Inspector Thomas Yeung v Neatrule Cement Rendering Pty Ltd as Trustee of the Neatrule Trading Trust

Relevant Principles 7In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s 8(2) of the Occupational Health and Safety Act 2000 with ss 21A, 22, 23 and 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 8Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 9Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; 115 ACrimR 104 , correctly, given the consideration in Markarian , recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. Proper regard is to be had to express legislative provisions and to the relevant statutory regime ( Markarian at [27]). The object of the Act is to protect employees from risk to safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the workplace. 10In Inspector Morgenthal v Houghton [2010] NSWIRComm 192, the Court observed at [9]: In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act ...are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: '[i]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion." 11Of relevance particularly is the effect of s 21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing and states, inter alia : . . . (2) Aggravating factors . . . (d) the offender has a record of previous convictions, ... (g) the injury, emotional harm, loss or damage caused by the offence was substantial, . . . (3) Mitigating factors . . . (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, ... (k) a plea of guilty by the offender (as provided by section 22) (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23) . . .

Consideration 12Neatrule is a small family company which operates performing plaster and cement rendering. The company, if it is doing domestic work, would only employ one renderer and one labourer but, if it obtains a commercial contract, can employ up to four renderers and a few contractors. 13The controlling mind of the corporation is Darren Bunney. He is a qualified cement renderer and plasterer. He is both a director and an employee of the company. His ex-wife was always the book keeper for the company and remains so. She, then, is also an employee. 14The turnover of the company is around $500,000 a year, although, on obtaining commercial contracts, the turnover increases. 15On the relevant date Mr Bunney had hired some three subcontractors to perform plaster rendering work. The work was being performed on a site controlled by the head contractor, Jacaranda Property Developments Pty Ltd ("Jacaranda"). The site consisted of six double storey blocks with a mix of townhouses and unit blocks (Blocks "A" - "F"). 16On the relevant date, the plasterers and renderers were working on Block B. The scaffolding around the top level of Block B had been erected with the inclusion of handrails. Above the scaffold were two high voltage power lines. The scaffold was erected under the authority of Jacaranda by a leading scaffold company. At Block B, the scaffold was in breach of clause 5.4 of Australian/New Zealand Standards 4576 ("Guidelines for Scaffolding") ("the Standard") which requires a safe working distance of four metres or more between metal scaffolding and overhead power lines of 33,000 volts. This breach had been avoided at Block A, as a decision had been made to not erect a handrail around the top level of the scaffold to ensure the minimum distance required by the Standard was adhered to. If there was any work to be done at the top level, there was an instruction that harnesses were to be used. 17No warning signs were placed on the scaffold. Mr Said Al-Khaled, a plasterer who had been subcontracted by the defendant company, went up to the top platform and, on the scaffold, raised a six metre aluminium straight edge (used to ensure rendering on the corner of the building was straight). Mr Al-Khaled raised the six metre aluminium straight edge and it struck the power lines causing him to suffer a severe electric shock and, evidence reveals, burns to 35 percent of his body. 18In a consideration as to penalty, the Court first assesses the objective seriousness of the offence as charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474): In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ... And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ... 19In considering the objective seriousness of the offence in context, it is necessary to state there are two separate defendants facing prosecution arising from this incident. Each faces a separate charge, under different provisions of the Act, given the role each played on this construction site. Neatrule, a corporation and the defendant in this matter, went onto a construction site on which Jacaranda (a company of which Stuart John Hill was a director) was the principal contractor, to provide the service of plastering and cement rendering. Jacaranda is in liquidation and faces no prosecution. Mr Hill, whilst bankrupt, also faces prosecution under the Occupational Health and Safety Act 2000 as a director of Jacaranda. 