Inspector Robert Johnston v Hire N' Higher Scaffolding Pty Ltd; Inspector Robert Johnston v Lipman Pty Ltd

CATCHWORDS: Occupational health and safety - prosecutions under s 8(2) of the Occupational Health and Safety Act 2000 - dogman falls five metres from scaffolding - sentence hearings following findings of guilt against both defendants - risk to safety obvious and reasonably foreseeable - second defendant's system of work in place at time of offence - importance of general deterrence in relation to falls from heights on construction sites - specific deterrence - respective culpabilities of both defendants considered and assessed - contribution of accident victim's employer also considered - absence of prior convictions - subjective factors considered - financial capacity of the first defendant to pay a fine considered - penalties - orders - costs.

Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Fines Act 1996 Occupational Health and Safety Act 2000

Capral Aluminium v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 Department of Mineral Resources (Chief Inspector Mackenzie) v Berrima Coal Pty Ltd and Another (2001) 105 IR 348 CASES CITED: Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 Inspector Robert Johnston v Hire N' Higher Scaffolding Pty Ltd; Inspector Robert Johnston v Lipman Pty Ltd [2006] NSWIRComm 9 Wong v Melinda Group Pty Ltd (1998) 82 IR 118

Prosecutor: Mr P. Skinner, of counsel Solicitors: Carroll & O'Dea

First defendant: LEGAL REPRESENTATIVES: Mr V. R. W. Gray, of counsel Solicitors: Corporate & Civil Legal

Second defendant: Mr P. Newall, of counsel Solicitors: Hicksons

Inspector Robert Johnston v Higher N' Hire Scaffolding Pty Ltd

Prosecution under s 8(2) of the Occupational Health and Safety Act 2000

Prosecution under s 8(2) of the Occupational Health and Safety Act 2000

1 The defendants Hire n' Higher Scaffolding Pty Ltd and Lipman Pty Ltd (first and second defendants respectively) have each been found guilty of one offence under s 8(2) of the Occupational Health and Safety Act 2000 following contested proceedings: Inspector Robert Johnston v Hire N' Higher Scaffolding Pty Ltd; Inspector Robert Johnston v Lipman Pty Ltd [2006] NSWIRComm 9. 2 As set out in the judgment both charges concerned events that took place on 25 June 2002 at the Neeta Shopping Centre, Court Road, Fairfield when shortly after 8am an employee of Pitchku Materno Pty Limited (then known as Deno's Hire Pty Limited trading as Deno's Cranes) fell some five metres through scaffold planks. The prosecutor had alleged that neither defendant at the time had provided any system of work to ensure the employee's safety, and that he was not provided with a system for adequate fall protection.

3 The facts and the evidence upon which the allegations were based have been dealt with in detail in my judgment and I do not propose to repeat them here. 4 The defendants come before the Court for sentence following the hearings and the findings of guilt against them in relation to both charges. Having considered the objective criteria in existence before and at the time of the offences I am compelled to the conclusion that the offences are objectively serious.

Risk to safety was obvious and reasonably foreseeable 5 During the contested proceedings I found that the relevant risk to safety was the risk occasioned to Mr Murdock of falling from scaffold planks. In my view that risk to Mr Murdock's safety was both obvious and reasonably foreseeable. At the time of the offence he was working on an elevated platform some five metres above the ground attaching loads of scaffolding planks to a moving crane without any kind of fall protection device and without any other measures having been implemented to ensure his safety. There were also a number of steps reasonably open to the first defendant that could have been taken to obviate the risk. These steps included the erection of temporary decking which was an option that had been canvassed following the incident in a work method statement created by both defendants in joint consultation and implemented by them shortly after the incident. In relation to the second defendant, Mr Quinlan the site foreman on the day of the offence and an employee of the second defendant, gave an instruction to the crane crew of which Mr Murdock was a member, which was to the effect that they should wait until the scaffolders arrived. This instruction left open the possibility that the crane crew believed that they could properly commence work when the first defendant's employees indicated that they needed a lift. The evidence revealed that Mr Murdock commenced work on the elevated platform without the benefit of any procedures as to how to undertake the task safely and without any fall protection. Both omissions I found were directly attributable to the defendants.

