Inspector Page v Stevens Construction Pty Limited and Alroy Constructions Pty Ltd

Industrial Relations Commission (NSW)|1994-09-23|Before: Boland J, Bauer J, Cullen J, Fisher CJ, Cullen JJ, Fisher P, Mr J, Ms P

Industrial Relations Commission of New South Wales in Court Session

CITATION : Inspector Page v Stevens Construction Pty Limited and Alroy Constructions Pty Ltd [2003] NSWIRComm 226 PROSECUTOR Inspector Victor Page PARTIES : DEFENDANTS Stevens Construction Pty Limited Alroy Constructions Pty Ltd FILE NUMBER: IRC 3937 & 3939 of 2002 CORAM: Boland J CATCHWORDS : Occupational Health and Safety - Section 16(1) of the Occupational Health and Safety Act 1983 - Two defendants - Pleas of guilty - First defendant was principal contractor - Second defendant was subcontractor - Second defendant subcontracted out the erection of formwork - Formwork subcontractor seriously injured in fall from building - First defendant safety system inadequate - Second defendant had no safety system - Second defendant more culpable - Second defendant was small family company - Consideration of the means of the second defendant - Offences proven against both defendants - Penalties imposed LEGISLATION CITED : Fines Act 1996 Occupational Health and Safety Act 1983 Benbow v Converquip Pty Ltd (2001) 106 IR 258 Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, 99 IR 29 Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 Ford v Warrah Ridge Pastoral Company Pty Ltd (unreported, Bauer J, 23 September 1994, Matter No CT1109 of 1993) Haynes v C I & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 Inspector Gordon v MIJO (NSW) Pty Limited (unreported, Cullen J, CT1002 of 1993, 2 December 1993) Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, Glynn and Cullen JJ, Matter No 1214 of 1990, 30 June 1992) Lawrenson Diecasting Pty Ltd v WorkCover Authority of NSW (Inspector Ch'ng) (1999) 90 IR 464 CASES CITED : Manpac Industries Pty Ltd (formerly t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435 Mauger v Krcmar Engineering Pty Ltd [1993] 47 IR 359 Nesmat Pty Limited v WorkCover Authority (NSW) (1998) 87 IR 312 P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102 Robins v C T Plumbing Pty Ltd (unreported, Fisher P, 16 December 1991, Matter No 522 of 1991) Shannon v Comalco Aluminium Ltd (1986) 19 IR 358 Tyler v Sydney Electricity (1993) 47 IR 1 Wong v Melinda Group Pty Ltd (1998) 82 IR 118 WorkCover Authority of New South Wales v Byrne Civil Engineering Constructions Pty Ltd (No 2) [2001] NSWIRComm 264 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (1999) 95 IR 383 WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163 HEARING DATES: 06/26/2003 DATE OF JUDGMENT: 07/30/2003

PROSECUTOR Ms L McManus of counsel Solicitor: Mr J Hanby WorkCover Legal Group

DEFENDANT LEGAL REPRESENTATIVES: Ms P E McDonald of counsel First Defendant Solicitor: Ms S Price Cowley Hearne Lawyers Second Defendant Solicitor: Ms L White Penmans Solicitors

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

Prosecution under section 16(1) of the Occupational Health and Safety Act 1983

Prosecution under section 16(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2003] NSWIRComm 226 1 Stevens Construction Pty Limited ("the first defendant") carried on the business of building construction and was the principal contractor at a building site at Lot 4, 155 The Entrance Road, Erina in the State. The first defendant contracted D & T Constructions for the latter to carry out concrete placement, formwork and steel fixing on the site. D & T Constructions subcontracted the formwork to Alroy Constructions Pty Limited ("the second defendant"). Alan Roy Lehto was a director of the second defendant and was employed by the second defendant as supervisor at the Erina site. The second defendant subcontracted Rossario Anthonio Marafioti to assist in the construction of the formwork.

2 On 19 April 2001 Mr Marafioti was working on a formwork platform about 2.9 metres from the ground. He fell from the platform and suffered multiple injuries including brain damage, cerebral haemorrhages, torn artery, broken nose, fractured skull and chipped ribs.

3 The first and second defendant were each charged with an offence under s 16(1) of the Occupational Health and Safety Act 1983. Mr Lehto was charged under s 50 of that Act and John Wayne Desborough trading as D & T Constructions was charged under s 16(2). The charges against Mr Lehto and Mr Desborough are yet to be dealt with.

