Ceerose Pty Ltd (the offender) has pleaded guilty to an offence that being a person who had a health and safety duty pursuant to section 19(2) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Jennifer Lipperts to a risk of death or serious injury contrary to section 32 of the Act.
The maximum penalty for the offence is a fine of $1.5 million.
[2]
Facts
The parties presented an Agreed Statement of Facts that can be summarised as follows.
The offender operated a construction management business and was the principal contractor for construction work (the work) on a site situated on the corner of Barr Street and Pyrmont Bridge Road, Camperdown (Barr Street site). The offender was also contracted to undertake remediation work on a site situated at 19-25 Lyons Road Camperdown (Lyons Road site).
In about August 2014 the offender took control of the Barr Street site and only had access to the Lyons road site for parking until it took full control of the Lyons Road site in late February 2015.
The Lyons Road site had been used by previous tenants for parking and storage and was secured with an electric gate. This gate was manufactured in such a way that the left-hand section would slide back and forth along a rail; whilst the right-hand side would swing open and shut on a hinge. Each of the tenants accessed the site via remote control, opening and closing the sliding gate. The Lyons Road site sloped downwards slightly, leading to the sliding gate have to close on a slope.
The dimensions of the sliding gate were approximately 5800mm in length, 2000mm in height and 50mm in thickness. The sliding gate was manufactured from thick tubular steel.
The sliding gate was capable of being operated both electronically and manually. Power to the Lyons Road site was disconnected on 21 March 2015. It was a standard automatic sliding gate consisting of:
1. A gate leaf made up of a frame and grill, a rack and wheels on the bottom frame and a guide rail attached to the top of the frame, running its length;
2. A support post, positioned at the left-hand side of the Lyons Road site which supported the gate via a guide bracket attached to the support post that came into contact with the guide rail
3. A guide rail, that was a 90 degree angled steel bar that was welded horizontally to the top frame of the sliding gate
4. A metal stopper welded to the end of the guide rail
5. A track under the bottom of the frame that the wheels would move along
6. A rack at the base of the gate leaf which was a geared toothed track positioned upside down and horizontal
7. An electric motor with a cog drive.
The sliding gate was designed to operate with the wheels mounting the track and rolling back and forth. The rack along the length of the gate coupled with the electric powered cog which moved the gate along the track as it turned. The guide bracket connected the gate to the support post to keep it upright and stable. The guide bracket also kept the gate the appropriate distance from the support post. The metal stopper welded to the guide rail would collide with the support post when the gate was closed, preventing it from running off the track or past the support post.
From about August 2014 the offender used the Lyon Street site as a car park and access point for delivery vehicles and truck washing. When not in use, the gates were closed and padlocked. A supervisor was usually required to open the gate for access and then lock it. Two supervisors had the key to the site, one being Mr Nakhoul. Other people, not related to the offender's business also had access to the site up to 12 January 2015.
At the time the offender took full control of the Lyons Road site in February 2015, the gate was still operated electronically. An identified risk of a brick wall collapsing onto a public footpath led to the offender disconnecting the power from the site on 21 March 2015. The gate had to be manually opened and closed after this time.
TS Media Pty Ltd, trading as Labour King (Labour King) was contracted by the offender to provide personnel to undertake traffic control duties at both sites. Ms Lipperts was employed by Labour King. Ms Lipperts is a German national. At the time of the incident she was in Australia on a working visa. She had obtained qualifications in traffic management and the application traffic control plans from the Roads and Maritime Services on 10 and 11 November 2014.
She worked as a traffic controller under the direction and control of the offender at both sites in February 2015. Ms Lipperts reported to Mr Nakhoul, project co-ordinator and Mr Walker, site manager with the offender. Roy Massoud was the site manager for the Barr Street site, but only attended that location on a weekly basis as he worked out of head office.
At approximately 4:15pm on 14 May 2015 the victim was working as a traffic controller at the Lyons Road site. She had been given the key to the padlock earlier that day and was asked to lock the gate when the trucks left by an identified supervisor. The victim had done this previously during busy periods.
Previously the victim had only been required to open and close the sliding gate only as the swing gate was already closed. When she first began working at the site, the gate was easy to open and close but after some time it became harder to move. At times, the victim would attempt to put her entire weight behind the gate to move it, with little success.
On the date of the incident both gates were open. When the victim began to close the sliding gate it dislodged from the track and fell, landing on her. The victim sustained numerous fractures to her pelvis, fractures to her sacrum and a wedge compression fracture of the T11 vertebrae in her thoracic spine.
The victim spent 3 months receiving treatment for her injuries in Australia before returning to Germany. Although improved somewhat, she continues to experience pain and discomfort from her injuries. She cannot lift heavy objects, has stopped physiotherapy treatment on advice from her doctors but continues to go to the gym.
