Inspector Michael Dall v Daracon Contractors Pty Ltd.

PROSECUTOR: Mr R Reitano of counsel SOLICITORS: Phillips Fox LEGAL REPRESENTATIVES:

DEFENDANT: Mr J West QC with Mr Warren of counsel SOLICITOR: Paul Hines

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Haylen J 9 May 2005 Matter No IRC 626 of 2004 Inspector Michael Dall v Daracon Contractors Pty Ltd. Prosecution under s 16(1) of the Occupational Health and Safety Act 1983 EX TEMPORE JUDGMENT [2005] NSWIRComm 149

The defendant in this matter, Daracon Contractors Pty Limited, has pleaded guilty to a breach of s 16(1) of the Occupational Health and Safety Act 1983. The circumstances leading to this prosecution by Inspector Dall involve construction work and an expansion project taking place at Kooragang Island and I will come shortly to the details. The charge to which the defendant has pleaded guilty alleges a breach of 16(1) of the Act in that there was a failure to ensure persons not in its employ, and specifically Mr Andrew Cosier, were not exposed to risk to their health and safety arising from the conduct of the defendant's undertaking when they were at its place of work. The particulars were as follows: There was a failure to ensure a system of work that was safe and without risk to health to non-employees for the unloading and transporting by forklift of 2 x 12 metre lengths of high density polyethylene pipes, weighing about 692 kilograms from a truck, referred to as "the unloading process" at the premises; and the failure included a failure to ensure adequate safe operating procedures for the unloading process at the premises, an alleged failure to ensure the parts were adequately secured to the forklift during the unloading process at the premises; failure to ensure a safe distance between pedestrians and the operation of the forklift; and failure to undertake a safe system to take into account the effects of the physical environment, strong winds and indentations and other irregularities in the surface of the premises on the stability of the pipes on the forklift during the unloading process.

It was further particularised that the defendant failed to conduct an adequate assessment of the risks involved in the unloading process using the forklift to ensure that the unloading process was carried out in a manner that was safe and without risk to the health of the persons not in its employ. A further particular was a failure to provide adequate training, instruction, information and supervision to employees, including the identification of the hazards involved in the unloading process; a failure to provide training, instruction, information or supervision to employees to ensure the pipes were adequately secured on the forklift during the unloading process to ensure safe distance between pedestrians and the operating forklift and giving adequate warning to employees of the dangers to others of the effects of the physical environment, including strong winds on the surface of the premises on the stability of the pipes during the unloading process.

Shortly put, what occurred on the day in question was the use of a forklift to remove these very large pipes described in the particulars of the charge, from a truck using the truck driver as a lookout. Apparently, on the material, contrary to the usual instruction, but in accordance with an instruction apparently given that day, the driver stayed near the truck, was involved in the unloading process, and during the course of the unloading process the pipes fell from the forklift pinning the driver of the truck, and causing severe injuries from which he ultimately died.

As I have indicated, the defendant has pleaded guilty to a charge under s 16(1) of the 1983 Act, and I understand from what has been said during the course of addresses, two further charges under s 17 of the 1983 Act will, ultimately, not be pressed.

It is against that background, and also some technical matters going to the way in which the charge was initially pleaded, that resolution of those matters enabled the defendant to plead guilty to this particular charge.

The prosecutor has tendered an Agreed Statement of Facts in some detail; a factual report prepared by the WorkCover inspector; a large number of photographs; a record of prior convictions demonstrating that the defendant has no prior convictions; a WorkCover guide for forklift drivers, and a report basically in relation to the weather on the day in question. I will return to that material shortly.

The defendant read an affidavit sworn by Mr Alan Leslie Ball, the business development manager for the Daracon Group of companies, and there were a number of annexures to that affidavit.