20Neatrule did not have a written safe work method statement in place for the task of rendering, nor did it require its subcontractors, including Mr Al-Khaled, to provide such a document, which document should ensure a knowledge of, and plan for, safe working. Neatrule also failed to undertake a risk assessment of the particular job being performed on this site. Such a risk assessment should have been able to identify the equipment to be used in the rendering process and the way that equipment would be utilised given the existence of live overhead wires above the scaffold on the top level of Block B. The undertaking of a risk assessment of this task was important, not only because of the proximity of the power lines at the site, but because Neatrule had knowledge of the existence of the overhead powerlines which had been identified as a risk on the construction of Block A on which the defendant company, Neatrule, had performed the plastering work. Therefore, the company knew of the risk but failed to provide to its subcontractor renderers adequate information and instruction of the risk prior to their working on Block B. 21The defendant asserts it was the usual practice for renderers to work from the middle level of any scaffolding and use a small step called a hopper on the middle level to reach the top of any wall whilst rendering. The effect of this submission is that the defendant corporation submits it did not expect its sub-contractors to climb to the top scaffold. It is therefore contended it was usual practice for the aluminium straight edge, that is the aluminium piece, to be placed into position from the middle level of the scaffold. The defendant corporation opines it is not aware why Mr Al-Khaled chose to access the top level of the scaffold. However, the defendant corporation, under the Act, is responsible for the safety of not only its workers on site, that is its employees, but also the safety of any member of the public and its sub-contractors who attend at the worksite. 22The defendant had an obligation to exercise abundant caution and maintain constant vigilance to take all practical precautions to ensure safety in its work place. The defendant owed such a duty not only to the careful and observant person, but also to the hasty, careless, inadvertent, inattentive, unreasonable, foolish or disobedient person ( WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 (at 257) per Bauer J). 23The principle of foreseeability is a factor in determining the objective seriousness of an offence. This was considered and affirmed in the Full Bench decision of Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610. On the issue of foreseeability, the Full Bench in Capral stated at [82]: The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209-210) in these terms: ... reliance on 'hindsight' must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. 24Here the defendant corporation knew of the existence of the overhead wires and should have ensured there were safety measures in place before it brought onto the site any contractor. There is a foreseeable element to this offence which makes it more serious. 25The gravity of the potential risk to safety flowing from a breach is relevant as to a measure of gravity of the breach itself and the culpability of the defendant. This incident is but another reminder of the need to co-ordinate activities on such dangerous worksites. In this circumstance, the risk to safety became reality. The words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 at [5], I find apposite: The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from the breach and its foreseeability are clearly relevant... 26In this set of circumstances, the potential risk of significant injury was not a remote possibility and the risk became a reality resulting in the electrocution of Mr Al-Khaled who suffered burns to 35% of his body. Section 21A(2)(i)(b) of the Crimes (Sentencing Procedure) Act 1999 provides that the fact that an offence involved a grave risk of death or injury to another person or persons is an aggravating factor to be taken into account in determining sentence for such an offence. 27In consideration of all the above factors, I am persuaded the Court should regard the defendant's breach as objectively a serious one. 28The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral at [71] - [77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: ... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example , Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43] ) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. 29In sentencing there must be considerations as to deterrence. I am persuaded, as the corporation, under the guidance of Mr Bunney, continues to operate in the field of plastering and rendering, an element of specific deterrence is necessary. Evidence reveals there was a verbal system of work in place but it was not documented. Evidence further revealed that the particular task was not risk assessed. There is evidence that the defendant has taken significant steps to improve safety following the incident. Mr Bunney, in his affidavit, outlines those steps as follows: 30. Since 12 November 2007 I have taken significant steps to improve Neatrule's compliance with safety procedures. This has included:- (a) A company known as "Safety Culture" was engaged to advise on all aspects of Neatrule's safe work procedures. (b) Safety Culture developed a specific safe work method statement for cement rendering. There is a separate statement for each aspect of rendering work. (c) A site specific risk assessment is undertaken at each site. (d) A permit to work form was also development (sic) which is required to be entered into by any person or company that provides services to Neatrule at building sites. This document covers various aspects of safety. (e) A procedure has been introduced by which any contractors of Neatrule are required to attend a site assessment with me prior to commencing any work on a site. Each person is then required to nominate in writing on a Job Safety Analysis Worksheet any safety concerns they have. Those concerns are then addressed with the head contractor before any work is commenced by Neatrule on the site. (f) Under the permit that Neatrule has with its sub-contractors they are required to inform the company of any changes in the site conditions immediately and to cease any work activity until a fresh risk assessment is carried out following those changes to the work environment. 