Inspector Spence v Cai

System of work prior to the incident 15Austar was the project manager at the site. It used a Construction Project Safety Plan for occupational health and safety management (the Plan). The Plan identified Mr Shang as the site manager and Mr Cai as the project manager. 16The Plan, described as "relatively comprehensive" in the Agreed Facts, was defective in a number of respects. It referred, for example, to an "Occupational Health and Safety Co-ordinator", "2-way radios", and, a "site shed", none of which existed at the site. It also referred to the adequate provision of PPE at the site, however, Mr Markovski was not wearing a helmet, gloves or proper boots on the day of the incident. 17The Agreed Facts record further safety procedures at the site which were either not implemented at all, or only partially implemented. For convenience, these are set out below: Site Induction and Recording The site induction consisted of completion of a form. Not all persons on site completed these forms. Mr Markovski did not complete a site induction. ... No system was in place to record planned or actual events. Mr Shang did not utilise a daily attendance sheet, so no record of who was on site on any particular day can be ascertained. No emergency procedures were established for the site. No hazard reporting procedure was established. Risk Assessment The Project Safety Plan refers to an "Ongoing Risk Analysis". The date that this analysis was conducted by Mr Cai and Mr Shang is shown as "22 February 2004". If the analysis provided was implemented and followed, it would have addressed and controlled the numerous hazards identified after the incident. These hazards include falling from heights, lack of handrails, access and egress to the concrete area, slips, trips and falls, hazardous substances, and falling of personnel and materials through penetrations. The plan identifies Mr Cai as being responsible for the implementation of "an effective Health & Safety System", "Monthly Safety Report" and "Site Registers". There is no record of any such reports or registers being kept in relation to the site prior to the incident. Subcontractors Requirements Subcontractors provided Safe Work Method Statements (SWMS) but they were not followed nor were they used by site management, including Mr Cai and Mr Shang, to monitor the subcontractor's work. Mr Cai claims that he undertook safety walks or inspections of the site approximately once a week. There is no record of consultation or involvement of any subcontractors in safety walks or discussions. Instruction No consultation was established and there appears to be no evidence of regular or comprehensive consultation, even via Toolbox Talks. Toolbox Talk sheets were provided, but those prior to the incident have no subject matter and only one or two names as persons in attendance. There was no Toolbox Talk on the day of the incident. 18In the related matter of Inspector Spence v Shang [2012] NSWIRComm 86, I found (at [13]): These matters show that to a significant extent the various safety procedures formulated by a number of entities involved in, or engaged at, the site were not implemented. At best, there was some partial implementation of some of those procedures. The Prosecutor's Facts, for example, attaches a number of "safety induction" forms some of which were signed by the inductees. As the Prosecutor's Facts disclose, the risk analysis conducted by Mr Shang was never implemented at the site, but if it had been, it would have addressed and controlled numerous hazards, such as, falling of personnel and materials through penetration. 19This finding applies with equal force in these proceedings. The Agreed Facts disclose that the risk analysis referred to in the above extract was conducted by both Mr Cai and Mr Shang, but it was never implemented at the site. 20Under Austar's Plan, Mr Cai, as the Project Manager, had primary responsibility for ensuring that the Plan was implemented and maintained on the Project. His responsibilities under the Plan included, but were not limited to, the following matters: Ensuring that this Project Safety Plan adequately sets out the health and safety issues relevant to the project and establishes systems and procedures for the management of these issues. Ascertain, in consultation with relevant project personnel, high risk areas of work which would require detailed Risk Assessments, and ensure such risk assessments are carried out by competent people. Ensure that there are adequate facilities for First Aid and Amenities on the project. Establish procedures to ensure that all contractors tendering, or commencing work on the project are aware of, and comply with, their workplace health and safety obligations. Ensure that a site specific safety induction has been developed and that procedures are in place so all project personnel undertake the site specific induction before commencing work on the project. Review the projects safety performance statistics with appropriate personnel and ensure all action is being undertaken to eliminate incidents occurring. Establish and maintain necessary records for the recording and reporting of accidents and incidents on the project. Ensure all relevant reports and statistical information are forwarded to the Main Office within the necessary time frame. 21Under the Plan Mr Cai, as Project Manager, was also responsible for directing contractors to comply with their obligations and, in the event of non-compliance, to stop the work until a contractor agreed to comply. He was also expressly required under the Plan to maintain an understanding of the obligations under the Act and under the Occupational Health and Safety Regulation 2001. 