SafeWork NSW v Demolition 1 Pty Limited

Catchwords: CRIMINAL LAW – prosecution – work health and safety– duty of persons undertaking business – risk of death or serious injury – maximum penalty
SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – appropriate discount for the utility of the plea – general deterrence – specific deterrence – remorse and contrition
COSTS – prosecutor’s costs
COSTS – capacity to pay - s 6 of the Fines Act 1996 – onus of proof

Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22
Criminal Procedure Act 1986 (NSW), s 257B
Fines Act 1996 (NSW), ss 6, 122
Work Health and Safety Act 2011 (NSW), ss 3, 19(1), 19(2), 31, 32, 33
Occupational Health and Safety Regulations 2001 (NSW)

Cases Cited: Bulga Underground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37
Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610; [2000] NSWIRComm 71
Environmental Protection Authority v Barnes [2006] NSWCCA 246
Ferguson v Nelmac Pty Ltd (1999) 92 IR 188
Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384
Haynes v CI & D Manufacturing Pty Limited (No 2); Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455
Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100
Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153
Jahandideh v R [2014] NSWCCA 178
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464
Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25
McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310; [2004] NSWIRComm 353
Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117; [2005] NSWIRComm 61
Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39
Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
Orbit Drilling Pty Ltd v The Queen (2012) 35 VR 399; [2012] VSCA 82
R v Cage [2006] NSWCCA 304
R v MA (2004) 145 A Crim R 434; [2004] NSWCCA 92
R v Miria [2009] NSWCCA 68
R v MMK (2006) 164 A Crim R 481; [2006] NSWCCA 272
R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309
Rahme v R (1989) 43 A Crim R 81
SafeWork NSW v Harris Holdings NSW Pty Ltd; SafeWork NSW v Harry Zizikas [2017] NSWDC 299
SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632
SafeWork NSW v Cosentino Australia Pty Ltd (No 2) [2018] NSWDC 182
SafeWork NSW v Grandcity Constructions Pty Ltd; SafeWork NSW v Cai [2018] NSWDC 398
Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465
WorkCover Authority of NSW v Sarjame Storage Pty Ltd [2015] NSWDC 151
WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700; [2000] NSWIRComm 142

Texts Cited: AS2601-2001 - Demolition of Structures
NSW Demolition Code of Practice, August 2019

Category: Sentence

Parties: SafeWork NSW (Prosecutor)
Demolition 1 Pty Limited (Defendant)

Representation: Counsel:
J Simpson (Prosecutor)
M Shume (Defendant)
Solicitors:
Department of Customer Service (Prosecutor)
Gillis Delaney Lawyers (Defendant)

File Number(s): 2023/250256; 2023/250288

Publication restriction: Nil

JUDGMENT

1. By Amended Summonses filed in court on 14 October 2024, Demolition 1 Pty Limited (the defendant) entered pleas of guilty to the offences contained therein.

2. The details of the offending are that on 5 August 2021 at the vicinity of 43-45 Addison Street, Shellharbour the defendant being a person conducting a business or undertaking who had a duty under s 19(1) of the Work Health and Safety Act 2011 (WHS Act) to ensure, so far as is reasonably practicable, the health and safety of workers while the workers are at work in the business or undertaking, did fail to comply with that duty and the failure to comply with that duty exposed workers, and in particular Mitchell Collins (Mr Collins) and Ryan Williams (Mr Williams) to a risk of death or serious injury contrary to s 32 of the Act.

3. Further the defendant owing a duty under s 19(2) of the Act, had a duty to ensure, so far as is reasonably practicable, the health and safety of other persons is not put at risk from work carried out as part of the conduct of the defendant’s business or undertaking, failed to comply with that duty contrary to s 33 of the WHS Act.

4. The maximum penalty for the s 32 offence is $1,782,579.25. The maximum penalty for the s 33 offence is $594,021.50.

5. The prosecutor tendered a Prosecution Sentence Tender Bundle which became exhibit A. The defendant tendered three affidavits of Mr Andrew Zeait - the affidavit sworn 23 January 2025, which became exhibit 1, the affidavit sworn 10 February 2025 became exhibit 2, and the affidavit sworn 17 February 2025 became exhibit 3. Mr Andrew Zeait gave evidence before me at the sentence hearing.

