Crimes (Sentencing Procedure) Act 1999Fines Act 1996Crimes Act 1900
Cases Cited: Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96Page v Walco Hoist Rentals Pty Ltd (No. 2) [2000] NSWIRComm 39Nesmat Pty Ltd v WorkCover Authority (NSW) (1998) 87 IR 312SafeWork NSW v Karimbla Constructions Services NSW Pty Ltd [2017] NSWDC 68Postigliano v The Queen (1996-7) 189 CLR 295SafeWork NSW v ProjectCorp Australia Pty Limited [2017] NSWDC 169R v Ingrassia (1997) 41 NSWLR 447Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37Butters v R [2010] NSWCCA 1
Category: Sentence
Parties: SafeWork New South Wales (prosecutor)Freyssinet Australia Pty Ltd (defendant)
Representation: Counsel: Mr I Taylor SC with Mrs E James appeared for the prosecutorMr A Moses SC with Mr D O'Neil and Ms J Alderson appeared for the defendant
On 27 October 2017, I found Freyssinet guilty of a Category 2 offence under s 32 of the Work Health and Safety Act 2011 (the Act). The matter now falls for sentence. The maximum penalty for the offence is a fine of $1,500,000.
The facts on which the sentence is to be based are set out in large measure in the reasons I published on 27 October 2017. I take them into account though I shall not be referring to them specifically except to the extent I find it necessary to do so in explaining my reasons. I have also been provided with an affidavit of Giovanni Carlo Marchese, sworn on 9 February 2018.
I commence the sentencing process by noting and taking into account the purposes of sentencing. I bear in mind the purposes of sentencing as enumerated in s 3A of the Crimes (Sentencing Procedure) Act 1999. I bear in mind the purposes of the Work Health and Safety Legislation, in particular ensuring the safety, health and welfare of workers and others on workplace premises. I bear in mind any aggravating and mitigating factors, including any mentioned in s 21A of the Crimes (Sentencing Procedure) Act so far as any of those may be relevant.
[3]
Objective seriousness
I start my analysis with a consideration of the objective seriousness of the offence. This may be determined in part by the foreseeability of the risk of injury, the foreseeability of the consequences of the risk coming home and the measures available to avoid the risk.
These matters have all been dealt with in my reasons of 27 October 2017. I need make only brief comment here.
There was a foreseeable risk. The likelihood that the risk would materialise in injury was slight. Once it is recognised that there was a risk, that risk, if it materialised, had potentially serious, even fatal consequences. Those consequences were readily foreseeable. There were available measures to address the risk. If of any cost, they were cheap and of little inconvenience.
There is a further factor I consider appropriate to take into account in considering the objective seriousness of the offence and that is a defendant with a cavalier attitude to safety commits an objectively more serious offence than a defendant with a conscientious attitude to safety.
Freyssinet's attitude to safety was highly commendable both as to the establishment of safety systems and the enforcement of those systems. I refer here, in particular, to [45] to [89] of my judgment of 27 October 2017. There are some other matters relating to safety that I shall address later. The matters in [45] to [88] all go to matters of safety in place at or before the time of the incident on 10 February 2015.
The puzzling feature of this case is how the risk was missed. Despite the regular and frequent risk assessments done of the work site, the staircase does not appear to have been included in that systemic process [1] . Nonetheless, it is difficult to understand that if the gap between the railing and landing had been seen and the depth of fall to the bottom landing had been seen how the hazard could have been missed. The hazard was missed. It was missed not just by Freyssinet, but by everybody on site. It was passed by workers and safety officers over 200,000 times in a six month period before the incident occurred. It was not only Karimbla and Freyssinet workers who missed the hazard. It was missed by all subcontractors on site.
There was no direct evidence of the number of subcontractors on site, but in a document handed up in Freyssinet's Court Book for Sentence Hearing is a list of 43 subcontractors (other than Freyssinet) on site on the day of the incident. This list of subcontractors is in a document of draft orders proposed by Freyssinet. It can fairly be taken that all those subcontractors were on site on the day of the incident. Whether they all used the staircase is not clear but as the staircase led to lunch room and toilets it is likely. The point is that every subcontractor, and they were all probably under a health and safety duty, who used the staircase missed the hazard.
