Building Maintenance Unit Service 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 David Wilson and Edwin Acero Castellanos 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 conducted a business maintaining and servicing building maintenance units (BMU). A BMU is a suspended platforms and associated equipment on a building used to provide maintenance access to the facade of the building. The offender provided electrical and mechanical repairs and upgrades to BMUs.
The Trust Company (RE Services) Limited (RE Services) owned a 13 level office building located at 20 Bridge Street Sydney (the premises), which they purchased in approximately December 2011.
Solutions Property Service Pty Ltd (Solutions) was a contractor engaged by RE Services to clean the external windows of the premises on a quarterly basis.
Ultra Clean Services Pty Ltd (Ultra Clean) was subcontracted by Solutions to clean the external windows of the premises.
In April 2014, Investa Asset Management Pty Ltd (Investa) was contracted by RE Services to provide property management services at the premises. Pursuant to a property management agreement (the 2014 PMA), they were responsible for the leasing, maintenance and upkeep of the building, including managing contractors engaged by or on behalf of RE Services. As RE Service's agent, they also had management and control of the BMU stored at the premises.
The offender had been responsible for maintaining the BMU at the premises for approximately 10 years. When Investa took over management of the premises in April 2014, they contracted the offender to undertake routine inspections, maintenance and repairs on the BMU. The offender was also responsible for setting up the BMU and inducting contractors engaged to use it.
The BMU was specifically designed for use at the premises. It was originally commissioned in 1999 or 2000 and was used by window cleaning contractors approximately once per quarter. It was stored in the car park when it was not in use.
The BMU comprised of two cradles that were each attached to a winch. The winches hung from supporting brackets protruding from the top of the building. The cradles and winches were connected by a support bracket which in part, contained a load bearing bolt. The load bearing bolts were hidden within the connection box that was constructed of sheet metal and secured with pop rivets. The load bearing bolts could not be inspected unless the connection box was disassembled, by drilling out the pop rivets.
Investa had in place a quarterly service schedule for the BMU, in accordance with the manufacturer's recommendations. The offender was contracted to undertake scheduled servicing and maintenance, and when required to effect minor repairs. In the 12 months prior to the incident, the offender conducted four inspections of the BMU. They did not record any issues about cracking in the load bearing bolts.
In order to inspect the load bearing bolts, the connection boxes had to be dismantled. At no time during the scheduled inspections did the offender dismantle the connection boxes. The load bearing bolts were never inspected or tested or periodically replaced.
Section 7.3.5 of Australian Standard AS 2550.13-1997 Cranes - Safe Use Part 13: Building maintenance units (AS 2550.13) provides that a BMU must be subject to a major inspection '10 years after commissioning or as recommended by a competent person'. A major inspection required inter alia the non-destructive testing of all nominated critical areas for evidence of cracking due to fatigue or excessive stress. It also required an assessment of the suitability of the equipment for future use.
Since 2003, all repairs and maintenance of the BMU at the premises had been conducted by the offender. They were aware of the existence of AS 2550.13, yet no major inspection was ever carried out. Given the BMU was commissioned in 1999 or 2000, it was due for a major inspection in 2009 or 2010.
The offender estimated the cost of a 10-year major inspection, including non-destructive testing to be $2,000.
In 31 March 2015, Investa enquired about the cost and due date of the 10-year major inspection.
On 2 April 2015 the offender advised the major inspection was due "now" but did not follow up to prompt Investa to have the major inspection done.
In August 2015, Ultra Clean provided Investa with a quotation for cleaning the external windows of the premises. Investa then arranged for Solutions to engage Ultra Clean. Ultra Clean would invoice Solutions for the work who in turn would invoice Investa.
On 19 October 2015, Investa engaged the offender to set up the BMU and induct the Ultra Clean workers, Mr Wilson and Mr Castellanos in the use of the BMU.
Before Ultra Clean could commence work, they were required to check the service records of the offender, prepare a site specific safe work method statement (SWMS) and obtain a Working at Heights Permit from Investa.
Ultra Clean workers were trained to undertake a visual inspection of the BMU to ensure that there were no obvious faults.
At approximately 11.15am on 20 October 2015, Mr Wilson and Mr Castellanos were standing on the BMU, cleaning the windows on the twelfth storey of the premises. Suddenly, the BMU fell 25 to 30 metres, hitting the awning above the street. During the fall, the BMU fell onto one side. Mr Wilson landed on the awning while inside the BMU. Mr Castellanos went over the edge of the awning, hanging by his safety harness.