4 The charge against the first defendant was that it failed to: [E]nsure that persons not in its employment, in particular, Rossario Anthonio Marafioti were not exposed to risks to their health or safety arising from the conduct of its undertaking while they were at its place of work, contrary to Section 16(1) of the Occupational Health and Safety Act 1983.

5 The particulars of the charge were that the first defendant: a) Failed to provide or maintain systems of work that were safe and without risks to health to prevent persons falling from formwork.

b) Failed to provide such information, instruction, and supervision as may be necessary to ensure that persons working at height had proper fall protection in place.

c) Failed to ensure that persons could not fall greater than 1.8 m in height pursuant to regulation 73(3) of the Construction Safety Regulations.

6 The charge against the second defendant, including the particulars, was in the same terms as that laid against the first defendant.

7 Both defendants pleaded guilty to the charges against them. Agreed statements of fact were tendered in relation to both charges and were in similar terms. Relevantly, the agreed statements stated: 19. On 18 April 2001 Mr Marafioti assisted the Second Defendant in the erection of formwork until about midday when he left the site. Mr Lehto had been told by Mr Marafioti that he was feeling dizzy. By the end of the day the Second Defendant with two subcontractors had positioned the frames. 20. Mr Marafioti returned to the site on 19 April 2001. Mr Lehto requested Mr Marafioti to finish off the deck by positioning several sheets on the deck and to brace the up turned wall and place the coil ties on the up turned wall. 21. Mr Marafioti was working on a formwork platform (or form ply deck). It was a leading edge for the ultra floor to be landed on. The ultrafloor was to be landed the following day. 22. He was working with Matthew Halls, who had also been contracted by the Second Defendant. 23. Mr Marafioti fell from the formwork platform onto the area below. 24. He suffered multiple injuries including brain damage, cerebral haemorrhages, torn artery, broken nose, fractured skull and chipped ribs. 25. Mr Marafioti has not returned to work. He has continuing health problems. 26. Mr Lehto was working approximately 6 metres away from Mr Marafioti and Mr Halls. 27. John Desborough of D & T Constructions was working on Site but in a different area. 28. No fencing, barriers or other safeguards were in place at the area where Mr Marafioti was working to prevent persons falling from the formwork deck. 29. Mr Marafioti did not undertake a site specific induction prior to him commencing work at the site. However Mr Marafioti did hold a site induction card for OHS General Induction Registration No. C08208. 30. The Construction Safety Regulations require that where persons are exposed to a risk of falling 1.8 metres or more, safeguards such as edge protection (for example handrails, guardrails, scaffolding) must be put in place prior to carrying out any work or progressively as the deck is being constructed and must remain in place until other fall protection safeguards are implemented. 31. The Code of Practice for Formwork dated 22 June 1998 stated that "Where the erection of formwork deck involves work at a height of more than one standard frame (of the standard 1.9m height) with end fittings, a system to prevent or arrest falls must be provided to safeguard persons at risk of falling." 32. On 19 April 2001, Inspector Peter Riley of the WorkCover Authority of New South Wales attended the premises and observed the following: (a) A formwork structure including 1 level of standard frame with end fittings extended, supported on 1 level of timber dunnage, with formwork bearers, joists and form-ply attached on the top. He measured this height to be 2.9 metres from the form-ply deck to the ground. (b) The frame was erected on uneven dirt and clay ground. (c) Outside the frame and in close proximity there was a timber pallet on which there was stacked a number of concrete blocks from one level closest to the frame to three levels furthest from the frame, each block measuring 200mm X 200mm X 400mm. (d) One of the blocks on the second level, in the centre of the right side of the pallet when looking at the frame, had a brown stain on the corner of the block in a position on the concrete block closest to the frame and towards the right. (e) On the ground at the right front corner of the frame there was a yellow tape measure, a red pencil, an orange work vest, a white shirt with a blue collar, a blue cap with yellow/brown brim with the words "CASCADE PREMIUM LIGHT" written in white, a pair of wire clips, a pair of wire frame sunglasses, and a roll of red and white nylon mesh. Most of these items as well as the timber dunnage, the adjacent block wall and some of the ground had red/brown stains on them. (f) On the left of the frame when looking at it there was a pile of sand and an aluminium ladder that was used to access the formwork platform. (g) At the time of the inspection, at the area identified as the place where the accident occurred, there was no fencing or other measures in place on the platform to prevent persons falling off the formwork. 33. The First and Second Defendants fully co-operated with WorkCover and its inspectors. 34. The First and Second defendants have no prior convictions.

