Inspector Sharpin v Bovis McLachlan Pty Ltd

SOLICITOR Phillips Fox SYDNEY. LEGAL REPRESENTATIVES: DEFENDANT Mr B Hodgkinson SC

SOLICITOR Freehills SYDNEY.

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

INSPECTOR JOHN SHARPIN v BOVIS McLACHLAN PTY LIMITED

Prosecution under s16(1) of the Occupational Health and Safety Act 1983 JUDGMENT

1 This is one of three prosecutions of separate defendants arising out of an incident which occurred at a building site at the Warringah Mall Stage 2 Development. Judgments have been delivered this day in the other matters: 1. Matter No. IRC4900 of 2000 - Inspector John Sharpin v Christie Civil Contracting Pty Limited ([2002] IRComm209). 2. Matter No. IRC4902 of 2000 - Inspector John Sharpin v Enpro Engineering Pty Limited ([2002] IRComm211).

2 The incident involved fatal burn injuries suffered by Bozo Marcelja, a foreman engaged by Enpro Engineering Pty Limited ('Enpro'), when he used an oxy-acetylene torch to cut a disused fuel pipe from an area in which he was installing structural steelwork to support an overhead structure whilst underground excavation and drainage works were undertaken. The fuel pipeline, although apparently disused for many years, had a residue of fuel which ignited and set fire to Mr Marcelja's clothing.

3 The defendant has no prior convictions and has entered a plea of guilty to the charge. The prosecutor accepts that the plea was entered early and that the court should exercise its discretion to grant a discount on that account within the range of 10 to 25 percent in accordance with the principles in R v Thomson; R v Houlton (2000) 49 NSWLR 383 at 417.

4 The matter proceeded upon the basis of a statement of agreed facts which, in the relatively usual way, recited the charge and particulars as follows: On 9 October 1998, at the undercroft site located at Warringah Mall, 109A Old Pittwater Road, Brookvale in the State of New South Wales, the Defendant breached Section 16(1) of the Occupational Health & Safety Act 1983 in that it failed to ensure that persons not in its employment were not exposed to risks to their health and safety arising from the conduct of its undertaking while they were at its place of work. In particular, the Defendant:

(a) was aware that the fuel pipeline was in existence at the site prior to the accident;

(b) failed to remove the fuel pipeline or failed to ensure that the fuel pipeline was safe for workers on or near the fuel pipeline;

(c) failed to adequately assess whether the fuel pipeline was a risk to health and safety; and

(d) failed to prevent persons from performing work with an oxy-acetylene cutting equipment on or near the fuel pipeline.

5 The agreed facts also satisfy the jurisdictional requirement of s16(1), namely that the defendant was an employer and that there was a relevant failure to ensure persons not in its employment, that is to say Mr Marcelja, were not exposed to relevant risks arising from the conduct of the defendant's undertaking while they were at the defendant's place of work. The agreed facts contain the following provisions:

Prior to the commencement of work and the engagement of contractors at the site, the Defendant identified an underground petrol storage tank as interfering with the proposed construction work. The Defendant liaised with the owner of the petrol tank, Myer Stores Limited t/as Grace Brothers (Grace Brothers), who agreed to arrange for the removal of the tank. Grace Brothers were an existing retailer at the site. As a result of the Defendant's enquiries in relation to the tank, it discovered that it had not been operational in approximately 15 years.

Grace Brothers arranged for Australian Petroleum Installations Pty Limited (API) to remove the underground petrol storage tank located near the undercroft area. On attending the site on 27 April 1998, API noted the presence of a fuel pipeline (the fuel pipeline) which had been used to disperse fuel from the fuel tank to fuel pump in the loading dock area located above the undercroft. API was not able to remove the fuel pipeline due to the undercroft area being cluttered with debris from the retail stores. API informed Grace Brothers both verbally, and subsequently in writing, that the fuel pipeline had been left at the site, that it was 'not gas free' and offered to return to the site to remove the fuel pipeline. Despite Grace Brothers' knowledge of the potential hazard, Grace Brothers failed to inform the Defendant of the presence of the fuel pipeline when they confirmed the removal of the petrol tank on 28 April 1998, or at any time.