30However, as the corporation continues to work in the industry, an element of specific deterrence must be a factor to be taken into account when considering penalty. I also consider an element of general deterrence is relevant. The construction industry, in which this offence occurred, has been taking rigorous steps to further ensure the safety of persons at construction work sites and there has been a significant improvement in safety. However, this offence reveals a basic breach of standards acknowledged necessary by the industry itself to ensure safe working in the vicinity of live power lines. Those standards must be rigorously adhered to. There is a need in penalty to deter other employers from failing to take a rigorous approach to ensure that known hazards within the construction site, especially in the vicinity of the hazard provided by the existence of live overhead power lines, are addressed. An element of general deterrence will be included. 31A number of subjective features have been placed before the Court. The defendant entered a plea of guilty to a further amended Application for Order on 8 April 2011. 32The amended summons was filed on 30 May 2011. The defendant corporation therefore entered a plea of guilty before the amendment to the summons. The original application for order was filed on 10 November 2009. The prosecutor submitted that in considering any deduction for the entering of an early plea of guilty as allowed for the utilitarian value of such a plea, as was said in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; 115 ACrimR 104 , the Court would consider when the plea was entered. Reliance is placed on an authority of Regina v Stambolis [2006] NSWCCA 56 (10 March 2006) where Howie JA stated at [11] and [12]: [11] Frankly I do not understand how on the established principles it could be determined that the pleas of guilty for the offences for which the respondent was sentenced were early pleas and that they justified a discount of 25 percent. There is no utility in a plea of guilty that has not been forthcoming. If the accused is not prepared to plead guilty until the Crown takes some course, then so be it. But if by withholding the plea the offender achieved the result he wanted, I do not understand why he should receive further favourable treatment on the basis that the plea of guilty had utilitarian value when it did not. Rarely, if ever, will the reason why the accused has withheld the plea of guilty be a relevant matter in determining the utilitarian discount. Where it has been used as a bargaining tool in order to achieve a favourable outcome from the Crown in respect of some other charge, I do not understand that this circumstance can excuse the delay or provides a basis for asserting that the plea was made at the first reasonable opportunity. [12] I accept that there may be exceptional cases, where as a matter of fairness to the offender, a discount will be given even though there was no utilitarian value in it. One such situation that has been recognised is where the Crown rejects the accused's plea of guilty to manslaughter and the accused is later acquitted of murder but convicted of manslaughter after trial: R v Oinonen [1999] NSWCCA 310; R v Cardoso [2003] NSWCCA 15. But in R v Harmouche [2005] NSWCCA 398 Hulme J, with whom Sully J and Latham J agreed, wrote: [38] Undoubtedly, the Respondent on the evidence before, and findings of, Judge Delaney made out an impressive subjective case. He had the factors of a plea, delay and youth arguing for a lesser penalty than would have been appropriate in their absence and was also entitled to have taken into account 134 days, i.e. something over 4 months, pre-sentence custody. [39] That said, the 25% discount for the Respondent's plea was unduly generous. In giving it his Honour seems to have made a mistake commonly seen in this Court that because a plea was entered at the earliest opportunity (commonly shortly after the Crown reduces a charge) an offender is entitled to that discount. Such an approach is to misread R v Thompson and Houlton (2000) 49 NSWLR 383 and to ignore the rationale for a discount of that degree. The Chief Justice made it clear, at [154-5], that the rationale for a 25% discount was the extent of the utilitarian benefit and the complexity of evidence gathering and of any trial which was avoided. Certainly his Honour made reference to a plea being entered at the earliest opportunity but that was in the context to which I have referred and where his Honour was obviously contemplating the committal stage of criminal proceedings where the community would be saved the costs associated with prosecution of the case from (the beginning of) that stage. . . . [41] I myself would go further. Albeit the extent of any discount is a matter in which a sentencing judge has some discretion - although as R v Thompson and Houlton at [159] makes clear, one subject to appellate review - where the rationale for a discount as high as 25% does not exist, a discount of that degree should not be given. Also the words of Hodgkinson JA in Regina v Dib [2003] NSWCCA 117 at [5] to [6] and relied upon: [5] If a plea is entered a long time after a person is first charged, but at a time when a lesser charge is substituted for a greater charge, the advantages to the administration of justice are less, even though the plea may have been made at the earliest opportunity. There is in any event no entitlement to a 25% discount; and the fact that in this situation there are less advantages to the administration of justice can justify a smaller discount. [6] This approach may mean that in some cases an offender may obtain a lower discount just because the prosecuting authorities initially brought a greater charge than that ultimately pursued, so that the delay in the plea of guilty was not the offender's fault. But this is consistent with the nature of the discount as being at least in part a recognition of practical advantages, and not merely a recognition of mitigation of culpability. 