8 In relation to the first defendant other evidence tendered by the prosecutor in the proceedings consisted of: (i) A factual inspection report relating to the incident on 19 April 2001 completed by Peter Riley, Regional Inspector, WorkCover Authority of New South Wales. (ii) Eleven colour photographs taken by Inspector Riley on the day of the incident showing various aspects of the building site including the formwork from which Mr Marafioti fell. (iii) A statement of prior convictions showing that the first defendant had no prior convictions under the Occupational Health and Safety Act .

9 The first defendant's evidence consisted of: (i) An affidavit sworn by Keith Ogden, a director and chief estimator of the first defendant. (ii) An affidavit sworn by Zoran Lazic, a foreman employed by the first defendant. (iii) An affidavit sworn by Tony Wealand, senior project manager employed by the first defendant.

10 None of the deponents were required for cross examination. Mr Ogden's affidavit described the nature of the first defendant's business, measures taken to gain assistance in implementing occupational health and safety policies and the first defendant's participation in WorkCover's premium reduction scheme. Mr Lazic's affidavit was relevantly to the effect that:

· Anyone working on the site was supposed to be inducted to the site. Site induction provides information on occupational health and safety matters. Mr Lazic was not aware that Mr Marafioti had commenced work on the site, therefore, Mr Marafioti was not inducted.

· Since the accident the first defendant has implemented new procedures relating to occupational health and safety including the holding of weekly site safety meetings and monthly supervisor training. The first defendant also requires work method statements from subcontractors which are checked to ensure compliance. The first defendant places much greater emphasis on workplace safety and has revised its occupational health and safety and rehabilitation policy.

11 Mr Wealand's affidavit dealt with changes to the first defendant's management structure and detailed the measures to improve occupational health and safety policies and procedures. In his affidavit Mr Wealand said: The Stevens Group has changed culture from being reactive to proactive and after the accident in April 2001, realised that we needed a process whereby we could be shown and assisted to improve workplace health and safety. We have moved from sessions concentrating on the downside of not complying with our obligations, to those where we are much more proactive at looking for and encouraging compliance including, for example, sessions on people handling skills in order to work with our sub-contractors on sites to ensure health and safety of everyone on site.

12 In relation to the second defendant the prosecutor tendered the following: (i) A record of prior convictions indicating the second defendant had no prior convictions under the Occupational Health and Safety Act . (ii) A factual inspection report of the incident on 19 April 2001. (iii) The same bundle of eleven colour photographs tendered in relation to the first defendant.

13 For the second defendant, affidavits by Mr Lehto and his wife, Leanne Lehto, were read.

14 Mr Lehto's affidavit described the nature of the second defendant's business and an explanation of what occurred on 19 April 2001. In his affidavit Mr Lehto said:

· No one from D & T Constructions P/L or Stevens Constructions P/L ever told me that it was my responsibility to provide scaffolding or handrails on this site.

· Mr Marafioti told me that he held an OHS site induction card. · Mr Marafioti was connecting wall bolts on a leading edge of formwork which effectively requires the tradesperson to work into space. · With the benefit of hindsight I can see there should have been a barrier to protect Marafioti in the event of his falling. I have never seen the erection of such safety guards or scaffolding on a leading edge such as that which Marafioti was working at the time of the accident. · I am now aware that the company should have conducted a risk assessment/hazard identification for the erection of the formwork at the site. D & T Constructions never requested such risk assessment/hazard identification from us. We were taking our instructions from them. · It was unclear to me who was responsible to put up the barriers on this particular formwork deck. · I had always participated conscientiously in any safety discussions at all sites on which my company was performing work. I am now proactive in conducting risk assessment/hazard identification procedures each and every day.

15 Mr Lehto described the changes he had made to occupational health and safety procedures and the training he and his employees had undertaken in relation to occupational health and safety. He deposed that the net assets held jointly by he and his wife were valued at $350,000. Mr Lehto said that: The accident and the prosecution of my company and myself has caused enormous distress to me and has placed stress upon my marriage. I have not expanded my business as much as I would have if I had not been facing these proceedings. I have struggled to pay my legal costs in preparation for sentence hearing in this matter and will have to either extend my mortgage over my house or sell a car to pay the penalty imposed by the Court.