The fuel pipeline was approximately 50mm in diameter and was attached to the underside of the suspended slab above the entrance to the undercroft at a height of approximately four to five metres.

Pursuant to the construction contract between Christie and the site owners, Christie was responsible for identifying redundant services at the site to the Defendant who would arrange for their removal. Neither Christie or Enpro were authorised to remove any identified redundant services. As head contractor under the construction contract, Christie had direct control over their contractors and subcontractors working in the undercroft and the systems of work used by those workers.

The undercroft area contained other redundant services in addition to the fuel pipeline. These included electrical and sprinkler services. Immediately prior to 9 October 1998, the Defendant arranged the removal of electrical and sprinkler services in the undercroft in response to the requests of Christie.

On 30 September 1998, Enpro provided a quote to Christie in relation to the erection of structural steel in the undercroft area. The Enpro employees, Mr Marcelja and Mr Selmo, first attended the site on 6 October 1998. Mr Marcelja was a highly experienced worker who had been engaged by Enpro as Foreman for 22 years.

On 6 October 1998 Mr Selmo and Mr Marcelja spoke to the Christie foreman, Mr Ibrahim, and requested the removal of all the services in the area, including the fuel pipeline. This request was not relayed to the Defendant by Christie. Mr Ibrahim claims that he requested the Defendant to remove all existing services from the undercroft area at a site meeting on 22 September 1998. The Defendant disputes Mr Ibrahim's claim.

On 6 or 7 October 1998, the Foreman for the Defendant, Mr Berry, asked Soloman Hava about the fuel pipeline and Mr Hava confirmed that it was a disused fuel pipeline. Mr Hava was an electrical subcontractor who had removed the electrical services from a fuel pump which had been connected to the redundant fuel tank.

On Wednesday, 7 October 1998, Mr Marcelja informed Mr Berry that the fuel pipeline would not impede the erection of structural steel and that he did not require it to be removed to complete his work in the area.

On Thursday, 8 October 1998, Mr Berry, Mr Hava, Mr Marcelja and Mr Selmo discussed the fuel pipeline. During this conversation Mr Hava informed Mr Marcelja and Mr Selmo that the pipe was a disused fuel pipeline and warned them not to cut it using oxy-acetylene equipment. Mr Berry reinforced to Mr Marcelja that the pipe was a fuel pipeline and directed him not to cut the fuel pipeline with an oxy-acetylene torch or any other cutting equipment. Mr Marcelja again informed Mr Berry that he did not require the fuel pipeline to be removed in order to complete the erection of structural steel.

On Friday, 9 October 1998, Mr Marcelja was directing and supervising boom-lift platform (commonly known as a 'cherry picker') in the vicinity of the fuel pipeline. The cherry picker had been brought on site by Enpro on or about 6 October 1998 for the purpose of erecting the structural steel. Although the company who provided the cherry picker to Enpro demonstrated its use to Mr Marcelja, Mr Selmo did not receive any training in its use.

Whilst Mr Selmo was cutting steel beams from the raised cherry picker, Mr Marcelja directed him to remove the fuel pipeline with an oxy-acetylene torch. Mr Selmo refused to remove the fuel pipeline stating that he did not know what was in the pipe. Mr Marcelja responded that there was 'nothing in the pipe' and that the pipe had been 'cleared'. Mr Selmo again refused to cut the fuel pipeline.

Mr Selmo came down from the cherry picker and Mr Marcelja, the Enpro Foreman, used the cherry picker to raise himself to the level of the fuel pipeline. Mr Marcelja then proceeded to make an incision in a section of the fuel pipeline with an oxy-acetylene torch at which time Mr Selmo saw a small flame and warned Mr Marcelja that there must be something in the pipe. Mr Marcelja repeated that there was nothing in the pipe and proceeded to cut through another section of the fuel pipeline. After Mr Marcelja had cut through a seven metre section of the fuel pipeline he proceeded to cut through a bracket which was holding the fuel pipeline in place. The remaining fuel pipeline dislodged and fuel poured onto Mr Marcelja and ignited.

