SafeWork NSW v Investa Asset Management Pty Ltd

District Court of NSW|2019-07-29

Judgment

Investa Asset Management Pty Limited (the offender) appears for sentence after it was found guilty after trial of an offence contrary to section 32 Work Health and Safety Act 2011 (the Act).
The Court's reasons for the finding of guilt are set out in its decision SafeWork NSW v Investa Asset Management Pty Ltd [2019] NSWDC 76 (the verdict judgment).
The maximum penalty for the offence is a fine of $1.5 million.

Facts

The matters set out in [5] to [61] below are the findings of fact made in the verdict judgment.
The offender managed a building at 20 Bridge Street, Sydney (the building) on behalf of its owners. A building management unit (BMU) was part of the plant stored and used at the building. A BMU is a suspended working platform used to provide access to the façade of a building for tasks such as maintenance and window cleaning. On 20 October 2015 the BMU was being used by Mr Wilson and Mr Castellanos to clean windows, when it fell about 12 storeys onto the awning of the building. Both Mr Wilson and Mr Castellanos were seriously injured. The BMU fell because the machined stud (stud) connecting the cradle to the winch on the right hand side broke as a result of fatigue. The instantaneous transfer of weight to the left hand side of the BMU caused the stud connecting the cradle to the winch on the left hand side to break also. The BMU was overdue for a 10 year major inspection in accordance with AS 2550.13-1997 and AS 2550.1-2011 (major inspection). The defendant was advised of the need for the major inspection on 2 April 2015 by the BMU service provider, but it had not been arranged or undertaken prior to the incident.

Mr King, Mr Vargas and Mr Pallawella were in the TST. The TST was responsible for undertaking projects relating to improving processes used to manage properties in the defendant's portfolio and to run tenders and prepare due diligence information on properties that were to be sold. Mr King was the General Manager of the TST and Mr Vargas and Mr Pallawella reported to him. Mr King had trade qualifications as a builder and an electrician. Mr McCallan, from time to time at meetings and over the telephone, had discussions with a number of employees of the defendant and in particular Mr Vargas about BMUs at various buildings that demonstrated that those employees had an understanding of the functions performed by a BMU and the maintenance that had to be carried out on them.
The 31 March email was drafted by the TST. The SOW was drafted by the TST with input from Shaun Condon, the General Manager of Environment and Safety of the defendant. Mr Hickey had some spare capacity because he was only managing a few buildings at the time and was asked to assist the TST by sending emails attaching SOWs and SOWPE templates to a number of service providers in relation to various plant and equipment.
The email group 'DL-Facilities Management NSW', as at 31 March 2015, included the email addresses of Mr O'Neill and Mr Taiyab.
The 31 March email was sent out to Mr McCallan at the same time as other Project Dragon sites, notwithstanding that the building was not for sale as part of Project Dragon. The process was later repeated for the remainder of properties managed by the defendant (ie, non-Project Dragon sites) at a later time in an operation known as 'Project SOWPE'.
On 2 April 2015 Mr McCallan sent a reply to the 31 March email, to Mr Hickey and Mr Vargas, attaching 12 completed SOWPE templates, including the SOWPE template for the building completed as follows (responses in bold): Yes/No Equipment Type Standard Frequency Last done Next due Cost estimate 2015 No Major Inspection AS2550.3 & 13 10-yearly N/A Now $1,710 + gst