As I have indicated, the agreed statement of facts is quite detailed, and I do not intend to summarise it, but it raises some interesting questions in relation to this matter in circumstances where another company, Bechtel Australia Pty Ltd, was also charged under s 16(1) of the 1983 Act in relation to this very incident, and was dealt with by Acting Justice Curtis on 17 October 2003.

I return to the Agreed Statement of Facts. It was accepted that, in this operation involving the movement of these heavy and long pipes at Kooragang, the defendant was effectively, although not formally, the provider of labour in a labour hire type situation to Bechtel Australia. Mr Ball's affidavit deals with this matter in some more detail, and I will deal with that when I come to his affidavit.

Bechtel was the project manager at Kooragang Island for this expansion project. Bechtel interviewed and selected certain persons for employment and then approached Daracon Engineering Pty Limited, part of the Daracon Group, and it ultimately used the services of an associated company (the defendant) to engage the persons selected by Bechtel. One of those persons was a Mr Franks who was a forklift driver. Mr Franks worked on the construction site pursuant to this agreement entered between Daracon Engineering Pty Ltd and Bechtel and the defendant was paid an hourly rate for his services.

It is accepted that at all material times the defendant was the employer of Mr Franks, and was responsible for paying his wages, and that he was under the supervision of a Mr Bell on the day of this incident, and Mr Bell in turn was employed by Bechtel.

In relation to what has been referred to as the unloading process, it is said in this Agreed Statement of Facts that Mr Franks assumed the role of escorting Mr Cosier and took him to the premises where the unloading of the pipes was to be conducted. The system of work used by Mr Franks and the unloading of pipes from Mr Cosier's truck was endorsed by Bechtel.

Mr Franks and Mr Cosier were the only persons participating in the unloading process, and during this process Mr Cosier acted as an observer for Mr Franks in ensuring that the load cleared the truck. How that occurred is set out in a number of paragraphs which I do not repeat for its detail, but this is said, and it is important and goes to the crux of the charge: During the unloading process Mr Cosier had to turn his truck in the other direction, and it was necessary for Mr Franks to lift the long pipes over the posts on Mr Cosier's truck. During the course of doing so, he was proceeding to reverse in a southerly direction to deposit the pipes on what is described as the lay down area of the premises, and as the pipes passed over the cabin of the truck with Mr Cosier acting as an observer for Mr Franks, he was standing on the passenger side, or the eastern side of the truck. While he was standing there, and as the pipes passed over the cabin, Mr Cosier gave Mr Franks the thumbs up, and Mr Franks then lowered the pipes to a height to clear the bonnet of the truck. While that was taking place, Mr Cosier moved around the front of the truck to be adjacent to the driver's side headlights, or on the western side of the truck. At the same time, Mr Franks was reversing the forklift, and about this time Mr Franks' focus returned to the front as a result of a noise he heard. When he did look to his right, he saw the pipes falling from the tynes of the forklift truck. At that time they were about 1.82 metres or about 6 foot or bonnet height from the ground.

This task had been carried out on a number of occasions in a similar way between 15 August 2000 and the date of the this accident, 9 November 2000, without incident. In relation to the system of work, it was agreed that there was no safe work method statement, or job safety analysis, or risk assessment formulated or conducted by either the defendant or Bechtel for the unloading process. There were a number of questions and answers in relation to aspects of this system given by employees of Bechtel that were included in the statement of facts. Again, without attempting to summarise those questions and answers, they show, firstly, that there appeared to be a usual method of doing this task, a view formed by Bechtel that the work undertaken by the forklift truck was not unusual in this particular circumstance, notwithstanding the length and weight of the load and that there were existing safe systems requiring the driver or any person to stand clear of the unloading process.

What the evidence does show on this day is that those parts of the system were simply not followed, and the forklift driver in fact involved the driver of the truck in the system of unloading. In relation to the physical environment, it is said that the surface of the area where the unloading process took place was constructed of a road base or similarly compacted material. It was level and relatively flat, although there were three indentations or potholes. Two of these indentations or potholes measured approximately 50 millimetres in depth, another one approximately 40 millimetres in depth and they were in the area where the unloading process was taking place.