Emphasis was placed in submissions on the well-known and often cited passages of Basten JA in Nash v Silver City Drilling (NSW) Pty Ltd [2] at [34], [42]. The case is distinguishable especially considering the attitude to safety taken by the defendant in that case (see, for example, [39]) and Freyssinet's attitude to safety. The point emerging from [34] and [42] is that relative culpability depends on an assessment of all relevant factors.
The term "blind spot" has been used in the course of the prosecutor's submissions. That may be an explanation for everyone missing it. That does not excuse Freyssinet (or anybody else) for not picking up the hazard, but it may help explain it.
Another possible explanation is that, so far as safety is concerned, there was intense concentration on the work site and accesses to that, such that somehow the more remote access was overlooked.
In short, Freyssinet's failure (as was everybody else's) was in not identifying the inadequacy of the railing and requesting Karimbla to fix it and in not instructing its workers not to use the stairway until it was properly guarded.
There was an amount of discussion in the case as to whether this risk was one of a fall from heights. It was but not in the sense commonly occurring on building sites and commonly seen in prosecutions. It was not a fall from a working platform, from scaffolding, from a roof, through an opening in a floor, from a ladder, etc. where a worker was going about his work. It was a fall off a staircase on a work site, but removed from the actual working environment. The risk may properly be classed as a risk of fall from height. It should not be seen, however, as a failure of Freyssinet to address generally the risk of falls from height. It addressed that meticulously. Something in the implementation of its system allowed this risk to be overlooked.
Notwithstanding all this, Freyssinet owed Mr Felemi a health and safety duty in relation to all accesses used by it at the work site including the one where he fell. It should have checked the staircase and acted on its inadequacies.
It is not always easy or helpful to categorise objective seriousness in terms of low, mid or high range and this is such a case. There is a seriousness about the offence and yet there are significant matters that mitigate that seriousness. I would categorise this offence at the upper level of low range.
[4]
Aggravating factors
I take into account Mr Felemi's injuries, which include severe brain injury, as an aggravating factor - s 21A(2)(g) Crimes (Sentencing Procedure) Act.
[5]
Deterrence
I take into account general deterrence. Those operating in the building industry must be conscious of the need for safety and be aware that there will be consequences for failure to adhere to it.
I take into account specific deterrence, but only in a minor way. This is because of Freyssinet's attitude to safety before the incident and its actions since the incident. Its approach to safety is set out in my earlier reasons at [45] to [89]. It is also usefully summarised in an affidavit of Mr Marchese sworn on 9 February 2018 at [18].
As at the time of the incident Freyssinet was spending over $1.8 million annually towards safety matters. Since the incident this has increased to almost $2.5 million.
Steps Freyssinet has taken since the incident have been described in Mr Marchese's affidavit at [25] as follows:
a. changed its tendering practices to include an express requirement that the principal contractor provide edge protection with mid rails on common areas of a worksite;
b. trained its workforce regarding the requirement that all edge protection on stairwells, including in common areas of a site, must have a mid rail as well as a top rail;
c. confirmed with workers that they should refuse to use stairwells without mid rails;
d. directed its workers to report stairwells without mid-rails to Freyssinet and/or the responsible principal contractor for rectification;
e. strengthened the culture of hazard identification and reporting 'HAZOB' (increased from 23 HAZOB's to 429 HAZOB's per month); and
f. reiterated and strengthened the involvement of line management in the work that Freyssinet performs at site.
[6]
Mitigating factors
Freyssinet has no prior convictions. That is impressive considering the size of Freyssinet and its involvement in high risk construction work. It was registered in Australia in June 1983. As at the date of the incident and currently, it has offices in NSW, Qld, Victoria, WA and in New Zealand. At the time of the incident it was operating on about 94 sites in Australia and currently on about 129. At the time of the incident it engaged and currently it engages about 400 employees and contractors. A record of no convictions in these circumstances comes about not by accident, but by careful preparation and implementation of appropriate safety systems.