On 2 April 2015 both Mr Hickey and Mr Vargas acknowledged receipt of Mr McCallan's reply. Mr Hickey did not look at the content of the template returned by Mr McCallan. It was Mr Vargas' responsibility to save the completed schedule to the K drive on the defendant's computer system.
BMUS did not send the completed template to Mr O'Neill or Mr Taiyab. BMUS took no other steps to prompt the defendant to have the major inspection carried out before the incident.
On 9 September 2014 BMUS issued a certificate that the BMU was safe for use. The certificate included the words: It is our considered opinion that the BMU described below is safe for use. Provided that the BMU is used and maintained as per the Australian Standard AS2550.13 the WorkCover of NSW Regulations Requirements and the OH&S Regulation 2001.
BMUS carried out further services on the BMU on 22 September 2014, 24 February 2015, 18 May 2015 and 19 August 2015. None of the service reports completed after 2 April 2015 referred to the need for the major inspection to be carried out. Mr McCallan did not tell the service technicians who attended the building to service the BMU that he had advised the defendant that the major inspection was due and they did not have any independent knowledge that the major inspection was due.
On 19 October 2015, Peter Zirkzee, a service technician from BMUS, attended the building, setup the BMU for use and inducted the window cleaners, Mr Wilson and Mr Castellanos. The window cleaners performed a number of drops. At the end of their day's work, the window cleaners left the BMU on the first floor awning of the building and used a ladder to get to the ground.
On 20 October 2015 the window cleaners resumed their work. At about 11.15am when Mr Wilson and Mr Castellanos were cleaning the windows on the 12th floor of the building, the BMU suddenly fell. The stud in the right hand connection box failed (broke). This caused a sudden weight transfer to the stud in the left hand connection box causing it to fail also. The BMU fell about 25-30m in an uncontrolled manner and hit the first floor awning. Mr Wilson was in the BMU when it hit the awning. Mr Castellanos rolled out of the BMU and went over the awning. He was hanging by his safety harness, face down and unconscious. Both workers sustained serious injuries and required hospitalisation.
On 11 December 2015 the BMU was inspected by Dr Robert Casey, a Mechanical Engineering Consultant retained by the prosecutor.
Dr Casey examined the right hand stud concluding that it had failed as a result of fatigue. Fatigue is a stepwise crack propagation caused by bending of metal. Each time the metal is bent the crack progresses further until the material that remains cannot support the applied load causing an overload failure. Each time the crack progresses a striation is left on the surface of the metal. The right hand stud demonstrated signs of fatigue on both sides that were opposite one another, indicating the stud had been bent one way and then the other (bi-directional bending). The alignment of the upper housing indicated that the stud had bent in a line that was front to back of the cradle. The failed surface had a narrow line of material, about 1mm to 1.5mm wide that had failed in overload. The crack propagated at each side of the stud over time, nearly meeting in the middle, leaving only a thin band of material to support the weight of the right hand side of the cradle causing an overload failure of the right hand stud.
Dr Casey examined the left hand stud and concluded that it also showed signs of fatigue but to a lesser extent. The fatigue was demonstrated on about 30% of the fracture surface and had commenced only on one side of the stud. The alignment of the start of the fracture in the left hand stud was different to the right hand stud. The remainder of the fracture surface was consistent with failure in overload. It had a helical or spiral appearance that was consistent with objects that fall with a combined action of tension and twisting.
Dr Casey could not observe any sign of defects in the composition of the metal in either stud.
The offender had actual knowledge of the content of the Australian Standards and the requirements of the major inspection. Mr King gave that evidence and it can also be inferred from the content of the 31 March email, the SOW and the SOWPE template. Further, between about 12 March 2015 and 25 April 2015 the defendant was aware that BMUS was conducting major inspections of the BMUs at 126 Phillip Street, Sydney; a building that was managed by the defendant and where it had its head office.
The requirements of a major inspection make it clear that the major inspection is intended to identify defects arising from the use of the BMU that could not be identified by a visual inspection or in the course of a quarterly service. The quarterly and annual inspections specified in the Australian Standards, did not require the stripping down of the BMU which would have included the dismantling of the LSD within the connection box to allow visual inspection, replacement or NDT of the studs. The major inspection required the dismantling of the LSD within the connection box.
The offender knew or ought to have known that the purpose of the major inspection was to identify defects in critical components of a BMU that could cause a catastrophic failure and that conducting a major inspection in accordance with the Australian Standard was a way of eliminating or minimising that risk.
The offender relied on BMUS as a specialist contractor for servicing, repairing, setting up and packing away the BMU as well as inducting workers on how to use it. The offender did not have the expertise to do any of those things.
Whilst it was necessary for the defendant to rely on BMUS for its technical expertise in servicing and maintaining the BMU, such expertise was unnecessary to determine if the BMU had undergone a major inspection.
The manufacturer of the BMU was identified on the compliance plate attached to the BMU. The defendant could have made enquiries of the manufacturer as to the age of the BMU and whether the manufacturer had service records relating to it. When the defendant asked BMUS if a major inspection had been undertaken, it was informed that it was due.
