Ceerose Pty Ltd is charged that on 13 April 2013, contrary to s 32 of the Work Health and Safety Act 2011 (the Act), it breached a duty imposed on it by s 19(1). Ceerose has pleaded guilty.
[2]
SOME PRELIMINARY MATTERS
DSF Constructions Pty Ltd has also been charged. The proceedings against it were listed for hearing together with the proceedings against Ceerose. Mr Ginters appeared for Ceerose and Mr Rooney appeared for DSF. Both Ceerose and DSF sought that the hearings be heard sequentially, rather than concurrently. This was not opposed by Mr Agius QC, who appeared with Mr Docking, for the Prosecutor. After some discussion, it was decided to proceed with the hearing of the matters sequentially.
The evidence of the Prosecutor in these proceedings consisted of an agreed tender bundle (Exhibit PX 1), a judgment of the Industrial Relations Commission in relation to earlier proceedings against Ceerose (Exhibit PX 2) and four victim impact statements (Exhibit PX 3).
Evidence on behalf of Ceerose comprised an affidavit of Mr Roy Massoud of 14 July 2016, together with exhibits referred to in that affidavit.
Mr Ginters informed me that present in Court during the hearing of the matter were Mr Marc Saadie, who is the general counsel at Ceerose and Mr Roy Massoud, who is a construction manager at Ceerose.
[3]
THE LEGISLATION
Section 19(1) of the Act provides:
A person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of:
(a) workers engaged, or caused to be engaged by the person, and
(b) workers whose activities in carrying out work are influenced or directed by the person,
while the workers are at work in the business or undertaking.
Section 32 relevantly provides:
A person commits a Category 2 offence if:
1. the person has a health and safety duty, and
2. the person fails to comply with that duty, and
3. the failure exposes an individual to a risk of death or serious injury or illness.
[4]
THE FACTS
Ceerose is a company that undertakes building and construction work.
On 13 April 2013, it was operating as the principal contractor at a site being 43-45 Australia Street, Camperdown. On the site was a three storey rectangular brick building. It was being refurbished for use as student accommodation. The work involved some demolition, some rebuilding and some maintenance of heritage aspects of the building. The internal structure and roof were being demolished and refurbished. A new skylight was being erected and installed within the centre of the building.
The skylight structure is described in an agreed statement of facts (ASOF) (Exhibit PX 1, tab 1[6]) as follows:
A new steel skylight structure was being erected and installed within the centre of the building. It consisted of:
a. A central vertical core comprising four full-height primary vertical steel columns;
b. A pair of primary parallel roof level beams;
c. A series of secondary and other beams which connect and span in various ways;
d. Short vertical lengths of column (support slots) used to support drop-on type rectangular framed flat grid structures ("skylight frames").
On 13 April 2013, the date of the incident, vertical and horizontal beams were in place. Crane work was required to lift and place three skylight frames onto erected beams. Crane work was undertaken by Coopers Heavy Industries Pty Limited which had been subcontracted to Ceerose to provide and operate cranes at the site. The particular task of lifting the skylight frames was beyond the capacity of Coopers' cranes and PC Cranes was subcontracted for that task.
The skylight frames started to be lifted at about 8.00am.
PC Cranes was under the direction of Mr Hogan and Mr Agusi. Mr Hogan was the representative on site for ZVI Constructions Company LLC. It was the construction management company for the task. Mr Agusi was the representative of DSF. It was subcontracted by Ceerose to design, manufacture, deliver, supply and install structural steel, including by bolting the skylight frames in place. PC Cranes completed the task of lifting and placing the three skylight frames in position by some time, probably between 9.30am and 10.30am.
Working on the site were three men who were employees of 1 Stop Workforce Pty Limited. 1 Stop was a labour hire company which recruited and allocated workers to "host employers" (ASOF [11.f.]). The three men were working on the site under an arrangement with Ceerose which was the "host employer". The three men were Mr Westover, Mr Barbasch-Bouchard and Mr Mathieu Linares-Lopez.
Before the lifting of the skylight took place, Mr Zeater, Ceerose's site manager, told the 1 Stop workers where the cranes were working, told them to be careful and told them not to go where the machines were working.
On the east side of the site, the 1 Stop workers had to take down guard rails. They were on level 2 lowering the temporary fencing from that level to level 1. When the erection of the building steel work was occurring near those workers, Mr Hogan told them to move to the west side of the site. They went there and started lowering the fencing from level 2 to level 1 to ground level floor. That took about one and a half to two hours.
