SafeWork NSW v Erector Group Pty Limited; SafeWork NSW v Rong Feng Wang

Other Persons

1. At all material times, the building adjacent to the site at Liverpool Road was a commercial and residential property. It was situated on a narrow commercial allotment and was constructed in 1935 from brick on brick foundations with a timber floor at first storey level under a pitched-frame corrugated iron roof. The ground floor of the adjacent building was occupied by LA Lulus Touch of Style Hairdressers, a hair stylist business owned and operated by Ms Chrisoulla Rossides. The first floor of the adjacent building was a residential apartment, occupied by Ms Jocelyn Perry, who was also an employee of the business.

Systems of Work

1. On 29 September 2015, Erector, as principal contractor at the site, engaged Geo-Environmental Engineering to conduct a geotechnical investigation into the site. Geo-Environmental Engineering informed Erector that the proposed development at the site was feasible but recommended that further investigation should be conducted once contractors and structural engineers finalised the excavation plan for the foundations.
2. Erector engaged Mr George Khalil, a structural engineer of ACSES Engineering Pty Limited, to provide technical drawings and a Proposed Residential Development Plan for the excavation work at the site.
3. Mr Khalil provided Erector with technical drawings and a Proposed Residential Development Plan for the site on 15 January 2016. These stipulated that: 1. the size, type and extent of the foundations of the adjacent building must be determined and verified by the structural engineer, geotechnical engineer, builder and other relevant contractors prior to any construction work commencing (this was contained in a box on a drawing headed: "BUILDERS NOTE"); 2. prior to any construction work commencing and once the footings of any adjacent building are exposed, an engineer should be consulted to develop and implement appropriate support mechanisms for the footing, such as underpinning the footing and/or constructing a shoring wall that could support a load from the adjacent building; 3. Erector shall be responsible for maintaining excavations in a stable condition without affecting adjacent building or services. Where required, temporary shoring shall be provided to the sides of footing excavations for the adjacent building; 4. excavation shall not extend below a line dipping at 45 degrees for clay and 30 degrees for sand and away from the nearest underside corner of any existing footings; 5. at no stage shall the base of the shoring wall capping beam be lower than the base of the adjacent building foundation or else a high-level shoring solution may be required (this was contained in a box on a drawing headed: "BUILDERS NOTE"); and 6. levels of the existing structures must be confirmed prior to construction commencing at the site.
4. Erector provided ADN, as a subcontractor at the site, with the Geo- Environmental Engineering report and technical drawings. However, ADN was not provided with a copy of the Proposed Residential Development Plan.
5. Before commencing excavation work at the site, ADN provided Erector with a Safe Work Method Statement (SWMS), which included a procedure for excavation work. The SWMS identified structural collapse of the adjacent building as a risk when excavating. The SWMS stipulated as control measures to deal with this risk: 1. Appropriate shoring measures should be implemented, and the supervisor should take note of the depth of the excavation, nature and faults in the earth or rock and the adjacent building and structures. 2. Seek advice from a geotechnical engineer prior to deep excavations close to an adjacent building or structure on the appropriate shoring measures.
6. As a result of the Geo-Environmental Engineering report and engineering report, Erector implemented a Work Health and Safety Management Plan (WHSM Plan) at the site. The WHSM Plan focused on several risks associated with construction and demolition work, including the specific risk that any excavation work may undermine the adjacent building's footing or foundation. The WHSM Plan indicated that this was an "extreme risk".
7. The WHSM Plan stipulated that to mitigate the risk to the footings of the adjacent building being put at risk, an engineer should be consulted to provide advice for the excavation work, including advice on the best system of shoring and protecting the footings of any adjacent building once those footings were exposed during excavation work.
8. The WHSM Plan nominated Mr Yan and Mr Lu as supervisors for the site.
9. On or about 23 February 2016, Erector provided ADN with the WHSM Plan.

