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[2011] NSWIRComm 96
Industrial Relations Commission (NSW)
2011-05-30
Boland J, Walton J, Staff J, Marks J
Original judgment source is linked above.
JUDGMENT 1This is an appeal against a judgment of Marks J in Inspector Nicholson v Pymble No 1 Pty Ltd & Molinara (No 2) [2010] NSWIRComm 151 which concerned the dismissal of two prosecutions for breaches of s 10(1) of the Occupational Health and Safety Act 2000 ("the Act"). The first prosecution was against the corporation, Pymble No. 1 Pty Limited ("Pymble") and the second was against its director, Mr Molinara, (collectively "the respondents") for a breach of the same section by reason of s 26 of the Act.
The appeal 2Pymble was the owner of premises at 23 Ryde Road, Pymble and Mr Molinara was a director of Pymble. Pymble had engaged Millennium Project Group Australia Pty Limited ("Millennium") as a building contractor to carry out construction work at the premises. Between 1 May and 22 June 2007 ("the charge period") the premises were used as a construction site by persons not being Pymble's employees as a place of work. The people in question were sub-contractors and employees of those sub-contractors who were engaged to undertake construction work at the premises. The construction site was unsafe during the charge period in that there were persons that were required to work at height without any fall prevention system in place. At the hearing of the matter, Marks J ruled that the respondents did not have any or any relevant control of the premises that were the subject of the charges and the proceedings were dismissed. 3The appeal was distilled to a singular issue, whether or not, in the circumstances, there was control by Pymble for the purposes of s 10(1). WorkCover ("the appellant") asserted that Pymble, as the owner of the premises, had control of them or, alternatively, by reason of its contact with the builder, retained control of the premises. Marks J, in rejecting both contentions, was said to have misunderstood and misapplied the operation and meaning of s 10(1) of the Act and the concept of 'control' under that section.
The relevant legislation 4Section 10 of the Act is in the following terms: 10 Duties of controllers of work premises, plant or substances (1) A person who has control of premises used by people as a place of work must ensure that the premises are safe and without risks to health. (2) A person who has control of any plant or substance used by people at work must ensure that the plant or substance is safe and without risks to health when properly used. (3) The duties of a person under this section: (a) do not apply to premises, plant or substances used only by employees of the person, and (b) do not apply to premises occupied only as a private dwelling or to plant or substances used in any such premises, and (c) extend to the means of access to or exit from a place of work, and (d) apply only if the premises, plant or substances are controlled in the course of a trade, business or other undertaking (whether for profit or not) of the person. (4) In this section, a person who has control of premises, plant or substances includes: (a) a person who has only limited control of the premises, plant or substances (in which case any duty under this section applies only to the matters over which the person has control), and (b) a person who has, under any contract or lease, an obligation to maintain or repair the premises, plant or substances (in which case any duty under this section applies only to the matters covered by the contract or lease). 5Section 26(1) of the Act is as follows: 26 Offences by corporations-liability of directors and managers (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 6Section 28 is as follows: 28 Defence It is a defence to any proceedings against a person for an offence against a provision of this Act or the regulations if the person proves that: (a) it was not reasonably practicable for the person to comply with the provision, or (b) the commission of the offence was due to causes over which the person had no control and against the happening of which it was impracticable for the person to make provision.
The particulars of the charge 7It is appropriate, as Marks J did, to reproduce below the charge brought against Mr Molinara because it contains within it all of the allegations of the charge and particulars of the charge that were brought against Pymble. [5] Mr Molinara is charged that being a director of Pymble No 1, he was [T]aken to have contravened section 10(1) of the Act in that between about 1 May 2007 and about 22 June 2007 (Pymble No 1) being a person having control of premises at 23 Ryde Road, Pymble being premises used by people as a place of work failed to ensure that the premises were safe and without risk to health contrary to section 10(1) of the Act. The particulars of the charge are:
The relevant facts 8The factual background was undisputed and is set out in the judgment with the provisions of the relevant contracts as follows at [7] to [40]: The factual background [7] The preponderance of the evidence was in documentary form, which was admitted by consent. It included statements made by the prosecutor, who also gave oral evidence. There were also included statements of a number of witnesses, being persons who were performing work in and about the construction site, a company search and photographs. In particular, there was tendered into evidence the building contract by which Pymble No 1 retained Millennium as its principal contractor on the construction site and a great deal of documentation consisting of progress reports produced from time to time by quantity surveyors addressed to the financier of the building works. I shall return to this material later in these reasons for judgment. [8] Because the factual background against which these proceedings were conducted was not in dispute, it is sufficient that I record the following findings, none of which were put in dispute in the proceedings:
Consideration of a number of authorities by Marks J 9Marks J considered the defence that Pymble did not have control of the premises and, therefore, s 10 of the Act did not apply. His Honour considered what was meant by the words "has control of premises" in light of the section, the general regime of the Act and a number of authorities at [44] to [49], as follows: The purposes for which the Act was established are stated succinctly in the Objects section, s 3, which is in the following terms: 3 Objects The objects of this Act are as follows: (a) to secure and promote the health, safety and welfare of people at work, (b) to protect people at a place of work against risks to health or safety arising out of the activities of persons at work, (c) to promote a safe and healthy work environment for people at work that protects them from injury and illness and that is adapted to their physiological and psychological needs, (d) to provide for consultation and co-operation between employers and employees in achieving the objects of this Act, (e) to ensure that risks to health and safety at a place of work are identified, assessed and eliminated or controlled, (f) to develop and promote community awareness of occupational health and safety issues, (g) to provide a legislative framework that allows for progressively higher standards of occupational health and safety to take account of changes in technology and work practices, (h) to deal with the impact of particular classes or types of dangerous goods and plant at, and beyond, places of work. [45] The focus of attention is directed to the health, safety and welfare of people at work. [46] The specific duties directed to employers, self-employed persons, the controllers of work premises, plant or substances and designers, manufacturers and suppliers of plant and substances are set out in Division 1 of Part 2 of the Act. They are expressed in absolute terms and, as is obvious, cover a wide range of circumstances that impact upon the performance of work. [47] Section 10 is expressed not to apply to the control of premises by persons in which only employees perform work. So much is clear from s 10(3)(a). This is a matter that is covered specifically in s 8(1)(a). [48] It may be concluded, in a general sense, that there is an absolute obligation on any person who has the control of premises that are used by people as a place of work other than only employees of the person, to ensure that those premises are safe and without risks to health. [49] Subsection (4) makes it clear that the section is designed to apply to circumstances where a person does not have absolute and exclusive control of the premises. Where there is limited control the duty is confined to "the matters over which the person has control." This is complemented by s 10(4)(b) which deals specifically with an obligation to maintain or repair premises under a contract or lease. The duty is confined to the matters covered by the contract or lease. 