PC Cranes completed its work involving the erection of the steel work. The 1 Stop workers then went back to the east side of the building.
Further construction work was to ensue on Monday, 15 April 2013.
After PC Cranes left the site, Mr Agusi had a discussion with Mr Zeater and Mr Dylan Cooper going through the scope of works for the second stage, level 2. Mr Agusi showed Mr Cooper which beams were to go to level 2. Mr Graham Cooper then operated one of the Cooper cranes until the incident occurred.
Following the placement of the three skylights at roof height and up to the incident, there was no exclusion zone in operation where Mr Linares-Lopez was working. Mr Barbasch-Bouchard and Mr Westover were on the first floor. They were passing the fencing down to Mr Linares-Lopez using ropes. The three steel skylight frames were about 11 to 12 metres above Mr Linares-Lopez. They were not secured in place in accordance with engineering specifications. As they were not secured, they were capable of coming free from the structure on which they rested.
While the crane was being operated, one of the skylight frames fell, striking Mr Linares-Lopez and causing him fatal injuries.
The skylight frame was able to do this as it had not been secured to the structure on which it rested. The frame was approximately seven metres in length and 2.4 metres wide and weighed about one tonne. It consisted of a number of steel members.
Investigation has not been able to establish beyond reasonable doubt the precise cause of the skylight frame falling. The incident happened shortly before noon. WorkCover New South Wales conducted an investigation and a report with extensive observations was included as part of Exhibit PX 1. The parties did not rely on it and it does not add significantly to the matters I have set forth.
[5]
THE SENTENCING PROCESS
Mr Ginters, quite properly, focussed his submissions on the precise charge levelled against Ceerose. The risk was described in the Amended Summons as follows:
The risk was the risk to workers, namely Mr Lopez, of death or serious injury from being struck by a falling object comprising a skylight frame falling from height within the building at the site (the risk).
The particulars of failure are described in the Amended Summons [7] as follows:
The Defendant failed to ensure the health and safety of workers, in particular Mr Lopez, in that it failed to take the following reasonably practicable measures to eliminate (or, alternatively, minimise if not reasonably practicable to eliminate) the risk by:
a. Maintaining and enforcing an exclusion zone or no go area such that it continued to be in place following the installation of the skylight frames and until verification that the skylight frames were secured, by any combination of:
i) Secure impassable barricades being in place with adequate signage and appropriate lock out procedures to prevent pedestrian access to the area;
ii) Information being provided to the on-site personnel advising them of the status of the no go area
in order to make sure persons were kept clear of areas where objects may fall and so that workers underneath the installed skylight frames were not exposed to the risk.
I bear in mind several matters. I bear in mind the purposes of sentencing as enumerated in s 3A of the Crimes (Sentencing Procedure) Act 1999. I bear in mind the purposes of the Work Health and Safety Legislation, in particular ensuring the safety, health and welfare of workers and others on workplace premises. I bear in mind any relevant aggravating and mitigating factors, including any mentioned in s 21A of the Crimes (Sentencing Procedure) Act so far as any of those may be relevant.
I start my analysis with a consideration of the gravity of the offence. This may be determined in part by the foreseeability of the risk of injury, the foreseeability of the consequences of the risk coming home and the measures available to avoid the risk.
Foreseeability of risk of injury to Mr Linares-Lopez was plain. No more needs to be said than that he was working under an operating crane.
The foreseeability of risk is not in any way diminished by the terms of the contract between Ceerose and DSF. DSF undertook many obligations under this contract. To some extent, they are set out in the ASOF. DSF agreed to design, manufacture, supply and install structural steel work such that it was fit for its intended purposes in all respects. The work was to be in accordance with specified plans. DSF was to establish and maintain a work procedure ensuring work place safety, not only for its employees, but for any other person on the site. The works required DSF to have the skylight frames delivered on site to be craned into position and bolted onto the roof frames. DSF warranted that it had the expertise and ability to carry out the works in accordance with the appropriate documentation and to the satisfaction of Ceerose. DSF was to provide full time, on site project supervisors/foremen to coordinate the works. These provisions may give Ceerose 100% protection in respect of civil liability. They cannot affect either the fact of or the nature and quality of the obligation on Ceerose under the Act.
If anything, documentary material highlights the obligation on Ceerose. Australian Standard AS3828-1998 "Guidelines for the Erection of Building Steelwork" has been in place since 1999 and has pertinent provisions. They include the following.
