Inspector Jones v T Helsby & Sons Contracting Pty Ltd

PROSECUTOR Mr R Reitano of counsel Solicitors: Ms M Simpson LEGAL REPRESENTATIVES: Phillips Fox

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J Wednesday 4 February 2004

Inspector Steve Jones v T Helsby & Sons Contracting Pty Ltd (Administrator Appointed)

Prosecution under section 16 (1) of the Occupational Health and Safety Act 1983 JUDGMENT [2004] NSWIRComm 5

1 In this matter Steve Jones, an inspector of the WorkCover Authority of New South Wales, seeks to proceed in his prosecution of the defendant company under s 16(1) of the Occupational Health and Safety Act 1983 in circumstances where the defendant is under Administration.

2 Southern Cross Lawyers had previously represented the defendant and on 18 March 2003 a plea of not guilty was entered. At the time and place for hearing, however, no appearance was entered for the defendant. Mr R Reitano, counsel for the prosecutor, provided copies of correspondence between his instructing solicitors and the Administrator wherein it was advised by the Administrator that he had insufficient funds in the administration to defend the action. It had been brought to the Administrator's attention by Mr Reitano's instructing solicitors that the proceedings against the defendant company were criminal proceedings and that pursuant to s 440D(2) of the Corporations Act 2001 (Cth) neither the Administrator's consent nor the leave of the Court was required in order to proceed against the defendant. The Administrator's view, expressed in a letter to the prosecutor's solicitors on 4 December 2003, was that s 440D(2) had no application to the proceedings but, nevertheless, he made no appearance.

3 I do not consider there is any doubt that the prosecutor is entitled to proceed against the defendant and that neither the Administrator's consent nor the leave of the Court is required in order to do so. Whilst Schmidt J in WorkCover Authority of New South Wales (Inspector Maltby) v Josef & Sons Contracting Pty Limited (In liquidation) & Ors (2002) 118 IR 259 was concerned with different provisions of the Corporations Act in determining whether she could make orders under s 4 of the Supreme Court (Summary Jurisdiction) Act 1967 against a defendant company in liquidation, I am fortified by her Honour's analysis in concluding there is no obstacle to the matter proceeding.

4 Notwithstanding the defendant was not represented in the proceedings there is no bar to the matter proceeding ex parte. Section 250 of the Criminal Procedure Act 1986 provides: 250 Procedure where accused person does not obey order to appear If the accused person does not appear on the day and at the time and place set by an order under Division 2 (or on a day to which a hearing has been adjourned), the court may, if satisfied that the order was served on the accused person: (a) proceed to hear and determine the matter in the absence of the accused person, or (b) if the court thinks the matter should not proceed on that day or without the accused person, adjourn the hearing to a specified time and place and make an order for the apprehension of the accused person under Division 2.

5 I am satisfied that the relevant order was served on the defendant and that the defendant and the Administrator were aware of the time and place for hearing. The Administrator made a conscious decision not to be represented.

6 The prosecution by Inspector Jones concerned a toxic fume incident that occurred on 18 February 2000 in the Sydney suburb of Ashfield. The evidence confirmed that the defendant was a plumbing contractor that had been contracted by Skyline Interiors Pty Ltd to carry out certain plumbing work at the premises of Chubb Security Holdings Australia Limited ("Chubb"). In carrying out that work the defendant contracted Supercut Concrete Service Pty Ltd ("Supercut") to undertake concrete cutting at the premises. An internal combustion engine fuelled by liquefied petroleum gas operated the concrete cutting machine. The construction work was being carried out in the proposed canteen area at the basement of a building. At the time the machine was in use employees of Chubb were working in an adjacent office area that included the accounts payable section. The adjacent office area was serviced by an air conditioning system and by a joint roof cavity with the proposed canteen area. During the construction work and afterwards persons working in the adjacent office area began to experience symptoms such as nausea, headaches and dizziness. Seventeen workers were hospitalised due to carbon monoxide poisoning. In total, forty-seven workers were affected by the carbon monoxide.

7 In an amended application for order the prosecutor alleged that the defendant: failed to ensure that persons not in its employment were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at is (sic) place of work. In particular the Defendant failed: (a) To conduct an adequate risk assessment prior to the use of a concrete cutting machine in or about the Premises. (b) To provide adequate training and instruction to persons not in its employment in risk assessment procedures to ensure the safe use of the concrete cutting machine in or about the Premises. (c) To ensure that persons not in its employment who were at risk of exposure to carbon monoxide were adequately warned of the risks of exposure prior to the use of the concrete cutting machine in or about the Premises. (d) To provide adequate ventilation whilst the concrete cutting machine was in use at the Premises. (e) To ensure that persons not in its employment were adequately protected from inhaling or being otherwise exposed to carbon monoxide at the Premises. (f) To evacuate persons not in its employment from the Premises prior to use of the concrete cutting machine at the Premises. (g) To fix a carbon monoxide limiting device such as a catalytic converter to the concrete cutting machine at the Premises. (h) To prevent the concrete cutting machine from being used in the Premises in its condition at the time.