16 Leanne Lehto is a secretary employed by the second defendant. She deposed that the second defendant employed four persons and had a turnover of $360,000 at the time of the accident. Attached to Ms Lehto's affidavit was the second defendant's trading and profit and loss statements for the years ending 30 June 2001 and 2002. Ms Lehto expressed regret for the accident. She said that she and her husband would personally bear the penalty imposed on the second defendant. Consideration

17 In relation to the first defendant the evidence shows that it did have a system in place which, if it had been observed, most probably would have averted the risk to health and safety arising out of the events of 19 April 2001. The contract between the first defendant and D & T Constructions required the latter to provide a work method statement "with particular emphasis on safe performance of the Subcontractor Works and full and proper protection of its employees and other personnel …" The contract also referred to the site safety requirements that D & T were required to observe including the provision of handrails and approved fencing where a person could fall more than 1.5 metres.

18 A work method statement was in fact provided by D & T which identified the hazard of working at height. This was to be addressed by "No persons shall work above 1.80 metres where they could fall. Suitable barriers or barricade systems will be provided and fully maintained at all times." Further, that "Supervisor trained. (sic) All persons have been instructed." It was evident, however, the work method statement, in so far as it related to Mr Marafioti, was not worth the paper it was written on. Mr Marafioti was working above 1.8 metres where he could fall and there were no barriers in place to prevent him falling. There was no evidence that Mr Marafioti had been trained in relation to the hazard of working at heights.

19 These particular failures would appear to be more appropriately sheeted home to someone other than the first defendant. However, the first defendant's failure, in its role as principal contractor with relevant supervision on site, was the failure to ensure that its subcontractors, in particular, D & T Constructions, actually fulfilled their safety obligations by providing and maintaining systems of work that ensured there was appropriate fall protection in place so that persons did not fall and that persons working at heights were properly instructed and supervised. There is little point in a principal contractor having a paper system in place aimed at protecting the health and safety of workers if the principal contractor does not also have an adequate system in place that ensures work method statements are actually implemented.

20 I note Mr Lazic's evidence that he was unaware of Mr Marafioti's presence on the site and that, therefore, Mr Marafioti was not "inducted" and did not receive instruction regarding occupational health and safety. This highlights a further flaw in the first defendant's system of work having regard to its occupational health and safety responsibilities on the site.

21 It is evident that the risk to safety of a person falling off the formwork deck was foreseeable and, indeed, foreseen as Ms P E McDonald, counsel for the first defendant, properly conceded. Appropriate measures to avoid the risk were readily available and feasible and included that: (i) Fall protection was in place; (ii) A safe working procedure was followed; and (iii) All persons working on the site were provided with adequate information, instruction and supervision.

22 In relation to the relevance of the maximum penalty for an offence, Wright J, President observed in Walco Hoist Rentals at 185-186: The maximum penalty available for an offence reflects the "public expression" by parliament of the seriousness of the offence; a large penalty indicates the gravity of the offence as perceived by the community. The task of the Court is thus to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the penalty scale of penalty set by the legislature from zero to the maximum: Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 698 - 699; Nesmat Pty Limited v WorkCover Authority (NSW) (1998) 87 IR 312 at 321; and Albury City Council at 407 - 408. The maximum penalty in this matter is $550,000.

23 The occurrence of death or serious injury may manifest the degree of seriousness of the risk to safety: Inspector Hannah v Wonar Pty Ltd (unreported, Fisher CJ, Glynn and Cullen JJ, Matter No 1214 of 1990, 30 June 1992); Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131; Lawrenson Diecasting Pty Ltd v WorkCover Authority of NSW (Inspector Ch'ng) (1999) 90 IR 464 at 476; WorkCover Authority of NSW (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 at 428-428; WorkCover Authority of NSW (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163 at 185. In this case Mr Marafioti suffered serious injuries and has continuing health problems.