Systems of work in place at the time of the offences 6 The circumstances in which the first defendant failed to provide any fall protection to Mr Murdock were, simply put, that no measures at all were taken to either provide some form of fall protection or inquire of the second defendant or Deno's Cranes as to whether there were any available. Indeed what the evidence suggested is that the first defendant took the view that such measures were outside its area of responsibility. Mr Ross who was the person nominated in the first defendant's work method document as the person on site responsible for supervision of the worker's safety said in evidence when asked whether he thought Mr Murdock should have been wearing a safety harness:

It's not up to me you see nothing to do with me whatsoever. That is something between Lipman or his boss. It has nothing to do with me.

Mr McCarron, the first defendant's director, also took no active role to ensure that the first defendant implemented measures aimed at ensuring the safety of Mr Murdock at the site. He assumed that Mr Ross would fulfil that task. In evidence Mr McCarron was asked the following questions to which he gave the following answers:

Q: Was anything other than the dogman relying on his own observation done to alert him to a potentially hazardous situation? A: Not to my knowledge but as far as he is - not to my knowledge

Q: As I understand your answer just now is that nothing was done to alert the dogmen to the foreseeable hazardous situation to your knowledge. The question is did you direct anyone to do something? A: My leading hand which I have full respect for should tell him whether you are or are not going up there or do you feel safe up there I have full confidence in my leading hand. 7 The evidence revealed that the first defendant also failed to provide any system to ensure the scaffolding was dismantled in a safe manner. No directions were given to the crane crew by any members of the first defendant apart from Mr Ross' instruction to the dogmen that he needed a lift. The first defendant did have a work method document which it had submitted to the second defendant which may or may not have adequately covered relevant safety aspects. The document however was not in the circumstances relevant to Mr Murdock's safety. Its contents were not brought to his attention and no aspect of his safety was discussed with him by any representatives of the first defendant nor were measures of any kind taken by the first defendant to ensure that Mr Murdock could safely perform his work.

8 The conclusions I draw from this evidence is that the first defendant did not take any measures to ensure the safety of other workers at the site who were not its employees. Instead, the Court is left with the firm impression that the first defendant took the view that it had no obligations to ensure the safety of any persons other than its own employees at the site. This is not and has never been a correct or acceptable view of the law. 9 The second defendant on the other hand had in place a system to ensure the safety of all contractors on the site. That system included a practice of inducting all workers at the site and included the requirement imposed on all contractors upon entering the site to produce a work statement. The evidence disclosed that the first defendant provided such a document to the second defendant. Deno's Cranes had generated their own work method statement and sent it to the site with the crane crew. It was not however produced to Mr Quinlan or any other employee of the second defendant although Mr Quinlan at least had intended to ask for it before the crew commenced work at the site. Mr Quinlan had also intended to induct the members of the crane crew before they commenced work. The standard induction involved discussion on how to perform a particular task. The second defendant utilised a standard form which was to be completed by each worker during the induction. This form required details of a worker's qualifications and employer to be filled in. Questions were also asked of each worker as to his or her company's particular work method statement. After the induction a worker was given the two back pages of the standard form and the second defendant retained the first page. As I found in my earlier judgment Mr Murdock was neither inducted nor asked about a safe work method statement. Had he been it seems likely that Mr Quinlan would have detected Mr Murdock's inability to read and appropriate safety measures would have been devised to ensure that he worked safely on the elevated platform. 10 There is no doubt that Mr Murdock and other members of the crane crew would have benefited from this system if they had been inducted upon their arrival at the site. This should have happened and there was nothing in the evidence to suggest that it could not have happened. Nevertheless, the existence of such a system which was operative at the time of the offence provides some evidence which mitigates the objective seriousness of the offence. I will take this into account in the second defendant's favour. Deterrence