10The first authority considered was a decision of Peterson J in the Industrial Court of New South Wales in WorkCover Authority of NSW (Inspector Page) v Woolworths Ltd [1994] NSWIRComm 207; [1994] NSWIRC 95 (" Growth Equities ") in which Growth Equities Services Pty Ltd was also a defendant. Woolworths Limited ("Woolworths") was a tenant in a retail shopping complex managed by Growth Equities. Woolworths had used a number of timber columns, which had been owned and used by a former tenant and which were stored in a storeroom, to partition off an area for the sale of garden plants. Shadecloth, which was owned by Woolworths, was used to connect the columns. The columns were erected by employees of Woolworths. The assistant manager of the retail complex had partly hung some of the shadecloth. The timber columns were unstable. One of them fell, killing a child who was in the retail area. 11Peterson J held that Growth Equities "had a degree of control over the columns which could have led to their withdrawal from use, or non use in the first place." His Honour held that the control that reposed in Growth Equities consisted of a right to have refused Woolworths the request to use the columns. 12The second authority considered was a decision of a Full Bench in McMillan Britton and Kell Pty Ltd v Leslie Mervyn Blake [1999] NSWIRComm 80; (1999) 89 IR 464 (" McMillan "). These proceedings also concerned the provisions of s 17 of the former Occupational Health and Safety Act 1983 as they applied to certain plant that was used on a construction site. There the defendant was able to show that it did not have relevant control over the plant at the time. It had passed it on. 13There the Court had discussed the judgment of Peterson J in Growth Equities and a judgment of Cullen J in the Industrial Relations Commission of New South Wales in Court Session in WorkCover Authority of New South Wales (Inspector Callaghan) v Rowson [1994] NSWIRComm 199; [1994] NSWIRC 76 (" Rowson" ). Rowson was described by the Full Bench at 479 as follows: [T]he defendant operated a chicken farm and contracted with a builder to replace the insulation in the roof of one of the chicken sheds. During the performance of the work, one of the builder's employees fell from the roof to the concrete floor and suffered fatal head injuries. 14Cullen J had dismissed the charge against the defendant owner of the premises because he: [H]ad no control over the method of work which resulted in the fatality. This was a matter under the control of a licensed builder contracted to perform the work. The defendant relied on the competence and skill of such builder and the control of persons working under his direction. 15The reasoning of Cullen J was approved by the Full Bench in McMillan, where the Full Bench observed at 480: The obligation imposed by s.17(1)(b) on the appellant to ensure the plant was safe and without risks to health is to be so viewed and as assisting in the determination of whether it had at the relevant time the requisite degree of control over the subject plant as would make it liable. In other words, the proper operation of the section requires, in our view, the degree of control which a defendant has over plant or substances or non-domestic premises, as the case may be, to be to the extent to which that person is able to ensure safety by guaranteeing, securing or making certain. For that reason, the applicable meaning of "control" in the context of s.17, by reference to its ordinary meaning as earlier outlined, must, it seems to us, have about it the sense of not mere "sway", "checking" or "restraint" but rather controlling in the sense of "directing action" or "command" - the ability of a person to compel corrective action to secure safety, having in mind the context and purpose of the statute, clearly seems to be necessary in order to enable safety to be ensured. If it were otherwise then the alleged controller would be simply unable to assume the strict duty cast by the section. We are satisfied that this approach to the meaning of "control" is consistent with that expressed in Rowson and Growth Securities by adopting the contextual approach stated in Australia and New Zealand Bank . It may be thought that the words "to any extent" qualify the word "control" so as to reduce or diminish the degree otherwise than as we have stated; however, and conformably with the context of the section, the phrase "to any extent, control" means no more than that the person liable being able to compel (or direct or command) to any extent. (At pp 480-481). 16In light of those authorities, Marks J concluded that "control" involved an ability to direct or command the way in which the work was to be performed. It was necessary that the defendant have "the ability ... to compel corrective action to secure safety ...". 17His Honour also considered the judgment of Kavanagh J in Inspector Dall v Brambles Australia [2006] NSWIRComm 213 (" Brambles "). The proceedings arose out of the death of an employee and injuries sustained by two employees of Demtech Pty Ltd ("Demtech"). BHP Limited ("BHP") occupied a site at Port Waratah. It contracted with Brambles Australia Limited ("Brambles") for the demolition of certain structures on the site and the general clean up of the site. Part of that work was, in turn, subcontracted by Brambles to Demtech. While this work was being undertaken, a boiler being demolished collapsed causing the death and injuries. Brambles was charged with a breach of s 10 of the Act. 18There was a comprehensive written contract between BHP and Brambles. Brambles was given a licence to enter the site for the purpose of carrying out the contracted work. That work was required to be carried out in accordance with relevant Australian Standards and Brambles was required to take effective measures for the protection and prevention of injury, loss or damage to people in performing the contract. Brambles was also obliged to ensure that the work was performed in accordance with the requirements of the WorkCover Authority of New South Wales and in compliance with BHP's safety requirements, which were set out as part of the contract. Brambles was made liable to remedy any breach by it of the contract and BHP was entitled to cancel the contract in the event of a breach. 