Background

6. The defendant was a registered corporation with Mr Robert Zeait (RZ) as the sole director and shareholder of the defendant, and Mr Andrew Zeait (AZ) as the General Manager. The defendant’s business was in demolition works. The defendant held a Restricted Demolition Licence under the Occupational Health and Safety Regulations 2001 (NSW). Mr Ahmed El Kurdie (Mr El Kurdie) and AZ are listed as nominated demolition supervisors on the licence.

7. Civil 1 Pty Ltd (Civil 1) conducted a business/undertaking in ground works. RZ was the sole director and shareholder of Civil 1.

8. Mosman Construction Pty Ltd engaged Civil 1 to undertake ground works including demolition and excavation works at premises located at the intersection of 43-45 Addison Street and Mary Street, Shellharbour (the site).

9. Civil 1 entered a subcontract with the defendant (subcontract). The subcontract price was $40,000 plus GST and contained provisions which authorised the defendant as the principal contractor and required that it be responsible for all labour, inductions, traffic control, material, tools, plant and equipment required for the work, and it must comply with the WHS Act and Regulations.

10. The site covered an area of approximately 1050m2 and on it was a one-storey factory structure (building) with a masonry double skin brick wall approximately four metres high and eight metres long facing Addison Street (masonry wall), and a wooded frame covered with Colourbond on the back and sides of the structure including the side facing Mary Street (the structure). On top of the masonry wall was a metal sign (the sign).

11. The development was subject to a Development Application submitted by Design Workshop Australia Shellharbour City Council on 22 November 2019 for demolishment and construction of a mixed-use development with offices and retail premises on the ground floor, and residential premises above with associated facilities. The value of the development was $6.5 million.

12. On 12 July 2021, the defendant lodged a Notice of Intent to commence work with SafeWork NSW, which specified the demolition period as 30 July 2021 to 6 September 2021, with AZ listed as Supervisor.

13. The works commenced on 2 August 2021 by the defendant. Between 2 and 4 August 2021, the internal part of the structure was stripped, and the roof, back and side external walls demolished.

14. On 5 August 2021 there were four workers on site who were hired by Civil 1 on behalf of the defendant: Mr El Kurdie, Mr Collins, Mr Williams, and Mr Norman Gunaseelan (Mr Gunaseelan). These workers were paid by Civil 1 but referred to themselves as being employed by the defendant.

15. The defendant influenced and directed the workers on the site and AZ gave directions to the workers on the site regarding tasks. On 5 August, Mr El Kurdie was employed as a Supervisor by Civil 1 to perform and oversee work for the defendant at the site. He was in the demolition industry with Civil 1 for two years and had, in 2018, attended traffic controller and supervisory training externally.

16. On 5 August 2021, Mr Collins and Mr Williams were employed by Civil 1 to perform work for the defendant as labourers. Neither of them had traffic controller cards or training, although Mr Collins had worked in the industry since he was 16 and had performed work for the defendant for approximately six months at the time of the incident. Mr Collins assisted with labouring duties relating to the demolition works. Mr Gunaseelan had been in the demolition industry for about 10 years and held an excavator licence, and he was employed by Civil 1 which then hired out his labour as an excavator operator to the defendant for the works at the site.

The Incident

17. Work commenced at the site on 5 August 2021 at 6.00am, and Mr El Kurdie held a toolbox talk with the workers. On the morning of 5 August 2021, Mr Gunaseelan used a 35-tonne excavator (the excavator) to clear rubble from the back half of the site, while Mr Collins and Mr Williams carried out labouring duties and cleared material. Mr Gunaseelan noticed the sign shaking and the masonry wall moving and believed the sign was leaning toward the nearby power lines next to the masonry wall on the boundary of Mary Street. The sign was not mentioned in the earlier toolbox talk. Mr Gunaseelan discussed his concerns and next steps with Mr El Kurdie.

18. After being contacted by two-way radio by Mr Gunaseelan, Mr El Kurdie understood that due to the wind, the sign was leaning toward the power line and was concerned that this would cause problems. Mr El Kurdie instructed Mr Gunaseelan to bring the wall down using the excavator bucket. He used a two-way radio to instruct Mr Collins and Mr Mitchell to put temporary signage stating “use other footpath” on the footpath at the site. Mr Collins and Mr Williams proceeded to place the signage on Addison Street for traffic control.