In relation to attachments to the forklift, it appears that Mr Franks was of the view that it was not necessary to use what are described as tag lines for this task, and he did not regard it as normal practice. In fact, he thought that there may be a risk of injury to use that type of method in the operation he was undertaking. Another employee of Bechtel had a view that the use of a jib attachment would not necessarily be an added safety feature in this particular task.

The Environment Safety and Health Manager for Bechtel had participated in a record of interview. He indicated that Mr Franks, in terms of supervision, would have had specific direction or supervision in relation to the task he was undertaking, and that overall he was under the supervision of Mr Bell. As to Mr Cosier, there was no specific direction given to Mr Cosier on the day.

In relation to training, there was no training provided to Mr Franks by the defendant or Bechtel in respect of the unloading process. He was hired as a trained, competent and experienced forklift operator.

That Agreed Statement of Facts needs to be put into the context of what is said by Mr Ball in his affidavit. He gives some history of his involvement with the Daracon group and his own history, the nature of the contracts for Kooragang Island and details how a tender by Daracon had been effectively amended by arrangement with Bechtel so that the cranage content, said to be valued at something like $450,000 would not be performed by Daracon. This agreement appears to have arisen because Bechtel was of the view that it could provide the cranage at a cheaper rate than Daracon, but it struck a difficulty, namely that the Port Waratah Coal Services prohibited Bechtel from the direct hire of employees because of its role as project manager.

There was a conversation with representatives of Bechtel where it was put to Mr Ball that the way Bechtel saw around this difficulty was that it would select the employees and they would be formally engaged by the defendant or by Daracon through one of its companies, and that apart from paying them, for which they were reimbursed together with some further amount, they would have no need or further interest in those employees because they would be treated effectively and for all purposes as under the control, direction and supervision of Bechtel. The importance of that arrangement lies in a number of factors, but one is that the evidence suggests, as it did before Acting Justice Curtis, that Bechtel was a very large international operation and had a reputation, not only in relation to the width and importance of its work for many, many years going back to the 1930s in major projects, but it also had a reputation for safety. It was said that these representations were important to the defendant in reaching the arrangement it did with Bechtel about the employment of persons, including Mr Franks.

This point is also made on behalf of the defendant: it is said that this work, that is, effectively being a labour hire company to Bechtel, was work that the defendant had not usually carried out, and because of that particular feature, a particular company in the Daracon group, that is this defendant, was chosen to be involved in the Kooragang project.

Mr Ball accepts that Mr Franks was interviewed by both Bechtel and Daracon and he accepts that Mr Franks' qualifications were impressive, and that he would have had no hesitation in employing him. Mr Franks was first placed in the defendant's civil works under its control, because the work which Bechtel wished Mr Franks to perform had not yet been finished, and it was not appropriate for him to start.

While under the control of the defendant he was required to, and attended, daily tool box meetings to discuss the work and the safety aspects of the work, and it was later that he was then moved under the supervision of Mr Bell of Bechtel.

It is said, and I will return to this shortly, Daracon was precluded from sending employees to supervise Mr Franks. The area of the warehouse where he worked was completely separate from the site where the defendant was working. That area was fenced, it was secured and only authorised personnel were to be admitted. On the assurances of representatives of Bechtel, Mr Ball was satisfied proper supervision and control would be exercised by Bechtel. He recounts some of the well known and significant projects that Bechtel had been involved in over a number of years.

It is said that neither the defendant, nor any company in the Daracon Group, has since engaged any person in this manner for any other project, and that this form of engagement for Bechtel ceased on the completion of the contract for the Kooragang extension. As confirmed by senior counsel for the defendant, it therefore continued in this arrangement after the accident.