19Brambles entered into a subcontract agreement with Demtech. Relevantly, its provisions reflected those in the head contract between BHP and Brambles. Marks J observed in relation to her Honour's decision in Brambles : [79] The factual circumstances in Brambles are indicative of a classic situation involving control. It must be remembered that Brambles was a head contractor and that Demtech was a subcontractor. The owner of the site was BHP. There does not appear to be any reference in her Honour's judgment to any assertion that in some way BHP had control of the premises. The indicia that led her Honour to conclude that relevant control reposed in Brambles are those that are referred to in [93] of her Honour's judgment, extracted above, and that are summarised in [97] and [98]. Brambles, as head contractor, had a great deal of involvement in the building works being undertaken by Demtech and a great degree of tangible influence extending to a right to direct Demtech in matters affecting, inter alia, occupational health and safety. I observe that the situation as found by Kavanagh J in Brambles is significantly and substantially different from the factual circumstances which apply to Pymble No 1 in the context of these proceedings, to which I have earlier referred. 20In Brambles , certain facts were considered by Kavanagh J to be significant in determining that Brambles had relevant control (at [93], [97] and [98]): [93] The prosecutor submitted the evidence established the defendant in reality exerted its control over the site. The following asserted facts are relied upon by the prosecution in support of this contention: the defendant's safety officer frequented regularly the site and conducted safety meetings. the defendant had "competent" people on the site who supervised. the defendant's site safety officer gave instructions about site safety, visited the site and conducted safety audits. the defendant obtained copies of job safety analysis and work method statements and reviewed them. the defendant instructed all induced collapses were to be reviewed by the defendant. it required Demtech to make available all documentation relating to any induced collapse. the defendant had both contractual capacity to control the site as well as an "in fact" capacity to do. Mr Merritt of the defendant gave instructions to Mr Wade (the defendant's safety officer) to check on Demtech's site safety on a regular basis. the defendant could issue a "show cause" notice and had power to terminate the contract if safety matters were not "fixed". the defendant was "all over the site" by its safety officer Mr Wade (and others) and that it had access to work method statements, job safety analyses, minutes of tool box meetings and to Demtech's personnel, meant it had every possible means of finding out what was happening at the site and how it was happening. It also had the ability to compel compliance with the OHS Act by giving instructions or by acting under the contract. the defendant chose to look in the other direction and take no action. ... [97] Was the defendant a "controller" of the premises at this worksite? Did the defendant have therefore the power to direct action on the premises? The defendant on 19 September 2002 was under contract with the head contractor to demolish structures located at the site. The defendant, notwithstanding it subcontracted out part of the work under a separate contract, was still a licensee of the relevant site. The defendant was along with the subcontractor, a licensee of the premises by the terms of its contract. While under the contract the defendant was able to subcontract out the work to the subcontractor, it did not pass over its obligations to ensure safe working to the subcontractor (cl 10.3.1). The defendant had to ensure work was performed in accordance with Australian Standards (cl. 7.1); it had to comply with all laws (cl 7.2.1); it had to prevent injury, loss or damage (cl 9.1.1); to comply with the head contractor's safety requirements (cl 13.1.2); and to remedy any breach (cls 13.2, 14.1). Under the contract the defendant was obliged to ensure its subcontractors complied with all their similar obligations (cl 10.3.2). [98] The defendant's action on site are also relevant as to whether it was a controller of the premises. The defendant's own site safety officer visited the site regularly; it required the subcontractor to discuss work method statements and information as to when any demolition was to occur; it required the provision of any JSAs for all work on the site; it had the power to issue termination notices. Evidence revealed the defendant conducted safety audits on the site. The defendant then gave the subcontractor written instructions. An example of such an instruction was over a very small issue on 3 June 2001 when the subcontractor was required to remove a hose and keep a walkway clear. Another example was on 5 September 2002, when the subcontractor wrote acknowledging it had received the defendant's "direction" regarding the movement of the scrap from the site. The defendant had conducted a safety audit on site and demanded action from the subcontractor. The subcontractor complied with what it interpreted as a "direction" from the defendant. Further, the defendant had its employees attend site safety meetings with the subcontractor and with the head contractor to determine procedures to be followed and the timetable for work on site. All such activities demonstrate an element of a control being exerted on site through the defendant's activities. The defendant's interaction with its subcontractor was a reflection of the power it held on the site.
Determinative factors at first instance 21The relevant dicta of Marks J is set out in [81] to [89], [91], [93] to [98] and [102] to [105], as follows: [81] In terms of the factual background, the circumstances which apply to these proceedings are manifestly different from those referred to by Kavanagh J in Brambles Australia . There is no evidence that Pymble No 1 or any persons on its behalf frequented the site regularly, or indeed at all. The only evidence is that the site was attended regularly by representatives of the quantity surveyors who provided reports to the financier. Certainly, there is, on the evidence, nothing to indicate any involvement on the part of Pymble No 1 in connection with any safety matters on site. This lack of involvement was a matter upon which the prosecutor relied, and I shall return to this aspect later in these reasons for judgment. [82] Furthermore, there is no suggestion that Pymble No 1 undertook any supervision of the building works or that any instructions were given to anyone about site safety and the like. There is no evidence that Pymble No 1 obtained copies of job safety analyses and work method statements and reviewed them. Furthermore, Pymble No 1 had only limited contractual capacity to deal with the building works. This could only occur in the event of a breach, after giving notice of the breach and the conduct of certain interlocutory steps, which I have previously described. These matters extended also to any safety concerns. [83] I am unable to conclude that there is any basis upon which it could be determined that Pymble No 1 had any ability to give directions to anyone performing building work at the construction site in connection with any matter involving any aspect of the building works. There is no evidence, nor could it be concluded, that Pymble No 1 had the ability to compel the taking of any action or to compel that anyone desist from taking any about safety matters, whether under the contract or otherwise. [84] Mr Reitano submitted that the requisite control could be implied from a number of circumstances. Firstly, if a representative of Pymble No 1 had attended the site and seen that there were people "working near the edge six metres up in the sky, no-one would bat an eyelid at the suggestion that he would have had a right under the contract to say to the contractor: You are in serious default because you are required to comply with relevant legislation and you are presently, as far as I can tell, in breach of s 10 of the Occupational Health and Safety Act . If you have employees here, you may be in breach of other sections. You might also be in breach of s 8(2) and I require you to correct that under pain of termination of the contract." [85] I observe that there is no such provision in the contract that would enable Pymble No 1 