• Clause 2.1 …
Close cooperation between the fabricator of the steel and the principal contractor erector is essential, both at the planning stage and throughout the erection process to ensure that a safe and efficient system of placing steel on the site is planned for and achieved.
The Prosecutor contended that the "principal contractor erector" in this case was Ceerose. Ceerose contended it was DSF. I think it is probably the latter. It is not of major moment. The point is that it speaks of the need for a safe and efficient system and I do not understand Ceerose to say it was not aware that;
• Clause 2.6 …
The designer, principal contractor, fabricator and the erector should consult about the structure to be erected. The plan should address the hazards, associated risks and control measures that will be implemented during the steel construction work and should cover all phases of the project. In addition to the readily identified risks such as falls from heights, falling objects and the stability of the structure, the plan should also consider, but should not be limited to, other factors such as the sequence of erection and in particular -
(a) access to work areas;
(b) location of workers in respect to other trades; and
(c) restricted areas.
This specifically draws attention to the stability of the structure, falling objects and restricted areas;
• Clause 3.2.2 …
NO GO AREAS can be an effective method making sure persons are kept clear of areas where objects may fall. NO GO AREAS are often needed around the perimeter of the building at ground, podium or other levels. Establishment of NO GO AREAS should take into consideration the following:
(i) Secure impassable barricades in place with adequate signage and appropriate lock out procedures to prevent pedestrian access to the area.
(ii) Information provided to on-site personnel advising them of the status of the NO GO AREA.
(iii) A level of supervision that ensures no person enters NO GO AREAS.
(iv) The enclosure of any area where a falling object might reasonably be expected to land and extending the enclosed area horizontally to a sufficient distance beyond the immediate work height.
The Standard plainly spells out the risk and offers a solution.
In a detailed submission made both orally and in writing, the defendant submitted that the risk was not reasonably foreseeable (written submissions [35]). I do not accept this submission. I have set out my reasons as to why I think the risk was foreseeable. Further, if the risk truly was not foreseeable, it is difficult to envisage what it is the defendant should have done to ensure the safety of Mr Linares-Lopez in accordance with s 19(1). The submission tends to cut across the plea. As Mr Ginters submitted, his client entered a plea to a risk, not to the incident. The risk to which the defendant entered a plea was that which I have described above [24] and set out in the Amended Summons.
In the event of this risk coming home, foreseeability of the consequences was also obvious and that includes fatal injury.
Measures available to eliminate the risk as set out in [7] of the Amended Summons ([25] above) were simple to implement. The establishment and supervision of a NO GO zone would have achieved this.
Ceerose draws attention to the short time that the risk was in place as evidence going to a lessening of its culpability. I do not accept that. I accept that Mr Linares-Lopez was not exposed to a risk for a long period of time in the sense of days. He was exposed from at least 10.30am until shortly before noon. Whether that it is a long time may depend on one's perspective. To be exposed to the risk he was, with its potential fatal consequences, when he should never have been exposed at all and his exposure could have been eliminated by the simplest of means, then in those circumstances, about one and a half hours of exposure would seem to be a long time. Further, the time was limited not by any compliance by Ceerose with its obligation, but by the very risk to which he was exposed coming home. It might be noted here that the working day extended until 5.00pm, but it is speculation to try to guess how long he would have been exposed had he not been fatally injured shortly before noon.
Ceerose also seeks to have its culpability limited by reference to what is submitted to be the higher culpability of others, including those not subject to prosecution. This was a submission in the nature of a parity submission. The authority relied on by the defendant was a parity case to the extent it was relied on - Inspector Ching v Hy-Tec Industries Pty Ltd [2010] NSWIRComm 73 at [48-49]. As was pointed out there, the role played by others may be used in assessing the culpability of the defendant, but it cannot, of itself, reduce the culpability of the defendant in any sharing or proportionate way of an overall penalty - see also Inspector Howard v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92 at [241-242]. As to those not the subject of prosecution or proceedings before me, I have nothing to compare. 1 Stop was one example put forward. I do not know if there was any evidence to support a prosecution against 1 Stop. There is more detail about 1 Stop's role in the DSF proceedings, but I cannot use that. 1 Stop was, at law, Mr Linares-Lopez's employer. 1 Stop did provide its workers with induction documents which covered safety. Its workers on site were under the immediate direction and control of Ceerose as the "host employer". There was no case for a representative of 1 Stop to be on site at all times.