19. Mr Gunaseelan used a 700-digging attachment on the excavator to pull the sign and part of the masonry wall down, which caused some bricks to fall onto the footpath of both Addison Street and Mary Street, Shellharbour. He then raised the excavator bucket again to pull the next section of the masonry wall down, and further bricks fell forward onto the footpath of Addison Street while vehicles were driving past the site.

20. At this time, Mr Collins and Mr Williams were outside of the site. They walked near the masonry wall in front of the site during the process of demolition of the masonry wall, on occasion stopping to move bricks from the footpath fallen from the site. At one point, they walked close to the masonry wall as the excavator bucket was grabbing the wall.

21. At around 8.38am, Mr Gunaseelan raised the excavator bucket a third time and attempted to pull the masonry wall down. The remaining portion of the wall collapsed forward uncontrollably onto the footpath of a lane on Addison Street and a second lane close to a passing vehicle. The driver of that vehicle pulled over and placed the vehicle’s hazard lights on.

22. At the time of the incident, Mr Collins and Mr Williams were on Addison Street where cars and pedestrians had access to Addison and Mary Streets near the site. About six vehicles had passed via the site during the demolition of the masonry wall. No persons were injured. When SafeWork NSW inspectors arrived at around 12.30pm, the rubble and debris were cleared from Addison Street.

Systems of Work Prior to the Incident

23. During SafeWork NSW’s investigation, Mr El Kurdie and Mr Gunaseelan stated that a scissor lift should be used so the front façade wall could be demolished using hand tools. Mr Collins stated they were waiting for scaffolding to be installed to demolish the masonry wall by hand. No scaffolding or scissor lift was observed by SafeWork NSW inspectors at the site. Mr El Kurdie stated the scissor lift was in a car park situated in Allens Lane behind the site.

24. The defendant had a Demolition Management Plan and a Demolition Work Plan prior to the incident, but neither plan referenced the demolition of façade or masonry wall/s by hand, nor is there reference to scaffolding, a scissor lift or hand tools in the plant and equipment section of the Demolition Management Plan. The Demolition Plan notes: “Bulk demolition works: An excavator will demolish the roof and perimeter walls using a grapple attachment and progressively lift down the roof trusses. External walls to be assessed to eliminate potential debris falling onto neighbouring properties”.

25. The Demolition Management Plan referenced:

26. Appropriate signage that must be placed at entry points prior to commencement of work.

27. Spotters that must be used when required, traffic control and management which should be controlled by Demolition 1’s licenced traffic controllers.

28. Investigations and reports which must be made/provided prior to commencement of work.

29. The Demolition Work Plan referenced: compliance with AS-2601 post completion of works, provision of Safe Work Method Statements in accordance with AS2601-2001 Demolition of Structures (involvement of a third-party engineer). Demolition 1 did not follow the above.

30. The demolition plans contained insufficient details regarding method and sequence of the demolition work and the structural integrity of the structure support systems. No notes regarding measures which must be taken prior to commencement of works were made, neither did it reference risks or hazards associated with the masonry wall of the structure. The Demolition Management Plan contained a requirement that external walls be assessed, and there is a reference to “Demolish structures using general demolition techniques” in the plan.

31. Both plans did not include sufficient details of traffic management plans, work health and safety systems to be enforced during the demolition work, dimensions of the exclusion zone, protective measures including overhead protection, scaffolding and hoarding required, and the type of equipment to be used in the process.

32. The defendant had a Safe Work Method Statement (SWMS), which replicated the SWMS of Civil 1. The SWMS refers to the task of demolishing roof and wall structure and exclusion zone in the building to be established but does not reference exclusion zones or specific reference to falling debris, despite having a requirement that external walls must be assessed. An external exclusion zone was not in force at the time of the incident.

33. The defendant had a SWMS which referred to having a scissor lift and hand tools but did not refer to the process of demolition of façade walls and the risks that it would pose. The Demolition Plan states that a Job Hazard Analysis will be developed from each of the Safe Work Method Statements and shall be undertaken by the work crew for each activity within each SWMS prior to commencement of that activity. The site-specific Demolition Risk Assessment Workshop will be utilised to determine the risks and associated controls for each task to be carried out. This did not occur.

