatly, on the evidence. It was also accepted that a discount of up to 25% flowed from the early plea. Reference was also made to the approach adopted to the co-defendant Hansen Yuncken in Inspector Patton v Hansen Yuncken Pty Ltd [2002] NSWIRComm 314.

13 The case advanced for the defendant by Mr Menzies QC was that the prosecutor's case proceeded on the basis of two errors. Firstly, that Mr Sywak was not a co-defendant and secondly, that as the agreed facts and Mr Sywak's evidence made clear, he did not have actual knowledge of the risk to safety here in question, it was AUF and Hansen Yunken which did.

14 This was a case, it was argued, where the Court might consider exercising its discretion not to record a conviction. The defendant's plea evidenced his acceptance of his obligations under the Act, as a director of AUF and the failure to meet those obligations. The Court could be satisfied that he was no longer in any doubt as to his obligations. This was the defendant's first offence; there was no issue that he had left the day-to-day observation of the obligations imposed upon AUF to others; that company no longer trades and the defendant was no longer involved in the building industry. He was a professional man, of general good character, who was concerned about the stigma associated with a criminal record and so it was an appropriate case for the discretion to be exercised.

15 That submission was not pressed, in light of my reservations as to the availability of such an approach in this case, given the approach of the Full Court in WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 100 IR 64, as to the exercise of the discretion given by s10 of the Crimes (Sentencing Procedure) Act 1999 not to convict and in WorkCover Authority of New South Wales (Inspector Patton) v Fletcher Constructions Australia Limited [2002] NSWIRComm 316, as to the delegation of obligations imposed by the Act.

16 It was submitted, however, that in fixing penalty, a similar approach would be adopted to this defendant, as was adopted in Hansen Yuncken. The result would be a maximum penalty in the order of $5,000, after the application of any discounts.

17 It was common ground that the maximum penalty for this offence was $55,000.

18 The starting point for any assessment of penalty is a consideration of the nature and seriousness of the offence in question. There was no doubt that the risk to safety here in question was a most serious one. An obvious and foreseeable risk to safety materialised, in circumstances where steps had been taken by the head contractor to avoid the risk and AUF had acted so as to nullify those measures. Had they been adhered to, this accident would plainly not have occurred. The result was serious injuries to the worker involved. It was as the result of good luck that the injuries were not more serious or that others were also not injured.

19 The Act imposes obligations upon corporations such AUF and directors such as Mr Sywak. His evidence demonstrated his imperfect understanding of the obligations which were imposed by the Act. His reliance upon Mr Stewart and his reading of the material provided by the Master Builder's Association, plainly did not result in him understanding what the relevant obligations were. The evidence also showed that his reliance upon Mr Stewart and the ability of AUF employees to adhere to safe working procedures, was misplaced.

20 While Mr Sywak accepted, in cross examination, that the obligations imposed by the Act upon the head contractor at this site, did not absolve AUF of its obligations, I was well satisfied that the circumstances here before the Court were such that the discretion not to record a conviction was not one properly available to be exercised.

21 This was a most serious breach of the Act. AUF built a bridge, to enable its employees to circumvent the safety measures put in place by Hansen Yuncken, to protect AUF employees from the very risk which here materialised. Had the workers in question worn the safety harnesses available at this site, while working on an unguarded edge, some 5 metres above the ground, they would have been protected from injury. Had they not gained access to this part of the site by the bridge they had built, but had gained entry via the locked gate erected by the head contractor, they would have been obliged to wear the safety harness, which would have ensured their safety. That Hansen Yunken also had obligations to ensure that the measures it had introduced were enforced, did not relieve AUF of its obligations under the Act. AUF actively took steps to circumvent those safety measures, a matter of which account must here be taken.

22 While I accept that the evidence did not show that Mr Sywak had actual knowledge of the steps here taken by AUF, the evidence did show most plainly that Mr Sywak did not take the necessary steps to ensure that AUF complied with its obligations under the Act. Both his obligations and those of AUF, were simply delegated to Mr Stewart.

23 The evidence also showed that while Mr Sywak understood that AUF had implemented written safety measures for the work to be undertaken at this site, the document in question was no such thing. While the document records that falling from heights was a potential hazard and that 'if safety harness required make sure employees are trained to use the equipment in the correct manner', it does not record any action as being necessary to be taken. The document also refers to the use of safety belts and life lines to be provided and used by employees working on unguarded elevated surfaces and effective fencing of open sides of floors.