to direct that work cease instantly, nor is there any obligation on the part of Pymble No 1 to visit the site or to seek access to it. [86] Secondly, Mr Reitano said that control could have been exercised by Pymble No 1 appointing an architect and the architect giving directions as permitted by the contract. [87] Thirdly, he asserted that Pymble No 1 could have given reasonable notice under clause F to seek access to the site so as to inspect it, especially in terms of occupational health and safety considerations. [88] I observe in connection with the second and third points above that whilst Pymble No 1 had the right under the contract to do either of these things, there was no obligation under the contract on its part to do so and apart from the matters raised by the prosecutor, no need for it to do so. [89] In summary form, it was the prosecutor's submission that Pymble No 1 could not avoid its obligations under the Act by simply "walking away" from any consideration of safety issues by failing to appoint a consultant or architect and by failing to seek access to the site. The fallacy with this submission is that it presupposes, in the first place, an obligation on the part of Pymble No 1 as owner of the site to take some active step in connection with safety matters independently of any contractual obligation (as opposed to entitlement) to do so. There is no such obligation. ... [91] The submissions made by Mr Reitano were made on behalf of the prosecutor, an inspector of the WorkCover Authority of New South Wales, and must be seen as representing the view of that Authority. This is a view that is inconsistent with the decision in Rowson and dismissal by Cullen J of the charge in those proceedings. I repeat that the Full Bench in McMillan Britton approved of the decision in Rowson . It seems to be the position of the WorkCover Authority of New South Wales that ownership of a building site per se will create an obligation under s 10 of the Act to ensure that the building works are conducted in a way that ensures that the premises are safe and without risks to health. This will be the case without any regard at all to the contractual provisions that apply to the carrying out of that work. If this position were correct, then every owner of every building site is liable to prosecution for a breach of s 10 of the Act if building work is carried out by anyone other than the owner in circumstances which render the building site unsafe and which create a risk to the health and safety of any person who is working in or about it including the means of access to or exit from the building site. ... [93] If this is the case, then each owner of premises upon which building work is being conducted will be compelled to make a value judgment about how often and in what circumstances and in what manner the owner should enquire about the safety of the premises having regard for the state of the building works and about any risks to health and safety posed to any persons performing work in and about the construction site. Perhaps such practices already exist in connection with very large construction sites, but one must query whether such practices exist in connection with any building site other than one that is very large. I make these comments so that there may be some awareness in the investment community about the position taken by the WorkCover Authority of New South Wales as reflected in its submissions in these proceedings, submissions that are consistent with those put in previous proceedings taken by way of prosecution for breach under the Act. [94] I reject the submissions made on behalf of the WorkCover Authority of New South Wales that every owner of premises upon which building works are being conducted has "the capacity to control everything that occurred on the premises ..." and that this equates with "control" for the purpose of s 10 of the Act. Such a submission at face value without any reference to any underlying factual situation is plainly inconsistent with the judgment of the Full Bench in McMillan Britton , which in turn endorsed the approach of Cullen J in Rowson . Ownership of premises upon which building works are being constructed does not, without more, create at law an ability to direct or command the way in which the building works are to be performed. It does not create at law the ability to compel corrective action to secure safety on the site. It does not constitute control for the purpose of s 10(1) of the Act. [95] As I have indicated, Mr Reitano submitted that Mr Molinara, or any other representative of Pymble No 1, could have arranged for someone to attend the site to see whether there was anything that was unsafe. Mr Molinara, on the evidence, resided in South Australia. This mattered not, according to Mr Reitano, because Pymble No 1 had the ability to retain persons on its behalf to inspect the site to ensure that it was safe. But this begs the question of how often such inspections should be undertaken. Furthermore, it would be necessary for either the owner or a representative of the owner to possess the necessary technical skills, expertise and qualifications to be able to assess and comprehend whether or not anything that was happening on the construction site created a risk to the health and safety of persons working on or about it. If one extrapolated this assertion, made on behalf of the WorkCover Authority of New South Wales, to its logical conclusion, it would be necessary for the owner or a representative of premises on which construction works were being undertaken to retain such persons with relevant expertise attaching to every facet of the building works being undertaken including every trade performing that work. It would require, in effect, constant and comprehensive supervision of the work being undertaken by the principal contractor and all subcontractors to ensure that the premises were safe and without risks to health as required by s 10. [96] In R v Chargot Limited (t/a Contract Services) and ors [2008] UKHL 73, Lord Hope of Craighead, delivering the principal speech in the House of Lords, speaking admittedly about a provision of a different kind in the equivalent English legislation, said: The first point to be made is that when the legislation refers to risks it is not contemplating risks that are trivial or fanciful. It is not its purpose to impose burdens on employers that are wholly unreasonable. Its aim is to spell out the basic duty of the employer to create a safe working environment. This is intended to bring about practical benefits, bearing in mind that this is an all-embracing responsibility extending to all workpeople and all working circumstances: Robens report, para 130. The framework which the statute creates is intended to be a constructive one, not excessively burdensome. (At [27]) [97] As was made clear by Lord Hope of Craighead, the legislation is intended to be applied in a practical sense so as to reflect everyday life. The imposition of an obligation under s 10(1) on the owner of premises in circumstances where building work is being conducted pursuant to a building contract with a head contractor involving no contribution or interference by the owner does not reflect common sense reality. Furthermore, as I have said, it is inconsistent with the judgment of the Full Bench in McMillan Britton and inconsistent with the approach of Cullen J in Rowson , endorsed by the Full Bench in McMillan Britton . Furthermore, it is inconsistent with the approach adopted by Kavanagh J in Brambles . Her Honour was able to identify many indicia in support of a conclusion that there existed in the circumstances of those proceedings relevant control, in the sense established by the Full Bench in McMillan Britton , which her Honour followed. [98] Of course, there will be circumstances where owners of premises on which building work is being conducted will clearly have the requisite