34. At the time of the incident, there was no scaffolding or hoarding in place around the site or masonry wall. There were 1.8 metre-high metal fences covered in black shade cloth temporarily in place but they could not sustain the impact of rubble. Video footage taken immediately prior to the incident shows one of the fence members was bent and leaning forward toward the Addison Street footpath.

35. The Development Approval granted by Shellharbour City Council for the site indicated that a Class B hoarding must be erected where work involved demolition of a building and tire work likely to cause pedestrian or vehicular traffic. If existing pedestrian access is impeded or obstructed, a safe alternate provision must be provided. If a hoarding is not necessary, an awning is to be erected, sufficient to prevent any substance from, or in connection with, the work falling into the public place. Any hoarding, fence or awning must be removed after completion of the work.

36. The Development Approval further notes all demolition work must be carried out in accordance with the provisions of AS2601-2001: The Demolition of Structures. The defendant’s SWMS contained a generic reference to traffic management and noted as the control to “obey traffic management instructions”. This system was not enforced to prevent vehicles from travelling along the road near the demolition works occurring.

37. A Construction Traffic Management Plan dated May 2021 was in place and created at the direction of TQM Design and Construct Pt Ltd (TQM), the principal contractor for the site. The defendant had been provided with a copy of the Traffic Management Plan which specified at par 4.4 that the existing footpath on Mary Street will not be affected during the works, and pedestrian movements on Addison Street will be managed by accredited Traffic Controllers during truck accesses.

38. The TQM Construction Management Plan largely focused on vehicular traffic coming and going from the site itself.

39. Mr Collins and Mr Williams did not hold the relevant qualifications or card to perform traffic control work.

Technical Report

37. SafeWork NSW Engineering Inspector Kenneth Nguyen, provided a technical report post-incident which noted that the information provided within the NSW Demolition Code of Practice dated August 2019 (Code of Practice) and the Australian Standards guidance material demonstrates that the hazard was foreseeable and the risk could have been minimised by: establishing adequate exclusion zones, installing appropriate protective structures such as hoarding, scaffolding and overhead protection, installing temporary braces to ensure the structure collapsed in a controlled manner, and the cost of implementing these measures is not grossly disproportionate to the risk of an unplanned structure collapse.

Systems of Work after the Incident

38. Following the incident, SafeWork NSW issued the defendant with Improvement Notices. The first Notice required that the Komatsu PL350 excavator was to be inspected by a competent person prior to use, to ensure its safe condition for use. The second Notice required that adequate advisory signage be displayed on the perimeter fencing for high-risk work activities such as “asbestos removal and demolition in progress”.

39. The defendant also convened a meeting with Civil 1 and the workers who were on site on the date of the incident to investigate how the incident occurred and steps to be taken moving forward including risk assessments and identification of hazards.

40. After the incident the defendant developed a revised demolition methodology which involved removing the roof sheets followed by timber purlins, and then the use of a scissor lift to bring down the front wall by hand, to a safe level before using an excavator to knock down the remaining wall.

Guidance Material

41. There was ample guidance material available to the defendant which is detailed at pars 47-48 of the Agreed Statement of Facts (ASOF), the Australian Standard which is detailed at [49]-[62] of the ASOF, and the Code of Practice which is detailed at pars 63-67 of the ASOF.

42. The defendant did not comply with the Australian Standard or the Code of Practice.

Sentencing Principles

43. The penalty to be imposed must be one which will give overall effect to the policy of the WHS Act, in particular, ensuring the safety, health and welfare of workers and others on workplace premises.

44. The court must have consideration for the objects of the WHS Act under s 3 in particular, that which is set out in subs (e) and (f) ensuring the court is to be guided by the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) (Sentencing Act) which include:

45. Section 3A which sets out the purpose of sentencing.

46. Section 21A which sets out aggravating, mitigating and other factors in sentencing.

47. Section 22 which provides that a guilty plea is to be taken into account on sentence, as is the time when the plea was effectively indicated or entered.