Freyssinet has expressed apology, regret and remorse. The prosecutor submits this cannot be taken into account as a mitigating factor because Freyssinet has not accepted responsibility for its actions as required by s 21A(3)(i). The prosecutor cited Bulga [3] at [189] to [192]. The circumstances were different. There the expression of regret and remorse was from a person who did not have authority from the offender to do so and the offender did not accept the trial judge's verdict. The prosecutor also cited Butters [4] at [17]. That does not advance the prosecutor's submission. It states that an offender is not required to give the evidence and all the relevant evidence will need to be considered.
Mr Marchese, in his affidavit, is plainly speaking on behalf of Freyssinet as well as himself. In the affidavit, he has acknowledged the finding of failure to comply with the duty, stated that Freyssinet has always been remorseful that the incident occurred, expressed sorrow that the incident happened, acknowledged the hurt caused to Mr Felemi's family, friends and colleagues and states that Freyssinet treats the consequences of the incident and the prosecution as matters of the utmost seriousness.
In addition to these matters, Freyssinet provided support to Mr Felemi and his family in a number of ways following the incident. It included providing accommodation for Mr Felemi's family close to the hospital while he was being treated, liaising with the workers' compensation insurer to ensure provision of support and compensation, payment of some of Mr Felemi's medical expenses and offering counselling support to Mr Felemi's family. These matters have another relevance going to the character and standing of Freyssinet. They are also consistent with regret and remorse.
I think the evidence is sufficient to establish remorse as a mitigating factor.
Freyssinet has taken remedial action since the incident. I have dealt with it in considering specific deterrence [5] and there is no need to repeat it here.
Freyssinet is a company of good standing in the community. Aside from this incident its safety record is outstanding and that is because of its approach to safety. It has been a contributor to a number of health, educational and other charities.
Freyssinet is unlikely to re-offend and, to the extent it is relevant and/or appropriate, it has good prospects of rehabilitation.
Freyssinet has co-operated with SafeWork in the investigation.
Freyssinet submitted that the non-prosecution of others (other than Karimbla) should be taken into account. Freyssinet relied on Page v Walco Hoist Rentals Pty Ltd (No. 2) [6] , especially at [31] to [34]. What emerges from those passages is that a failure to take into account the culpability of another party not prosecuted could result in an inappropriate penalty and lead to a legitimate sense of grievance. Wright P drew significantly from Nesmat Pty Ltd v WorkCover Authority (NSW) [7] . There, the Department of Public Works contracted with a company for the company to do some work on a decommissioned, but not de-energised, sub-station. The Department knew the sub-station was live and, despite its appearance of not being live, did not inform the company it was. The Department authorised the company to break into the sub-station to gain access. An employee of the company was electrocuted. The Department was prosecuted, but the prosecution was withdrawn. The Commission, in court session, considered that the primary cause of the risk was that the sub-station was not de-energised when it was decommissioned or at any time before its contract with the defendant company. The risk was compounded by the failure to specify in the contract that the sub-station was live. The company had relied on the Department. The absence of a prosecution against it left it with a justifiable sense of injustice. This case is different to Nesmat in a number of ways:
1. Freyssinet had no reliance on any of the contractors not prosecuted;
2. In Freyssinet's case, its breach not only exposed one to whom it owed a duty to risk of death or serious injury, but it resulted in serious injury;
3. The other potential defendants here number over forty and it might be thought impracticable or unfruitful to prosecute them all.
I do not consider Freyssinet to have a justifiable sense of injustice in having a penalty imposed when the other sub-contractors were not prosecuted.
[7]
Fines Act
Freyssinet is a large corporation. A measure of its size and areas of activity is covered in [23]. It has three business streams in New South Wales - civil, remedial and building. Its civil work includes work on bridges and roads. In terms of s 6 of the Fines Act 1996, it is more than capable of absorbing any fine that could be imposed.
[8]
Parity
Parity is an issue in these proceedings. This is because Karimbla has been prosecuted and sentenced in respect of the same incident.
I have received competing submissions as to parity. I am of the view that the relative culpability of Freyssinet is lower than that of Karimbla.
I put aside Karimbla's plea of guilty. If one is looking at the figure undiscounted for the plea, the plea does not enter into consideration.