8 Evidence tendered in the proceedings by the prosecutor included the following: (i) Correspondence between the solicitors for the prosecutor and the Administrator regarding the proceedings.

(ii) Correspondence between the solicitors for the prosecutor and Southern Cross Lawyers (who had previously represented the defendant) advising of an intention to amend the application for order and in respect of which the defendant's lawyers did not respond.

(iii) Inspector's Statement (with attachments including colour photographs) made on 18 February 2000 by Inspector Chris Henson who attended Chubb's premises to investigate the incident.

(iv) Documents relating to the issue of whether the defendant was an employer. (v) Witness statements including the statement of Shannon White, an employer of Supercut and the operator of the concrete cutting machine on the day in question.

(vi) Statements by 33 persons who were affected by toxic fumes on 18 February 2000 at Chubb's premises in Ashfield.

(vii) Hospital/Medical reports of persons admitted to hospital suffering from the effects of carbon monoxide poisoning.

(viii) Documents relating to whether the defendant was conducting an undertaking.

(ix) A report prepared by Robert David Pearson, Head, Fire and Explosion Unit, TestSafe Australia dealing with the incident at the Chubb premises on 18 February 2000 dated October 2000.

(x) Documents relating to the chain of custody of the concrete cutting machine.

(xi) Documents relating to whether the levels of carbon monoxide present at Chubb on 18 February 2000 were dangerous.

(xii) Documents relating to the risk associated with the use of the concrete cutting machine in a confined space.

(xiii) Various documents supporting each of the particulars of the charge.

9 Oral evidence was adduced by the prosecutor from Mr Frank Zuccala who on 18 February 2000 was employed by the defendant as a supervisor. Mr Zuccala had previously made a statement on 26 July 2000 to Inspector Jones. Mr Zuccala said that he was aware of the work required to be done in relation to the cutting of concrete on 18 February 2000. Mr Zuccala said that he conducted a risk assessment by ensuring that that there was no danger in cutting into anything below the concrete slab and that because the job was relatively small he expected it to be finished before employees of Chubb started work. However, he agreed that at 7.30 am when the cutting work was to commence there were persons working in the area. In the event the cutting work did not commence until about 9.00 am. As to any consideration of fumes generated by the machine, Mr Zuccala said: I was not too familiar with an LPG saw so I left that to them [Supercut], and … it was Supercut that suggested an LPG saw was suitable for that job.

10 Mr Zuccala said he opened doors and windows but did not give any consideration to the location of air conditioning ducts or to confined spaces. Mr Zuccala also admitted he gave no warning to anyone regarding exposure to carbon monoxide that might be generated by the concrete cutting machine and did not take any steps (other than it seems opening doors and windows) to deal with carbon monoxide emissions from the machine.

11 Mr Reitano referred in particular to the report prepared by Mr Pearson of TestSafe Australia. Mr Pearson had 13 years experience in research, investigations and testing relating to fire and explosion safety. Amongst other qualifications he holds a bachelor's degree in science (applied chemistry). I accept his expertise in the area covered by his report. The objectives of Mr Pearson's investigation were to: 1. report on tests conducted upon the concrete saw and the LPG cylinder involved in the incident, and 2. examine the circumstances leading up to the incident to determine if the saw was the origin of the fumes.

12 Under the heading "Discussion" in his report Mr Pearson stated: Measurements and calculations have shown that: 1. lethal concentrations of CO [carbon monoxide] were produced by the saw, and 2. the volume of the toxic exhaust produced could have exceeded the total volume of the room. Inspection of the site of the incident showed that: 1. there was no forced air ventilation/extraction set up for the cutting, 2. the window and door were on the same side of the room, therefore there may have been little air movement from wind induced drafts, and 3. the operator was working in an area distant from the open window and doors in an area partly clad with gyprock …, and 4. the engine [of the concrete cutting machine] was not fitted with a catalytic converter.