33The prosecutor opines the defendant is entitled to a discount for the plea of guilty but submits there was a significant delay in the plea being entered. In the circumstances I have outlined, where the plea was entered prior to any agreement related to an amended Application for Order, and given the prosecution was not pressed pending appeals on matters of law related to Occupational Health and Safety prosecutions when that could have affected both the prosecution and plea entered on the application, I accept that this defendant is entitled to the full 25 percent discount. 34It is also necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A(1) of the Crimes (Sentencing Procedure) Act 1999 relevant to the defendants. As was said in R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168: [56] ... it is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c) Ultimately, all of the above factors must be considered as part of "a complex of inter-related considerations" ( R v Gallagher (1991) 23 NSWLR 220 (at 228)). 35Mr Bunney places before the Court some character evidence and evidence that goes to the fact that persons who have worked with him had the opinion he was very safety conscious when working on site and he verbally instructed employees of the defendant corporation rigorously as to the care and attention they had to take when performing work under his guidance. 36He also places before the Court the new work site safety plan which is comprehensive and was designed with the assistance of expert advice. Further, reliance is placed upon his personal circumstances and the financial circumstances of the corporation. 37Mr Bunney separated from his wife in 2008. They had been married for 13 years. They have two children aged six and three who are dependent upon him. Despite the separation, his wife has continued to provide administrative assistance to the corporation. As a result of the property settlement in the separation, he retains his interest in the Trust and a superannuation interest that is held in the Trust of about $46,000. 38He fully co-operated on behalf of the corporation as Trustee of Neatrule with the WorkCover investigators. 39As to assistance he provided on behalf of the corporation to the family of the subcontractor, he has visited him on many occasions over the fortnight he was in hospital and has been in touch with him on 12 separate occasions over the following years to enquire about his health. 40In Cahill v State of NSW (Department of Community Services) (No 4) [2008] NSWIRComm 201, Boland J (President of the Industrial Court of New South Wales) said at [62]: A simple expression of contrition or remorse by a representative of a corporate offender, no matter how senior the representative, is not enough to enable the Court to find that the offender is remorseful: As Cummins J said in DPP v Esso Australia Pty Ltd [2001] VSC 263; (2001) 124 A Crim R 200, "personal expressions of remorse need to be translated into reality". See also see Regina v Heip Tan Nguyen [2004] NSWCCA 438 per Bell J (Hidden and James JJ agreeing) at [21]. There must be evidence that the offender has accepted responsibility for its actions and also that the offender has acknowledged any injury, loss or damage caused by its actions or that it has made reparation for such injury, loss or damage (or both). Section 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 provides " remorse " may be taken into account as a mitigating fact if, and only if: . . . (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both) (emphasis added) . . . 41I am satisfied there has been an appropriate acceptance of responsibility through Mr Bunney by the corporation. He has guaranteed the contractor further work if he wishes to resume duties. Mr Bunney has expressed his remorse and contrition as best he could. 42I accept there are safe work practices now in place. 43In considering penalty there are obligations on the Court to take into account not only the subjective features, but the seriousness of the offence in accordance to legal authority. Penalty must reflect the seriousness of the offence. While I have accepted this is a small family company, with only Mr Bunney and his wife as employees, it does have a turnover in the normal course, when doing domestic type plastering and rendering, of approximately $500,000. After the distribution of costs, there seems to be approximately $130,000 profit to be shared. In incorporating his operation, Mr Bunney gained some significant financial advantage, but with that financial advantage is the obligation on a corporation to ensure workplace safety, not only for its employees and subcontractors, but for any person at its work site. They are onerous obligations under the Act placed on the corporation which are reflected in a penalty, at a maximum of $550,000. 44I have considered this a serious offence. I take into account the subjective features but am obliged to give penalty reflective of seriousness. 45I find the defendant guilty. The defendant is fined in the sum of $50,000 with a moiety to the WorkCover Authority. The defendant shall pay the prosecutor's costs. I will formulate formal orders. Orders 46The Court makes the following orders:

1. In Matter No IRC 1773 of 2009, I find the defendant guilty of the offence as charged.
2. The defendant is fined in the sum of $50,000 with a moiety to WorkCover Authority of New South Wales.
3. There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. 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: 02 September 2011