22These facts confirm that Mr Cai had responsibilities for the daily operations and activities undertaken at the site. Despite this, the risk of falling through the penetration, which was known before the day of the accident, remained unchecked. Responsibility for this unchecked hazard lay with Mr Cai who had primary responsibility for implementing the Plan, in particular, the implementation of those safety measures nominated as falling within the purview of the Project Manager's obligations on site. 23Moreover, the Plan contained a section headed "Ongoing Risk Analysis". In that section, the risk of falling through penetrations was expressly identified and the appropriate control measures (extracted below) were set out in some detail: All penetrations to be covered and permanently secured - where possible mesh & collars to be cast in When working in or near penetrations (greater than 1.8m) appropriate fall arrest system to be used, area to be barricaded and signed accordingly (esp Air Conditioning risers) At completion of work area to be adequately protected SWMS to be detailed by Site Manager re: Stair Well Construction & Riser work Sub-contractor to supply SWMS before removal of any penetration covers 24Given this material, a clear inference is available that the risk of falling through the open, unsecured penetration was reasonably foreseeable. Mr Cai provided no explanation as to why this risk was allowed to remain unchecked for some period of time before the incident. According to Mr Djukic, there had been no cover on the penetration for about one or two weeks prior to the incident. The risk of persons falling through open, unsecured penetrations on building sites is well-known within New South Wales, a fact confirmed in the numerous sentencing judgments in this jurisdiction under the occupational health and safety legislation. According to the Agreed Facts, Mr Cai had prior experience in managing construction projects of a similar size to the size of the project being undertaken at the time of the incident. 25Simple and readily available steps could have been put in place to control and eliminate the risk. These include some obvious measures identified by the prosecution in written submissions such as: Not permitting persons working at the site to work in close proximity to the open penetration. Warning persons about the penetration. Conducting a risk assessment in relation to the risks associated with working near it. Implementing site inductions to inform persons of the presence of the penetration. Securing the penetration with a dedicated cover. 26The consequences of exposure to the risk were also serious. Mr Markovski fell 3.7 metres through the penetration onto a concrete slab. Although the consequences of the accident do not impact on the quantum of penalty, the seriousness of the risk to which Mr Markovski was exposed is a relevant factor to be taken into account by a Court when assessing the objective seriousness of an offence. 27When these objective factors are considered in combination, it must be concluded that the offence is objectively serious. 28General deterrence must also be taken into account in the sentencing process. As earlier noted, falls through unsecured penetrations at construction sites are well-known. Any penalty to be imposed for a breach of an offence involving risks of falling through penetrations must be of a severity sufficient to deter others from failing to detect and act upon such risks. 29Specific deterrence also falls for application in the proceedings. Mr Cai gave evidence in these proceedings that he works in project administration as a sub-contractor for a company called "the Madeli Group". The work in which Mr Cai is engaged involves the construction of duplexes. 30Mr Cai has prior convictions under the Act and therefore faces a maximum penalty of $82,500. 31There are a number of subjective features in Mr Cai's favour which serve to mitigate the objective seriousness of the offence. In oral evidence, Mr Cai acknowledged that he had made a "huge mistake" in not improving safety measures at the site. He also acknowledged that as Project Manager he had control of the site. He said that upon being notified of the accident he attempted to contact Mr Aleksic in order to find out about Mr Markovski. He said he felt responsible and, "very bad, very very sorry" for what had happened. 32The Agreed Facts record a number of remedial steps taken by various parties engaged to work at the site, including Mr Cai, shortly after the accident: Within a few days after the incident, Gordon Gao visited the site to discuss remedial work in response to the Prohibition Notice. He also conducted a meeting at the site with Mr Cai and Mr Shang to discuss safety issues, and he instructed Mr Cai to conduct an investigation into the incident. He also directed Mr Cai to work full-time at the site. Mr Cai produced an incident report on 2 September 2009. This report described the incident in some detail, but did not investigate why there was no secure cover over the penetration. The report bears the signatures of Mr Cai and Mr Aleksic. On 3 September 2009, Inspector Hayden received a facsimile from Austar signed by Peter Xie noting that the incident arose "due to the breakdown of our onsite safety control". Mr Cai stated that he prepared this letter and arranged for Mr Xie to sign it. WorkCover Improvement Notices were complied with and the site was returned to safe operating condition. 33These matters in combination demonstrate contrition on the part of Mr Cai which will be taken into account in mitigation of penalty. 