Mr Ball states that if he had been supervising the site he would have made it known to all persons on the site to stay clear of the unloading process, and that was all that was needed to make the system safe. He observed that objects could fall from the tynes of a forklift, and whilst a driver is well secured in a reinforced cage in the forklift, the proximity of the fall could be a danger. He expressed, on behalf of the Group, deep regret and sorrow at the loss of Mr Cosier in the tragic circumstances of his death, and also records that since the accident Daracon as a group has been ever more vigilant in matters of safety. Some of those matters are set out in the remaining part of his affidavit, some of it, by agreement, is accepted as not applying to this particular defendant, but it may well apply to the Group. The considerable annexures demonstrate that Mr Franks was well qualified for this work by training and experience.

I move to deal with the case presented to Acting Justice Curtis in relation to Bechtel. The charge under section 16(1) of the 1983 Act is essentially the same as the charge faced by this defendant. His Honour found that the dangers were obvious, and that it was a very serious offence as demonstrated by the death of Mr Cosier in the circumstances outlined. His Honour noted that there were simple remedial steps, and they were steps that could be taken at no cost. He notes that if there had been a simple risk assessment conducted of this unloading process, those who were participating would certainly have had to have turned their minds to the simple measure of ensuring that the driver of the delivery truck was told to stand away from the truck. His Honour finds on the evidence, in fact, that simple remedial step was taken by Bechtel and it did so by signifying what might be termed a withholding area for people to stand in, away from the trucks while this operation was undertaken.

His Honour considered both general deterrence and specific deterrence, and noted that a modest fine would add little specific deterrence for this huge corporation turning over some 11 billion dollars a year. In relation to subjective factors, his Honour concentrated upon the safety record and the safety system of Bechtel throughout its worldwide operations, its innovation, and I think obviously was favourably impressed by that evidence.

His Honour concluded that an appropriate fine was $133,000. He discounted that figure by 25 per cent, because of the plea of guilty and convicted the defendant Bechtel and fined it $100,000. The existence of that judgment is a significant factor to be considered in this particular case.

In relation to the case that the Court has before it, the defendant made it clear that the recounting of the arrangements with Bechtel were not recorded to seek to isolate itself in any way from its plea of guilty. It says that those rather unique factors put this offence in its proper context. The defendant is not usually engaged as a labour hire company. The defendant usually does not engage in the type of arrangement that it entered into with Bechtel. The defendant now no longer participants in such arrangements. It says, again as part of the background to this offence, that given the international reputation of Bechtel it was entitled to rely on the assurances and representations made by that company that it would properly supervise these employees that it had participated in selecting with Bechtel. Now, there is force in all of that, but in concluding that this was a serious offence, I think the following factors have to be taken into account.

Firstly, Daracon as a group gave consideration how best to be involved in this arrangement. It chose the defendant as part of the Group to be the separate company to be involved in this particular project. It participated with Bechtel in interviewing Mr Franks. It was not precluded by anything Bechtel imposed upon it from attending the site and satisfying itself that Mr Franks was being properly trained and supervised in the work he was performing. Those matters are of significance. Mr Franks, of course, was also for a period under the direct control of the defendant before being handed over to Bechtel for the work to be undertaken in the warehouse.

After the event, and this of course is not part of the particulars of the charge, the defendant became involved with Bechtel as to what remedial steps should be taken. Bechtel says it reinforced, through a variety of measures including meetings and like, its policies and that this defendant had involved itself in those steps.

For the prosecutor it is put that the importance of the arrangement was that the defendant nevertheless knowingly handed over control of its employees, that is, having accepted the obligations of the employment relationship, handed those people over to another employer, Bechtel, and played no further role in their supervision and training, or ensuring that the systems of work under which they were employed were safe.

In the same way, although this is not a traditional or usual labour situation, the concerns that move the Court to emphasise to labour hire companies that they continue to have a responsibility for those that they send to work for another employer, apply in this case. All of these matters indicate that this was a serious breach by the defendant.