control for the purpose of s 10(1). A clear example is an owner builder. If the owner, having contracted for the whole of the building works to be carried out by a head contractor nevertheless retains the right to influence the manner in which the building works are being carried out and establishes a regime to allow the owner to regularly inspect and make directions about the manner in which the work is to be conducted, this will also arguably constitute control. However, in the circumstances of these proceedings, no such indicia exist. I reject the prosecution's submissions that the ability to regain possession after termination of the building contract or the mere fact that a breach of the Act constitutes a breach of the contract will per se create the requisite control of the premises for the purposes of s 10(1). ... [102] I know of no principle of law, apart from any contractual obligation or entitlement, that would result in the owner of premises upon which building works are being undertaken being able to exercise the relevant control over those building works so as to ensure that the construction site is safe and without any risks to the health of people who are working upon it. Any such control would need to be determined either pursuant to contract or pursuant to some custom and practice or course of conduct established as having an appropriate factual basis. Control cannot be equated with a contingent right of access which may, in certain circumstances, repose in the owner of premises. In the absence of any contractual or other basis properly established on the evidence, it is impermissible to conclude that Pymble No 1 was entitled in some way to direct what action should be taken or to give commands about any action designed to remove the unsafe circumstances and the risks to health which undoubtedly existed on the building site between the dates alleged in the charge. [103] The conclusion that I have reached is reinforced in my opinion by the provisions of s 10(4)(a). There can be no doubt that in the circumstances of these proceedings, if there was any relevant control vested in Pymble No 1 (and I have found that there is no such control), it would be designated as "limited" control. Such control would therefore extend only to "the matters over which" Pymble No 1 had control. If, for present purposes, I assume that there was some control as asserted by the prosecutor in the nature of the ability to access the premises upon reasonable notice or the ability to give notice of a breach, this control would extend to these matters only. It would not extend, without further steps being taken, to the issuing of directions or the giving of commands that the deficiencies be rectified. Whether and to what extent the giving of notice about a breach could have been effected so as to compel action to be taken at some stage between 1 May 2007 and 22 June 2007 is a matter of speculation. In circumstances where there is no evidence that any representative of Pymble No 1 was aware of the state of the building works at any time and in circumstances where I have concluded that there was no obligation of any kind to inspect the premises, it would be unsafe to determine that there was any limited control which extended to the issue of a direction or the giving of a command which would have been effective at any given time after notice of the breach had been given by Pymble No 1 to Millennium and after the procedures which are set out in the building contract had been complied with. [104] For completeness, I return to the particulars of the charge. They are all framed in terms of Pymble No 1 having failed to take certain action. These include the conduct of an adequate risk assessment, the provision of a fall prevention system, the provision and maintenance of a safe work method statement, the provision and maintenance of an occupational health and safety management plan and the conduct of site-specific induction training. These are all matters that would clearly fall outside any control that Pymble No 1 may have exercised in connection with these building works. It is feasible that it could have conducted a risk assessment and could have provided and maintained an occupational health and safety management plan at the premises. However, any such action on its part would have, in turn, required an appropriate interrelationship with Millennium and, in turn, between Millennium and any subcontractors on site. On the other hand, arguably it would be impossible for Pymble No 1 to provide any adequate fall prevention system, to provide and maintain safe work method statements to people who were working at height and to conduct any site-specific induction training before allowing people to work at heights at the premises. In order to attend to any of these matters, it would have been necessary first for Pymble No 1 to have terminated the contract with Millennium. [105] The particulars levelled against Pymble No 1 are inappropriate and inadequate. They do not reflect the case that the prosecutor sought to make out in the course of the proceedings, which was based on a submission that Pymble No 1 should have given appropriate directions or commands to Millennium or others involved in the unsafe circumstances attending to the building site. Arguably, the prosecution case that was put during the course of the submissions is not consistent with any particular with which Pymble No 1 is charged. On this basis also, the proceedings should be dismissed. However, it is not necessary that I determine this particular matter given the conclusion that I have reached, that Pymble No 1 did not relevantly have control of the premises as alleged.
The appellant's submissions 22Mr R Reitano of counsel appeared for the appellant. In summary, the appellant's submissions were: a) During the charge period, Pymble had control of the premises because it had ownership of them: i) in respect of ownership, Pymble had complete dominion over the premises at all material times and it could not contract out of its ability to control the premises and thus attract liability under s 10(1) of the Act (see, for example, the discussion in WorkCover Authority of New South Wales (Inspector Stewart) v Siemens Dematic Pty Limited (No. 2) [2003] NSWIRComm 45; (2003) 121 IR 283 at [42] and Inspector Nikolovski v McCrudden & Anor [2011] NSWIRComm 45 at [63]). b) Control also arose because of the contract between Pymble and Millennium: i) the combination of contractual provisions that applied as between Pymble and Millennium reposed in Pymble, at the very least, limited control over the premises; ii) the relevant contractual provisions were clauses A2, A4, A5, A6, A7, F1, F2, G1, G2 and more generally sections Q and P; iii) the effect of the contractual provisions was to give Pymble the right to appoint an architect who could give directions or instructions to Millennium; to require the contractor to comply with relevant legislation (including the Act); to maintain a satisfactory occupational health and safety system at the premises and to allow Pymble to enter the premises on reasonable notice to inspect them; iv) a breach of the relevant obligations by Millennium entitled Pymble under threat of termination of the contract to seek to have the faults in compliance with the contractual terms remedied; v) in this way the appellant alleged that there was control or at least limited control in Pymble over the premises arising from the contract; vi) Pymble had the ability to access the premises in order to inspect the works to secure progress payments. It could have exercised this power to ensure compliance with the obligation to obey relevant legislation and to have an appropriate occupational health and safety system in place. Marks J effectively disregarded this evidence by ignoring the force and effect of the contractual terms. c) On both bases, the owner of the premises, Pymble, relevantly had