24 I consider that the offence was in the moderately serious range but it was not a case of an employer completely ignoring a known and apparent danger or having no regard to appropriate occupational health and safety standards in the workplace. 25 In relation to general deterrence, the offence committed by the first defendant was in the building industry in the course of the construction of a new office development for the first defendant. Falling from heights is an ever present danger in the building industry and in setting a penalty in such circumstances general deterrence should be a factor, although the penalty should be at a level that will realistically operate as a deterrent but not so high as to be oppressive: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; 99 IR 29.

26 As to specific deterrence, I consider that the defendant has taken prompt and appropriate steps to avoid any further risks to health and safety. The first defendant has a good safety record operating as it has for over 14 years in an inherently dangerous industry and has no prior convictions. Whilst I propose to include an element for specific deterrence in the penalty it will not be substantial.

27 There are a number of subjective factors to be taken into account in sentencing. These factors are: 1. The first defendant pleaded guilty at an early stage. 2. The first defendant cooperated with the WorkCover Authority in its investigations. 3. The defendant took immediate steps to eliminate the particular risks that gave rise to the charge in this matter including: (a) Immediate reminder and reinforcement to employees and subcontractors of their responsibilities to comply with safety requirements. (b) Improvement in the induction process on site through the introduction of a more comprehensive induction procedure. (c) Enhanced recording of persons who have been inducted onto site. (d) Improved and more comprehensive monitoring of the compliance by subcontractors to safe systems of work. (e) Enhanced communication on site between the head contractor and subcontractors through weekly site safety meetings. 4. The first defendant has demonstrated an ongoing commitment to occupational health and safety. 5. The first defendant has no previous convictions. 6. The first defendant expressed contrition and remorse.

28 I turn to the second defendant who had been contracted by D & T Constructions in relation to the erection of formwork and concrete placement on the site and who in turn subcontracted Mr Marafioti to work on the placement of ground floor formwork and suspended formwork.

29 Mr Lehto's evidence reveals that he had a lamentable lack of regard for safety. Mr Marafioti had not performed any work for the second defendant previously and Mr Lehto had not previously met him prior to 17 April 2001. Yet Mr Lehto was prepared to accept at face value that Mr Marafioti held an "OHS site induction card". On 18 April 2001 Mr Marafioti complained of feeling dizzy and went home at midday. Yet the following day Mr Lehto allowed Mr Marafioti to work at a height of 2.9 metres and "into space" without any fall protection and without any inquiry as to whether or not Mr Marafioti was fit to work at heights.

30 It is also evident that prior to 19 April 2001 the second defendant had no systems in place on the building site in question to protect persons from risks to their health and safety. A subcontractor cannot transfer its responsibility under the Occupational Health and Safety Act to the principal contractor; it cannot say that a particular aspect of health and safety protection such as the erection of hand rails and fall protection lies outside the scope of its responsibility. If the fall protection has not been put in place, the subcontractor's obligation is to ensure that persons in respect of whom it has a responsibility in relation to health and safety are not put at risk. Mr Lehto was aware that there was no fall protection at the location from which Mr Marafioti fell and he was aware that Mr Marafioti was working at that location.

31 In my opinion, the risk to health and safety was readily foreseeable and capable of being avoided by the measures I earlier referred to in relation to the first defendant. That Mr Lehto did not recognise the risk and, therefore, did not foresee it is not to the point. as it was said in Shannon v Comalco Aluminium Ltd (1986) 19 IR 358 at 364: The standard of foreseeability is objective, but it is not necessary to show that a reasonable man placed in the defendant's position would have foreseen as a possibility the particular chain of cause and effect involved in the happening of the defendant's accident.

32 The maximum penalty in this case is $550,000. As to the relevance of the seriousness of the injuries sustained by Mr Marafioti I have already addressed this in relation to the first defendant.

33 The offence was in the moderately serious range. However, I consider that the second defendant's culpability was greater than that of the first defendant. In P F Thearle & Co Pty Limited v WorkCover Authority of New South Wales (Inspector Reynolds) [2002] NSWIRComm 102 it was said that: When determining an appropriate penalty in circumstances where more than one individual or legal entity can be said to have contributed to the relevant risk it is important to view the seriousness of the defendant's offence by reference to the contribution of the defendant to the relevant risk: see WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (1999) 95 IR 383.

