Consideration
11 In a consideration of penalty, the court must consider the objective seriousness of the offence or, as has been said, the nature and quality of the offence. The Full Bench commented in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474) as follows:
. . . in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. 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" . . .
12 The prosecutions arise from the demolition of a boiler on the BHP site in Newcastle. BHP contracted with Brambles Australia Limited for the demolition of all buildings and structures at the Newcastle site. Brambles sub-contracted with Demtech for the demolition of seven boilers. Boiler 6 which weighed approximately 300 tonnes and was 31 metres in height was the next boiler to be demolished. It was one of two very large boilers.
13 It was originally intended to "drop" the boiler to the north. WorkCover issued a permit for the demolition of the boiler to the north. Given the existence of a coal bunker in the fall path to the north, after the Permit issued it was determined to drop Boiler 6 in a westerly direction. Mr Porta adjusted his calculations for an amended application for a new permit and on 18 September 2002, faxed the amended methodology to WorkCover. The methodology and calculations were technically similar to the methodology for the induced collapse of Boiler 6 to the north. Those calculations were however erroneous. Therefore the calculations used for the methodology for the western drop were also erroneous as they were calculated from the August plan.
14 Mr Porta was advised by the WorkCover Authority that it would review the amended proposal. No permit for the amended proposal was issued prior to an on-site tool box meeting of Demtech on the morning of 19 September 2002 with the four employees who were to be involved in performing the task. Mr Rees, one of the employees commented at that morning meeting he had noticed a slight movement in the structure. This comment was not considered.
15 Without a further permit issued from the WorkCover Authority as to the proposed new method for the demolition to the west, the employees of Demtech went about implementing the amended method proposed by Mr Porta for the collapse of the Boiler 6 on 19 September 2002.
16 Mr Porta's original calculations had been based on an understanding that a major structural beam, the B11 beam, was still within Boiler 6. The cross beam had however been removed on 10 August 2002. On 18 September 2002, B1 was removed. On the morning of 19 September 2002, B12 was removed. Then two employees were raised up in a cherry picker and they began to cut the columns of the structure to make "hinges" to bring down the boiler. Due to the lack of cross support, the columns could not hold the transfer of weight which caused Boiler 6 to collapse in an uncontrolled manner. There was no secondary restraint or bracing on Boiler 6.
17 Mr Rees, the employee performing the cut in the cherry picker, suffered fatal injuries as the cherry picker was struck in the fall of the boiler. Another employee, Mr Edwards, in the cherry picker suffered injury.
18 The collapse was caused "by the removal of beams and the weakening cuts made for the induced collapse reducing the structural capacity of the column to the point at which it could no longer sustain the imposed loads" and "the demolition procedure adopted for the boiler was inadequate and cuts made to the south-west column created instability in the structure" and "the work plan for the demolition of the boilers did not comply with the Australian Standard AS 2601 . . . in that temporary bracing was not used to stabilise the structure".
19 Mr Britton, visited the site on the morning of 19 September 2002. There was no evidence Mr Banks visited the site on the morning of 19 September 2002. Particulars of the charges assert that the two defendant/directors (and employees of Demtech) (now wound up by creditors) failed to provide a safe system of work in ensuring redundant demolition material was removed from the site; failed to prepare an adequate work method for the demolition of the boiler; failed to ensure a permit was obtained; failed to undertake a proper risk assessment for the demolition of the boiler by induced collapse and in so failing, failed to ensure the structural calculations as to loads were accurate; failed to engage a suitably qualified and experienced engineer; and failed to implement a secondary system of restraint to prevent an unexpected collapse.
20 In submissions, Mr Britton relied upon the following propositions:
(1) They (he and Mr Banks as directions and employees of Demtech) had hired an experienced and qualified engineer who had already performed six induced collapses for Brambles on the site.
(2) A general work method statement had been prepared and there was a tool box meeting on the day which should have been reflected in a Jobs Safety Analysis for the work method.
(3) There was much demolition material on the site but this is common on all demolition sites.
(4) The engineer had informed him that he had notified WorkCover and was expecting the permit.
21 Mr Britton submitted both he and Mr Banks relied upon the experience and qualifications of the demolition expert engineer, Mr Porta, with whom Demtech had contracted to do the calculations and methodology. He asserted he had thought the engineer had built into the system, given the WorkCover permit, some secondary restraint system.
