Safe Work (NSW) v Activate Fire Australia Pty Ltd; Safe Work

Hanna Plumbing's case on sentence

1. Hanna Plumbing relied on an affidavit of Heinz Stalder sworn 24 May 2017. Mr Stalder was present in Court and cross-examined on 8 June 2017. The salient points of his evidence can be summarised as follows.
2. Mr Stalder is a director of Hanna Plumbing that commenced operation in 1987. Mr Stalder was first qualified as a licensed plumber in 1979 in Switzerland. He came to Australia in 1981 and redid his plumbing apprenticeship. He was qualified in Australia in 1986.
3. Hanna Plumbing undertook a wide variety of work specialising in fire protection work in commercial premises. At the time of the incident, Hanna Plumbing employed, Robyn Stalder (Mr Stalder's wife), Dylan Stalder (Mr Stalder's son) and other workers as required by its workload. At that time Mr Stalder worked about 60 hours per week, including administration.
4. Mr Stalder now works about 12-15 hours per week. Mr Stalder has wound down the activities of the company (and himself) because of his age, his health and the effect of the incident on him. Mr Stalder suffered a heart attack on 2 May 2015 and this caused him to rethink his work/life balance.
5. Hanna Plumbing now has maintenance contracts with 3 commercial premises in Port Macquarie and does "one-off" plumbing jobs. The most recent financial accounts for the financial year ending 30 June 2016 reflected a significant reduction in the revenue of the company and recorded a minimal profit.
6. Prior to the incident Mr Stalder did not believe that it was possible to isolate some of the power in the roof space. If he had realised that, he would have required it to be done as he was concerned about the state of the wiring in the roof space. He instructed the workers to be careful to avoid the wiring in the roof space and observed them following his instructions.
7. Mr Stalder was called to the incident and when he tried to move Mr Gumbleton into the recovery position he received an electric shock. He then kicked Mr Gumbleton's hand off the steel pipe and told Dylan Stalder to turn off the power. Mr Stalder commenced CPR until other assistance came.
8. Mr Stadler expressed regret that Mr Gumbleton had been injured and the distress caused to him and his family by the incident. Mr Stalder stayed in close contact with Mr Gumbleton in 2014 out of concern for his welfare.
9. After the incident a revised SWMS was issued, some of the wiring was tidied up and the power was isolated when the work recommenced. On subsequent jobs Hanna Plumbing has sued the revised SWMS that provides for inspection of roof spaces by a licensed electrician, the fitting of RCDs and if there is any doubt the isolation of the power.

Activate Fire's case on sentence

1. Activate Fire relied on an affidavit of Glen Chapman sworn 5 June 2017. Mr Chapman was present in Court and cross-examined on 8 June 2017. The salient points of his evidence can be summarised as follows.
2. Mr Chapman is the sole director of Activate Fire and it commenced operation on 31 October 2012. Prior to that Mr Chapman had been employed in the fire safety industry for more than 20 years by Wormald. At Wormald Mr Chapman was responsible for the contract and project management of the installation of fire sprinkler systems. He was aware of the content of Wormald's SWMSs and had no prior experience of the need to isolate power during the installation of a fire sprinkler system. Mr Chapman undertook similar duties for Activate Fire as he had previously undertaken at Wormald.
3. After hearing of the incident, Mr Chapman ordered that work stop at each of Activate Fire's other active jobs, until the roof spaces had been inspected and RCD's fitted.
4. Mr Chapman attended the hospital with Mr Stalder to check on Mr Gumbleton's condition. Mr Chapman offered financial support to Mr Gumbleton's partner who was at the hospital.
5. Mr Chapman expressed remorse and regret for the injury suffered by Mr Gumbleton. He gave evidence that he would not have allowed the job to continue if he could have foreseen the circumstances that led to the electric shock. Mr Chapman gave evidence that he feels sick about the incident and he has suffered a significant amount of stress as a result.
6. Immediately after the incident, Mr Chapman amended the SWMS that he uses and has modified his approach to later jobs. He attends safety inductions and site specific training for each job. He has refused to undertake any more retro fitting of sprinkler systems at nursing homes, which he estimates would have generated about $1.5 million in revenue for Activate Fire since March 2014.
7. Mr Chapman has tried to raise awareness of the incident in the industry and has experienced some resistance from some principals. Mr Chapman has required electrical inspection reports for the jobs he has undertaken after the incident.