34 In the present case, whilst the charge and the particulars of the charge were the same for both defendants the second defendant's contribution to the risk to safety was greater than the first defendant. Whilst the first defendant did have in place an extensive safety system, its essential failure was a failure to adequately adhere to that system. On the other hand, the second defendant had no recognisable safety system in place and demonstrated a disregard for safety issues. Moreover, I consider that the more proximate cause of the detriment to safety was the second defendant's failure to ensure that its subcontractor, Mr Marafioti, was provided with proper instruction and supervision and worked in circumstances that were safe.

35 There are a number of subjective factors to be taken into account. The second defendant entered a plea of guilty at an early stage. Further, the second defendant has no prior convictions under the Occupational Health and Safety Act. The second defendant also cooperated with the WorkCover Authority in its investigations.

36 The second defendant has taken appropriate steps to improve its occupational health and safety policies and procedures and has a much greater awareness of the need to be vigilant in such matters. It is evident that the second defendant is only a small operation and that any penalty would have to be borne by the Lehto family. The evidence showed that for the year ended 30 June 2001 the second defendant made a net loss of $89,022.96. In 2002 on a gross profit from trading of $313,401.71 the second defendant made a net profit of $4,095.57. Net joint assets of Mr and Mrs Lehto were valued at $350,000. The second defendant employs four employees and subcontracts work to various tradespeople.

37 In WorkCover Authority of New South Wales v Byrne Civil Engineering Constructions Pty Ltd (No 2) [2001] NSWIRComm 264 Hungerford J was dealing with a not dissimilar situation of a small family company as the defendant and the question of the defendant's means. His Honour referred to the: [D]etails of the defendant's income and expenses for the period from 1 July 2000 to 31 March 2001. For that period of nine months, the document disclosed the defendant's income totalled $430,824 with expenses of $359,620 giving a net income before tax of $71,204. Mr Byrne deposed further that as at 11 May 2001 the defendant had no employees. In a further affidavit sworn on 25 May 2001, again filed by leave with the consent of the prosecutor, Mr Byrne annexed a true copy of the defendant's balance sheet for the year ended 31 March 2001 indicating its position for that year and for the previous year ended on 31 March 2000; also annexed was a true copy of the trading, profit and loss statement as at 31 March 2001 showing details for that year together with the previous year ended on 31 March 2000. I do not propose to analyse in any detail those financial documents, suffice it to indicate that they disclosed the defendant had an authorised capital of 1.0 million ordinary shares at $1.00 each but its issued and paid-up capital was $2. 00 from two ordinary shares at $1.00 each. The balance sheet for the current year disclosed net assets of $201,000 and for the previous year of $187,652; current assets for the present year showed loans to directors in the sum of $83,067. For the present year, the net operating profit was $13,347 compared to an amount of $188,952 for the previous year which amounted to unappropriated profit as at 31 March 2001 of approximately $201,000.

38 His Honour dealt with a number of the relevant authorities as follows: 16 The Fines Act 1996 in s 6 requires a court in exercising discretion to fix the amount of any fine to consider the means of the defendant. In any event, this Court and its predecessors have consistently, as a matter of principle, taken into account the means of a defendant in assessing an appropriate penalty for the breach of occupational health and safety legislation. The approach was put this way by a Full Court of the former Industrial Court in Haynes v C I & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 at p 457 : In a number of cases decided under the OHS Act where the corporate structure of the defendant has been shown to be little more than the means of distribution of earnings arising from personal exertion, or where, as a matter of corporate structure, the burden of any fine levied would fall on one person or one family group ownership, the Court has seen it appropriate to impose a fine substantially less than if the corporation was functioning as a company with assets of a substantial kind. (See Gordon v MIJO (NSW) Pty Ltd; Ford v Warrah Ridge Pastoral Company Pty Ltd (unreported, Bauer J, 23 September 1994, Matter No CT1109 of 1993); Robins v C T Plumbing Pty Ltd (unreported, Fisher P, 16 December 1991, Matter No 522 of 1991) and Mauger v Krcmar Engineering Pty Ltd [1993] 47 IR 359). We consider that as precedent has been developed there are two strands to the consideration of fines under the OHS Act. The first comes into play when the defendant is an individual and there is no corporate structure. Where the defendant is a company with the structure as above considered, the principles and approach adopted in the cases above cited are to be applied.

