SafeWork NSW v CTN Construction Pty Limited

District Court of NSW|2017-11-27

Solicitors: SafeWork NSW (prosecutor) David Chang Legal (defendant) File Number(s): 2016/00319998

Judgment

CTN Construction Pty Limited (the offender) has pleaded guilty to an offence that being a person conducting a business or undertaking that had a health and safety duty under s 19(1) of the Work Health and Safety Act 2011 (the Act) it failed to comply with that duty and thereby exposed Mr Jong Hyun Son (the victim) to a risk of death or serious injury contrary to s 32 of the Act.
The maximum penalty for the offence is a fine of $1,500,000.

THE INJURED PERSON

The offender engaged Mr Jong Soo Son (the employer) as a subcontractor to carry out timber framing work (carpentry work) at the site and purchase the necessary materials. The subcontractor arrangements between the offender and the employer were verbal only. The offender paid the employer by cash cheque.
The employer engaged two other workers in order to assist him in undertaking the carpentry work at the site - his brother, the victim, and another worker. The victim commenced working at the site with the employer at least two weeks prior to the incident on 15 September 2015.
The employer split the cash cheque payments that he received from the offender with the victim and the other worker. The offender was aware of the employer's payment arrangement with his workers.
The main duties of the victim included carpentry work on rooves, frames and floors. The victim would come and go from the site and provide assistance when needed. The victim had worked as a carpenter for more than 30 years and held a carpenter's licence.

THE SITE AND THE CONSTRUCTION

Between the ground floor and the second storey of the site, there was an open penetration (the void) that was to be used for the installation of a staircase, which had not yet been constructed. The void was 1 metre by 1 metre in diameter and approximately 3 to 4 metres in height from the ground floor.
The void was used to move material, such as gyprock, up to the second storey.

THE INCIDENT

On 15 September 2015, at approximately 9:20am, Mr Ha asked the victim to come up onto the second storey of the site to discuss a double gutter roof.
While the victim and Mr Ha were discussing the work required for a double gutter roof, the victim walked backwards and fell 3 to 4 metres through the void to the ground. The void was not covered or guarded at the time of the incident.

INJURIES AND AFTERMATH

The victim sustained serious injuries from the fall, that were initially believed to be life threatening. These included a traumatic brain injury, multiple fractures to his skull and facial bones, a punctured lung, fractured collarbone and minor neck fractures in the C2 vertebra. The victim underwent surgery to treat his brain injuries and was hospitalised for two months.
While the victim was hospitalised a diagnostic process uncovered that he was suffering from liver cancer which was quite unrelated to the injuries suffered in the incident. That disease ultimately led to the victim's death.

SYSTEMS OF WORK BEFORE THE INCIDENT

There were no covers or fall prevention devices, such as guard rails, in place in order to prevent the risk of falling through the void.
According to Mr Ha, when the void was not being used to move material up to the second storey there was a timber brace in place. Mr Ha stated that on the day of the incident gyprock was being moved through the void which was why it was open at the time.
The victim and the employer often worked on the second storey near the void during the course of their two weeks at the construction site. They said that the void had never been covered or guarded at any time during that period.

Risk Assessment

A risk assessment document produced by the offender on 10 August 2015 identified a risk of falling from height while working on the roof or wall framing. The risk assessment document is generic and does not specify the work site it was prepared for, nor does it identify the void at the construction site as being a hazard.
The employer stated that he had not seen the risk assessment document prior to the incident occurring. Neither the employer nor the victim were informed of the risk associated with working near the void. Nor were they informed of the control measures that were available to eliminate or minimise those risks.

Induction

The victim was not given an induction to the site regarding the risk of falling through the void, and was not instructed about the means by which the risk could be controlled, eliminated or minimised. According to Mr Ha, the victim was verbally inducted regarding general matters including personal protection equipment, where the toilet and other facilities were located, the location of the first aid kit, and the location of the gas and water mains.
There is a site induction record for the employer dated 20 August 2015. The employer stated that he was not working on the site on 20 August 2015 and had not seen a copy of the induction record previously.
The induction record dated 20 August 2015 includes, among a number of other items, a record that the employer was shown the work area, drinking water, toilets and location of the first aid kit. The offender's document titled "WHS Arrangements" (undated) said that: "No worker will work at height without ensuring that ladders, steps and handrails are secure or fall prevention/arrest harnesses are in place…CTN Construction Pty Ltd will ensure that: (1) workers working at height are made aware of the hazards and risk management procedures; (2) fall prevention equipment is provided and used; (3) workers are instructed in the correct use of fall prevention equipment…"
The "WHS Arrangements" document was not implemented or alternatively not enforced at the construction site.

Instructions

All safety instructions for work at the site were given verbally to workers. Mr Ha discussed general safety issues with workers in morning meetings and during breaks.
No specific instructions were given to the workers to stay away from the void unless it was covered or a fall prevention device, such as guard rails, was in place. General instructions were provided to workers to be careful and to walk forwards, not backwards.
On the day of the incident, Mr Ha directed the victim to come up to the second storey to discuss a double gutter roof. The void was not covered and no guard rails were in place prior to them accessing the second storey.