BMUS provided service reports to the defendant each time it attended the building to inspect, repair, set-up, induct workers and pack away the BMU. Any required repairs to the BMU were noted on the service report and a copy was given to the Facilities Manager and the office of BMUS. This was done to ensure that the required repairs were quoted for, approved and undertaken. BMUS did not raise in any of the service reports that the major inspection was required or that the BMU was not safe to use. The service reports were filed by the defendant on its computer system. The content of the service reports was also the topic of discussions on several occasions between Mr Taiyab and Mr McCallan or the service technicians from BMUS.
The defendant operated a computer based safety system known as 'SASSI'. The system required a contractor to electronically sign into the premises and to fill out details of the work they were doing and the Safe Work Method Statement (SWMS) they were using. In addition, to use or test the BMU, workers were required to be granted a Working at Heights Permit (WAHP). The issue of a WAHP required the completion of a form by the contractor and the verification of its content by Mr Taiyab. The WAHP identified the SWMS that the workers were using and verified that they had been trained in the relevant system of work.
At the completion of the work the contractors were required to electronically sign out. The system provided the opportunity for contractors to report anything unusual or safety related that came to their attention during the course of being on site at the building.
Mr McCallan did not tell any of the service technicians of BMUS that he had advised Mr Vargas on 2 April 2015 that the BMU was due for a major inspection. The service technicians attended to work involving the BMU on a number of occasions between 2 April 2015 and 20 October 2015.
BMUS supplied annual certificates that the BMU was safe for use which were used to register the BMU with the regulator, including one dated 9 September 2014. However, the certificate was clear on its face that it was subject to the proviso that the BMU had been maintained in accordance with the Australian Standard AS2550.13. The BMU had not been so maintained because it had not undergone a major inspection 10 years after the date on which it had been commissioned.
The system employed by the defendant to ensure the safe use of the BMU, whilst comprehensive, did not adequately deal with the need to perform major inspections. When the defendant did ask BMUS if a major inspection was due, the information received by it was not acted on.
It was a simple matter for Mr Vargas to inform Mr O'Neill or Mr Taiyab of the need for the BMU to undergo the major inspection. It was important safety information that Mr O'Neill expected would have been passed on. The information could have been simply and swiftly provided by email.
Mr King gave evidence that the process designed by him and approved by his superiors to collect the information in the SOWPE template, envisaged the involvement of the Facilities Managers and/or the Senior Facilities Managers to liaise with the service provider to collect the information required to populate the template. Mr King's evidence was that this requirement had been notified to the Facilities Managers in a series of forums at which he spoke to them. That aspect of the process was important because it incorporated the knowledge of the Facilities Managers into the process, who were the employees of the defendant with actual knowledge of the present cost of the services that were being quoted for. In other words, the input of the Facilities Managers was necessary to ensure that the quotation being provided for future services was accurate and, for example, did not involve a unilateral price hike by the supplier, before the information collected was stored in the defendant's computer system. The implementation of the system to involve the Facilities Managers in the process of collection of the information and the failure of the system to achieve that aim was conduct of Mr King, the TST and also conduct of the defendant.
The evidence of Mr O'Neill and Mr Taiyab was that they did not involve themselves in the process because they did not know they had to. However, they had been sent the 31 March email in which Mr Hickey had asked BMUS when the next major inspection for the BMU was due. The email sought important safety information about the BMU that they were responsible for. It would have been a simple matter for either Mr O'Neill or Mr Taiyab to find out the content of Mr McCallan's reply from Mr Hickey, Mr Vargas or Mr McCallan.
It was reasonably foreseeable that the defendant would be informed of the need for a 10 year inspection by the return of the completed SOWPE template. The template asked the question when was the major inspection 'Next Due'? It was reasonably foreseeable that a possible and necessary response to that question was that it was due immediately. It followed that the defendant would be on notice of the requirement for a major inspection to be done and that information would need to be dealt with. The defendant's system to deal with that information failed to operate to pass it onto Mr O'Neill and/or Mr Taiyab.
The Australian Standard provided for the requirements of the major inspection to be undertaken by a competent person as a way to deal with the risk arising from such defects. There were a number of recognised firms that could carry out a major inspection, including BMUS, BMUA and E W Cox. The evidence was that BMUS used a suitably qualified subcontractor to carry out the major inspections of the BMUs at 126 Phillip Street. BMUS was the incumbent service provider for the BMU and it is likely that had the defendant arranged a major inspection of the BMU that it would have asked BMUS to do it.
There was no cost to the defendant associated with the arrangement of the major inspection of the BMU. That was an integral part of the service provided by the defendant as the building manager. The cost of the major inspection itself would have been borne by the owner of the building. It was also part of the service provided by the defendant to obtain competitive quotes for that type of work from reputable service providers.
If it was necessary to take the BMU out of service until the major inspection was completed, this would not have caused any inconvenience to the offender or the building owner, apart from delaying the window cleaning until the BMU had undergone a major inspection.