13 Mr Pearson went on in his report to consider why it was that the operator of the machine did not experience any ill-effects from the exhaust of the machine: Since the fumes did not affect the operator even though the room appeared to be poorly ventilated and the exhaust was very toxic, there must have been some additional ventilation occurring. The exhaust gases from the saw would have been very hot and so more buoyant than the general room air. Therefore the exhaust fumes would have floated to the ceiling forming a warm toxic layer. If there was no ventilation while the saw was operating, then this layer would have thickened, descended towards the head of the saw operator, and eventually intoxicated him and other persons standing in the room. Examination of the room where the cutting was done showed that about 22 tiles were missing from the suspended ceiling … Air conditioning duct outlets were also observed in the ceiling. The suspended ceiling was 2.65m high. The openings in the roof space, due to the missing tiles and air conditioning ducts, may have allowed the buoyant fumes to escape via these routes. This situation could have become more likely during the last hour of continuous cutting when the room was further isolated due to construction of the "gyprock" wall. Therefore, the suspended ceiling, which was common to the workroom and the Accounts Payable office area, and air conditioning ducting, may have provided: 1 a means for the toxic exhaust to leave the work room, and 2 a means of transporting a portion of these toxic gases into the adjoining office area.

14 The conclusions reached by Mr Pearson were as follows:

The incident at Chubb was due to the inhalation of carbon monoxide (CO) by persons working at the site.

The concrete saw was shown to be capable of producing large volumes of exhaust containing high concentrations of carbon monoxide.

The operation of the saw was consistent with the time of exposure of those affected and the way in which CO causes intoxication.

There appears to be a mechanism that could transport the carbon monoxide rich exhaust fumes away from the operator of the saw and into the adjacent office area.

In the absence of any other credible source of carbon monoxide, it is reasonable to conclude that the concrete saw was the source of the carbon monoxide that caused the toxic fume incident at Chubb.

The concentration and volume of carbon monoxide that could have been produced by the saw were sufficient to pose a lethal risk to the concrete saw operator and persons in the immediate vicinity. There were no fatalities amongst those affected by CO. However, a large number of people were affected by this toxic fume incident and 17 persons were taken to hospital.

Although the concentration of CO that the office workers were exposed to is not known exactly, it appears possible that it may have been high enough so as to pose a risk of fatality to persons with severe heart disease or the foetuses of pregnant women.

15 Having submitted his report Mr Pearson was asked a series of questions by the solicitors for the prosecutor regarding his report seeking clarification of a number of issues and asking how he arrived at certain conclusions. Mr Pearson provided a detailed reply that was tendered into evidence.

16 Also in evidence was a report by the New South Wales Fire Brigades who attended the incident. The report indicated that the highest reading recorded was 31 parts per million of carbon monoxide at 1456 hours.

17 Section 16(1) of the Occupational Health and Safety Act provides: Every employer shall ensure that persons not in the employer's employment 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.

18 The elements the prosecution needs to prove beyond reasonable doubt in order to establish an offence under s 16(1) are as follows: 1. The defendant was an employer; 2. There were persons not in the defendant's employment; 3. The persons were at the defendant's place of work; 4. The defendant failed to ensure those persons were not exposed to risks to their health or safety; 5. The risk arose from the conduct of the defendant's undertaking.

19 Further, the prosecutor must show a causal relationship between the conduct of the defendant and the consequent risk to the health, safety or welfare of the relevant persons.

20 I am satisfied on the evidence that the defendant was an employer. In this respect there was the evidence of Mr Zuccala that he was an employee of the defendant at the relevant time. Additionally, there was documentary evidence in the form of group certificates and workers' compensation insurance policies indicating that the defendant was an employer.

21 As to elements 2 and 3, the term "place of work" is defined in s 4 of the Occupational Health and Safety Act to mean "premises, or any other place where persons work." The evidence was that the defendant was undertaking plumbing work at the Chubb premises in Ashfield. The canteen area where the cutting work was to be undertaken and the immediate environs including the adjacent office area was, in my opinion, the defendant's place of work: See Clarke v W C Meinhardt and Partners Pty Ltd (unreported, Fisher CJ, 30 June 1992); Page v Woolworths Ltd (unreported, Peterson J, CT93/1044, 9 September 1994); Mainbrace Constructions Pty Ltd v WorkCover Authority of New South Wales (Inspector Charles) (2000) 102 IR 84 at [42]-[61]. Persons not in the defendant's employment, namely, employees of Chubb, were present on the premises in an office area adjacent to where the concrete cutting was taking place. I am satisfied these elements have been made out.

22 As to element 4, I turn to the particulars. Particular (a) alleged that the defendant failed to conduct an adequate risk assessment prior to the use of a concrete cutting machine in or about the premises. There was no adequate risk assessment. So much is clear from the evidence of Mr Zuccala. Particular (a) is made out.

23 Particular (b) alleged that the defendant failed to provide adequate training and instruction to persons not in its employment in risk assessment procedures to ensure the safe use of the concrete cutting machine in or about the premises. Again, Mr Zuccala's evidence confirmed that no such training and instruction was provided to persons not in the defendant's employment to ensure the safe use of the machine. Particular (b) is made out.