11 The circumstances of these matters exhibit a strong case for general deterrence. Mr Murdock was exposed to a serious risk to his safety because he was required to work on top of scaffolding at a height of some five metres. The risk to safety was compounded by the failure on the part of both defendants to provide Mr Murdock with any fall protection device or to devise some procedure or work method that would have ensured that Mr Murdock could carry out his work safely. Falls from heights at construction sites happen with alarming regularity and often result in serious or even fatal accidents. In most cases such accidents are easily avoidable and require only relatively simple measures to work out a procedure that will keep workers safe. Employers on construction sites should also be made aware that they all share equally the responsibility for ensuring the safety of persons at work sites. If for example the principal contractor has a practice of inducting all workers who enter the site then subcontractors also working at the site with those workers should ensure that they have been properly inducted before work commences. It has been emphasised many times in this jurisdiction that an employer cannot delegate its responsibilities to ensure a safe work place and ensure workers' safety. This is especially important to understand in the context of a typical construction site at which may be found a large and diverse workforce consisting of a principal or head contractor, any number of specialists contractors and labour hire personnel. Working at heights is a potentially dangerous activity and it is imperative that employers take adequate measures to ensure their workers can work above ground safely and without fear of injury. Specific deterrence

12 The principle of specific deterrence also has relevance in relation to both defendants. Both defendants continue to operate their respective businesses in the construction industry as employers. Specific deterrence assumes a particular significance in occupational health and safety prosecutions, with the principle being acknowledged in many leading authorities in this jurisdiction, most notably in Capral Aluminium v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610 at [77]. Gravity of the offences and likely consequences of the breach

13 A further factor which falls for consideration in these proceedings is the relevance of the likely consequences of the breaches of the section and the impact this may have on the overall seriousness of the offences. This particular principle which has been referred to in many authorities has been expressed in Capral Aluminium where the Full Bench said:

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 of serious injury may manifest the degree of seriousness of the relevant detriment to safety...

There is little evidence to confirm the extent of Mr Murdock's injuries sustained from his fall off the scaffolding. According to the evidence Mr Murdock fell five metres off the scaffolding onto concrete and was injured. There is no doubt given these brief facts that Mr Murdock's injuries could well have been extremely serious even fatal. Respective culpabilities

14 Both defendants urged the Court to consider their respective culpabilities by reference to the contributions of Mr Murdock's employer, Deno's Cranes. It will be recalled from my earlier judgment that Deno's Cranes was engaged by the second defendant to assist with the relocation of the scaffolding which spanned the length of the building facade along Court Road. Joe Maviglia, a spokesperson for Deno's Cranes had allocated a franna crane and the crane crew to the task. A Deno's Cranes time sheet for the booking nominated the starting time on 25 June at 7am and a finish time at 10am. This document was taken to the site by the crane crew on 25 June. In addition the safe work method statement had been generated by Deno's Cranes for the use of the crane crew on 25 June. This statement listed a procedure comprising fifteen steps and identified possible hazards, controls and areas of responsibility. The statement on its face governed a procedure to be followed upon arrival at the site and preparatory steps which involved checking the crane and lifting equipment. The second step in the procedure required the crane crew to locate the site office then take part in an induction. This was stated to be the responsibility of the "site manager". In his evidence Mr Maviglia confirmed that "site manager" was a reference to a supervisor at the Neeta Shopping Centre and not to an employee of Deno's Cranes. This evidence represents the sum of Deno's Cranes' involvement in the safety of the crane crew workers at the site. I was advised by the prosecutor during oral submissions on sentence that Deno's Cranes was an obvious third party that might have been considered for prosecution but wasn't because it was in liquidation. The authorities dealing with the respective culpabilities of other responsible parties who have not been prosecuted were collected and summarised by Walton J, Vice-President, in the Department of Mineral Resources (Chief Inspector Mackenzie) v Berrima Coal Pty Ltd and Another (2001) 105 IR 348 who said at 191-195:

[191] In Nesmat Pty Ltd v WorkCover Authority (NSW) (1998) 87 IR 312, a Full Bench of the Court considered that the absence of prosecution against other parties upon whom a defendant had reasonably relied meant that the sentence imposed upon the defendant gave rise to a justifiable sense of injustice (at 322-323).