Both Ultra Clean workers suffered extensive injuries. Mr Wilson sustained fractures to his right shoulder, right tibia, left knee, ribs, jaw and teeth, as well as head and spinal injuries and a punctured lung. Mr Castellanos sustained a spinal fracture with spinal cord decompression, a fractured ankle and a dislocated finger.
The BMU collapsed because the right hand bolt within the connection box fractured, causing a sudden transfer of load to the left hand bolt which then became twisted and also failed. The fracture was the result of extensive cracking in each of the bolts, caused by recurring cyclical loading of the plant during operation.
Once the winches and "Sky Lock" safety device became separated from the cradles, the only support for the BMU came from the cables stored around the cable drums. The cable drums did not offer any significant resistance to the BMU falling once the two bolts broke.
From about 24 November 2015, the offender required that all BMU equipment be thoroughly tested and checked and all load bearing bolts replaced. The BMU involved in the incident was replaced.
[3]
The Offender's Case on Sentence
The offender relied on an affidavit of Wayne McCallan, a former General Manager of the offender, affirmed 30 January 2019. Mr McCallan was present in Court and not required for cross-examination.
The offender commenced operating as a partnership and was incorporated in January 2001.
Wayne McCallan took up the position of general manager of the offender in late 2016. He managed the day to day operation of the business, including arranging new contracts, preparing invoices and quotations and the allocation of work.
Whilst he was not employed by the offender at the time of the incident, Wayne McCallan deposed that the offender's employees were greatly affected by the incident. He accepted responsibility on behalf of the offender for the company's acts and omissions which contributed to the risks which Mr Wilson and Mr Castellanos were exposed to on the day of the incident.
Wayne McCallan expressed regret on behalf of the offender that the incident occurred and empathy towards Mr Wilson, Mr Castellanos and their families. He noted the effect the incident has had on his father (James McCallan).
The offender fully cooperated with the investigations of SafeWork NSW following the incident.
In response to the incident, the offender modified its systems of work. They adopted the motto "If in doubt, tag it out". Employees were encouraged to tag out equipment if they had safety concerns and instructed that no ramifications would flow from rendering equipment unsafe for use.
The offender developed an App for use by their service technicians to streamline inspections and avoid paperwork being lost or not actioned. The App also has a client interface, which requires clients to acknowledge if the BMU has been tagged unsafe for use.
The offender's Service Schedule inspection checklist was updated to ensure technicians consider whether the BMU is due for a major inspection and individual inspection items were amended to provide greater detail.
The offender implemented a database which reminds service technicians when an annual or 10 year inspection is due. The database also records whether a BMU has been tagged out.
The offender retained Laboratories for Materials Advanced Testing Services (LMATS) to attend and carry out non-destructive testing on all BMUs at annual inspections. Wayne McCallan personally attended all annual inspections.
The offender implemented a new system to ensure managers of BMUs were not ignoring the risks identified by the offender during an inspection. The offender's employees were required to complete and sign a Job Safety Assessment prior to commencing work.
They also implemented general safety alerts to all employees, an updated WHS policy, a Cloud based system containing safety and equipment information, a Monthly Checklist for safety equipment and quality assurance forms/registers.
The offender relied on an affidavit of James McCallan, a prior Director of the offender, affirmed 31 January 2019. The content of his affidavit can be summarised as follows, I will not repeat matters I have already referred to.
James McCallan was a Director of the offender since it was incorporated in January 2001. At the time of the incident it had 10 employees, including its directors.
As Operations Manager, James McCallan would carry out the day to day operation of the business, including all matters relating to new contracts, preparing invoices and quotations and the allocation of work.
James McCallan acknowledged the pain and suffering caused to Mr Wilson, Mr Castellanos, their family and friends. He expressed regret and remorse personally and on behalf of the offender, stating he continues to be extremely distressed by the incident. Following the incident, he made the decision to step back from the business and Wayne McCallan was employed as Operations Manager. Wayne McCallan's primary focus was to review and update the offender's procedures, including workplace health and safety policies and procedures.