34Mr Cai's plea of guilty was entered at an early stage of the proceedings, a matter conceded by the prosecution. The prosecution also submitted that the plea of guilty was entered in the face of a strong prosecution case and constituted therefore, a "recognition of the inevitable". This latter submission may demonstrate an absence of contrition. The timing of the plea, however, is relevant to a quite different consideration, namely, the utilitarian value of the plea. Given that the plea was entered at a "relatively early stage", the Court considers that a discount of 25 per cent of the penalty to be imposed is warranted. 35Mr Cai also tendered two testimonials in order to demonstrate his good character and his acceptance of responsibility for the circumstances of the offence. Carson Gao, from the Master Builders Association wrote: I know Jackson to be a kind and caring man. He has a wife and three young children. I also know him to be professional and competent. He has expressed his concern for the man who was injured and accepts that, as the Project Manager, he should have ensured that all appropriate safety plans and mechanisms were followed. I am confident he now understands the importance of maintaining supervision on sites by all who are involved and responsible for the management and safety of workers. Jackson has accepted he will be punished for his failure and has seen the human consequences of it. I am confident that he has learnt from this mistake. 36The testimonials will also be taken into account in Mr Cai's favour. 37The prosecution also acknowledged that Mr Cai co-operated fully with the WorkCover Authority in its investigation. This factor will be taken into consideration in mitigation of penalty. 38In oral submissions, on Mr Cai's behalf, the Court was asked to take into consideration that Mr Cai, in effect, was a person of modest financial means. Financial documents were produced to the Court and Mr Cai underwent substantial cross-examination on the contents of those documents. 39In his evidence, Mr Cai explained that he owned two properties, both under mortgage. One was the marital home and the other an investment property at Chippendale rented out at $500 per week. Mr Cai, as earlier noted, is engaged as a contractor undertaking project administration work. In 2012, he earned $68,000 working for the Madeli Group. According to Mr Cai, and the financial records which he produced, a substantial portion of his income is set aside for mortgage repayments on the two properties. 40In written submissions, the prosecution invited the Court to consider the following matters relevant to Mr Cai's capacity to pay a fine: Section 6 of the Fines Act 1996 (NSW) provides that in exercising a discretion to fix the amount of any fine the Court is required to consider the means of the accused. However, in light of the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant needs to be "carefully scrutinised" (Manpac Industries Pty Ltd v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435 at 467). If the Defendant wishes to invoke the discretion of the Court by reference to the Fines Act it is necessary to adduce the evidence in a proper form which is capable of being tested by the Prosecutor and is capable of being understood by the Court (WorkCover Authority (Insp Jones) v Protgeros [2005] NSWIRComm 237). This is because the defendant is uniquely qualified to provide that information (McColl v John Watson Building Services Pty Ltd [2004] NSWIRComm 353 at [27]). 41At the conclusion of the evidence, during oral submissions, the prosecution also contended on the issue: In my submission, the evidence which has been presented this morning is quite unclear about the financial means of the accused but taken at it highest this is not a case where the defendant is impecunious or is near to that point. It's clear that the defendant does have some financial resources. There are two properties that are held in the name of himself and his wife. Whilst there are substantial mortgages on those properties, it's unclear the extent to which any equity is held in those properties. The onus is of course on the defendant to establish those matters but he hasn't done that. He said, for instance, that there's no valuations that he knows of on those two properties, so it's entirely unclear what equity is held in the properties. And of course there's the conundrum that despite the limited amount of income that the defendant is earning, he and his wife have substantial repayments to meet each month and that disparity between income and repayments has not been clearly addressed by the defendant this morning. HER HONOUR: He did suggest, though, that the income from Chippendale together with his income from his work as a subcontractor was just enough to meet these repayments and there was little left over. MOIR: Yes. He said that but he hasn't produced any records relating to the rental payments nor has he produced his taxation returns which set out what his income is and what his expenses are. For instance, he made reference to his pretax income being significantly higher I think than what's shown as the taxable income on the ATO assessment forms but he hasn't produced any of that documentation. He's given a figure for the rent that's earned and he's also made reference to occasional payments he might receive from family or friends. But apart from these four documents, nothing else has been produced. But even taking those documents at their highest, this is not a defendant whose financial means are so limited that, in my submission, an appropriate penalty would put them in a position of being impecunious. It's clear, for instance, Mr Cai has an investment property in addition to the family home and it's not clear what equity is held in that investment property but presumably there is some equity in it and from that equity there would certainly be capacity to meet the appropriate level of penalty. 