[192] This contention was also raised in WorkCover Authority (NSW) (Inspector Ankucic) v McDonalds Australia Ltd (2000) 95 IR 383. In that case the defendants relied upon the Nesmat decision and Wong v Melinda Group Pty Ltd (1998) 82 IR 118. In Wong , the defendant was charged after a window cleaner died as a result of a fall from a building owned by it. Charges were only laid against the defendant, even though the deceased was not its employee and it had not been informed that the work was occurring contrary to its own policy. The Court concluded that these circumstances were relevant to the assessment of penalty. Of particular relevance was the ''equality of treatment in terms of the relative seriousness of the offence''. In the McDonalds case I considered that what the Court was paying regard to in Wong was the (at 437):

''. . . actual contribution of the defendant for the purposes of assessing penalty . . . [having] regard to the fact that the defendant was virtually wholly removed from the causal factors for the incident or the work actually performed by the window cleaner and even lacked knowledge of the performance of the work actually performed . . .''

[193] Further, I stated (at 437): ''The absence of a prosecution of another entity merely serves to emphasise the unfairness that may be occasioned to a defendant in the assessment of the objective seriousness of an offence if a proper assessment of their contribution to an accident is not undertaken.

This approach is consistent with the approach in Nesmat and Wong . Nothing in the decision in Nesmat warrants the adoption of the further approach contended for by the defendants that the Court should assess, in the context of the sentencing of the defendants, whether a prosecution should have been continued against Lennard and Mercer. Nor is it consistent with the principle of parity or the abovementioned decisions for the Court to embark upon an inquiry in sentencing proceedings which, in substance, would require the Court to make specific findings as to the culpability of such entities under s 17 and the 'nature and quality' of any offence committed by them.''

[194] I note also that this analysis of Nesmat and Wong has been affirmed by Wright J, President, in Walco (No 2) where his Honour stated (at par 31):

''. . . In any event, as I understand the decision of the Full Bench in Nesmat Pty Ltd it was not held that the failure to prosecute a defendant which was otherwise appropriate to be prosecuted was a matter which, of itself, would mitigate the penalty. Rather, what the Full Bench decided was that in a situation where there had been a failure, in assessing a defendant's relative culpability, to consider the inter-related culpability of another party which had not been prosecuted, and that failure resulted in an inappropriate penalty being imposed, that situation itself engendered an appropriately based sense of grievance which was in turn emphasised by the failure to prosecute the other potential defendant.''

"The Court was there reflecting upon a number of considerations, both objective and subjective (but particularly the former), which it concluded had not been taken into account sufficiently at first instance. Particularly relevant was the role of the other potential defendant which had not been charged and its role, both independently and contributory, in the events which had led to the defendant's conviction. Such matters, as is clear from the second last paragraph cited, were crucial to an assessment of the culpability of the defendant. The reference to the 'justifiable sense of grievance' is also relevant to the application to the appeal principles which were applicable at the time of that appeal (for example, House v The King (1936) 55 CLR 499 and Cranssen v The King (1936) 55 CLR 509) which are different to those now applicable under s 196 of the Industrial Relations Act 1996 and, for example, Fletcher Construction Australia Ltd v WorkCover Authority (NSW) (Inspector Fisher) (1999) 91 IR 66 at 75.This analysis is consistent with the approach of Walton J, Vice-President, in WorkCover Authority (NSW) (Inspector Ankucic) v McDonald's Australia Ltd (at 436-438).

The significance of the failure to prosecute, or to continue the prosecution of the other potential defendants, is not that fact but rather the fact that any assessment of the role of the present defendants must be considered in the light of the consideration that the criminality for the breach of occupational health and safety was one which did not fall solely on the shoulders of these defendants. That fact, of itself, involves consideration of matters which may mitigate the conclusion as to the objective seriousness of the offences committed and thus the penalty which should be imposed in relation to them.''