absolute or, alternatively, limited control of the premises because of the contract: i) under the contract Pymble had the right or entitlement to give directions over the way in which the premises operated. In this respect, the appellant relied upon the approach taken by Peterson J in Growth Equities , as in that case the manager of the shopping centre had the power to direct Woolworths to cease using the relevant plant under pain of termination of the licence agreement that applied between them; ii) reliance was placed on the judgment in McMillan. In that case the Full Bench held at 480 that: It is worth repeating, we think, that the obligation cast on relevant persons to "ensure" the safety of others is indeed strict and necessarily of a high standard. As Watson J. said in Carrington Slipways Pty. Limited v. Callaghan ([1985] 11 I.R. 467 at p.470), "in their context and purpose, there would appear to be no reason to make any implication that the words 'to ensure' are to be construed in any way other than their ordinary meaning of guaranteeing, securing or making certain"; that view has been consistently followed in later cases and is, we accept, now well settled. The obligation imposed by s.17(1)(b) on the appellant to ensure the plant was safe and without risks to health is to be so viewed and as assisting in the determination of whether it had at the relevant time the requisite degree of control over the subject plant as would make it liable. In other words, the proper operation of the section requires, in our view, the degree of control which a defendant has over plant or substances or non-domestic premises, as the case may be, to be to the extent to which that person is able to ensure safety by guaranteeing, securing or making certain. For that reason, the applicable meaning of "control" in the context of s.17, by reference to its ordinary meaning as earlier outlined, must, it seems to us, have about it the sense of not mere "sway", "checking" or "restraint" but rather controlling in the sense of "directing action" or "command" - the ability of a person to compel corrective action to secure safety, having in mind the context and purpose of the statute, clearly seems to be necessary in order to enable safety to be ensured. iii) the owner of premises always had the power to direct the way in which those premises were utilised or used for any purpose; iv) the contractual provisions permitted Pymble to give directions (whether through its agent, the architect, the contractual terms agreed with its builder or otherwise) as to what was to be done on the premises or, alternatively, to give directions by issuing a notice under pain of termination of the contract as to the way in which the occupational health and safety site plan was to be implemented or, alternatively, as to the way in which relevant legislation was to be complied with; v) this gave Pymble the power to compel, direct or command corrective action so as to secure, guarantee or make certain safety at the premises; vi) the appellant took issue with Marks J's analysis of Brambles at [65] to [78]. It was not relevant that anyone from Pymble, or anyone on its behalf, frequented the premises regularly or at all. It was not relevant to the fact of its control over premises it owned. There was no evidence to indicate any involvement on the part of Pymble in connection with any safety matters at the premises. In the appellant's view, these facts highlighted Pymble's delinquency; vii) the approach taken by Marks J disregarded the very obligation that is imposed by s 10(1) of the Act on controllers (of premises). The fact that Pymble absented itself from premises which it owned and which it had contractual rights in respect of was inculpatory rather than exculpatory. Likewise, the matters at [82] concerning supervision or the failure to give instructions on behalf of Pymble missed the relevant point. Pymble, as the owner of the premises, or, alternatively, contractually as the entity which was entitled to appoint an architect to give instructions, had every right to give directions; viii) the approach taken by Marks J failed to understand that once persons were performing work on premises owned by Pymble, an obligation arose under s 10(1) of the Act; ix) if Pymble controlled the premises it had the obligation irrespective of the obligations of others (including the WorkCover Authority); x) Marks J misunderstood and misapplied the judgment in Rowson . In that judgment the relevant control was said to lay in an occupier of the premises. Here, the issue was ownership. Moreover, in Rowson , there was no contract as between the occupier of the premises and the person performing the work on the roof. Certainly there were no contractual provisions that were the subject of any contest in the determination of the proceedings. Marks J preferred Rowson to the approach of Peterson J in Growth Equities and. moreover, ignored the clear guidance of the Full Bench in McMillan ; xi) section 10(1) of the Act is clear in its meaning and intent: people who control, even in a limited way, premises that are used as a workplace must ensure the safety of people who are at those premises insofar as they are not their employees. The obligation extends to all sorts of people well beyond employers that are dealt with in ss 8(1) and 8(2) of the Act and well beyond self-employed people who are dealt with in s 9 of the Act or suppliers, manufacturers and designers who are dealt with in s 11 of the Act; xii) the approach taken by Marks J to s 10(1) suffers the same deficiency that emerged in WorkCover Authority of New South Wales (Inspector Ching) v Bros Bins Pty Limited [2003] NSWIRComm 386; (2003) 130 IR 62 in that it confused the interpretation and application of s 10(1) with the need to consider the statutory defence as to what may have been reasonably practicable. It also misunderstood the policy behind the Act in securing the safety of workplaces under pain of criminal sanction.
The respondents' submissions 23Mr Molinara appeared in person as Sole Director of Pymble and contended that Marks J correctly applied the authority of the Court and that there was consistency with precedent. In summary: a) the respondents had entered into a binding and legal contract with a licensed builder in the State of New South Wales. Under the terms of that contract, the contractor's obligations in relation to building the works included maintaining a satisfactory occupational health and safety system on site. The respondents did not interfere with the obligations of the contracted parties; b) the building contract specifically required the contractor/builder to perform this function in the contract, and the respondent considered its contractor, being a licensed entity, had the requisite skills and competency to perform this critical function; c) Pymble had no employees, did not have independent safety inspectors, did not visit the site or interfere with the agreed contract between itself and the head contractor. Pymble did not have any interaction with any of the sub-contractors; d) Pymble, as the owners, gave up possession of the site to the contractor, who in turn became the occupier. Breaches of the Act occurred whilst the contractors were the occupiers; e) the appellant contended that Pymble had the power to appoint an architect who would monitor occupational health and safety issues in addition to the contractual obligations imposed by the contract on the builder. The respondents' contention was and remained that there was no legal obligation to do so. Pymble relied on the contractor to perform this function, as it deemed that the contractor had the requisite skills and resources to comply. If Pymble, in fact, had appointed a person to actively monitor occupational health and safety outside its contractual obligations then it would flow that through its own actions it retained an element of control per Cullen J in Rowson .