42In oral submissions made on behalf of Mr Cai on this issue, reliance was placed on the following matters: Your Honour, I think, interpreted Mr Cai's evidence about his financial position the way that I did, namely that the income derived from the investment property and what he's been earning as a project administrator covers the mortgages over the two properties and with a little bit left over and there would appear to be some money coming in from family members and small amounts of money coming from other sources. HER HONOUR: Mr Moir made the point which was valid, in my view, that the documentation basically fell short of meeting fairly stringent requirements in a number of authorities as to what needs to be proved by a defendant who seeks to make good a submission that he or she has limited capacity to pay. There was no Statement of Income or expenses; the only documents the Court's received in terms of taxation are two ATO assessments. The figure for the rent in Chippendale is not supported by any documents. The documentation is wanting in other words. JONES: The financial material is what it is, your Honour, I can't really put a gloss on it. However, your Honour has heard Mr Cai give evidence on oath and you can make an assessment of him as a witness. 43In the Court's view, the financial records produced, together with the evidence of Mr Cai concerning his financial capacity, reveal that he has some capacity to pay a fine. In forming this conclusion, it should not be understood that the Court accepts that the records produced were sufficiently adequate to properly assess the state of Mr Cai's finances. In any event, the Court regards the offence as objectively serious for the reasons earlier set out in some detail. 44There are numerous statements in this jurisdiction to the effect that even where a defendant establishes by means of appropriate documentation that he, she, or it has a reduced capacity to pay a fine, that consideration does not necessarily result in the Court not imposing a heavy penalty as a reflection of the objective seriousness of an offence: see, for example, Wright J in Ferguson v Nelmac Pty Ltd (1999) 92 IR 188. Other statements in this jurisdiction emphasise the primacy of the objective seriousness of an offence which necessitates careful scrutiny of a defendant's financial situation where reliance is sought to be placed on a reduced capacity to pay a fine: see, for example, Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority of New South Wales (Inspector Glass) [2001] NSWIRComm 190; (2001) 106 IR 435 at 467 at [82]. 45Accordingly, the Court considers that the penalty to be imposed should reflect the objective seriousness of the offence, mitigated by those features advanced by both parties and accepted by the Court as favourable to Mr Cai.

Role of Aleksic in circumstances of offence 46In oral submissions, Mr Cai contended that Aleksic, and its director, Mr Aleksic, had a "higher" level of culpability in the circumstances of the offence, which should be taken into account in assessing Mr Cai's culpability. In written submissions on behalf of Mr Cai, the following matters were relied upon to develop the submission: In determining an appropriate sentence in circumstances where more than one individual or entity can be said to have contributed to the relevant risk, it is important for the court to view the nature and seriousness of the offence by reference to the contribution of the defendant to the relevant risk - Workcover Authority (Inspector Page) v Walco Hoist Rentals Pty Ltd (No. 2) (2000) 99 IR 163 at [31]. The defendant concedes that as project manager, he had direct responsibility to ensure that proper safety standards were implemented and maintained at the site. That said, it is submitted that the company that was retained to supply and install timber framing on the site, Aleksic, failed to take appropriate steps to address an obvious and known risk to persons working at the site. Moreover, a principal of Aleksic, Milivoje Aleksic, was performing the role of site operations manager with direct responsibility to ensure that the instructions he gave to Mr Markovski, Mr Djukic and Mr Preston did not expose them to the risk of physical harm. The defendant submits that Mr Aleksic was the most senior person with authority at the site and that he issued the work directive that directly led to Mr Markovski falling through the penetration. It was Mr Aleksic that noticed the unsecured penetration. The defendant submits that the steps that Mr Aleksic took to cover the penetration were completely inadequate and in fact significantly increased the risk of someone falling into the open penetration. Mr Markovski, Mr Djukic and Mr Preston were directed by Mr Aleksic to lift the fibro sheet that was used to cover the penetration onto the second floor of the building under construction. This directive left the penetration uncovered in circumstances where the three workers were trying to move the sheet in close proximity to the penetration opening. The defendant submits that the actions of Mr Aleksic were particularly irresponsible given that he knew that Mr Markovski was on a vocational rehabilitation program and had little experience with construction sites. This fact was peculiarly in the knowledge of Mr Aleksic. Moreover, Mr Markovski did not complete a site induction and was not wearing a helmet, gloves or boots when he was asked to move the fibro sheeting. The agreed statement of facts note also that the Safe Work Method Statement identified "Erect temporary handrail at edge of penetration" as a control measure to be implemented. The defendant does not cavil with the proposition that as a project manager he had direct responsibility to ensure that proper safety standards were implemented and maintained at the site. The defendant concedes that this included direct responsibility to ensure that all subcontractors working on the project complied with their obligation under the Occupational Health and Safety Act 2000 (NSW). It is submitted that the court should take into account the fact that Mr Aleksic and Aleksic Carpentry Pty Ltd contributed significantly to the relevant risk: Workcover Authority (Inspector Farrell) v Schrader (2002) 112 IR 284 at [54]. 