17 In the present case, it is clear from the information provided in Mr Byrne's two affidavits sworn in May 2001 that although the defendant presently has no employees, no doubt managing its affairs through Mr Byrne as the director, it nevertheless continues trading at a not insignificant level in the industry and even though its paid-up capital is $2.00. On the evidence, it is open to conclude, as I do, that the respondent conducts a sizeable operation which, apart from Mr Byrne as the working director, regularly engages persons employed by labour hire companies to perform work for which it had contracted and where its equipment is utilised - that was certainly the case during the period in late-1997 to which the present offence related. In that situation, and having in mind the evidence as to the financial position, I do not see this as a case, as the Full Court observed in C I & D Manufacturing (No 2) , "where the corporate structure of the defendant has been shown to be little more than the means of distribution of earnings arising from personal exertion, or where, as a matter of corporate structure, the burden of any fine levied would fall on one person or one family group ownership". In my view, it is appropriate in assessing penalty here to regard the defendant as a corporation but of a relatively small size and where any financial burden from a penalty would be met by one family. Even so, I necessarily must have in mind the comments of a Full Bench of the Court in Manpac Industries Pty Ltd (formerly t/as Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of New South Wales ( Inspector Glass) [2001] NSWIRComm 190 in par [82], as follows: [82] However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at pp 209-210, Wright J, President observed : "... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty.

When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence. ..."

18 In WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163 at pp 185-187 in pars [21]-[27], Wright J, President extensively reviewed the principles applicable to sentencing under the Occupational Health and Safety Act and in Benbow v Converquip Pty Ltd [2001] NSWIRComm 85 in par [42] his Honour stated that such principles were well settled. It is sufficient for present purposes to cite the following extracts from his Honour's judgment in Walco Hoist Rentals (99 IR at p 185): [22] The primary factor to be considered in determining the appropriate sentence is the objective seriousness of the offence charged. This has been expressed in various ways. For example, by observing that "the true measure of penalty lies in the nature and quality of the offence" ... The proper approach involves initially considering the gravity of the offence viewed objectively with the Court ensuring that the allowance for subjective factors does not produce a sentence which fails to take account of the objective gravity of the offence ... The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety ...

[23] The proper consideration of subjective matters such as "previous good industrial citizenship and the absence of prior convictions", rank in importance well behind "the two primary aspects of the matter namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce" ... The maximum penalty available for an offence reflects the " public expression" by parliament of the seriousness of the offence; a large penalty indicates the gravity of the offence as perceived by the community. The task of the Court is thus to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the penalty scale of penalty set by the legislature from zero to the maximum ... Although some cases have referred to the consideration that a penalty should not be " oppressively high", such dicta should not be considered as qualifying the approach to balancing subjective and objective factors ... 19 The approach so stated was affirmed by the Full Bench in Manpac Industries (in pars [69]-[71]). In summary, then, the proper approach in sentencing an offender is to consider the objective seriousness of the offence charged in terms of its nature and quality so as to compel attention to occupational health and safety risks but not so as to be oppressively high; matters subjective to the defendant, such as previous good industrial citizenship and the absence of prior convictions, whilst relevant rank in importance well behind the primary aspect of the nature and quality of the offence. Overall, a penalty is to be imposed so as to give effect to the clear policy of the Occupational Health and Safety Act , namely, the establishment of safe standards and the protection of the workforce. I will so approach the present matter.

39 I propose to take the same approach to sentencing the second defendant as Hungerford J in Byrne. 40 In relation to the first defendant and having regard to the objective seriousness of the offence committed by that defendant, I consider an appropriate penalty to be $100,000 with a discount for the early plea of 25 per cent and a further 10 per cent for other subjective factors. This results in a fine of $65,000.

41 In relation to the second defendant and having regard to the objective seriousness of the offence committed by that defendant, I consider an appropriate penalty to be $120,000 with a discount for the early plea of 25 per cent and a further 10 per cent for other subjective factors. This results in a fine of $78,000.

42 The Court makes the following orders: Matter No 3937of 2002 - Stevens Construction Pty Limited 1) The offence is proven and a verdict of guilty is entered.

The defendant is convicted of the offence as charged. 3) The defendant is fined an amount of $65,000 with a moiety thereof to the prosecutor.

The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. Matter No 3939 of 2002 - Alroy Constructions Pty Limited 1) The offence is proven and a verdict of guilty is entered. 2) The defendant is convicted of the offence as charged. 3) The defendant is fined an amount of $78,000 with a moiety thereof to the prosecutor. 4) The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs.

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