22 In an assessment of the objective seriousness of the offence, I accept the defendants had prepared some general statements acknowledging an awareness of site safety. I accept they prepared a Job Instruction and Safety Analysis particularly directed to the drop of Boilers 6 and 7. However, the Job Safety Analysis was not a particularised work method statement nor was there an associated risk assessment of the particular task.
23 The defendants, through Demtech, had to ensure safe working at their worksite. They were, through Demtech, responsible for the safety of their employees. They cannot meet their obligations under the Act by suggesting the responsibility lies with Mr Porta, the expert engineer. The defendants had a number of employees on this worksite. While they entrusted their calculations to Mr Porta, an experienced engineer, the evidence reveals the defendants failed to ensure the permit for the amended methodology for the collapse of Boiler 6 in the westerly direction was issued.
24 Further while the calculations were amended when it was determined the induced collapse would fall to the west instead of the north the defendants failed to recognise, given the B11 beam was missing, that Mr Porta's calculations were incorrect and the cuts were being made right to the web of the column. The methodology being employed was erroneous.
25 Mr Porta redesigned the methodology for the drop to the north. He incorporated into his amended calculations an original error leading to a false estimate of the weight bearing capacity of the boiler's columns. It cannot be accepted the tool box meeting of employees could be perceived as meeting the requirements and the need for a formal work method statement and risk assessment of the particular task.
26 The prosecutor contends a risk assessment could well have informed the defendants that the calculations were not accurate. The defendant failed to carry out that risk assessment. The basic methodology used for the collapse of Boiler 6 was faulty; no risk assessment was conducted; there was no bracing of the structure nor a secondary restraint in accordance with regulations and industry standards; and no permit had been issued by WorkCover for the amended methodology. The defendants failed in their duty to ensure safe working by failing to check on the above requirements.
27 The principles applicable to an application of a proper system of work were enunciated in WorkCover Authority of New South Wales (Inspector Downie) v Menzies Property Services Pty Limited (2004) 136 IR 449 where the Full Bench stated:
[67] The . . . discussion of paper systems in WorkCover Authority (NSW) v Fernz Construction Materials Ltd (No 2) (2000) 100 IR 23 at [35] is pertinent:
The existence of a system on paper alone is clearly not sufficient to comply with the obligations imposed by the Act. The employer is required to ensure that its ''paper systems'' are implemented and maintained in its daily operations: see Sydney City Council v Coulson (1987) 21 IR 477 at 480; WorkCover Authority (NSW) v Abigroup Contractors Pty Ltd (2000) 99 IR 196 at [26]. The Court must have regard not merely to the system as it exists in theory, but as it is implemented in practice. In WorkCover Authority (NSW) v Supercoat Feeds Pty Limited (unreported, Industrial Relations Commission, NSW, Fisher P Matter No CT96/1020, 22 April 1997) for example, Fisher P said:
The relevant system of work, however, is the customary method of carrying out the operation in which the employer is engaged - the system of work is that actually utilised and operated at the place of work. "Paper" systems whose prescriptions are not followed do not represent the actual system of work utilised and are irrelevant.
See also WorkCover Authority (NSW) v Kirk Group Holdings Pty Limited and Anor ( 2004) 135 IR 166 at [155]-[156].
28 In the circumstances, I find there was an element of foreseeability to the offence. It was foreseeable that in the above circumstance, given the neglect by the employers of requirements under the Act, regulations and standards that there would be a risk to safety in the way Boiler 6 was collapsed.
29 In all the circumstances, I find this a serious offence.
30 The maximum penalty against an individual for an offence under the Act is $55,000.00.
31 In consideration of penalty a number of subjective features to the offence have been placed before the court. The defendants continue to operate another demolition business through another company, Banitton Pty Ltd
32 I accept each defendant had a continuing commitment to occupational health and safety and this commitment was reflected before the incident in the existence of the general policy statement and regular Job Safety Analysis prepared before demolitions. There was a Job Safety Analysis in a generic form prepared in preparation for the demolition of Boilers 6 and 7 as well as other policy documents directed to safe working. The defendants have reviewed their existing procedures and have ensured their work method statements are prepared particular to each demolition. They have incorporated the requirements for bracing and putting in place secondary restraint on all structures to be demolished. Procedures for future practice in the demolition industry have been revised. A risk assessment for each task is now conducted.