Supervision

1. As site supervisors, Mr Lu and Mr Yan had the responsibility of identifying safety issues and enforcing the WHSM Plan.
2. Both Mr Lu and Mr Yan say that they were not the supervisor on the site.
3. Mr Lu stated that he was a leading hand at the site, and not a supervisor. Mr Lu's work experience, notably in demolition and excavation work, was limited. Mr Lu was given the technical drawings and the Proposed Residential Development Plan on about 27 February 2015, but was not familiar with the details, especially the requirement that at no stage should the base of the shoring wall capping beam be lower than the base of the adjacent building foundation.
4. Mr Yan stated that he was the Project Coordinator for Liverpool Developing but was not a supervisor on site for Erector. Mr Yan states he oversaw coordinating contracts and labour hire at the site and was not involved with workers or subcontractors other than hiring.
5. Mr Yassine stated he would see Mr Lu "walking around" the site but did not "bother talking to" Mr Lu and he only ever spoke directly to Mr Yan, who would pass on any information to Mr Wang.
6. As such, there was no clear supervision structure at the site.

The Incident

1. By 4 February 2016 demolition of the building on the site was completed.
2. On Friday 12 February 2016 Erector informed ADN via e-mail that excavation work should begin on Monday 15 February 2016. The excavation would involve capping beam and piling works. Erector informed ADN that the shoring issue of the brick footing of the boundary wall of the adjacent building (referred to in the e-mail as the "footing issue") would be resolved "in couple days" [sic].
3. On Monday 15 February 2016 the shoring issue of the brick footing of the boundary wall of the adjoining building had not been resolved and ADN did not commence excavation work.
4. On Friday 19 February 2016 work involving a sewer trench held up the commencement of excavation. Erector sent an e-mail to ADN stating that: "the hotmix has already been placed and I believe nothing can stop you to commence the excavation to bottom of capping beam". The shoring issue of the brick footing of the boundary wall of the adjoining building was still not resolved by Friday 19 February 2016.
5. By Monday 22 February 2016 ADN had not commenced excavation. Erector sent an e-mail to ADN at 5.49pm stating: "...the water pipe will be removed by 10am tomorrow. Please make sure the site will be excavated to the bottom of capping beam tomorrow as the surveyor will be onsite Wednesday."
6. The shoring issue of the brick footing of the boundary wall of the adjoining building was still not resolved by Monday 22 February 2016.
7. By Wednesday 23 February 2016 ADN had not commenced excavation. Erector sent an e-mail to ADN stating that: "...the surveyor has been rebooked for tomorrow. Please make sure the site will be excavated to the bottom of the capping beam by COB today. If the site is not ready for surveyor to peg out the piles tomorrow, a rebooking fee plus liquidated damage will be apply [sic] due to it delay our program [sic]."
8. On Thursday 25 February 2016 Mr Wang sent an email to Mr Yassine saying that nothing should affect the progress of the earthworks and that it would only take 30 minutes to excavate to the bottom of the capping beam.
9. The shoring near the brick footing of the boundary wall of the adjacent building had not been resolved. No test pits had been dug. None of the preliminary or precautionary measures recommended by the engineer Mr Khalil had been carried out.
10. On Tuesday 29 February 2016 ADN commenced excavation work at the site using an excavator. Commencement of the excavation work was authorised by Mr Wang and was to be done by Mr Yassine.
11. Between 10.00am and 12.00pm Mr Yassine commenced excavating the area next to the adjacent building. During this excavation, no shoring measures were implemented. Mr Yan was not involved in the excavation work. Mr Lu was sporadically present during the excavation work. There was no direct supervision. Neither Mr Yassine nor Mr Lu took note of the depth of the excavation, or the nature and faults in the earth or rock in and around the adjacent building.
12. When the excavation commenced, customers of the hairdressers were continuously coming and going. Ms Christine Moeakiola, Ms Andry Vareltsis, and Ms Chrisoulla Rossides were working there throughout the day. They noticed constant shaking of their building, with supplies on the shelves constantly falling.
13. By 5.00pm the excavation work was completed for the entire length of the site and next to the entire length of the adjacent building. Mr Yassine had excavated between 400mm to 500mm below the capping beam level of the adjacent building's brick walls and brick footing.
14. At about 8.00pm, Ms Jocelyn Perry, who resided in the first-floor apartment in the adjacent building, called Ms Rossides and told her that the building and walls were starting to shake and looked likely to collapse. Ms Perry subsequently left her home.
15. At about 9.20pm, Emergency Services (000) were called and informed that the adjacent building was beginning to collapse.
16. When the NSW Police arrived, they observed the eastern side wall of the adjacent building to have partially collapsed. The front wall had cracked extensively and there was a strong smell of gas fumes. The Police subsequently closed Liverpool Road in both directions as a precaution and established a 50m exclusion zone around the adjacent building.
17. At about 3.00am on 1 March 2016 the entire eastern side and rear of the adjacent building had collapsed.