Evidence of Shaun Condon

The offender relied on an affidavit of Shaun Yuahan Condon affirmed 18 June 2019. Mr Condon is the General Manager Environment and Safety of the offender. Mr Condon was present in Court during the sentence proceedings but not required for cross-examination. The effect of Mr Condon's evidence can be summarised as follows.
Mr Condon deposed that at the time of the incident, Investa believed that BMUS was contractually obliged to advise it of the need for a major inspection. The offender independently had a number of internal processes in place to ensure that the BMU was safe to operate including an alert system to ensure the BMU was registered with SafeWork NSW, a hazard register, an external audit programme and a system that prompted contractors to record any issues with equipment after service (SASSI).
Following the incident the offender issued a stop work order on all of its BMUs in Australia and appointed an independent expert, IntegraLift, to ensure that the inspections on all BMUs under its control were up-to-date. The offender introduced a number of updated policies and procedures, created a new Scope of Works for the maintenance of BMUs, hired an independent expert to independently review all ongoing BMU maintenance reporting and introduced a range of management controls to ensure the proper functioning of the system.
After the incident on 20 October 2015 Mr Condon attended the site and stayed till the early morning of the following day to liaise with SafeWork and Emergency Services.
Mr Condon deposed that the offender relied on BMUS as an expert independent contractor in the servicing and setting up of the BMU. BMUS did not tell the Facilities Manager of the need for the major inspection of the BMU.
In or about July 2014 the offender requested the assistance of Cox Gomyl to draft a Scope of Works for BMU Maintenance because the offender did not believe it had the required expertise to do so. The intention behind that process was to make the service reporting relating to the BMUs more transparent and easier to understand. The 2015 Scope of Works was ultimately issued to BMUS.
BMUS had a history of taking out BMUs at other sites managed by the offender. For example, in April 2015 the BMU at 201 Kent Street had been tagged out.
The offender had in place a Risk and Sustainability Committee (RSC) which was a sub-committee of the Board of the head entity in the Investa Group. The RSC met four times per year. Its role included the review of quarterly safety performance across the business, commentary and corrective actions relating to serious incidents, review of audit findings and any resultant changes to the Safety Health Environment Management System.
The offender used a risk management platform known as RAP. It recorded inspections, hazard identification, risk assessment and control processes. Records of registrations and certifications in respect of each property, incident reporting and escalation to all levels of management and tracking of safety audit findings and completion of associated actions. The Facilities Manager and Senior Facilities Manager received a monthly heatmap report generated by the system to identify matters that were due for review. The system contained internal certification that required the offender to remain up-to-date with the requirements of the system or else it record an expiry of the certification.
The offender also had regular external audits of its safety systems carried out at the time of the incident by the National Safety Council of Australia (NSCA), now called Greencap. It carried out six monthly audits and physical inspections of all sites within the Investa portfolio. These audits included a review of the service reports for the BMU. Between 1 April 2014 and the day of the incident, three external audits were conducted by NSCA at the premises. Each of the audit reports staged that the BMU service reports had been cited and were current at the time of each inspection.
The offender conducted random compliance checks to ensure the contractors were completing and complying with its requirements.
The offender had in place an annual review of the Safety Health and Environment Management Systems. The review was conducted by a consultation group comprising of senior members of staff, the Facility Management Departments and the Safety Department. Those reviews included a review of changes to work health and safety legislation. The offender also maintained a subscription to OHS alerts and received notifications of articles that were published through that system in response to SafeWork notices that were issued.