Matters I consider that place Freyssinet at a lower level of culpability are:
1. Karimbla had responsibility for the whole site;
2. Karimbla's health and safety duty extended to all persons on site thereby putting an onerous duty on it in respect of hundreds of workers;
3. Karimbla erected the railing without the mid-rail and thereby created the risk. Karimbla thereby had actual knowledge of the circumstances that created the risk;
4. there were three access stairways to the basement and Karimbla directed all workers to use the one where the risk was and the incident occurred;
5. Karimbla carried out full site inspections every day, yet still missed the hazard - SafeWork NSW v Karimbla Constructions Services NSW Pty Ltd [2017] NSWDC 68 [26];
6. Karimbla appears to have operated in ignorance of the requirements of the Standard. The Standard required an intermediate or mid-rail. Mr Sykes, Meriton's national safety manager, accepted that at Karimbla's sentence hearing [8] . Yet, in these proceedings, he stated that before the incident, he did not see a need for mid-rails [9] ;
7. after the event when directed by SafeWork inspectors to rectify the hand railing, Karimbla did so but in an unsatisfactory way and it had to be rectified yet again.
In other respects, there is little to differentiate the relative culpabilities of Freyssinet and Karimbla.
This material relating to parity is not used as a starting point in fixing penalty, but as a check to determine whether the penalty contemplated should be adjusted - Postigliano v The Queen [10] ; SafeWork NSW v ProjectCorp Australia Pty Limited [11] .
[9]
The penalty
Freyssinet has submitted that no conviction should be recorded and s 239 should be utilised with or without a fine.
The prosecutor has submitted that this course should not be adopted, because in the circumstances of the case there should be a conviction and fine. It was submitted also that a fine could not be imposed in the absence of a conviction.
I do not think the submission that a fine cannot be imposed in the absence of a conviction is made good. The submission is based, in part, on R v Ingrassia [12] . What that case stands for is that it is contrary to common law principle that a person who has not been convicted may be punished by order of a court, but legislation expressed in sufficiently clear terms may displace that principle - 450D. In that case, the principle was not displaced by the language of the now repealed s 556A of the Crimes Act 1900. The Court noted that s 558 did have language displacing the principle.
The language of the Act, in my view, is sufficient to displace the common law principle.
Section 234 provides,
This Division applies if a court convicts a person, or finds a person guilty (the offender), of an offence against this Act.
The Division applies as Freyssinet has been found guilty of an offence against the Act.
Section 235 provides,
(1) One or more orders may be made under this Division against the offender.
(2) Orders may be made under this Division in addition to any penalty that may be imposed or any other action that may be taken in relation to the offence."
A fine is a penalty that may be imposed in relation to the offence of which Freyssinet has been found guilty.
The statutory condition here relating to the orders that may be made is not spelled out as one that applies to penalties or actions that may be taken on conviction only. That would defeat one half of s 234. The other half of s 234 is that orders may be made under the Division on the finding of guilt, even where there is no conviction.
The literal interpretation of the clause "any penalty that may be imposed" in s 235(2) covers a fine as a fine may be imposed in relation to the offence.
The effect of the prosecutor's submission is that the construction of that clause should be limited by reading it as "any penalty that may be imposed in accordance with law" and then adding that this will not include a fine because a fine may not be imposed in accordance with law in the absence of conviction. That, however, is not the totality of the law. The law is, a fine may not be imposed in the absence of a conviction unless the statute under consideration reveals otherwise. That then brings the argument back to the point of commencement, namely whether the Act reveals otherwise.
Supporting the literal interpretation are:
1. the provision in s 234 making the provisions of the Division applicable where there is a finding of guilt, but no conviction;
2. the provision in s 235(2) providing that orders under the Division may be made in addition to any penalty that may be imposed. The word "any" is of the widest import. The clause in which it appears is unqualified.
The prosecutor's submission also relied on s 95(c)(ii) of the Crimes (Sentencing Procedure) Act. The submission was that provision makes clear that there is no power under a bond to "make any payment, whether in the nature of a fine, compensation or otherwise" as a condition of the bond. If anything, that provision is counter to the prosecutor's submission. The section provides,
A good behaviour bond:
…
(c) may contain such other conditions as are specified in the order by which the bond is imposed, other than conditions requiring the person under bond:
(i) to perform community service work, or
(ii) to make any payment, whether in the nature of a fine, compensation or otherwise.
Were it not for subclause (ii), it may be taken that the section would otherwise permit a fine as a condition of the bond.