Legal Obligation, Codes of Practice and Guidance Material

1. Erector had a legal obligation under cl 35 of the Work Health and Safety Regulation 2011 (NSW) which requires that a duty holder must, in managing risks to health and safety, eliminate risks to health and safety so far as is reasonably practicable, and if it is not reasonably practicable to eliminate risks to health and safety, minimise those risks so far as is reasonably practicable.
2. Guidance materials providing advice regarding any excavation and demolition work was readily accessible and available in the public domain. Such guidance materials included: 1. Code of Practice: Excavation Work (July 2015) (Code of Practice). The Code of Practice provides practical guidance for a person conducting a business or undertaking (PCBU) on how to manage the health and safety risks associated with excavation work. The Code of Practice applies to all types of excavation work. 2. AS2601-2001: The Demolition of Structures (13 September 2001) (the Standard) is an Australian Standard that provides guidance to planners, engineers, contractors and interested parties on the planning and procedures for the demolition of a structure, on how to manage the health and safety risks associated with the demolition work and the subsequent excavation of a site. 3. SafeWork Australia: Demolition Work Code of Practice (3 February 2016) and SafeWork Australia: Demolition Work Code of Practice (27 March 2015) provide practical guidance to PCBUs and contractors on how to manage the health and safety risks associated with demolition work, including systems for establishing temporary supports or shoring to maintain stability and to prevent a building collapse during excavation. 4. SafeWork Australia: Construction Work Code of Practice (July 2014) provides practical guidance to PCBUs and contractors on how to manage the health and safety risks associated with construction work, which includes any work with an excavation component and prescribes engineering controls such as shoring the sides of the excavation to prevent a building collapse during excavation.

After the Incident

1. On 1 March 2016 Mr Martin Jenner, Burwood Council Senior Compliance Manager, authorised that the remaining front section of the adjacent building be demolished to prevent further collapse and render the location safe for the public.
2. Mr Martin Dwyer, an engineer from NSW Public Works Advisory, declared the site located at 246, 246B and 256 Liverpool Road and the adjacent building to be unsafe and dangerous. As a result, police directed all persons to leave the site, to move outside the danger area and to not enter the danger area pursuant to s 60L of the State Emergency and Rescue Management Act 1989 (NSW).
3. Temporary fencing was erected around 246, 246B and 256 Liverpool Road and the adjacent building. The footpath of Liverpool Road was restricted to pedestrians.
4. On 4 March 2016 rectification work was completed and Mr Dwyer (for NSW Public Works Advisory) and Mr Khalil (for Erector) advised that it was safe for the occupants of 246, 246B and 256 Liverpool Road and the adjacent building to return.