24 This was a most disjointed document, part of which had been produced for another AUF site at Double Bay, where the work involved ground floor formwork. The evidence did not permit the conclusion that as a result of the approach adopted, AUF was pro-active in its pursuit of its obligations under the Act, or that Mr Sywak's understanding as to AUF providing a work method statement for each task to be performed on the site, was correct. To the contrary, apart from taking necessary steps to ensure that its employees could gain access to the site, it appears as if lip service was otherwise given to those obligations.

25 The law is clear that directors such as Mr Sywak cannot simply delegate the obligations which the Act imposes, upon employees like Mr Stewart, nor can they rely upon others to meet those obligations, such as the head contractor at a site, upon whom obligations might also be imposed by the legislation. There was no evidence as to why Mr Sywak was satisfied as to the appropriateness of delegating to Mr Stewart, all of AUF's obligations under the Act, apart from his long experience in the industry.

26 It follows that the evidence as to the circumstances here in question was such, that it must be recognised that the plea was properly entered. (See WorkCover Authority of New South Wales (Inspector Patton) v Fletcher Constructions Australia Limited [2002] NSWIRComm 316). Section 50 of the Act provides that a director of a corporation which contravenes the Act 'shall be deemed to have contravened the same provision'. Here there can be no doubt that AUF contravened its obligation under the Act.

27 AUF is in liquidation. The evidence showed that Mr Sywak was a director and the sole shareholder of AUF, by which he was paid a salary. While he was also a director and shareholder of another company engaged in this industry, it too has gone into administration. In the circumstances, I accept that the need for specific deterrence has been somewhat diminished in this case, as forming an element of the penalty imposed. I do not exclude it entirely however, given the evidence that Mr Sywak continues as a director of other corporations. I also accept that there is a need for general deterrence to form an element of this offence.

28 I have given consideration to the approach urged by Mr Menzies, to be adopted to determining penalty. Upon reflection, I have concluded that it is not properly available. I cannot accept that Mr Sywak may properly be treated in exactly the same way as the approach adopted in the case of Hansen Yuncken. Parity in sentencing is a principle to which regard must obviously be had. Nevertheless, the evidence cannot here lead to all of the same conclusions, as were reached in Hansen Yuncken.

29 I am satisfied that the evidence as to the approach adopted by AUF and Mr Sywak to their obligations under the Act, put them into quite a different light to Hansen Yuncken. I am also satisfied that the nature and quality of the two offences are not identical.

30 A delegation of responsibility in relation to safety matters, on a basis which, as I have earlier noted, appears to have resulted in mere lip service being paid to those obligations, with the result that a deliberate circumvention of the safety measures developed at the site occurred, which persisted for a period of some two weeks, when the risk which is the subject of the charge in this prosecution materialised, cannot be regarded in the same light as the circumstances of the other offender. In that case, impressive evidence was given as to that defendant's approach to safety matters. Its failure, for that period to detect and attend to the circumvention of the applicable safely measures, which also permitted the risk in question to materialise, led to the imposition of a significant fine, despite that general approach.

31 I am satisfied that a different approach is here required, in the light of the evidence in this case, which puts this offence into a rather more serious light. While this was also a first offence, the evidence showed that this was one of those cases, where it could not be concluded that this record resulted from good management of the obligations imposed by the Act. The evidence of the deliberate circumvention of the safety measures developed specifically at this site by the head contractor to prevent this risk arising, also must result in a rather more substantial penalty, than would otherwise be the case.

32 In adopting this approach I am satisfied that it accords with that discussed by Haylen J in Inspector Stewart v Siemans Dematic Pty Ltd No 2 [2003] NSWIRComm 45 at [45] to [47], albeit his Honour was there dealing with a somewhat different situation.

33 As to discount, I am satisfied that the defendant's early plea should entitle it to a 25% discount for utilitarian savings. I am also satisfied that there was evidence of contrition and a response to the accident, of which some account must be taken, by way of further discount, which I assess at 3%, making a total discount of 28%.

34 Having taken all of the factors earlier mentioned into account, I have determined that this offence must result in a penalty of $20,000. Applying the discount I have determined, the final result is a penalty of $14,400.

35 For all of these reasons, I convict the defendant of the offence charged and order him to pay a penalty of $14,400, with a moiety to the prosecutor.

36 The usual order as to costs is that the defendant pay the prosecutor's costs, as agreed or assessed by the Court. The parties have liberty to approach, in the event that no agreement is reached. That liberty should be exercised within 28 days of the date of judgment. ------------------------

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