48. The court is to approach a sentencing exercise on the basis of it being one of “instinctive synthesis”: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25.

49. The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 at [109] in this way:

“The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the “instinctive synthesis” approach, involves the making of a global judgement without any attempt to state precisely how any given factor has influenced the judgement.”

Objective Seriousness of the Offence

47. The primary consideration requires a determination of the objective seriousness of the offence. The High Court made this clear in Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [27]:

“…The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of offending.”

48. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474-475.

49. The duties of the defendant require that they ensure the health and safety of workers as far as reasonably practicable. This duty is not delegable, and the duty requires the identification of risks in the workplace and an assessment of measures to address such risks.

50. The gravity of the offence is determined by the extent of the duty holder’s failure to ensure, so far as was reasonably practicable, that its workers were not exposed to risks to their safety: Orbit Drilling Pty Ltd v The Queen (2012) 35 VR 399; [2012] VSCA 82 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465.

51. The objective degree of foreseeability is a matter for the court to have regard to when considering the gravity of the offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610; [2000] NSWIRComm 71 (Capral Aluminium) at [81].

52. An offence will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117; [2005] NSWIRComm 61.

53. Subjective factors should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700; [2000] NSWIRComm 142 at [31].

54. The Court of Criminal Appeal examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 (Nash v Silver City Drilling). His Honour Justice Basten, under the heading ”Assessment of Risk” said at [34]:

“The sentencing judge commenced his consideration with the proposition that ‘[g]reater 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 upon an assessment of all those factors.”

55. His Honour further observed at [42]:

“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, which were not even assessed, were straightforward and involved only minor inconvenience and a little, if any, cost. That assessment will involve both objective considerations and a consideration of what the respondent’s responsible officers knew or ought to have known.”

56. I accept that s 3A of the Sentencing Act is generally regarded as a codification of the common law principles of sentencing: R v MA (2004) 145 A Crim R 434; [2004] NSWCCA 92. The purposes of punishment in the section are constrained by the sentencing principles that exist under the common law such as the principles of proportionality and totality: R v MMK (2006) 164 A Crim R 481; [2006] NSWCCA 272.

57. The court is obliged to make an assessment of where on the scale of criminality the offence lies referable to the maximum penalty prescribed by the legislature: R v Cage [2006] NSWCCA 304 at [17]-[18] (Latham J).

58. Where there was an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible, it will be a serious offence: WorkCover Authority of NSW v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ).

59. The objective seriousness of an offence under s 32 of the WHS Act is considered in the context of the gradation of offences contained in ss 31-32 of the WHS Act: Nash v Silver City Drilling at [54]-[56]. The matters relevant to objective seriousness for a s 32 offence include:

60. The potential consequences of the risk. Consequences may range from mild to catastrophic. Offending will be more serious where the potential injuries are severe, regardless of whether they are likely to materialize: Nash v Silver City Drilling at [34].

61. The availability of steps to eliminate or minimise the risk: Nash v Silver City Drilling at [34].

62. Whether those steps are complex, burdensome or mildly inconvenient. If mitigating steps could easily have been taken, the offending will be more serious: Nash v Silver City Drilling at [34] and [53].

63. Whether the risk was known or ought reasonably to have been known to or identified by the offender.

64. Whether the risk was an obvious or clear one.

65. The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd*; SafeWork NSW v Cai* [2018] NSWDC 398 at [55] (Russell SC DCJ).

66. However, I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of. In Nash v Silver City Drilling his Honour Justice Basten dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying at [53]:

“It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of the injury occurring is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialise. The objective seriousness of the conduct will also be affected by the ease with which mitigation steps could have been taken.”

Matters are Relevant to Determining the Culpability of the Defendant

61. The risks were raised in the relevant guidance material, which was referenced in the defendant’s own documentation and included in its SWMS prepared with respect of this work, as follows;

62. The task of “Demolish [sic] roof and wall structure” would produce a hazard in the form of falling objects.

63. The tasks of “Demolishing the building or structure” would produce a hazard that “Workers and others [may be] injured by structural collapse”. As a potential control measure, it was noted that “temporary braces, propping, shoring or guys may be needed to be added to ensure the stability of the structure is maintained so as to prevent an unexpected collapse of part or all of the structure”. (see SWMS p 10)

64. The steps that might have been taken by the defendant were known, simple and convenient to carry out.

65. The defendant recognised the importance of undertaking steps to properly assess the risks and hazards arising from the demolition work in both its Demolition Management Plan and a Demolition Work Plan. Both plans identified measures directed towards management of risks arising out of the demolition works.