Evidence for the offenders

1. Mr Wang affirmed an affidavit on 13 February 2020. He is the sole director and secretary of Erector. He expressed his sincere apologies and deepest remorse for the failure to mitigate the risk of building collapse which came about "due to my oversight and our inability to appreciate the risk".
2. Mr Wang was not supervising at the site on the date of the incident because he was working on another construction site on that day. He trusted the competency of Mr Yassine to know that engineers should be consulted before ADN started any major excavation work at the boundary. Mr Yan and Lu were away from the site on other duties.
3. In his affidavit Mr Wang acknowledged that his instructions to ADN and Mr Yassine were not clear. He said that "the incident happened due to the oversight and recklessness in giving instructions on the part of Erector and me".
4. Mr Wang gave evidence of the measures which were immediately taken to deal with the problems caused by the collapse of the adjacent building. He also gave evidence of measures which he had implemented to improve the work health and safety procedures of Erector to ensure that such an incident would not happen again.
5. There was no evidence in the affidavit about capacity to pay.

Consideration

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

Objective seriousness of the offence

1. 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 The Queen (No. 2) [1988] HCA 14; (1988) 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] NSWCCA 242; (2006) 66 NSWLR 566 at [15].
2. 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 [1988] HCA 67; (1988) 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].
3. 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].
4. 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] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.
5. 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 judgment without any attempt to state precisely how any given factor has influenced the judgment.
6. The Court of Criminal Appeal has recently examined the sentencing process with regard to the Act 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. His Honour Justice Basten at par 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."
7. Further at par 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, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."
8. At par 53 his Honour dealt with the proper approach to considering the objective seriousness of offences under the Act, saying: "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 the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting 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 materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken."
9. My findings about the level of culpability of both offenders are based upon the following: 1. The risk of persons suffering serious injury or death as a result of a building collapse caused by excavation work which adversely affected the footings of the adjacent building was foreseen and was known by Erector and Mr Wang. The engineer Mr Khalil had referred to that precise risk in plain terms in his documentation. 2. Given the lack of support for the adjacent building, the failure to dig test pits and the failure to supervise the excavation contractor, the risk was highly likely to occur. 3. The potential consequences of the risk were very serious. While no-one was injured, it was only because the tenant fled from the building that she was not caught up in the collapse. 4. Simple and available steps could have eliminated the risk. Such steps were advised by Mr Khalil and were also readily available in the guidance material. 5. There would have been a cost to implement suitable steps, but such cost should have been built into the price charged by Erector for the construction work. 6. By good luck there was no injury to any person. However the damage to property was significant as the collapsed building had to be demolished. 7. The maximum penalties for the offences are a fine of $1,500,000 in the case of Erector, and $300,000 in the case of Mr Wang, which reflect the legislature's view of the seriousness of the offences. 8. The failure to follow and implement the advice of the engineer, and the lack of supervision and clear instruction by Erector was a major factor in what happened. Putting instructions in one sentence in a curt email (which seemed largely concerned with threatening financial consequences if the excavation work was not done straight away) was a poor substitute for being on site to talk to the excavation contractor to discuss how the work should be safely performed.
10. I find that the level of culpability of both offenders is in the high end of the mid- range.

Deterrence

1. The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180].
2. The penalty must reflect the need for specific deterrence. Erector is still conducting a business. Its operations involve the potentially dangerous activities of excavation, demolition and construction.

Mitigating factors

1. Neither offender has any previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999.
2. The offenders are otherwise of good character: s 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. The steps which were taken after the incident demonstrate this. Erector has been in business since 2001.
3. The offenders are unlikely to re-offend: s 21A(3)(g) Crimes (Sentencing Procedure) Act 1999.
4. The offenders have good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. They have taken positive steps to guard against the risk of an incident such as this ever happening again. Erector has brought its documentation and its procedures into line with those which, on all the evidence, should have been in place before this accident occurred.
5. Both offenders have shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. They have provided evidence that they accept responsibility for their actions and have acknowledged that the risks to the safety of others was caused by their actions.
6. Both offenders 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 the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) Crimes (Sentencing Procedure) Act 1999. Both offenders pleaded not guilty and the matter was set down for a 3-week trial to commence on 10 February 2020. On 17 January 2020 the pleas were changed to guilty and the lengthy trial was thus avoided, saving public expense and inconvenience. The pleas were entered to the Summons as filed on 27 February 2018, not to an Amended Summons. In Cameron v The Queen [2002] HCA 6; (2002) 209 CLR 339 the High Court said that the question of whether it was possible for a person to plead guilty at an earlier time is not one answered simply by looking at the charge sheet, but the question is when would it first have been reasonable for a plea to be entered. No explanation has been provided by the offenders on this issue. It is appropriate to give both offenders a 10% discount for an early plea.