I do not think comparison with s 10 of the Crimes (Sentencing Procedure) Act is appropriate. That section is available in this case if the circumstances are appropriate. Section 239 is also available. Section 239 must have work to do beyond what s 10 does. It is not appropriate to limit the scope of s 239 by considerations that apply to s 10.
I turn then to consider whether s 239 should be applied with or without a fine. There is much that can be said in Freyssinet's favour, both as to the level of culpability and matters in mitigation. I have dealt with those.
One matter Freyssinet relies on in seeking to have s 239 apply is the effect of a recorded conviction. Mr Marchese stated in his affidavit,
40 A recorded conviction against Freyssinet in respect of the Incident may prejudice Freyssinet's ability to successfully tender for state and federal government work.
41 If Freyssinet is unable to successfully tender for private and government work, there is a real prospect that it may have to decrease its operational size and workforce.
Paragraph 40 speaks of government work. Paragraph 41 speaks of both private and government work. The concern as to conviction was limited to government work.
Companies like Freyssinet with its attitude to safety are companies that should be encouraged to be in the work place. It would be unfortunate if a recorded conviction had the consequence mentioned by Mr Marchese. However, the evidence does not establish that this will or is likely to happen. The prospect of failing to secure government work could have been established by historical evidence that it has occurred, by standard terms and conditions of tender for government contracts or by evidence of government policy and practice. This observation would be applicable to private contractors also.
The evidence in this case establishes that the risk in respect of which Freyssinet has been found guilty was a risk that existed for about six months. I am mindful that Freyssinet has been found guilty of an offence committed on one day only, being 10 February 2015 and can be sentenced only in respect of that offence. That does not mean that the history of the presence of the risk for a period of six months should be ignored in determining the appropriate sentence. It is one of the relevant surrounding circumstances. Also, Freyssinet's safety system, extensive as it was, failed to include the staircase. The alternative is that the system did include the staircase, but the hazard was missed.
In all the circumstances, I am satisfied that the appropriate penalty is a conviction and fine. Accordingly, Freyssinet is convicted of the offence.
Mr Oketi Felemi provided a victim impact statement which was marked for identification. I think it is appropriate to take it into account. The statement is very brief, but it is apparent that the incident continues to significantly affect Mr Felemi adversely. It is important, however, not to double count. In this regard, the injuries to Mr Felemi have been taken into account as an aggravating factor.
I think the circumstances of this case require the imposition of a fine. Not to impose one would not give due weight to the objective seriousness of the offence constituted by the foreseeable risk, the foreseeability of the consequences in the event of the risk materialising, the readily available simple measure to eliminate the risk and the duty of safety on Freyssinet as employer of its workers, including Mr Felemi. It would also not give due weight to deterrence. I think in all the circumstances, the appropriate fine is $80,000.
[10]
Costs
Freyssinet resists the prosecutor's application for costs. It submits that costs should be awarded in its favour in respect of particular 6(b). Alternatively, it submits that the prosecutor should not have its costs in respect of that particular and also in respect of an abandoned particular relating to the preparation of a safe work method statement [13] .
Freyssinet also submits that costs should be awarded in its favour in respect of costs thrown away by reason of the amendments [14] . It submits that the late amendment of the Summons, during oral submissions, exposes the prosecutor to a costs order for the full hearing. Accordingly, it seeks the costs of the hearing up to 7 September 2017 [15] . Alternatively, it submits that no costs should be awarded to the prosecutor on the basis that its success was attributable only to the late amendments on 7 September 2017 [16] .
The ordinary rule is that costs follow the event. There are circumstances where a different order may be made. One circumstance is where there are multiple issues and a party succeeds on some issues but fails on others. This is especially so where the unsuccessful party succeeds on issues that were dominant or separable. These matters are well established and summarised in Bulga - [220].
The case for a variation of the ordinary rule on the basis that the Summons was amended during the course of oral submissions on 7 September 2017 is not made out. This amendment was sought out of an abundance of caution.
The content of [6] of the Further Amended Summons was as follows.