The offender had a documented Work, Health and Safety policy. Each month they held meetings and Tool Box Talks with employees on a range of topics such as safe work environment, first aid and falls. The offender also used these Tool Box Talks to update employees on relevant Australian Standards, WorkCover Guidelines, OH&S legislation and to provide training. Two days after the incident, the offender held a Tool Box Talk/Safety Meeting, which lasted approximately three hours.
In response to the incident, the offender mandated that all holdings bolts contained in the BMUs it serviced be checked and replaced. In addition, any BMUs which were becoming due for a 10-year major inspection were to be tagged out until further testing could be undertaken.
The offender remained committed to reviewing its work, health and safety policies until December 2017 when it became unable to continue to viably trade.
[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 offence is one of some objective gravity.
The risk was reasonably foreseeable and actually known by the offender. The offender knew that the BMU has not undergone a major inspection and that such inspection was well overdue. The offender was a specialist service provider for BMUs. It ought to have known that the manner of construction of the BMU provided for considerable forces to be exerted on the load bearing bolts.
The likely consequences of the risk were obvious, serious and demonstrated by the incident.
The injuries sustained by Mr Wilson and Mr Castellanos were substantial and have left them both with permanent disability.
The likelihood of the risk occurring was high. In this case it was merely fortuitous that the cable caught on one of the winch handles and prevented the BMU from free falling.
More than one worker was exposed to the risk. The risk included a risk of death.
The means of preventing the risk were simple and inexpensive. The offender could have refused to set up the BMU until it had been properly inspected.
I have had regard to the maximum penalty for the offence.
[6]
Deterrence
The penalty imposed in relation to the offences must provide for general deterrence. PCBUs must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large businesses 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].
The need for specific deterrence in this case is negligible. The offender has sold the business and exists only to recover some money that it is owed.
[7]
Aggravating Factors
The injury, harm and loss caused by the section 32 offences 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 offence does not require an injury to be sustained but only the creation of a risk.
The Court received Victim Impact Statements (VIS) from both Mr Wilson and Mr Castellanos. Mr Wilson was also present in Court on the sentence hearing and I had the opportunity to examine the significant scarring on his forehead and right shoulder. The offender did not challenge or call into question the VIS and it is appropriate to take them into account in establishing the aggravating factor: R v Tuala [2015] NSWCCA 8.
Mr Wilson suffered bleeding on the brain and was placed in a medically induced coma. He has experienced memory loss and mood changes. He has had a shoulder reconstruction that has left him with considerable use limitations of his right and shoulder. Mr Wilson suffered a broken jaw and broken teeth requiring more than 30 dental visits. His right leg was broken and required internal fixation. He suffered broken ribs, a punctured lung and a right wrist injury. Mr Wilson stated that his life had been seriously affected. He can no longer engage in scuba diving, surfing or swimming. The incident has also had a significant impact on Mr Wilson's wife.
Mr Castellanos describes experiencing severe back pain, humiliation and depression. I will not set out the matters he stated in the VIS to save him further embarrassment, but I consider those matters to be substantial and life changing. The incident has placed his family under considerable financial strain.
[8]
Mitigating Factors
The offender does not have any previous convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender was incorporated in 2011.
The offender is unlikely to reoffend: 21A(3)(g) Crimes (Sentencing Procedure) Act 1999. The offender has sold the business and no longer operates in a way likely to cause a breach of the Act.
The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender took a series of steps after the incident to ensure that it could not be repeated. Those steps were comprehensive and timely.
The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender has accepted responsibility for its actions and expressed remorse through its directors. I am satisfied that the offender has demonstrated genuine contrition and remorse.
The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. It is entitled to a discount on penalty that reflects the utilitarian value of that plea: 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]
Capacity to pay a fine
The Court is 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.
The offender sold the business for $350,000. The proceeds of sale of the business were used to repay creditors. The offender owes approximately $27,000 to the bank and it presently trying to recover $30,000 owed to it. The directors of the offender gave unchallenged evidence that the offender does not have any other funds or assets. I am satisfied that the offender has a limited capacity to pay, but I do not think that this is an appropriate case to exercise my discretion because of the seriousness of the offence and the need for general deterrence.
[10]
Penalty
The offender is convicted.
I have taken into account the VIS.
The appropriate fine is one of $400,000 which will be reduced by 25% to give effect to the plea of guilty.
I impose a fine of $300,000.
I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
The offender is to pay the prosecutor's costs as agreed or assessed.
[11]
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Decision last updated: 19 February 2019