47In written submissions addressing this issue the prosecution relied on the following matters: In determining an appropriate sentence in circumstances where more than one individual or entity can be said to have contributed to the relevant risk, it is important for the Court to view the nature and seriousness of the Defendant's offence by reference to the contribution of the Defendant to the relevant risk, (Workcover Authority (Inspector Page) v Walco Hoist Rentals Pty Ltd (No. 2) (2000) 99 IR 163 at [31]). However, this principle does not require a sharing or apportionment of culpability and hence of sentence, (WorkCover Authority (Insp Carmody) v Consolidated Constructions Pty Ltd (2001) 109 IR 316 at [48]). The Prosecutor submits that the Defendant performed the role of a project manager with direct responsibility to ensure that proper safety standards were implemented and maintained at the site. This included direct responsibility to ensure that all subcontractors working on the project complied with their obligations under the OHS Act.19 In performing this role, the Defendant failed to take appropriate steps to address an obvious and known risk to persons working at the site - namely, the risk identified in particular (d) of the charge. The risk to which Mr Markovski, Mr Djukic and Mr Preston were exposed was both self-evident and grave. The Prosecutor submits that the foregoing demonstrates the Defendant's conduct contributed to the relevant risk to a significant degree. The Defendant had primary responsibility for the safe performance of work activities undertaken at the site. The fact that the Defendant was not regularly present at the site, or that he last attended the site nine days before the incident, does not necessarily entitle him to any degree of leniency. The risk of falling through the penetration was known before the day of the incident. As set out in the Statement of Facts, the Defendant (along with the Site Manager) was responsible for co-ordinating the subcontractors engaged at the site, for monitoring the work performed there and dealing with site safety issues. Overall, the Prosecutor submits that the Defendant's culpability was at the higher end, given that he had primary responsibility for the management of the project undertaken at the site. 48In oral submissions, the prosecution contended that both Aleksic and Mr Cai had, "a high degree of culpability and the degree of culpability therefore was on equivalent terms". The prosecution added in support of the submission: The culpability of Mr Aleksic and his company is obviously quite high for the reasons the President identified. But in these particular incidents the culpability of Mr Cai is also at the upper end of the range because he had the primary responsibility to ensure that the project was undertaken safely and in this case the evidence is that the safety at this particular site was clearly inadequate and in failing to ensure that level of adequacy there's a serious failure on the part of Mr Cai. 49The prosecution also reminded the Court in oral submissions that Aleksic only had a role at the site for a specific period of time and for a specific task, namely, to install the timber framing. In contrast, Mr Cai, as the project manager, had an ongoing and continuous role at the site. 50The prosecution's contentions on the issue recognise that Aleksic and Mr Aleksic had immediate responsibility for Mr Markovski's safety. Mr Aleksic gave the instruction which resulted in the accident. Mr Cai, on the other hand, had ultimate responsibility for all issues of safety at the site. Mr Cai's failure to address specific issues of safety at the site demonstrates a high level of culpability. 51It is difficult to distinguish between the respective culpabilities of the parties by reference to what each party actually did, or did not do, at the site in discharging their respective obligations and responsibilities. The Court agrees with the prosecution's submissions that the conduct of Aleksic and Mr Aleksic exhibits a high degree of culpability because of their direct supervision of Mr Markovski. Moreover, Aleksic was aware that Mr Markovski was engaged as a vocational rehabilitation person who had been on long-term unemployment benefits and had limited experience on construction sites. What, in the Court's view, elevates Aleksic and Mr Aleksic's role to a higher degree of culpability than that of Mr Cai is that Mr Aleksic knew that the penetration was unsecured and yet failed to take adequate steps to address what was an obvious hazard, apart from placing a sheet of compressed fibro over the penetration with the assistance of Mr Djukic, a few days before the accident. On any view of it, this was a very inadequate attempt to address the problem. 52For these reasons, the Court views the actions of Aleksic and Mr Aleksic as exhibiting a higher degree of culpability than that of Mr Cai in the circumstances of the offence. However, having regard to the objective and subjective factors relevant to these proceedings, it must be concluded that the offence was serious thereby warranting the imposition of a significant penalty.

Orders 53In IRC 1398 of 2011, the Court makes the following orders: (1) The defendant is convicted of the offence under s 10(1) of the OHS Act 2000 and fined $12,500 with a moiety to the prosecutor. (2) The defendant is to pay the reasonable costs of the prosecutor as agreed or in the absence of agreement as assessed.

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: 13 February 2013