An inspection of the gate after the incident revealed the following:
1. The slider block was missing
2. The sliding gate could be moved from side-to-side between the support post and external fencing whilst engaged on the track
3. When resting against the external fence post, the sliding gate was too far from the support post, rendering the stopper inactive if the gate was in the closed position
4. There was damage to the mid-rail and top-rail of the gate
5. As the slider block was missing, the gap between the gate and support post could extend past the length of the metal stopper, meaning that the stopper would not impact with the support post, enabling the gate to go beyond its intended position.
Prior to the incident the gate was operated electronically, until the offender made the decision to disconnect the power to the site. The victim had not been properly instructed in the correct method of manually opening the gate. She had informed Mr Nakhoul at some time between February 2015 and the date of the incident that she was having increasing difficulty in opening the gate. No written complaint was made by either the victim or Mr Nakhoul to the offender regarding this issue.
The offender did not conduct a proper risk assessment after the power was disconnected and the gate had to be operated manually. No records of inspection, either visually or otherwise were produced by the offender pertaining to the gates' operation.
Immediately after the incident the gate was locked and not used. Subsequently, the gate was removed and temporary cyclone fencing was installed at the site. The Lyons Road site remained empty until commencement of the intended remediation works.
[3]
The Offender's Case on Sentence
The offender relied on an affidavit of Roy Massoud, the Construction Manager the offender, sworn 23 October 2017. Mr Massoud was present in Court for the sentence hearing and was not required for cross-examination. Mr Massoud's evidence can be summarised as follows.
Mr Massoud commenced work for the offender on 11 October 2010. He was appointed the Construction Manager and a member of the senior management team in February 2015. He has a supervisory role for all of the offender's construction work and projects. Mr Massoud holds tertiary qualifications in Construction Management and has had over 13 years' experience in construction, project design, planning and management.
The offender was the principal contractor for construction work at the site. It took control of the site in about August 2014 for the purpose of constructing an apartment complex.
Mr Massoud deposed that the offender acknowledged its safety systems in relation to the gates were inadequate and failed to prevent the incident. The reasonably practicable measures had not been taken. The offender acknowledged the pain and suffering to Ms Lipperts and expressed remorse for her injury and ongoing disabilities.
The Lyons Road site where Ms Lipperts was working was being remediated for use as a public park. Whilst the apartments were being constructed the site was being used for parking, washing trucks and storage of materials.
In about late February 2015 the offender identified that a high brick wall on the Lyons Road site was at risk of collapsing. The offender engaged engineers who advised that the wall needed to be demolished. The power supply for the Lyons Road site ran through the wall so it was disconnected on 21 March 2015 prior to the demolition.
The gate was thereafter only able to be opened manually. After the incident the gate was put back into place and secured so that it could not be used.
Ms Lipperts was visited in hospital and contacted by a number of the offender's staff. The offender paid Ms Lipperts the shortfall between her normal wages and her compensation payments.
The offender had a comprehensive work health and safety (WHS) system in place at the time of the incident. In 2013 it had been audited by an external provider and the suggested amendments to it were implemented by the offender. On 27 April 2015 the offender had an external provider deliver a seminar to its staff relating to the incident.
Since 2013 the offender's sites have been controlled by a Site Manager and a Site Foreman, as well as other supervisory staff depending on the size of the project. The Site Manager is required to conduct at least weekly site inspections.
Weekly toolbox talks involving all staff and contractors are held on site in busy periods of construction and fortnightly tool box talks are held at other times. Site supervisors hold a weekly meeting at which WHS issues can also be discussed. The wearing of personal protection equipment (PPE) on site is strictly enforced.
At the time of the incident the offender had 7 experienced supervisors for the project. The offender had also engaged an external provider to conduct fortnightly inspections of the site.
No risk assessment or inspection of the gate was ever conducted after the power was disconnected. Ms Lipperts was not instructed on the correct method of operation of the gate after the power was disconnected and there was no assessment made of her physical capacity to undertake that task.
Ms Lipperts had otherwise been inducted and trained in accordance with the offender's WHS plan for the site. The WHS system did not identify the risk posed by the gate.
After the incident the offender has ensured stricter compliance with the WHS policies and sought to continually review and improve the procedures in place. The offender has employed a WHS Quality and Environmental Manager and engaged a new external provider to undertake safety audits.
On 8 March 2016 the offenders WHS management system obtained Australian Standard compliance. In June 2016 the newly appointed WHS Quality and Environmental Manager reviewed and revised the WHS system to take into account that new role, including weekly site safety visits. WHS objectives are reviewed by management on a monthly basis taking into account the work in the past month and the work to be completed in the following month.