The Defendant failed to ensure the health and safety of workers, in particular Mr Felemi, in that it failed to take one or more of the following reasonably practicable measures to eliminate (or, alternatively, minimise if not reasonably practicable to eliminate) the risks to health and safety of workers including the risk of falling from height by:
a. Instructing workers not to access stairways and steps at the site unless they were fitted with adequate edge protection;
(i) and in particular instructing workers, including Mr Felemi, not to use the stairway until an intermediate rail was fitted, or until other suitable guarding was installed that removed or minimised the risk; and/or
b. Ensuring that all stairways and steps at the site were fitted with guardrailing which, if of post and rail construction, either comprised a top rail with one or more intermediate rails spaced such t the lowest rail and any toeboard, where fitted, did not exceed 450mm or, alternatively with other means such as guard railing of welded mesh construction, which in any case complied the requirements of Australian Standard AS 1657-2013 "Fixed Platforms, walkways, stairways and ladders - Design, construction and installation"; and/or
c. Identifying that the stairway was not fitted with adequate guard-railing and requesting Karimbla install adequate guard-railing such as an intermediate rail on the landings, or other suitable guarding that would remove or minimise the risk.
The amendments that were sought and made were those underlined.
The purpose of the amendment was to make it clear that the prosecutor was relying on the three particulars a., b. and c. as alternatives. This was not an amendment that affected the substance of the case or conduct of the case in any way.
Freyssinet's submission that there should be any variation to the ordinary rule in respect of the amendment is rejected.
The prosecutor failed in respect of particular b. and Freyssinet seeks a variation from the ordinary rule in respect of that. Again, I think that submission should be rejected.
There are, for present practical purposes, two aspects to particular b. One is the assertion that Freyssinet had an obligation in respect of "all stairways and steps at the site". The other is the content of the Australian Standard. Freyssinet succeeded in respect of the first aspect. That aspect involved very little time.
Despite Freyssinet's success on the first aspect of particular b, the second aspect remained relevant and live. The content of the Standard and Freyssinet's state of knowledge (actual or constructive) of the Standard were relevant in relation to the stairwell from which Mr Felemi fell.
Freyssinet's success on particular b. was limited to a part of that particular and a part of the case that was so limited in the time occupied that it does not warrant a variation to the ordinary rule.
That leaves Freyssinet's submission in relation to the first amendment. The Summons as originally framed alleged breach, in short, in failing to have:
1. a safe work method statement;
2. in failing to instruct workers not to use stairways without adequate edge protection;
3. in not ensuring that all stairways had guard railing with identified properties that complied with the Australian Standard.
The Summons was amended on 8 February 2017. In short, it dropped particular a. above. It kept particular b. above with some added material. It kept particular c. above. It added a particular which, in short, was that Freyssinet should have identified the deficiency and requested Karimbla to fix it.
The only matter that calls for consideration here is the dropping of the particular relating to the safe work method statement. In all other respects, with the exception of the amendment made in submissions, the matter proceeded to hearing on the basis of the Summons as amended on 8 February 2017.
It seems to me the only area where Freyssinet may have cause for complaint is in respect of costs wasted in preparing to defend the proceedings on the safe work method statement count. I am in no position to know to what extent Freyssinet was engaged in such preparatory work or to what extent any of such work was fruitless. It is appropriate that Freyssinet recover any costs wasted. It cannot be measured and will be covered by an order in general terms.
[11]
orders
The defendant is convicted. The defendant is fined the sum of $80,000 with a moiety to the prosecutor.
The prosecutor is to pay the defendant's costs wasted by reason of the inclusion in the Summons and later withdrawal of the allegation relating to safe work method statement. Otherwise the defendant is to pay the prosecutor's costs.
The orders for costs are that the party liable is to pay such costs as may be agreed or otherwise assessed.
[12]
addendum OF 10 may 2018
Pursuant to the slip rule the orders made in paragraph 79 of the judgment of this Court on 29 March 2018 are amended as follows:
The defendant is to pay the prosecutor's costs (excluding the prosecutor's costs attributable to the inclusion in the summons and later withdrawal of the allegation relating to the safe work method statement), less any sum attributable to defendant's costs attributable to the withdrawn allegation.
[13]
Endnotes
Day 4, 30 March 2017, T64.16
[2017] NSWCCA 96
Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
[78] of Freyssinet's written submissions
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Decision last updated: 10 May 2018