Parity

1. ADN and Mr Yassine were also prosecuted and sentenced for breach of their health and safety duties arising under the Act, relating to the same incident in which the adjacent building collapsed - Safework NSW v ADN Investments Pty Limited; SafeWork NSW v Yassine [2019] NSWDC 469.
2. Where two or more offenders are involved in the same criminal conduct or enterprise the parity principle requires that there should not be such disparity between the sentences imposed so as to give rise to a justifiable sense of grievance. The effect of the application of the principle may vary according to the circumstances of the matter including differences between the charged offences: Green v R [2011] HCA 49; (2011) 244 CLR 462 at [30].
3. The principle operates in the nature of a "check" required of the sentencing Court: DPP v Gregory [2011] VSCA 145; (2011) 34 VR 1 at [31]. The Court should first determine the appropriate sentence having regard to the objective criminality and the other relevant factors and then consider whether the sentence needs further adjustment because of the parity principle: DPP v Gregory. In Jimmy v The Queen [2010] NSWCCA 60; (2010) 77 NSWLR 540 at [139] Justice Campbell said: "An essential characteristic of the parity principle is that it permits comparison of two individual sentences and alteration of one sentence as a direct result of the comparison with the other sentence."
4. The court should not use a co-offender's sentence as a starting point and then increase or decrease the sentence by reference to other factors: Jimmy v The Queen at [32]; Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357.
5. It is appropriate for the court to consider the respective contributions of ADN, Mr Yassine, Erector and Mr Wang. The reason for doing so is not to reduce the culpability of any one party in any proportionate way in an overall penalty, but rather it is a factor that assists in determining the real culpability of a defendant for the offence charged: WorkCover Authority of NSW (Inspector Carmody) v Consolidated Constructions Pty Limited [2001] NSWIR Comm 263; (2001) 109 IR 316 at [46]. The contribution of other entities may in some cases be relevant in mitigation: WorkCover Authority (Inspector Howard) v Baulderstone Hornibrook Pty Limited [2009] NSWIRComm 92; (2009) 186 IR 125 at [241].
6. I find that both Erector and Mr Wang are to a small degree less culpable than ADN and Mr Yassine. While the offenders have acknowledged that they should have provided clearer instructions and better supervision, ADN was the qualified and experienced demolition contractor on the site. Its actions in excavating so close to the adjacent building as to cause a structural collapse are hard to fathom.

Capacity to pay a fine

1. I am required to have regard to s 6 of the Fines Act 1996 (NSW) 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: Mahdi Jahandideh v The Queen [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.
2. 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."
3. There was no submission about capacity to pay, so this issue does not arise.

Costs

1. The parties have agreed to an order that the offenders are to pay the prosecutor's costs.

Penalty for Erector in proceedings 2018/64962

1. My orders are: 1. The offender Erector Group Pty Limited is convicted. 2. The appropriate fine is $200,000 but that will be reduced by 10% to reflect the plea of guilty. 3. Order the offender Erector Group Pty Limited to pay a fine of $180,000. 4. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 5. Order the offender Erector Group Pty Limited to pay the prosecutor's costs.

Penalty for Mr Wang in proceedings 2018/64973

1. My orders are: 1. The offender Rong Feng Wang is convicted. 2. The appropriate fine is $40,000 but that will be reduced by 10% to reflect the plea of guilty. 3. Order the offender Rong Feng Wang to pay a fine of $36,000. 4. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 5. Order the offender Rong Feng Wang to pay the prosecutor's costs.

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: 26 February 2020