6 The prosecution has made full submissions on the objective features of the offence including its nature and quality, the maximum penalty prescribed by Parliament which in this case is $550,000, and the need for deterrence. Those submissions embraced consideration of both general and specific deterrence and the authorities in support thereof. Reference was also made to the judgment of the Full Bench of the Commission in Lawrenson Diecasting Pty Limited v WorkCover Authority of NSW (1999) 90 IR 464 at 476 which indicated a number of factors which may tend to establish the existence of an objectively serious offence as being the: (i) obvious risks involved to the degree of seriousness of the breach;

(iii) the failure by the employer to adequately inform itself of safe working.

7 It was submitted that the facts established that each of those matters was satisfied to establish that the offence here was objectively serious.

8 While the accident, as measured by the injury suffered by Mr Marcelja, was obviously a serious one, the prosecutor submits, correctly in my view, that: "The true measure of the penalty lies in the nature and quality of the offence and not merely the result. The gravity of the injury actually resulting from the breach does not of itself dictate the amount of penalty, nevertheless, the occurrence of death or serious injury manifests a degree of seriousness of the relevant detriment to safety."

9 The defence case included the evidence of Leo Michael Murphy, the Regional Environment, Health and Safety Manager - Asia Pacific at Bovis Lend Lease Pty Limited ('Bovis Lend Lease'). Mr Murphy had been employed by the defendant and subsequently by Bovis Lend Lease after the acquisition of the defendant by the latter in January 1999. Mr Murphy has been employed in the area of environment, health and safety for some 14 years, three of which have been in the construction industry. He possesses a Degree of Bachelor of Engineering and Chemical Engineering from the University of New South Wales (1975) and a Graduate Diploma in Safety Science from that University (1996).

10 Mr Murphy's affidavit evidence dealt with the background history of the defendant, its position within the Lend Lease Group of Companies, and its employment figures. While Bovis Lend Lease employs approximately 700 employees in New South Wales and approximately 5000 contractors in its undertakings in a typical month in Australia, the defendant employed, at the time of the accident to Mr Marcelja, approximately 100 employees, 50 of whom were in New South Wales.

11 The defendant contracted to provide project management services for Stage 2 of the Warringah Mall redevelopment. The defendant engaged Christie Civil Contracting Pty Limited as head contractor for the project. In that respect the defendant acted as agent for Warringah Mall Pty Limited and Perpetual Trustee Company, both subsidiaries of AMP Investments Australia Pty Limited.

12 Pursuant to the Contract for Works, Bovis Australia was the nominated Superintendent of the project. It was entitled to issue directions to contractors and subcontractors and remove them from site under certain circumstances.

13 Mr Murphy deposed with respect to the removal of services that once a service had been identified by the contractors for removal or diversion, it was the responsibility of the defendant to make arrangements for its removal or diversion. It accepted that responsibility for the electricity and sprinkler services located in the undercroft area.

14 The redundant fuel tank was identified in the Scope of Works document and was the responsibility of Grace Brothers. On 29 January 1998 BML confirmed that requirement to relevant officers in the Warringah Mall management. At the defendant's request surveyors produced a plan of the project site which identified the tank but not the fuel pipeline. It was established that Grace Brothers had been licensed by Warringah Mall to install the fuel tank on the condition that it would be removed by Grace Brothers at the conclusion of the licence. Surveyors were requested to undertake a further services search which resulted in a revised plan but which did not document the existence of the fuel pipeline. The fuel tank but not the pipe to the line was removed from the site on 27 April 1998 by Australian Petroleum Installation Pty Limited ('API'). On 28 April 1998 representatives of the defendant, AMP and Grace Brothers met and discussed the fact of the removal of the tank but the defendant was not informed of the existence of the fuel pipeline. It appears at this time that the fuel pipeline may not have been able to be removed due to congestion of the undercroft area.

15 On 15 May 1998 API informed Grace Brothers of the fact that the fuel pipeline had been left at site, that it was not gas free and offered to return to remove the pipeline when the area was clear. The defendant was not supplied with or informed of this facsimile or its contents.