Consideration 24A consideration of the contract and whether it reposed control in the respondents for the purposes of s 10 of the Act must be premised with an assessment of its terms and the actual means and capacities of the respondents to exercise control over the construction of a building on their land in the facts and circumstances of this matter. 25The appellant submitted that an owner may control the development of land by reason of ownership alone. This may be accepted, but it does not resolve the legal question posed by this matter. By the contract the respondents commissioned a contractor to construct a development on a site it owned. The respondents had no competencies or skills relating to building or the development of the worksite. Nor did they have any particular knowledge of the method of work. It is, in this context and by these means, in our view, that the respondents divested all relevant legal and practical control of construction work on the land. The interaction with the site, as a construction project, was through a third party intermediary for the purpose of progress payments. The provision of a safe workplace for such construction works was subsumed into those arrangements. 26This necessitates, in our view, the conclusion that the respondents did not control the site for the purposes of the Act. It was only by means of divesting control, while building work progressed, to a properly qualified contractor that the respondents could construct the buildings and, in doing so, comply with the Act. 27The various provisions of the contract relied upon by the appellant to demonstrate control served no such purpose, but rather illustrate, in all relevant respects, the remoteness of the respondents from the project and the lack of immediacy in the remedial steps open to them. For instance: (a) although there was an option under the contract which allowed the owner to give instruction through an architect, this was not utilised. There was no mandate under the contract to do so. There was no evidence that any such architect, if engaged, would perform the role of supervising the occupational health and safety at the workplace or that such a professional would have been necessary authority to do so; (b) the respondent could only access the building site on providing reasonable notice. That is, its capacity to interact with the site was contingent on access being granted by the contractor; (c) the respondents could give notice to the contractor to remedy a default. It was not part of the arrangement that the respondents could proactively address faults. Clause Q1 could only be used reactively because the respondent only had contingent access to the site. In addition, it was not realistic that the respondents would utilise the clause because they lacked any skills in relation to the building works. 28Marks J had accurately described the contract as one where (at [82]): Pymble No 1 had only limited contractual capacity to deal with the building works. This could only occur in the event of a breach, after giving notice of the breach and the conduct of certain interlocutory steps, which I have previously described. These matters extended also to any safety concerns. 29The indicia Marks J considered pertaining to the respondents' proximity and actual capacity to exercise control of the premises while the building works went on are also relevant. The following indicia were, in our view, correctly considered in determining whether the respondent could exercise control and had control of the premises: a) there was no evidence that Pymble No 1 or any persons on its behalf frequented the site regularly, or indeed at all; b) the only evidence was that the site was attended regularly by representatives of the quantity surveyors who provided reports to the financier; c) there was nothing to indicate any involvement on the part of Pymble No 1 in connection with any safety matters on site; d) there was no suggestion that Pymble No 1 undertook any supervision of the building works or that any instructions were given to anyone about site safety and the like; e) there was no evidence that Pymble No 1 obtained copies of job safety analyses and work method statements and reviewed them; f) Pymble No 1 had only limited contractual capacity to deal with the building works. This could only occur in the event of a breach, after giving notice of the breach and the conduct of certain interlocutory steps; g) there was no basis upon which it could be determined that Pymble No 1 had any ability to give directions to anyone performing building work at the construction site in connection with any matter involving any aspect of the building works; h) it could not be concluded, that Pymble No 1 had the ability to compel the taking of any action or to compel that anyone desist from taking any about safety matters, whether under the contract or otherwise; i) there was no such provision in the contract that would enable Pymble No 1 to direct that work cease instantly, nor was there any obligation on the part of Pymble No 1 to visit the site or to seek access to it; j) Pymble No 1 had the right under the contract to appoint an architect to give direction. There was no obligation for it to do so; k) Pymble No 1 could have given reasonable notice under clause F to seek access to the site so as to inspect it. There was no obligation for it to so; l) Mr Molinara, on the evidence, resided in South Australia; m) neither the owner nor a representative of the owner possessed the necessary technical skills, expertise and qualifications to be able to assess and comprehend whether or not anything that was happening on the construction site created a risk to the health and safety of persons working on or about it; n) to find control and to ensure safety would require, in effect, constant and comprehensive supervision of the work being undertaken by the principal contractor and all subcontractors to ensure that the premises were safe and without risks to health as required by s 10. 30The respondents' situation can be distinguished from that of the controller of the premises in Growth Equities . There, Peterson J considered that control did not necessarily require possession. However, his Honour considered it important in determining whether there was control to observe that Growth Equities could not only terminate the contracts in relation to OHS breaches but, in addition, had actual proximity to the plant and a capacity to influence the conduct in relation to occupational health and safety. His Honour reasoned (at (16)): Extending that reasoning to this case, the possession of the columns by Woolworths may not obviate control by Growth Equities unless possession is a requirement of "control" under s.17(2)(b). In my opinion the language of the section suggests the contrary. The qualification of control imported by the words "to any extent" should not be read as confined to a duality of control as Mr. Holmes submitted (although it would include it) but naturally extends to cover various degrees of control. Here the evidence suggests that the managing employees of Growth Equities did not consider it their responsibility to oversee the use of the columns (and, incidentally, they did not observe any risks in the use thereof). However, those matters do not absolve them from the duty to exercise any control they may have had. While the evidence is, as I have said, inconclusive, as to any express authorisation of use, I consider that the evidence of each of Messrs. Hunter, Hollingworth and Fanning is consistent with a finding that Growth Equities had a degree of control over the columns which could have led to their withdrawal from use, or non-use in the first place. Mr. Hunter said that he took no role re the columns. Mr. Fanning claims Mr. Hunter suggested their use. Mr. Hollingworth claims Mr. Fanning sought his permission for their use, which he effectively gave with the words "I have no problem with that". On any view of these alleged circumstances a refusal of a right to use the columns, I am convinced, would have caused them to remain safely in store. Equally, Growth Equities staff could have reacted to the configuration of columns and shadecloth on the basis they should not be so used because of the risk involved. I do not accept the proposition that they could do no more than influence as opposed to control the use of the columns. In all practicality, a requirement of Woolworths to not use the columns would have been effective control; a later requirement that Woolworths cease to use them, failing which the licence could be terminated on one week's notice, or the actual removal by Growth Equities of the columns, would be within the scope of the section - "to any extent, control". 