Following the Incident

After the incident, Investa made regular enquiries about the welfare of the injured workers through Nicholas Mather of UltraClean. The offender arranged for its counselling service to contact staff who were directly involved in the incident or who were present or attended the scene of the incident.
Investa issued a stop work order on all BMUs until the state of inspection of each BMU could be independently verified by an independent consultant. It reformed its safety system introducing a new online system to manage inspection dates, installation dates, part replacements and lock-outs for BMUs. The offender expanded the scope of its auditing system to include these matters and institute regular reviews of BMU maintenance by senior management at "monthly check point meetings".
The stop work remained in effect until IntegraLift had confirmed that all inspections and maintenance for each BMU had been completed, that the operating manuals were current and reflected any physical modifications and improvements to each BMU and that all relevant registrations were current. In addition, IntegraLift was asked to review the standard of maintenance and quality of services being provided by the BMU maintenance contractors nationally, to advise on the development of new BMU maintenance Scope of Works and contract structures, to make recommendations with regard to service providers and to review and further develop the offender's procedures, control measures and oversight processes involved with the inspection testing maintenance and operation of BMUs.
IntegraLift has been incorporated into the management framework with responsibility for the servicing and certification of BMUs. This resulted in an update of the offender's safety systems in so far as they related to BMUs. This resulted in consequent changes to all the processes in place prior to the incident, which I will not recount. As a result, expenditure on the maintenance of BMUs has increased by approximately 200%. These funds have been directed in improving the overall standard of BMU maintenance and engaging independent consultants who oversee annual and major inspections and improving the offender's internal systems and controls to ensure all maintenance is properly carried out on BMUs in compliance with the standards.
The offender has found that BMU service providers, since the incident, have a more proactive approach to repairs and safety issues. This has led to the recommendation of more repair work being necessary and an increased incidence of BMUs being tagged out in response to safety issues.
The offender co-operated with the SafeWork NSW investigation.
As a result of the incident, the offender was the subject of adverse publicity contained in a number of newspaper articles referred to by Mr Condon. I note that on my review of the articles exhibited to the affidavit of Mr Condon, that the offender was not specifically identified, except in an industry publication published in May 2019 after the verdict judgment had been handed down. In addition, the offender believes that it is likely to suffer some adverse consequences in tendering for government work as a result of a conviction for an offence under the Act.