GUIDANCE MATERIAL

The SafeWork Australia Managing the Risk of Falls at Workplaces Code of Practice (March 2015) (SafeWork CoP) applies to all workplaces where there is a risk of a fall by a person from one level to another that is reasonably likely to cause injury.
Section 3.2 at page 16 of the SafeWork CoP provides: "Protection of openings and holes Holes, penetrations and openings through which a person could fall should be made safe immediately after being formed. If a cover is used as a control measure, it must be made of a material that is strong enough to prevent persons or objects falling through and must be securely fixed to prevent any dislodgement or accidental removal."
The WorkCover Preventing Falls in Housing Construction Code of Practice (July 2014) (WorkCover CoP) provides practical guidance on how to eliminate, or if that is not possible, to minimise the risk of falls from height in housing construction. This code of practice is approved under s 274 of the Act.
Section 1 of the WorkCover CoP states that "Falls are a major cause of death and serious injury in Australian workplaces. Fall hazards are found when carrying out common tasks in the construction of a typical one or two storey house", and that: "A person conducting a business or undertaking has more specific obligations under the WHS Regulations to manage the risk of a fall by a person from one level to another, including requirements to: ensure, so far as is reasonably practicable, that any work involving the risk of a fall is carried out on the ground or on a solid construction provide safe means of access to and exit from the workplace, and provide adequate protection against the risk of falls."
Both codes of practice provide specific guidance for persons conducting a business or undertaking ('PCBU') for managing risk under clauses 34-38 of the Work Health and Safety Regulation 2011 (the Regulation) in relation to falls from heights.
Clauses 34-38 of the Regulation require that PCBUs must: 1. identify reasonably foreseeable hazards that could give rise to risks of health and safety; 2. eliminate the risk to health and safety so far as is reasonably practicable, and if not reasonably practicable to do so, minimise the risk so far as is reasonably practicable by implementing control measures in accordance with the hierarchy of risk control under clause 36 of the Regulation 3. maintain the implemented control measure so that it remains effective; and 4. review and, if necessary, revise all risk control measures.
The most effective control measure to eliminate the risk would have been the implementation of a fixed cover for the void or, alternatively, a fall prevention device such as guard rails.

SYSTEMS OF WORK FOLLOWING THE INCIDENT

Immediately following the incident a timber cross bracing was placed across the entrance to the void, made from supplies available at the construction site.

THE EVIDENCE FOR THE OFFENDER

Mr Ha swore affidavits dated 13 November 2017 and 27 November 2017.
Mr Ha said that he had familiarised himself with the codes of practice and nowadays regularly consulted them. He has completed a CPD course called Occupational Health and Safety. Mr Ha has arranged for his solicitor to visit three different work sites to show him the procedures he now has for identifying risks, conducting inductions and implementing and reviewing control measures.
Mr Ha provided a frank explanation as to the occurrence of the incident. He accepted responsibility for the accident, both for himself and on behalf of the offender. He acknowledged that the offender failed to comply with its duty to ensure as far as is reasonably practicable the health and safety of all workers on its sites. He expressed genuine contrition and remorse for the serious injuries suffered by the victim. Mr Ha and his wife visited the victim many times while he was in hospital.
The first affidavit of Mr Ha dealt with the offender's financial position. That matter will be dealt with later in this judgment.

CONSIDERATION

I have had regard to the objects of the Crimes (Sentencing Procedure) Act 1999 set out in s 3 and the purposes of sentencing set out in s 3A.