The only other body against which proceedings have been taken, as far as I am aware, is DSF. Ceerose has drawn on a considerable amount of evidence to demonstrate that DSF has a greater culpability. It is not in doubt, however, that although I cannot take the facts from the DSF proceedings into account, the agreed statement of facts is those proceedings is not consistent in many respects with that in these proceedings. The point is simply that though I do take into account the whole of the evidence Ceerose relies on in these proceedings for the purpose of determining its culpability, that is not necessarily the totality of the evidence that would enable me to compare culpability.
I do not accept the submission that the culpability of Ceerose should be seen as less than that of DSF by reason of the extensive failures of DSF as set out in the ASOF. The flaw in the submission is exposed by the result contended for. That result is that Ceerose should be penalised to a lesser extent than DSF. The problem with that is that, based on a different set of agreed facts, DSF has a similar submission in relation to itself in its proceedings. Both submissions cannot possibly be correct. It is not possible to accede to Ceerose's submission and give it a penalty less than DSF and also to accede to DSF's submission and give it a penalty less than Ceerose.
Whatever the culpability of others, it cannot operate in diminishment of the obligation which Ceerose was bound to comply with. Further, as head contractor, it had an overriding responsibility for safety on the site. Yet further, the ASOF describes Ceerose as the "host employer" of the 1 Stop workers. Civil law establishes that it had a duty to these workers akin to the duty an employer has to its employees - TNT Australia Pty Limited v Christie (2003) 65 NSWLR 1. The 1 Stop workers were under the direction and supervision of Ceerose.
I do not consider that Ceerose is able to rely on DSF's contractual obligations to it in diminishment of its culpability. DSF's contractual obligation included securing the stability of the skylights and included bolting them to the roof frames. That obligation plainly was to ensure the integrity of the structure so that no damage was done to the building or harm to persons. If anything, that heightens the obligation on Ceerose to have done the things specified in [7] of the Amended Summons until it had verification that the skylight frames had been secured.
There were multiple causes involving multiple persons that contributed to this incident. As between DSF and Ceerose, my view is that the higher culpability lies with Ceerose. It had an overriding duty of safety as principal contractor. Its relationship with Mr Linares-Lopez was that akin to employer and employee and it had direct supervision and control of him. It could have obviated the risk by the simplest of measures in the creation of a NO GO zone.
The objective seriousness of the offence in this case is added to by the fact that it is one that occurred in a high risk industry. That calls for careful vigilance to ensure safety obligations are complied with.
I consider this offence to fall in the mid-range of objective seriousness.
Other matters need to be considered. Deterrence, both general and specific, is relevant. Th Court is seeing frequently cases involving people or objects falling from height at construction sites. Regrettably, many involve fatalities. It is a high risk industry. Special vigilance to ensure compliance with statutory obligations is called for. Those operating in the industry must understand that this is so and must also understand that failure to comply will have consequences. General deterrence is to be taken into account.
Specific deterrence is also to be taken into account. Ceerose still operates in the industry.
The defendant relies on evidence in Mr Massoud's affidavit in mitigation generally and also in relation to specific deterrence. In that affidavit, Mr Massoud sets out a number of matters relating to the work health and safety systems of the defendant prior to the incident, including:
in about 2004, it implemented a suite of occupational health and safety policies, registers and plans which were developed in consultation with an external consultant;
in about 2010, a major internal review of the defendant's work health and safety management system was undertaken by a senior project manager; and
in about 2013, it increased the level of direct management resources for construction projects by reducing the number of jobs being managed by project managers and also appointing a dedicated contract administrator and site manager for each project.
Mr Massoud's affidavit outlines a number of further steps the defendant has taken since the incident to update work health and safety systems, including:
in July 2013, it engaged an external occupational health and safety consultant to undertake a comprehensive review of its systems, which resulted in a number of developments and changes;
further reviews and updates were completed in January, April and June of this year; and
in March 2016, following an independent audit and assessment, its work health and safety management system was certified as compliant with Standard AS/NZS 4801-200, its quality management system was certified as compliant with AS/NZS ISO9001-2008, and its environmental management system was certified as compliant with AZ/NZS ISO 14001-2004.