Evidence of Osvaldo Kirszman

The offender also relied on an affidavit of Osvaldo Silvio Kirszman affirmed 18 June 2019. Mr Kirszman is a Consulting Engineer and the Managing Director of IntegraLift. Mr Kirszman's affidavit annexed a statement dated 17 June 2019. The effect of Mr Kirszman's evidence on sentence can be summarised as follows.
IntegraLift was first asked to advise the offender on its BMU maintenance systems after the incident. IntegraLift then conducted a review of all the service records for all of the BMUs on Investa properties, devised a new management system which captured every aspect of maintaining BMUs in compliance with the Australian Standard, commenced to conduct annual and major inspections of BMUs on Investa properties and devised for Investa BMU service providers a new technical Scope of Works specifying a minimum set of maintenance tasks to be performed at each service.
Mr Kirszman was also aware that the offender had implemented regular training for its facilities managers and senior facilities managers in BMU safety and maintenance.
The offender has introduced a BMU management system at considerable cost, which continues to be reviewed. IntegraLift attends quarterly meetings with the offender's BMU service providers, facilities managers and senior facilities managers for every building operating a BMU.
To Mr Kirszman's observation, the knowledge and practices of property owners and managers as to the servicing and maintenance of BMUs has substantially improved after the incident, predominantly as a result of the incident. Mr Kirszman has noted a profound change in the attitude of those stakeholders to BMU safety. They are now more aware of their safety obligations relating to BMUs and prepared to take measures to ensure that they are complying with them. This has included an awareness of BMUs with the potential for single point of failure. Mr Kirszman deposes that within weeks of the incident, every existing client of IntegraLift and some new clients had contacted it about the incident expressing concerning about their own BMUs.
Prior to the incident, property managers and owners had a laid back approach to maintenance of their BMUs. Inspections were often delayed or not conducted and repairs were not followed up. After the incident, Mr Kirszman's experience is that owners and managers have been prepared to allocate significantly more funds to comply with BMU maintenance and inspection processes. Prior to the incident, IntegraLift had never been asked to carry out a major inspection but has, after the incident, been contracted to carry out 70 major inspections.
Mr Kirszman has also had discussions with other BMU service providers since the incident. He believes that the incident has empowered BMU service providers to be more assertive about maintenance requirements and that they have shown a greater willingness to tag out BMUs that they deem to be unsafe.
It is Mr Kirszman's evidence that there has been a significant change in the attitude of relevant stakeholders towards BMU safety. Mr Kirszman deposes that more permanent policy changes by the regulator are needed to achieve and/or continue this, such as regularly reminding building owners and managers of their obligations with respect to inspections and developing safeguards to ensure compliance. Mr Kirszman recommends that there be included on the registration of plant renewal form, a check box requiring building owners and/or managers to certify that the BMU has had a major inspection as a pre-requisite to the registration being granted.

Consideration

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

Objective Seriousness

The offence is one of some objective gravity.
The risk was reasonably foreseeable and ought to have been known to the offender. The offender had actual knowledge of the Australian Standard and the requirement for a major inspection. The offender knew or ought to have known that the purpose of the major inspection was to identify defects in the critical components of a BMU that could cause a catastrophic failure of it.
The likelihood of the risk that critical components of the BMU could fail was low to moderate. The risk increased over time. The longer the BMU was overdue for a major inspection, the greater the likelihood of the risk occurring. At the time when the risk came home, the offender knew that the major inspection was required, and in fact overdue.
The steps that could have been taken to eliminate the risk were simple and could have been undertaken at no cost to the offender.
The offender had significant safety systems in place, intended to ensure the health and safety of users of the BMU. The offender ensured that the BMU was serviced quarterly and certified fit for use annually. It required the operators of the BMU to be inducted by appropriately qualified persons from BMUS. It arranged for the BMU to be set up and packed away by BMUS. It required the BMUS technicians and the cleaning contractors to sign into its SASSI system, to ensure that they were using a SWMS and that they had appropriate training. The offender relied on an appropriately qualified independent contractor in BMUS to undertake tasks which its employees were not qualified to do. The offender's safety systems were independently audited at regular intervals, to ensure compliance with its requirement. The offender's system in relation to the operation of the BMU was deficient in that it failed to identify that the BMU was due for a major inspection.
As part of the due diligence exercises involved in Project Dragon and Project SOWPE, the offender sought to contractually bind BMUS to inform it of the need for a major inspection. For the reasons I gave in the verdict judgment as a matter of contract law, those attempts were ineffectual. I accept that the offender and BMUS may have proceeded on the assumption that BMUS would advise the offender of the need for a major inspection. However, that is not particularly mitigating because the offender was not entitled to rely on BMUS to inform it of the need for a major inspection, even if BMUS had been contractually bound to do so, and when the offender advised by BMUS that the major inspection was due, it did not act on that advice.
The degree of harm that could result was significant. It included a risk of death for any workers using the BMU and for anyone on the street below it.
The injuries sustained by Mr Wilson and Mr Castellanos were serious and have left them both with permanent disability.
I have had regard to the maximum penalty for the offence.