OBJECTIVE SERIOUSNESS OF THE OFFENCE

The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v R (No. 2) (1998) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton (2006) 66 NSWLR 566 at [15].
The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R (1998) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].
The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] NSWSC 432 at [61].
The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [89]. The question of foreseeability of the risk is to be determined objectively.
The Court of Criminal Appeal has recently examined the sentencing process with regard to the Work Health and Safety Act 2011 in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96; 93 NSWLR 338. His Honour Justice Basten at paragraph 34, under the heading "Assessment of Risk" said: "The sentencing judge commenced his consideration with the proposition that 'greater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely'. However the truth of that proposition depends upon other considerations including: (a) the potential consequences of the risk, which may be mild or catastrophic; (b) the availability of steps to lessen, minimise or remove the risk; and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors."
Further at paragraph 42 his Honour continued: "The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step‑by‑step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."
My findings about the offender's level of culpability are based upon the following: 1. Workers, such as the victim, were placed at risk of death or serious injury as a result of a fall from height. The risk was obvious, identifiable and foreseeable; 2. The risk was specifically identified in: 1. SafeWork Australia Managing the Risk of Falls at Workplaces Code of Practice March 2015; 2. WorkCover NSW Code of Practice for the Prevention of Falls in Housing Construction July 2014; 1. The WorkCover NSW Code of Practice for the Prevention of Falls in Housing Construction July 2014 contains a graphic illustration of a person falling backwards through an unguarded void. 2. The risk involved is a risk of very serious injury or death. The injuries that the victim suffered are a manifestation of that risk. 3. Mr Ha was a licensed builder who had worked in the industry for 20 years. He should have been well acquainted with the risks associated with an unguarded void. 4. The cost and inconvenience to the offender of guarding the void in question was minimal. This is demonstrated through the installation of the cross-work of two timbers that were placed across the opening after the incident occurred. Such a simple and effective solution could have been constructed and put into place by the offender readily. 5. There is a disagreement on the evidence as to whether the void had been covered or guarded at any time. It is noted that Mr Ha refers to gyprock being moved through the void on the day in question. However, there is no evidence that sheets of gyprock were being transported at the time of the incident. When the void was not being used for this purpose, it should have been guarded. 6. Mr Ha and the victim were engaged in a conversation, and in close proximity to each other when the victim stepped back through the void. Mr Ha was aware of the existence of the void, and should have been aware of the relative position of the victim to the penetration and as such the risk posed by the victim's proximity to the void.
I find that the offender's level of culpability is in the mid range.

DETERRENCE

The penalty imposed in relation to these offences 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 Limited v Nash (2016) NSWCCA 37 at [180]. Sadly, accidents such as this are far too common.
The penalty must reflect the need for specific deterrence. The offender is still conducting a business and is still responsible for people working at heights.

AGGRAVATING FACTORS

The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999.

MITIGATING FACTORS

The offender does not have any record of previous convictions: s 21A(3)(e) of the Crimes (Sentencing Procedure) Act 1999.
The offender is otherwise of good character: s 21A(3)(f) of the Crimes (Sentencing Procedure) Act 1999. The steps which the offender took after the incident demonstrate this.
The offender is unlikely to re-offend: s 21A(3(g) of the Crimes (Sentencing Procedure) Act 1999.
The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has taken positive steps to guard against the risk of an incident such as this ever happening again.
The offender has shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender proved that it has accepted responsibility for its actions and has acknowledged that the injury to the victim was caused by its actions.
The offender entered a plea of guilty: s 21A(3)(k) Crimes (Sentencing Procedure) Act 1999. The court must take into account the fact that the offender has pleaded guilty, when it pleaded guilty, and the circumstances in which it indicated an intention to plead guilty: s 22(1) Crimes (Sentencing Procedure) Act 1999. In my view the offender indicated its intention to enter a plea of guilty at the earliest possible opportunity. It is appropriate to apply a discount of 25%.
The offender gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. The offender co-operated at all times with the prosecutor and provided all documents requested in a prompt fashion.

CAPACITY TO PAY A FINE

I am required to have regard to s 6 of the 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.
In his first affidavit Mr Ha said that the offender has lodged all of its taxation returns and is up to date with its taxation obligations. The only assets of the company are two motor vehicles and some tools and equipment, which of course are necessary for the offender to conduct its business. When the first affidavit was sworn the offender had $23,400 in a cheque account with the bank.
Mr Ha annexed to his first affidavit a copy of the offender's financial statements for the year ended 30 June 2017.
Unlike many defendants who come before the court on prosecutions of this type, Mr Ha provided up to date and complete material in relation to the company's financial circumstances.
The 30 June 2017 balance sheet showed that the company at that date had $84,934 in a cheque account. The company had no short or long term borrowings whatsoever. The trading revenue for the financial year ended 30 June 2017 with $542,883. In that year the offender made a profit before income tax of $51,645. Income tax of $14,198 was paid upon that profit.
I accept the submission of counsel for the offender that Mr Ha runs a small company which has a relatively modest turnover and which makes a relatively modest profit.
In his second affidavit Mr Ha requested some leniency in respect to the fine which the court imposes. He said that the offender wishes to continue to conduct its business and to pay the fine and the costs of SafeWork NSW.
Counsel for the offender submitted that the financial records disclosed that the offender does not have the capacity to pay a large fine. I accept that submission. Nevertheless the company has some cash resources and I presume would have the ability to borrow funds to meet any penalty imposed. I was presented with no information about the financial position of Mr Ha personally and his wife, but as a director of a small company he may well have the capacity to borrow funds himself for injection into the business.
I will moderate the fine which I would otherwise impose.

COSTS

The parties have agreed to an order that the offender is to pay the prosecutor's costs agreed in the sum of $20,000.

PENALTY

The offender is convicted.
The appropriate fine is $100,000 but that will be reduced by 25% to reflect a plea of guilty.
I impose a fine of $75,000.
I order pursuant to s 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
I order the offender to pay the prosecutor's costs agreed in the sum of $20,000.

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: 29 November 2017

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Judgment (23 paragraphs)

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