Unity's case on sentence

1. Unity relied on an affidavit of Peter Gurtner sworn 2 June 2017. Mr Gurtner was present in Court and cross-examined on 21 June 2017. The salient points of his evidence can be summarised as follows.
2. Mr Gurtner is the sole director of Unity. It was incorporated on 30 June 1998 and was initially provided the project management services of Mr Gurtner, before undertaking commercial construction projects. Mr Gurtner has 27 years of experience in the construction industry.
3. Unity has involved itself in charitable work and support of charitable causes. It has also won industry awards for its work in 2011 and 2014.
4. Unity has undertaken varied commercial projects as well as a number of projects retrofitting and refurbishing fire sprinkler systems. Unity usually operated with a limited number of employees and by engaging subcontractors.
5. Mr Gurtner is actively involved in all aspects of the operations of the company. He maintains and supplements Unity's Safety Management Plan. In 2011 Unity gained Occupational Health and Safety accreditation from the NSW government for NSW government projects.
6. The Safety Management Plan is extensively documented and the Site Supervisor is responsible for implementing it on site. The system requires workers to undertake a site specific induction. The site supervisor also had responsibility for conducting tool box talks with the workers on site and conducting meetings with subcontractors on a fortnightly basis to discuss matters including safety.
7. Unity received and reviewed the SWMS prepared by Activate Fire and the consultation required by the Safety Management Plan was undertaken in relation to the project.
8. After the incident Mr Gurtner travelled from Sydney to the facility. Mr Gurtner enquired as to the welfare of Mr Gumbleton.
9. Unity has experienced a significant downturn in its business and profitability after the incident. In 2014, Mr Gurtner sold his home to contribute $419,049 into the business. In 2016, Unity's office was sold to repay debt owing to the bank of approximately $238,000. In 2017 the ATO served a statutory demand on Unity for $213,285.71. Presently, Mr Gurtner is trying to enter into a payment arrangement with the ATO on behalf of the company.
10. The latest completed accounts for the year ending 30 June 2016 showed a profit after tax of approximately $191,000. The profit and loss statement to 30 April 2017 indicates a loss of approximately $200,000. Mr Gurtner gave evidence that he has had to give part of the capital of the company to his wife in a property settlement and that this is reflected in the company accounts.

Consideration

1. 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.

Objective seriousness of the offence

1. Each of the defendants was aware of the risk of the workers suffering an electric shock in the roof space and that extra precautions were required to minimise the risk. The defendants took some extra precautions, by installing a new manhole and removing the roof sheets to provide safer access to the roof space and by training the workers in procedures and by reminding them to be careful in the course of the installation work.
2. The defendants failed to appreciate that the risk could be minimised by isolating the power to some of the power cables that were present in the roof space. They did so because in the collective experience of Mr Stalder, Mr Chapman and David and Peter Gurtner that step had not been taken in the past. The relevant people were of the general understanding that the power could not be isolated because the work was being completed in an occupied nursing home. However, the power to the administration wing could have been easily isolated by the BCS staff, at no cost to the defendants or BCS and without inconveniencing the work.
3. The likelihood of the risk occurring was low.
4. The gravity of the risk was significant and it included a risk of death.
5. I am not satisfied beyond reasonable doubt that the injury sustained by Mr Gumbleton was a manifestation of the pleaded risk. The electric shock to Mr Gumbleton occurred in circumstances that were not reasonably foreseeable. The positioning of the lighting cable on top of the screw could not be seen by the workers from within the roof space. It only became visible later through the hole in the ceiling that was caused by Mr Gumbleton falling through it. Further, it is unlikely that the cable came to rest on top of the screw as a result of the work in the roof space. There was no evidence that the cable was moved at any time before the electric shock. I am satisfied that the cable came into that position when the duct was installed and the cable had not been penetrated until Mr Gumbleton leant on the duct. Whilst it is true that Mr Gumbleton would not have suffered an electric shock if the defendants had isolated the power to the roof space, the risk posed to Mr Gumbleton that came home was not the result of the work being undertaken. The pleaded risk was one of direct contact with the live electrical wiring and not indirect contact through a latent defect in the installed fittings in the roof space. The risk that came home was present by reason of a combination of poor electrical workmanship and the subsequent installation of the duct. None of the defendants had the expertise to identify or predict the presence of the danger and it was not reasonable foreseeable to any of them. In those circumstances, no actual harm was caused by the defendants breach of their respective health and safety duties.
6. The defendants had taken significant steps towards compliance with their health and safety duties. The failure to isolate the power to the administration wing arose from a lack of imagination and the departure from the standard required from a reasonable person was not substantial. In Hanna Plumbing's case it was told that it was not possible to isolate the power to the administration wing. The moral culpability of each of the defendants is substantially reduced.
7. The objective seriousness of the offence is in the low range.

Deterrence

1. 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].
2. There is also a need for specific deterrence although it is significantly reduced. Each of the defendants continue to operate and they may engage workers, although each has had a downturn in the work undertaken by it. Each of the defendants have improved their safety systems after the incident and have incorporated additional steps to be undertaken when working in roof spaces.