66. Those measures included completion of a detailed investigation of both the site and structure, and the preparation of a detailed work plan, and were to be carried out in accordance with the relevant Australian Standard. However, the defendant failed to take fundamental steps that it had identified before it began to demolish the parts of the structure. Its risk assessment was clearly inadequate.

67. This created a circumstance where the workers were ultimately faced with an emergency situation that led to a decision to depart from the planned method for demolition of which would have been adequate had the adverse wind conditions not arisen.

68. Similarly, the SWMS was inadequate as it did not refer to the process of demolition of the façade walls and the risks arising from that process, including the establishment of exclusion zones to keep unauthorised people out of potential collapse zones, nor install an overhead protective structure where the work was adjacent to the public.

69. The uncontrolled collapse had the capacity to cause very serious injuries to any person who was standing in the vicinity.

70. The likelihood of risks arising in the context of demolition work was relatively high in the absence of appropriate control measures. The decision was made to bring down the masonry wall using an excavator. The only control measure implemented to prevent pedestrian access to the vicinity immediately beside the masonry wall was to place signs directing pedestrian traffic to another footpath.

71. The demolition industry is a notoriously dangerous industry in part because the industry involves the interaction of humans with large collapsing structures and heavy machinery and items. These present circumstances highlight the need for caution on demolition sites, including the obvious need to ensure workers and people are not put in harm’s way when moving heavy items around a site.

72. However, the defendant was contracted for the demolition work only. It was not the principal contractor for the site.

73. On 12 July 2021 the defendant lodged with SafeWork NSW a Notice of Intention to Commence Demolition. It notified AZ as the supervisor, and the licence nominated both AZ and Mr El Kurdie as supervisors. Mr El Kurdie was employed as a supervisor to oversee the demolition work at the site.

74. The defendant accepts the measures that it had been charged with and pleaded guilty to acknowledge a multiplicity of failures which, had they been followed, could have eliminated or minimised the pleaded risks.

75. I accept that those risks arose as a result of a change in conditions which meant that the defendant had to take urgent action to prevent what could have been a worse risk situation occurring.

76. I accept that the intention of the defendant was to demolish the wall by using a scissor lift, and I accept that was neither unsafe nor unsatisfactory.

77. The reality for the defendant was;

78. After visiting the site, it had decided to use manual demolition for the removal of that specific wall.

79. The combination of the roof being removed and weather conditions led to the wall becoming unstable with a sign blowing towards power lines, which left it in a very difficult position whereby it made a choice in a short period of time to use mechanical demolition to bring the wall down.

80. The new method, mechanical demolition, had greater risk involved in the sense that it involved much more power being applied to the wall thus increasing the destabilisation of the wall which had already been seen to be moving under the force of the wind.

81. I accept that this was not a defendant that had no systems in place, nor was it oblivious to its obligations under the WHS Act. This is not a defendant that did not plan how the work was to be done. A system was put in place, but it failed to take into account that adverse weather conditions could arise.

82. If the wind had not destabilised the sign and wall, no risk would have arisen. The underlying problem was the failure to build into the system that was being used added layers of safety which would have limited the risk so far as reasonably practicable in the event of adverse issues.

83. Upon being made aware of the imminent risk, the defendant attempted to remediate the situation by the use of signs and protections.

Deterrence

79. In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act.

80. General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J).

81. When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.

82. The Court of Criminal Appeal in Bulga Underground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37 (Bulga) at [177]-[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]-[75] which said:

“[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.

…

[75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.”

83. General deterrence must be a significant feature of the sentence imposed upon the defendant. It can be appropriately used to direct the industry’s attention to the consequences of inattention and the need for greater concentration on the potential risks of death or serious injury associated with the building, construction and demolition industry and working, in particular with moveable plant demolishing existing buildings, and in areas where members of the public may be present, is an industry that would appropriately be described as hazardous.