The effect of these authorities as summarised by Walton J is that the culpability of a defendant may be assessed by reference to the roles and responsibilities of other parties who have not been prosecuted. This in turn may affect the penalty imposed on it. This does not mean however engaging in an enquiry which would require specific findings as to culpability to be made against the other parties. Those other parties are not before the Court and have not had an opportunity to place material before the Court. 15 My attention was specifically directed by the second defendant to the decision of Wong v Melinda Group Pty Ltd (1998) 82 IR 118. However in my view the facts in that case are readily distinguishable from the present circumstances. In Wong v Melinda Group the sentencing judge, Hungerford J, found that the real culpability lay with entities other than the defendant. His Honour found that the defendant had been the victim of circumstances and limited in what action he could have taken in relation to the work which was proceeding at the time and which resulted in a window cleaner falling about sixteen metres from the third floor window ledge of a building and fatally injuring himself. By contrast in the present circumstances both defendants are closely associated with the causative facts leading up to the actual incident. Deno's Cranes on the other hand although it sent the crane crew to the site armed with a work method statement made no attempt to ensure that the members of the crew were properly inducted into all relevant safety procedures in relation to the work to be performed at the site and made no enquiries as to the availability for example of any fall protection device. Given the work being undertaken by Mr Murdock such protection was obviously necessary to ensure his safety. Deno's Cranes in this context is not unlike a labour hire company that sends its worker to a foreign work site but fails to follow up or make any enquiries or take any steps to ensure that the workers sent to the site can work safely and without fear of injury. The body of authority in relation to the obligations of labour hire companies under the occupational health and safety legislation emphasises that those obligations are no less than the obligations of the principal contractor at the site (the second defendant) or of the subcontractors working at the site (the first defendant). This point is perhaps best illustrated in Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 where the Full Bench said (at 445):

The relationship created between a labour hire company and its employees is distinguishable on a number of grounds from that existing between traditional employers and their employees. A labour hire agency does not employ people to work for itself but to work for a client, it does not directly on a day to day basis supervise the tasks carried out by the employee and it is usually not in control of the workplace where the work is done. However, these circumstances do not obviate, or diminish, the obligation of the employer under s 15(1) of the OH&S Act to ''ensure the health, safety and welfare at work of all the employer's employees''. Indeed, in our view, an employer who sends its employees into another workplace over which they exercise limited control is, for that reason, under a particular positive obligation to ensure that those premises, or the work done, do not present a threat to the health, safety or welfare of those employees. Certainly, there is no basis to consider that such an employer has a lesser liability or obligation under s 15(1).

A labour hire company cannot escape liability merely because the client to whom an employee is hired out is also under a duty to ensure that persons working at their workplace are not exposed to risks to their health and safety or because of some alleged implied obligation to inform the labour hire company of the work to be performed. In our view, a labour hire company is required by the OH&S Act to take positive steps to ensure that the premises to which its employees are sent to work do not present risks to health and safety. This obligation would, in appropriate circumstances, require it to ensure that its employees are not instructed to, and do not, carry out work in a manner which is unsafe. 16 It follows from the foregoing summary of the evidence and the relevant authorities on the point that Deno's Cranes must share some of the overall culpability for the conduct to give rise to the offences. Having said this I do not agree with the submission made by the first defendant during the sentence proceedings that it's role was "very minor". The prosecutor submitted that the respective culpabilities of the two defendants were objectively indistinguishable or at least difficult to separate. The first defendant with the requisite expertise in scaffolding had particular control of the task of relocating and dismantling the scaffolding but the first defendant as principal contractor had overall control of the site. On the other hand as I have found, the second defendant had in place prior to the offence a system of safety for all contractors at the site. This system was comprehensive, and, by all accounts, adequate. The prosecutor described the system as "laudable". Nor could the system be described as a mere paper system. Instead, it was successfully implemented at the site in relation to both employees and contractors. According to the affidavit of David Moffat, the second defendant's construction director, prior to Mr Murdock's accident, 68 workers had been inducted at the site. This number represented all workers on the site with the exception of the three members of the crane crew. In my view the existence and operation of this system at the site makes the objective culpability of the second defendant less than that of the first defendant. As to Deno's Cranes it had a significant role as Mr Murdock's employer and, on the facts was capable of making appropriate enquiries to ensure the crane crew undertook the task it was assigned safely. I intend to take the culpability of Deno's Cranes into account when sentencing both defendants.