16 Mr Murphy deposed that the defendant became aware of the existence of the pipeline not until about 6 or 7 October 1998 through its employee, Hayden Berry. Mr Murphy has concluded that from a letter from Solomon Hava, the electrician, to the defendant dated 19 October 1998 in which this was stated.

17 Following the accident, work on site was suspended pending the review and approval by the defendant of all work method statements of contractors at the site and evidence was obtained of relevant training of contractors. A full site investigation was conducted. A Contract Safety Officer was engaged. Steps had already been taken to recruit a permanent Site Safety Officer who in fact was recruited and commenced on 26 October 1998. A Project Safety Committee and schedule of inspections was commenced shortly after the incident. This occurred earlier than was originally intended having regard to the number of contractors on site. The defendant created the position of National Occupational Health, Safety and Environment Co-ordinator in which Mr Murphy commenced in January 1999.

18 A further revision of the Project Safety Plan was undertaken early in 1999 in response to the implementation of the Bovis Asia-Pacific Safety and Environment Management System, a safety management system which the defendant applied across all projects.

19 An environmental health and safety audit of the defendant on the Warringah Mall project was carried out in April 1999 as a six month follow up to verify that all actions and policies were in place.

20 In July 1999 the safety management systems of the defendant obtained accreditation with the New South Wales Construction Policy Steering Committee.

21 A second Site Safety Officer was engaged in July 1999 in response to an increased workload.

22 An ex gratia payment was made to Mrs Marcelja by the defendant in the sum of $50,000.

23 In November 1999 the defendant was acquired by Lend Lease Corporation and since that time its occupational health and safety policies and procedures have been replaced by the systems used by Bovis Lend Lease, which has a strong commitment to occupational health and safety. It has developed a number of programmes to maintain and organise a systematic approach to ensuring high standards in occupational health and safety in its operations. A company priority is to ensure that every person is provided with a safe and healthy workplace in which to work.

24 Mr Murphy also dealt with the corporate approach of Lend Lease Corporation to health and safety throughout its business operations. A sub-committee of its Board of Directors known as the Risk Compliance Sub-Committee reports directly to the Board, six members of which sit on the Committee. The Committee meets quarterly and one of its primary functions is to ensure compliance throughout the organisation with its occupational health and safety policies and procedures.

25 Bovis Lend Lease was awarded a WorkCover Construction Safety Award in 2001 for outstanding contribution to the industry in the development of occupational health and safety management systems.

26 Mr Murphy deposed that the defendant deeply regretted the incident and took steps to implement a comprehensive management system to prevent such events. The incident has also had a lasting personal impact on those staff directly involved at the time.

Conclusions 27 It is clear from this evidence that the element of specific deterrence is of minimal import in the present matter. The progress of the defendant, particularly in the context of its present ownership by Lend Lease, in the context of occupational health and safety policy and management, is notable. Nevertheless, some attention must be paid to the fundamental principle of sentencing that the element of general deterrence must be weighed in the sentencing equation.

28 While Mr Murphy's evidence makes clear that the procedures leading up to the work undertaken by Enpro did not formally bring to attention the existence of the fuel pipe, the fact is that Mr Berry, as Mr Murphy deposes, became aware of the existence of the pipe and its former purpose two or three days before the incident. While Mr Berry gave a specific instruction to Mr Marcelja not to cut the pipe using oxy-acetylene, it was in substance the failure to prevent that work being undertaken which permitted the incident to occur and grounds the offence.

29 In terms of the level of culpability, I cannot distinguish the position of the defendant here from that of Christie Civil Contracting. This is a first offence for the defendant and the elements of contrition and responsiveness to the incident in the context of occupational health and safety management are strongly evident. The principle of parity in sentencing ought operate here. I assess penalty at $65,000 and apply a discount of 30 percent giving a penalty of $45,500.

30 The defendant is convicted of the offence charged and fined the sum of $45,500 with a moiety of penalty to the WorkCover Authority of New South Wales. The defendant is to pay the prosecutor's costs as agreed or, in the absence of agreement, as determined by the Court.

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