84. The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the WHS Act very seriously.

85. However, whilst general deterrence is a matter that I must consider in the sentencing process, it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all other factors.

86. In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve the safety of its worksites following a breach of a duty are relevant, as is the propensity for the defendant to reoffend.

87. There is a continuing need for specific deterrence where the defendant continues to operate a business that potentially exposes workers and other persons to risk during its operations. However, the prosecutor concedes, and I agree, that the need for specific deterrence is tempered by the defendant’s lack of prior convictions, and response to the incident, which included appropriate amendments to its systems of work.

Mitigating Factors

88. In Haynes v CI & D Manufacturing Pty Limited (No 2); Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 at 456-457 the Full Bench held the following:

“We think that having regard to the specific nature of the legislation, the past record upon which the both the prosecution and the defendants should rely must be intimately bound to the nature of the offences which the Court is considering, namely industrial safety, health and welfare. We add one comment on the question of the previous record, and that is that the Court should attempt to ensure the accuracy of the record and have objective regard to it in relation to the industrial enterprise and the extent of its operations. We consider that the extent of the operations of the defendant enterprises is to be taken into consideration when coming to conclusions having regard to the past record.

Human experience indicates that the larger the number of industrial transactions a company is involved in the larger the number of industrial accidents which occur as a matter of statistical expectation. The safety record of very large company with some prior convictions may, on analysis, be better than that of a small company with fewer such convictions. However, we again emphasise that in the context of the OHS Act the record is only one of the factors to be taken into account in assessing penalty and the essential inquiry must remain the circumstances of the breach in question.”

89. The defendant has no previous convictions under work health and safety law: s 21A(3)(e) of the Sentencing Act, and as such is entitled to the leniency on such basis.

90. I accept that the defendant is unlikely to reoffend as it has undertaken significant changes and is even more focussed than before on the health and safety of its workers: s 21A(3)(g) of the Sentencing Act. This is not a defendant that had no regard to safety at all – it had systems in place to protect its workers, but there was no enforcement of such policies when the workers went to perform the installation tasks.

91. I accept that the defendant has demonstrated a commitment to workplace safety, and therefore has very good prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act*.* Importantly, the defendant is not actively trading and intends for any future demolition works be subcontracted out to another company or companies.

92. I note that the defendant whilst accepting responsibility for the offence, has demonstrated limited remorse: s 21A(3)(i) of the Sentencing Act.

93. The defendant co-operated with SafeWork NSW during its investigations: s 21A(3)(m) of the Sentencing Act.

94. The defendant entered a plea of guilty to the Amended Summons at an early stage of the proceedings. Such a plea of guilty demonstrates remorse, and I will allow a deduction of 25% for the utilitarian value of the plea in accordance with the principles set out in R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 and s 21A(3)(k) and s 22 of the Sentencing Act.

Capacity to Pay

95. Section 6 of the Fines Act 1996 (NSW) provides as follows:

“6 Consideration of an accused’s means to pay”

In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider:

(a) Such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and

(b) Such other matters as, in the opinion of the court, are relevant to the fixing of that amount.”

96. The onus is on the offender to satisfy the court on the balance of probabilities as to the truth of such evidence and its relevance to the fixing of penalty: McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310; [2004] NSWIRComm 353 at [24].

97. The offender’s capacity to pay is relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16] (Rothman J, Hoeben CJ at CL agreeing).

98. In Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100, Staff J said at [57]-[58]:

“The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 are as follows:

‘[83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50):

“It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.”

[84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82):

“... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76).”

However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed:

“... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty …

When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence ...”

[85] I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476:

“Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant’s means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86”.’”

99. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said:

“First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to ‘the means’ of the defendant, pursuant to s 6 of the Fines Act 1996.”

100. I accept this authority is relevant to these proceedings. The company consisted of a few family members and has endured some financial hardship, and could not be described as a “large corporation”. It was also significantly affected by the COVID 19 pandemic.

101. The Full Bench of the Industrial Relations Commission of NSW observed in Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153, citing Rahme v R (1989) 43 A Crim R 81 that:

“It is well established that a court should first arrive at a penalty and then review it on the basis of any case properly made out by a defendant of a lack of capacity to pay a substantial penalty or any penalty.”