Between 2014 and 2016 the offender spent $235,310 on worker safety and management systems. The offender spent $60,600 on external safety audit reports for the project.
The offender is a member of various industry bodies. The offender has also contributed to community and charity organisations, contributing around $70,000 to those bodies since 2010.
[4]
Consideration
I have had regard to the objects of the Act set out in section 3 and the purposes of sentencing set out in section 3A Crimes (Sentencing Procedure) Act 1999.
[5]
Objective Seriousness
The crush risk posed by the gate was obvious. The sliding gate was 5.8m long by 2m high and constructed to thick tubular steel. It closed on a downward slope. There was nothing to stop it sliding past the track provided for it and nothing to attach it to the post, so that when it was slid too far it was likely to fall. A cursory examination of the gate would have identified the issues. An inspection should have been undertaken at the time that the power was cut to determine if it was safe for Ms Lipperts to operate the gate manually. No inspection was undertaken after Ms Lipperts complained to Mr Nakhoul that the gate was becoming difficult to operate.
The likelihood of the risk coming home were moderate to high. The gate was operated manually from 21 March 2015 and the incident occurred on 14 May 2015. The gate was opened and closed a number of times a day and had become more difficult to operate, requiring the application of additional force by Ms Lipperts.
The steps that could have been taken were simple and inexpensive. All that was required was a visual inspection and the refitting of the slider block, which could have been done by the offender at little, if any cost.
The risk was one of serious injury.
The injuries sustained by Mr Lipperts were significant. She suffered 3 pelvic fractures, 2 of which were displaced, a complex fracture of her right sacrum and a wedge fracture at T11 in her thoracic spine. She was hospitalised for about 4 weeks. She suffered pain and complications including a bladder infection. She was required to undergo physiotherapy and hydrotherapy for a number of months. She is still experiencing pain 2.5 years later and she is understandably concerned about the impact her injuries may have on childbirth. She continues to have difficulties with mobility and getting comfortable, when sitting and lying down. She cannot carry anything heavy. She was very active young person before the accident and has been unable to return to many sporting and leisure activities. Ms Lipperts is presently 25 years of age.
[6]
Deterrence
The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180].
There is also a need for specific deterrence because the offender continues to operate in an industry that presents significant risks to the health and safety of its employees. The offender has 2 previous convictions for occupational health and safety breaches. In an incident in June 2008 a worker fell from height suffering severe leg injuries. On 13 April 2013 a worker was killed when a skylight fell from a crane at one of the offender's sites. The penalty imposed for this offence needs to bring home to the offender that if it continues to breach its safety obligations that it will meet with condign punishment. I have taken into account that the offender has made further adjustments to its safety systems as a result of the incident.
[7]
Aggravating factors
The offender has a record of previous convictions: 21A(2)(d) Crimes (Sentencing Procedure) Act 1999. Multiple convictions for offences of this type are rare for a PCBU. This offender has 2 previous matters, one resulting in serious injury and the other resulting in the death of a worker. Prior convictions are pertinent to deciding where, within the boundaries set by the objective circumstances are set, a sentence should lie: R v McNaughton (2006) 66 NSWLR 566 at [26]. Prior convictions should not be taken into account in such a way to punish the offender again for those earlier matters, but they do not assist the offender in affording to it any particular leniency.
The injury harm and loss caused by the offence was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. In order for the aggravating factor to be established I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. The Victim Impact Statement was not objected to or called into question and in my view it is proper to take it into account in consideration of the establishment of the aggravating factor: R v Tuala [2015] NSWCCA 8. I am satisfied beyond reasonable doubt that the injury harm and loss caused by the offence was substantial.
[8]
Mitigating factors
The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender expressed remorse through the affidavit Mr Massoud. I am satisfied on the balance of probabilities that the offender has accepted responsibility for its actions and demonstrated genuine remorse and contrition.
The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. The offender is entitled to a discount on penalty that reflects the utilitarian value of that plea. The extent of the discount should generally be assessed in the range of 10-25%, but that is only a guide. The primary consideration in determining where in the range a particular case should fall is the timing of the plea, so that the earlier the plea the greater the discount: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The appropriate discount is 25%.
The offender co-operated with the Safe Work investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
[9]
Penalty
The offender is convicted.
I have considered the Victim Impact Statement of Ms Lipperts.
The appropriate fine is one of $400,000 that will be discounted by 25% to take into account the plea of guilty.
I impose a fine of $300,000.
I order that pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
I order that the offender pay the prosecutors costs as agreed or assessed.
[10]
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Decision last updated: 13 November 2017