Deterrence

The penalty imposed in relation to the offences must provide for general deterrence. PCBUs must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large businesses will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180].
There is some need for specific deterrence because the offender continues to have control over a number of workplaces where it owes various duties under the Act, but it is reduced for the reasons that follow. At the time of the incident the offender had in place an extensive and comprehensive safety system that was insufficient to respond to the risk in this case, but was nevertheless a thorough and genuine attempt to comply with its obligations under the Act. The offender has responded to the incident in an exemplary and extensive way. The offender has introduced systems that have significantly changed the way it considers and deals with BMU maintenance. Those systems are multi-layered and involve appropriate fail safes and ongoing review mechanisms.

Aggravating Factors

The injury, harm and loss caused by the section 32 offences was substantial: section 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. For the reasons set out in [150] to [192] of the verdict judgment I was satisfied beyond reasonable doubt that had a major inspection have been carried out that the cracking in the right hand stud would have been observable to the naked eye (in the 18 months prior to the incident) and that the studs would have been replaced with a new part, irrespective of their condition and without subjecting them to NDT. I am satisfied beyond reasonable doubt that there was a causal connection between the incident that occurred and the offender's failure to have the major inspection undertaken.
In order for the aggravating factor to be established, I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26]. The offence does not require an injury to be sustained but only the creation of a risk and the infliction of serious injury to the 2 workers is sufficient to satisfy the aggravating factor.
The Court received Victim Impact Statements (VIS) from both Mr Wilson and Mr Castellanos. The offender did not challenge or call into question the VIS and it is appropriate to take them into account in establishing the aggravating factor: R v Tuala [2015] NSWCCA 8.
Mr Wilson suffered bleeding on the brain and was placed in a medically induced coma. He suffered traumatic amnesia and has experienced memory loss and mood changes. He has had a shoulder reconstruction that has left him with considerable use limitations of his right and shoulder. Mr Wilson suffered a broken jaw and broken teeth requiring more than 30 dental visits. His right leg was broken and required internal fixation. He suffered broken ribs, a punctured lung, internal injuries and a right wrist injury. Mr Wilson stated that his life had been seriously affected. He can no longer engage in scuba diving, surfing or swimming. His employment prospects at age 60 have been seriously limited. There is a risk that Mr Wilson may suffer seizures in the future and he is concerned about getting cancer from the extended radiation treatments that the has had to his hands. The incident has also had a significant impact on Mr Wilson's wife. Mr Wilson was present in Court on the sentence of BMUS and I had the opportunity to examine the significant scarring on his forehead and right shoulder.
Mr Castellanos describes experiencing spinal cord damage, severe back pain, humiliation and depression. He has suffered altered sensation below his waist with consequent difficulties in a number of bodily functions. I will not set out the matters he stated in the VIS to save him further embarrassment, but I consider those matters to be substantial and life changing. The incident has placed his family under considerable financial and emotional strain. He has enrolled in TAFE to improve his English skills, with the hope of retraining to find alternative employment, as he is no longer fit for his pre-injury duties.

Mitigating Factors

The offender does not have any previous convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999.
The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender took a series of steps after the incident to ensure that it could not be repeated. Those steps were comprehensive and timely.
The offender co-operated with the Safe Work investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
The offender conducted the trial in a manner that reflected a willingness to facilitate the course of justice: R v Thangavelautham [2016] NSWCCA 141 at [58] per Bathurst CJ. The offender conducted the hearing in a way that saved considerable Court time by making appropriate admissions, restricting the issues to be decided, allowing witnesses to give evidence-in-chief by tender of their statement, not requiring a considerable amount of witnesses for cross-examination, allowing the expert witnesses to give evidence concurrently and making a number of its employees available for conferences with counsel for the prosecutor. In the end, a trial with a three week estimate was completed within seven days of hearing time.