102. It follows that the question of capacity to pay and, hence, the exercise of the discretion under s 6 of the Fines Act 1966 should be considered after the court has determined the appropriate fine(s).

103. I accept that the principles which are then applicable to the exercise of the discretion conferred by s 6 of the Fines Act 1966 are as follows:

104. The financial position and means of a defendant should be taken into account when determining the fine to be imposed.

105. The defendant bears both the evidentiary onus and the onus of proof, on the civil standard, in relation to satisfying the court that it does not have the capacity to meet a fine.

106. It is for the defendant to place detailed financial information that fully discloses his financial circumstances to the court so that a proper assessment of his capacity to pay can be undertaken.

107. It is for the prosecutor to check the information provided by the defendant and to assist the court in relation to the assessment of the defendant’s capacity to pay.

108. In any event, notwithstanding the capacity of a defendant to pay a fine, the penalty to be imposed must reflect the objective seriousness of the offence: Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at [209]-[210]; McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310; [2004] NSWIRComm 353 at [24]-[25]; SafeWork NSW v Harris Holdings NSW Pty Ltd; SafeWork NSW v Harry Zizikas [2017] NSWDC 299 at [134]-[141]; SafeWork NSW v Cosentino Australia Pty Ltd (No 2) [2018] NSWDC 182 at [23]-[24].

109. AZ gave evidence before me about the financial circumstances and I accept him as a witness of truth.

110. The defendant tendered evidence setting out its financial position, and I accept that such evidence reflects a limited capacity to pay a fine. That evidence demonstrates that during 2020 and 2021, as a result of the COVID 19 pandemic, the defendant experienced a substantial decline in annual turnover. The subsequent destabilisation of the global supply chain and effects of inflation on the building and construction industry, I accept, has adversely affected the defendant’s business and ability to make a financial return from extant contract. I further accept that a large fine would be detrimental to the ongoing survival of the defendant as it does not have spare funds and is operating at a loss. Such fine may result in the defendant becoming insolvent, or I accept, may have to terminate workers.

111. The issuing of costs against a defendant in both criminal and civil proceedings is not punitive, but rather compensatory to the prosecution: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543 (Mason CJ).

112. However, given the objective seriousness of the offending and the requirement for general deterrence, the fine must be such that it satisfies all of the relevant sentencing considerations.

113. On the basis of the totality of the documents before me, I propose to exercise my discretion under s 6 of the Fines Act and afford the defendant some leniency.

114. The court is entitled to take into account the fact that the defendant will be liable to pay the prosecutor’s costs when considering any monetary penalty to be imposed on the defendant, particularly in circumstances where there is evidence of a limited capacity to pay a fine, and I have done so. Costs payable to the prosecutor are the “normal” rule as the prosecutor has been successful, although there can be exceptions: see for example, Bulga.

115. The court can also have regard to the defendant’s own costs that it will have to bear as a consequence of a breach of the WHS Act, and I have done so: Environmental Protection Authority v Barnes [2006] NSWCCA 246 at [78].

Penalty

111. I make the following orders:

With regard to the Section 32 offence:

1. The defendant is convicted.
2. The appropriate fine is $200,000 and that will be reduced by 25% to reflect the plea of guilty, leaving a fine of $150,000.
3. In exercising my discretion under Section 6 of the Fines Act 1996 (NSW), that fine will be reduced by 50%.
4. Accordingly, I order the defendant to pay a fine of $75,000.
5. Pursuant to Section 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor.
6. Pursuant to Section 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor’s costs, as agreed or assessed.

With regard to the Section 33 offence:

1. The defendant is convicted.
2. The appropriate fine is $40,000 and that will be reduced by 25% to reflect the plea of guilty, leaving a fine of $30,000.
3. In exercising my discretion under Section 6 of the Fines Act 1996 (NSW), that fine will be reduced by 50%.
4. Accordingly, I order the defendant to pay a fine of $15,000.
5. Pursuant to Section 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor.
6. Pursuant to Section 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor’s costs, as agreed or assessed.

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Amendments

21 March 2025

Section 32 offence - Order 4 amended.