17 I have taken into account on sentence the fact that neither defendant has prior convictions. This entitles them to leniency normally extended to an offender who was otherwise not adversely recorded. The absence of prior convictions also means that the maximum penalty applicable to both defendants in these matters is $550,000. Post accident measures

18 I also take into account on sentence the actions of both defendants in relation to certain measures taken subsequently to the incident. These measures were taken to ensure that a similar set of circumstances giving rise to the original incident would not be repeated. Immediately following the incident the first defendant notified all its employees about the circumstances and at the same time attempted to emphasise to those employees the importance of not taking safety measures for granted. It will also be recalled that following the incident both defendants cooperated to produce a new work method statement specifically tailored to the task of relocating and dismantling the scaffolding and which included such safety measures as the erection of temporary decking underneath the work area. Industrial record: second defendant

19 The affidavit of Mr Moffat also sets out the commitment of the second defendant to occupational health and safety issues. The affidavit lists a number of achievements of the second defendant in the area of occupational health and safety. These include accreditation in February 2005 to the New South Wales Department of Commerce Occupational Health and Safety Management Systems Guidelines. The second defendant was also accredited by that department as a Best Practice Contractor. It also has a workplace reform committee which meets regularly. A consistent aspect of that committee's deliberation is a proactive emphasis on safety practices. As part of its safety plan, hazard inspections are conducted by the second defendant at each site on which it operates and responsibility for correcting any potential hazards is identified and appropriate action taken. This ongoing commitment to safety matters by the second defendant is a matter I take into account in its favour on penalty. Capacity to pay a fine: first defendant

20 The first defendant tendered into evidence some financial records to support a submission that it had limited capacity to pay a fine. A court is required under s 6 of the Fines Act 1996 to consider the means of a defendant in exercising a discretion to impose a fine. I was advised by the first defendant that it is a small "husband and wife" company with a core staff of 13 personnel and a part-time labour staff mainly involved in scaffolding work. The records represent some financial statements for the year ending 30 June 2005. The profit and loss account for the year ending 30 June 2005 shows profit available for appropriation in the sum of $66,787.83 and a dividend payout in the sum of $78,170.00 leaving accumulated losses of $11,382.17. The balance sheet for the same period shows total assets of $117,907.50. There were no other records tendered into evidence such as banking records which might shed some more light onto the first defendant's financial situation. Taking into account the information available from the records tendered I conclude that the first defendant is capable of paying a modest fine. I also bear in mind in this regard the comments of Wright J, President, in relation to s 15(1) of the 1983 Act the predecessor to s 8(1) of the 2000 Act in Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209-210:

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. Penalty

21 In determining penalty against both defendants I have taken into account the objective seriousness of the offences, the personal factors outlined above, respective culpabilities and the contribution of Deno's Cranes as well as the absence of prior convictions. All these factors have been considered by reference to the Crimes (Sentencing Procedure) Act 1999 in particular s 21A. I have also taken into account on sentence the first defendant's capacity to pay a fine. Orders

22 In Matter No IRC 3476 of 2004 I make the following orders:

1. The defendant Hire N' Higher Scaffolding Pty Ltd is convicted of the offence.

2. The defendant Hire N' Higher Scaffolding Pty Ltd is fined $110,000 with a moiety to the prosecutor.

3. The defendant Hire N' Higher Scaffolding Pty Ltd is to pay the costs of the prosecutor for the contested proceedings and these sentence proceedings as agreed or in the absence of agreement as assessed. 23 In Matter No IRC 3475 of 2004 I make the following orders:

1. The defendant Lipman Pty Ltd is convicted of the offence.

2. The defendant Lipman Pty Ltd is fined $100,000 with a moiety to the prosecutor.

3. The defendant Lipman Pty Ltd is to pay the costs of the prosecutor for the contested proceedings and these sentence proceedings as agreed or in the absence of agreement as assessed.

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