31Such a view is consistent with the decision in Rowson, where control of a site was passed off from owner to contractor for the purposes of repair. There, Cullen J observed (at (7)): The evidence in this case indicates that the Defendant had no control over the method of work which resulted in the fatality. This was a matter under the control of a licensed builder contracted to perform the work. The defendant relied on the competence and skill of the builder and the control of the person working under his direction. 32In a more recent analysis of the test for control, the Full Bench stated in McMillan (at (480 to 481)): For that reason, the applicable meaning of "control" in the context of s.17, by reference to its ordinary meaning as earlier outlined, must, it seems to us, have about it the sense of not mere "sway", "checking" or "restraint" but rather controlling in the sense of "directing action" or "command" - the ability of a person to compel corrective action to secure safety, having in mind the context and purpose of the statute, clearly seems to be necessary in order to enable safety to be ensured. If it were otherwise then the alleged controller would be simply unable to assume the strict duty cast by the section. We are satisfied that this approach to the meaning of "control" is consistent with that expressed in Rowson and Growth Securities by adopting the contextual approach stated in Australia and New Zealand Bank. It may be thought that the words "to any extent" qualify the word "control" so as to reduce or diminish the degree otherwise than as we have stated; however, and conformably with the context of the section, the phrase "to any extent, control" means no more than that the person liable being able to compel (or direct or command) to any extent. 33Control was also considered in Brambles. Kavanagh J reviewed contractual and practical indicia which illustrated the proximity of and actual capacity of Brambles to control the subject site in that matter as follows (at [93], [97] and [98]): [93] The prosecutor submitted the evidence established the defendant in reality exerted its control over the site. The following asserted facts are relied upon by the prosecution in support of this contention: the defendant's safety officer frequented regularly the site and conducted safety meetings. the defendant had "competent" people on the site who supervised. the defendant's site safety officer gave instructions about site safety, visited the site and conducted safety audits. the defendant obtained copies of job safety analysis and work method statements and reviewed them. the defendant instructed all induced collapses were to be reviewed by the defendant. it required Demtech to make available all documentation relating to any induced collapse. the defendant had both contractual capacity to control the site as well as an "in fact" capacity to do. Mr Merritt of the defendant gave instructions to Mr Wade (the defendant's safety officer) to check on Demtech's site safety on a regular basis. the defendant could issue a "show cause" notice and had power to terminate the contract if safety matters were not "fixed". the defendant was "all over the site" by its safety officer Mr Wade (and others) and that it had access to work method statements, job safety analyses, minutes of tool box meetings and to Demtech's personnel, meant it had every possible means of finding out what was happening at the site and how it was happening. It also had the ability to compel compliance with the OHS Act by giving instructions or by acting under the contract. the defendant chose to look in the other direction and take no action. ... [97] Was the defendant a "controller" of the premises at this worksite? Did the defendant have therefore the power to direct action on the premises? The defendant on 19 September 2002 was under contract with the head contractor to demolish structures located at the site. The defendant, notwithstanding it subcontracted out part of the work under a separate contract, was still a licensee of the relevant site. The defendant was along with the subcontractor, a licensee of the premises by the terms of its contract. While under the contract the defendant was able to subcontract out the work to the subcontractor, it did not pass over its obligations to ensure safe working to the subcontractor (cl 10.3.1). The defendant had to ensure work was performed in accordance with Australian Standards (cl. 7.1); it had to comply with all laws (cl 7.2.1); it had to prevent injury, loss or damage (cl 9.1.1); to comply with the head contractor's safety requirements (cl 13.1.2); and to remedy any breach (cls 13.2, 14.1). Under the contract the defendant was obliged to ensure its subcontractors complied with all their similar obligations (cl 10.3.2). [98] The defendant's action on site are also relevant as to whether it was a controller of the premises. The defendant's own site safety officer visited the site regularly; it required the subcontractor to discuss work method statements and information as to when any demolition was to occur; it required the provision of any JSAs for all work on the site; it had the power to issue termination notices. Evidence revealed the defendant conducted safety audits on the site. The defendant then gave the subcontractor written instructions. An example of such an instruction was over a very small issue on 3 June 2001 when the subcontractor was required to remove a hose and keep a walkway clear. Another example was on 5 September 2002, when the subcontractor wrote acknowledging it had received the defendant's "direction" regarding the movement of the scrap from the site. The defendant had conducted a safety audit on site and demanded action from the subcontractor. The subcontractor complied with what it interpreted as a "direction" from the defendant. Further, the defendant had its employees attend site safety meetings with the subcontractor and with the head contractor to determine procedures to be followed and the timetable for work on site. All such activities demonstrate an element of a control being exerted on site through the defendant's activities. The defendant's interaction with its subcontractor was a reflection of the power it held on the site. 34Here all the indicia of the parties' actual relationship vis vis the building at the site reflected that control of the premises resided with the contractor with little input by the respondents. The respondents never professed or sought to engage with the site. Nor was it the case that they had any practical means to do so.
Conclusion 35Establishing control for the purposes of s 10 is a matter of fact and degree. Here ownership of the premises by the respondents did not equate to relevant control of the constructed premises because the nature of the contract entered into by the respondents (when seen in the light of the nature of obligations and duties of the parties under the contract, and when understood in terms of the works being performed). The respondents had no capacity to oversee or effectively manage the building works and to all intents passed their responsibility for control to the contractor.
Orders 36The Court orders as follows: 1.Leave to appeal is granted. 2.The appeal is dismissed. 3.There is no order as to costs.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 July 2011
Inspector Nicholson
Pymble No 1 Pty Ltd & Molinara
[1999] NSWIRComm 80
[1994] NSWIRComm 199
[1994] NSWIRComm 207
(1999) 89 IR 464
(2003) 130 IR 62
(2003) 121 IR 283