Mr Massoud states that the defendant's work procedures at the time of the incident included:
daily pre-start discussions with workers conducted by the site manager;
review of subcontractors' site specific safe work method statements by site management staff;
a requirement that site managers "walk the job" throughout the day to review progress and work and complete the site safety checklist. I might note here that after the steelwork was finished at about 10.30am on the day of the incident and a different phase of work was commenced, either there was no walk through or, if there was, the presence of the 1 Stop workers in what should have been a NO GO zone was not observed;
site coordination meetings, usually conducted weekly, where safety was discussed;
project meetings, where safety was discussed; and
the setting and enforcement of exclusion zones by the site manager, although Ceerose "typically required the subcontractor to identify, establish and assist in the enforcement of an exclusion zone." It might be noted here that its requirement that the subcontractor undertake this task did not remove the responsibility which lay on Ceerose.
After the incident, Ceerose also implemented a number of measures in respect of the project where the incident took place. They are set out in some considerable detail from [38] to [43] of the affidavit of Mr Massoud. It is not necessary to detail this. I accept that the measures were comprehensive. I note that this has been at considerable financial cost to Ceerose. It has expended about $600,000 and it commits about $120,000 per annum towards safety personnel resources.
These are all commendable steps and they support the view that specific deterrence, though a factor, is not as significant as it might be in other cases. They reveal a dedication to safety such that Ceerose is unlikely to reoffend. If it does, that is not likely to be for the want of proper systems in place.
Specific deterrence, nevertheless, needs to be taken into account in light of the fact that Ceerose is still in the business and in a fairly substantial way and also the fact that this offence occurred despite an earlier wake-up call. In this regard, I note that Ceerose was convicted on 20 April 2011 of an offence under the equivalent provision of the previous Occupational Health and Safety Act. The conviction was in relation to a worker falling from a hoarding at a construction site where Ceerose was the principal contractor. The worker was in the process of setting up for a lift of a load for a crane.
There are aggravating factors. The earlier conviction is one - s 21A(2)(d) of the Crimes (Sentencing Procedure) Act. The injury was substantial and that is another - s 21A(2)(g).
There are mitigating factors.
I have set out steps taken by Ceerose to improve the implementation of its safety systems.
Whilst Ceerose does have a prior conviction, it had been a growing business since 1998. It was relatively small when it started then. It is now a leading tier 2 band property construction and development company undertaking major property projects including new construction, fitouts, refurbishment and heritage restoration work. It works on projects varying from $5 million to $100 million in value. It engages over 50 staff. Plainly, it also engages many subcontractors. It operates in a high risk industry. Its record is not ideal, but it is relatively good especially for that industry.
Ceerose has apologised for the incident. It has expressed its regret and remorse and acknowledged its responsibility. Related to that is Ceerose's plea of guilty. Apart from that being evidence of remorse, it was entered almost immediately on the service of the Amended Summons and there is no submission that it should not be entitled to a discount to the extent of 25% for that.
Ceerose has been a donor to a number of charities and is a corporate citizen of good character and standing.
Ceerose has co-operated with SafeWork in its investigations and prosecution.
The defendant will be paying the Prosecutor's costs in an agreed amount of $60,000. For reasons expressed in WorkCover Authority of New South Wales v JMW Developments Pty Limited [2010] NSWDC 259 at [21], it is appropriate to make some allowance for that.
[6]
ORDERS
The defendant is convicted and fined the sum of $300,000 with a moiety to the Prosecutor.
The defendant is to pay the Prosecutor's costs in an agreed sum of $60,000.
[7]
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: 24 August 2016
Victim impact statements were read and admitted into evidence. I was referred to R v Turnbull [2016] NSWSC 847 for the extent to which I could use this material. Turnbull was a very different case. The statements clearly demonstrate the tragic loss and suffering visited on the family members whose statements were read, they being Mr Linares-Lopez's father, mother, brother and sister. I take the statements into account to the extent that they confirm the impact of the death on the members of Mr Linares-Lopez's family. This Court expresses its condolences to the family for this tragic loss. Their hurt and sorrow are profound and perfectly understandable.
I think the circumstances of this case require a substantial fine. Not to impose one would not give due weight to the objective seriousness of the offence constituted by the foreseeable risk, the foreseeability of the consequences in the event of the risk materialising, the readily available simple measure to eliminate the risk, the overarching duty of safety on the defendant as principal contractor on site and the direct supervision and control the defendant had in relation to the 1 Stop workers. It would also not give due weight to deterrence. I think in all the circumstances, after allowing a discount of 25% for the plea of guilty, the appropriate fine is $300,000.