33 The defendants' description of the work they perform through their new company provides a general profile of the demolition industry. On occasions they have less than six employees and on occasion employ up to 22 employees. They have faced significant litigation arising from this incident and their original company, Demtech (now in liquidation) was found liable for a considerable sum. Mr Britton has outlined a litany of misfortunes that have followed both since the incident including the severe effect on their ability to obtain further business and the attack on their personal reputations. These are the natural consequences of such a serious incident. They will have to live with those consequences and only by future safe work practices will they re-establish their professional and personal reputations. I am persuaded they are endeavouring to do so.
34 I have no doubt as to their genuine remorse. I have no doubt as to their commitment to safe working. What I see in this case are two young men, establishing a new business without rigorously enforcing known standards in the performance of a particularly dangerous task. Small business carries the onerous, but necessary, obligations which, under the Act, require they ensure safe working practice. The failure to provide a safe work system to perform a large demolition in what is an inherently dangerous operation created a most serious risk.
35 I accept the defendants now ensure, through their new company, Banitton Pty Ltd that there is a rigorous application of safe working methods and a commitment to ensure awareness for safe work practices on its worksites. The regulations under the Act and the Australian Standards for demolition work are designed in recognition of demolition being a dangerous task and to ensure compliance with a safe working regime. There were on 19 September 2002 on the worksite many breaches of this well designed protocol directed to ensure safe working. All procedures were known to the defendants. I accept they now ensure each regulation and standard is rigorously enforced.
36 I am satisfied there should be no re-offence. I accept the defendants have not manifested, by their commission of this offence, a continuing attitude of disobedience to the law or a likelihood that any offence of like kind will be committed in the future. The defendants are first offenders and now have in place proper safety practice and procedures which procedures ensure there should be no risk of re-occurrence.
37 The defendants have no prior recorded convictions. Nonetheless, there must be an element of both specific and general deterrence in any penalty applied. The defendants continue to operate in what is a recognised dangerous industry and this incident once again reiterates the need to remind the industry generally as to the care that must be taken by employers in a notoriously dangerous occupation to ensure the safety of its employees.
38 The prosecution supports the submission that the defendants co-operated with all inquiries in relation to this incident. I accept the pleas of guilty were entered at the earliest reasonable opportunity. I am satisfied the circumstances reflect the pleas should attract a discount for their utilitarian value. In accordance with the guideline in R v Thomson; R v Houlton (2000) 49 NSWLR 383, I allow a discount of 25 per cent for the utilitarian value of the plea of guilty entered by each defendant.
39 Each defendant placed before me its personal financial circumstances. The defendants held small mortgages until this incident. Both have now taken out larger mortgages to establish their new company. Under s6 of the Fines Acts 1996 the personal financial circumstance of the defendants is a matter for consideration. The prior company had good earnings until this incident. At present, in their new venture they take out $500 each week and put further company earnings back into the business. They take no distribution of profits from the company. The company has assets of some $180,000 and a turnover of $1 million for the 2005 financial year. Both defendants support families with young children. Each defendant's wife works for the company without income in an effort to re-establish their reputation within the industry.
40 Both defendants were established employees of Brambles and broke away from the Brambles Demolition Division to set up a demolition company to benefit financially from Brambles' head contract with BHP. It was for each a disastrous decision.
41 They seek the protection of s10 of the Crimes (Sentencing Procedure) Act 1999. Guidance in this consideration is given in Inspector Stephen Cooper v Kwik-Seal Pty Ltd and Anor [2006] NSWIRComm 48, where Haylen J stated in consideration of a similar application:
[40] Significantly, in Berrima Coal , the Vice-President, Walton J, stated:
[174] In applying the foregoing authorities for an application for the exercise of the Court's discretion under s 10 of the Crimes (Sentencing Procedure) Act , it is important, however, to bear in mind that each matter requiring consideration under s 10 of that Act needs to be considered in the light of its own particular circumstances: WorkCover Authority (NSW) (Inspector Robins v Ecolab Pty Ltd (1999) 90 IR 413 at 430.
[41] It is appropriate in this discussion to set out the relevant provisions of s10 of the Sentencing Act :
10 Dismissal of charges and conditional discharge of offender
(1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders:
(a) an order directing that the relevant charge be dismissed,
(b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years,
(c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program.
(2) An order referred to in subsection (1)(b) may be made if the court is satisfied:
(a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or
(b) that it is expedient to release the person on a good behaviour bond.
. . .
(3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors:
(a) the person's character, antecedents, age, health and mental condition,
(b) the trivial nature of the offence,
(c) the extenuating circumstances in which the offence was committed,
(e) any other matter that the court think roper to consider.
. . .