24 Particular (c) alleged that the defendant failed to ensure that persons not in its employment who were at risk of exposure to carbon monoxide were adequately warned of the risks of exposure prior to the use of the concrete cutting machine in or about the premises. The evidence was that no person was warned of the risk to exposure to carbon monoxide. Particular (c) is made out.

25 Particular (d) alleged that the defendant failed to provide adequate ventilation whilst the concrete cutting machine was in use at the premises. On the basis of Mr Pearson's report and subsequent answers to questions from the prosecutor's solicitors I consider that particular (d) is made out.

26 Particular (e) alleged that the defendant failed to ensure that persons not in its employment were adequately protected from inhaling or being otherwise exposed to carbon monoxide at the premises. Mr Pearson provided information to the effect that the concrete cutting machine did not have fitted to it a catalytic converter. Mr Pearson stated: A properly designed, installed and functional catalytic converter, when fitted to the exhaust of an internal combustion engine may provide beneficial reductions in the concentrations of carbon monoxide, unburned hydrocarbons and other unwanted gases.

27 Mr Pearson, however, was unable to comment on the appropriateness of fitting converters to LPG fuelled internal combustion engines so I cannot conclude that in the absence of such a converter the defendant failed to ensure that persons not in its employment were adequately protected from inhaling or being otherwise exposed to carbon monoxide. But in any event the defendant took no effective action to ensure that persons not in its employment were adequately protected from inhaling or being otherwise exposed to carbon monoxide. Particular (e) is made out.

28 Particular (f) alleged that the defendant failed to evacuate persons not in its employment from the premises prior to use of the concrete cutting machine at the premises. The defendant took no steps to evacuate any person prior to using the machine. Particular (f) is made out.

29 Particular (g) alleged that the defendant failed to fix a carbon monoxide limiting device such as a catalytic converter to the concrete cutting machine at the premises. This is true but no connection has been established beyond reasonable doubt between such failure and the risk to health and safety.

30 Particular (h) alleged that the defendant failed to prevent the concrete cutting machine from being used in the premises in its condition at the time. The evidence of Inspector Henson was that when he inspected the machine on 18 February 2000 "The exhaust manifold of the concrete saw appeared to have a hole in it and was in a state of disrepair". Mr Zuccala was present at the Chubb premises when the concrete saw arrived but it does not appear from the evidence that he inspected the machine or made any inquiry about whether it was in a proper state of repair or was fit for the task. Mr Zuccala left the site prior to the saw being operated. In Inspector Moore v Blacktown City Council (2003) 124 IR 59 at [31] the Full Bench observed: In this regard the CIM said, "It is not a breach of the Act for the defendant to rely on a contractor operating its specialist equipment. It creates hazards when non-specialists give specialists advice." In the context of an employer's obligations under s 16(1) of the Act, we consider it is unhelpful and inappropriate to draw a distinction between specialists and non-specialists. We consider that it is incumbent on employers, regardless of the extent of their specialist knowledge or skill, to satisfy themselves as far as reasonably possible that, indeed, the contractor had the necessary skill and experience to carry out the work for which he or she had been contracted and the tools and equipment to be used were up to the task. I consider that particular (h) is made out.

31 I am satisfied on the evidence that the source of carbon monoxide present at the Chubb premises in Ashfield on 18 February 2000 was the concrete cutting machine. I accept Mr Pearson's hypothesis as to how the toxic gas came to affect the Chubb employees. I am satisfied that persons not in the defendant's employment, namely, employees of Chubb, were put at risk by their exposure to the gas. I am satisfied beyond reasonable doubt that on 18 February 2000 the defendant failed to ensure those persons were not exposed to risks to their health or safety in the manner particularised other than particular (g).

32 As to the fifth element of the offence, namely, that the risk arose from the conduct of the defendant's undertaking. The risk to health and safety arose from the emission of toxic carbon monoxide gas from the concrete cutting machine. The defendant had been contracted by Skyline Interiors to carry out plumbing work at the Chubb premises. In order to be able to do that work the defendant contracted Supercut to undertake the work of concrete cutting. In my opinion, even though the work of concrete cutting was required to be done by a specialist contractor, that work formed part of the defendant's conduct of its undertaking: See Mainbrace Constructions Pty Ltd v WorkCover Authority of New South Wales (Inspector Charles) (2000) 102 IR 84 at [15]-[41].

33 I find the offence under s 16(1) of the Act proven. The Industrial Registrar is directed to serve a copy of this judgment on the defendant's Administrator, Mr Murray Godfrey of Vouris & Bell Chartered Accountants. I will hear the parties as to sentence and costs at 10.00 am on Monday 1 March 2004. The parties have liberty to apply in the meantime if that date is not convenient.

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