Aggravating factors

1. There are no relevant aggravating factors. Mitigating factors
2. Each of the defendants did not have any previous convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. Hanna Plumbing had been operating since 1987, Activate Fire since 2012 and Unity since 1998.
3. Each of the defendants has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. Each of the defendants were concerned for the welfare of Mr Gumbleton. Each of the defendants had demonstrated a significant commitment to safety before the incident and each of them has taken heed of the additional steps to be included when working in roof spaces.
4. Activate Fire and Hanna Plumbing contended that they had demonstrated remorse sufficient to make out the mitigating factor provided for by section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The evidence of both Mr Stalder and Mr Chapman expressed remorse for the injury to Mr Gumbleton and the effects of it. The affidavit evidence of each of Mr Stalder and Mr Chapman did not accept responsibility for the actions of Hanna Plumbing and Activate Fire respectively. Both gave evidence in cross-examination that they were not remorseful for committing the offence. I was of the view that the question put that way was unfair to both of them, because it rolled up a matter that may have been unfamiliar to lay persons. However, on close examination of their primary evidence the acceptance of responsibility for the actions of each company is missing. The primary evidence is an acknowledgment of the injury to Mr Gumbleton and concern for his welfare and whilst that demonstrates remorse and I will take that into account, it is insufficient to establish the mitigating factor provided for in section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999.
5. Hanna Plumbing entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. Hanna Plumbing 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 plea was entered on the first day of trial. The utilitarian benefit of the plea was significant. The plea was entered to an amended Summons. The appropriate discount is 15%.
6. Each of the defendants co-operated with the investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
7. On the basis of my finding that no actual harm was caused by the offence, I have not had regard to the Victim Impact Statement of Mr Gumbleton.

Capacity to pay a fine

1. I am required to have regard to section 6 Fines Act 1996 before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the Court that it should exercise its discretion to limit the amount of the fine. The offender's capacity to pay is relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.
2. I am satisfied that Hanna Plumbing has a reduced capacity to pay a fine. It is also less culpable than the other defendants as it had less input into the SWMS and it was told that the isolation of the power to the administration wing was not possible.
3. I am satisfied that Unity has a reduced capacity to pay a fine, however the objective seriousness of the offence calls for a relatively small fine and in those circumstances I have not reduced what I consider to be the appropriate fine.

Penalty - Hanna Plumbing Pty Limited

1. The offender is convicted.
2. The appropriate fine is one of $5,000 that will be discounted by 15% to reflect the plea of guilty.
3. I impose a fine of $4,250.
4. I order that pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

Penalty - Activate Fire Pty Limited

1. The offender is convicted.
2. I impose a fine of $10,000.
3. I order that pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

Penalty - Unity Pty Limited

1. The offender is convicted.
2. I impose a fine of $10,000.
3. I order that pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

Costs

1. In Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 the Court of Criminal Appeal reviewed the principles relevant to awarding costs to a prosecutor pursuant to section 257B Criminal Procedure Act 1986 relating to a prosecution under the Act. At [70] the Court stated that it may be appropriate in the circumstances of a case to award costs by reference to success or failure on discrete issues.
2. The prosecutor failed to establish 4 of the 5 particulars or breach of duty that it alleged. Further, it sought to argue at the hearing that [9] of the Summons should be decided in its favour. I deferred that issue to the sentence hearing because the allegation that the injury to Mr Gumbleton was a manifestation of the pleaded risk was not an element of the offence. At the sentence hearing the prosecutor failed to establish that allegation for the reasons I have given.
3. Further, at the time the hearing was commenced the prosecutor had not served any evidence from any person at BCS as to the ability of the power in the administration wing to be isolated, the inconvenience that would cause to BCS and what steps were taken when the work was recommenced. This evidence went to the heart of the particular of breach that I found to be established. I permitted that evidence to be called but only on resumption of the matter. The failure to have that evidence served as part of the brief of evidence extended the hearing time.
4. The prosecutor should not be awarded all of its costs relating to the prosecutions as it was substantially unsuccessful on a number of issues. The causation of the injury issue applied to each of the defendants.
5. I order that Hanna Plumbing Pty Limited pay 85% of the prosecutor's costs as agreed or assessed on the ordinary basis.
6. I order that Activate Fire Pty Limited pay 50% of the prosecutor's costs as agreed or assessed on the ordinary basis.
7. I order that Unity Pty Limited pay 50% of the prosecutor's costs as agreed or assessed on the ordinary basis.

Endnotes

1. Exhibit 1, Tab 12.
2. I infer that the reference to "H&S" in the term "EH&S" was a reference to health and safety. Peter Gurtner gave evidence that he understood Mr Chapman's reference to "JSA" to mean "Job Safety Analysis". 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: 27 July 2018