In relation to general deterrence, because of the labour hire aspect even though it arises unusually here, that aspect must play a role in the sentencing exercise. In relation to specific deterrence I think here it is appropriate to say it plays a very minor role, given the unusual circumstances of the arrangement that the defendant entered into, and the evidence of Mr Ball that it has not entered into such an arrangement again.

I then look to subjective factors. Here, the defendant has no prior convictions. I do not know from the evidence a great deal about the defendant, the number of people it employs, nor a great deal about the Group, although the Group appears, from Mr Ball's evidence, to have been in existence for a considerable period of time. In that sense there is a good prior record. It is clear from Mr Ball's affidavit that there is contrition for this accident. They seem to be the very limited subjective factors which are to be taken into account in this case.

I then have to consider how this defendant is to be dealt with, having regard to the penalty imposed on Bechtel by Acting Justice Curtis . That requires the Court to give some consideration to the principles of consistency and parity.

Consistency has been said to be a reflection of the concept of equal justice. The task is to achieve even handedness in sentencing. Nevertheless, when sentencing different offenders, the Court must consider the range appropriate to the objective gravity of the particular offence, and to the subjective factors relevant to the particular offender. The parity principle, of course, deals with co-offenders. Parity is to be determined by having regard to the circumstances of the co-offenders and their respective degrees of culpability. It will also be influenced by different criminal histories, which may justify a real difference in sentence. A different factual basis may justify a different sentence for a co-offender, but the difference is not to be disproportionate. It is also repeatedly said that it does not automatically follow that the co-offender should receive the same sentence.

In this particular case, having regard to the time in which the plea was entered, and having regard to the surrounding circumstances, I am satisfied that this was an early plea, and there is no reason why the defendant should not receive the full extent of the discount usually given for an early plea. I would therefore allow a discount of 25 per cent in relation to that matter.

In Bechtel, although Bechtel was a much larger operation by all accounts, here was no prior history, and 25 per cent discount was given by his Honour Acting Justice Curtis for an early plea. I accept what was put on behalf of senior counsel for the defendant that this appears to produce, in a rounded way, the reduction of the $133,000 penalty initially arrived at, to a final penalty of $100,000. In that case, his Honour listed a number of subjective factors relating to that particular defendant and noted the prompt remedial action taken and the apparent effectiveness of remedial action, but those subjective factors do not appear to have been formulated as a separate discount, but that course perhaps explains why the figure of $133,000 was arrived at which, on one view at least, might be thought to be towards the lower end of the range. There is no suggestion that no was action taken to challenge the appropriateness of that figure.

Looking at this particular defendant, its history is similar. It is a company involved in heavy industry, undoubtedly not as large as Bechtel, but nevertheless it has a good industrial record. There is no suggestion here that the defendant did not have a safe system of work applied elsewhere - however, it is the peculiar circumstances of this case that leads to it facing this charge and pleading guilty to this charge. The only other subjective factor is the one of contrition. I consider, and I accept, that has been demonstrated both by the plea and by what Mr Ball said in his affidavit.

Weighing these matters for the application of the principles of parity and consistency, is not an easy task. It is tempting to look at some aspects of the defendant's behaviour here to emphasis their particular culpability, but I think overall I cannot find this defendant more culpable than Bechtel. I am not satisfied that it is less culpable than Bechtel, but there are different considerations. Those considerations do not lead me to any different result than that found by Acting Justice Curtis . I think, having regard to the principles I must consider that the proper result here is to fine the defendant the same ultimate sum as found by Acting Justice Curtis , that is $100,000. In those circumstances, the Court makes the following orders: 1. The defendant is found guilty of a breach of s 16(1) of the Occupational Health and Safety Act 1983 to which it pleaded guilty in IRC Matter No 626 of 2004. 2. The defendant is fined the sum of $100,000 with moiety to the prosecutor. 3. The defendant is to pay the costs of the prosecutor, as agreed or in the absence of agreement, as ordered by the Court.

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