Parity

BMUS pleaded guilty to an offence under section 32 of the Act. It was fined the sum of $300,000 taking into account a 25% discount for the plea of guilty.
I have had regard to the parity principle: Green v The Queen (2011) 244 CLR 462 at [28].
There are a number of factors on which the relative culpability of BMUS and the offender can be differentiated. First, the offender was a considerably larger organisation than BMUS, but it did not have expertise in BMU maintenance that BMUS did. The offender relied on BMUS' expertise and it was appropriate to do so. The offender had a far superior safety system in place but ultimately BMUS and the offender were guilty of similar conduct, in that they both had knowledge that a major inspection of the BMU was due, but neither took steps to ensure that the major inspection took place. BMUS' superior expertise included that it ought to have known of the fact that the studs were critical components in the construction of the BMU and thereby should have had a far greater understanding of the magnitude of the risk. In my view, each of BMUS and the offender had considerable degree of control over the BMU itself. Whilst BMUS had the opportunity to have access to the BMU, that access was controlled by the offender.
This is a case that calls for parity of the sentences imposed, except as to the imposition of the adverse publicity order, which I will deal with below.

Adverse Publicity Order

A court may make any of the other orders provided for by Division 2 of Part 13 of the Act, in addition to any other penalty imposed, if the court finds a person guilty or convicts the person of an offence: section 234 and 235 of the Act.
The Court may make an adverse publicity order to publicise the offence, its consequences, the penalty imposed and any related matter: section 236 of the Act.
The prosecutor seeks an adverse publicity order to the effect that the offender be required to publish the notice in Annexure A to this judgment for a period of one month, in three industry publications, namely; Facility Management Magazine, the Facility Management Industry Association of Australia official magazine and INCLEAN Magazine (collectively, the publications).

Evidence of Inspector Walker

The prosecutor relied on a statement of Inspector Samuel Walker in support of the application for an adverse publicity order. Inspector Walker was present in Court on the sentence hearing but was not required for cross-examination. The effect of Inspector Walker's evidence can be summarised as follows.
The prosecutor, in its capacity as the Regulator, has adopted and published various policies identifying the need to reduce serious injuries and fatalities from chosen high impact harms, for example, falls from height. The aim of the Regulator is to reduce the incidence of falls from height to zero.
BMUs and suspended scaffolds (a work platform that is not permanently fixed to the building) are a common method of accessing building facades for the purpose of undertaking maintenance or building work.
On 6 November 2015 SafeWork NSW issued a Safety Alert on BMUs and suspended scaffolds following the incident. The Safety Alert continues to be published on the SafeWork NSW website. The Safety Alert was addressed to owners and users of BMUs and suspended scaffolds of the need to identify critical components of such equipment and to ensure that major inspections were conducted.
As at 29 April 2019 there were 232 BMUs registered with SafeWork NSW.
In the 10 years up to May 2019 there were 42 reported incidents involving BMUs (24) or suspended scaffolds (18). Four out of the 24 incidents involving BMUs resulted in serious injuries being sustained by workers, with six of these incidents involving falls from height in three of which workers were injured. Twelve out of the 24 incidents involved mechanical issues.
Five out of the 18 incidents involving suspended scaffolds were falls from height, including one in which a worker was injured. Two out of the 18 incidents resulted from mechanical issues, including one in which a worker was injured.
The Regulator contends that the adverse publicity order would increase awareness of the need to conduct major inspections amongst owners and users of BMUs as well as building managers with control of BMUs.
The Regulator contends that the publications are the three major industry publications relevant to Facilities Managers who are likely to have management control of BMUs. Each publication has a readership of approximately 20,000 and is available only to subscribers. The relevant publications are available and most often accessed online. The cost of a full page advertisement in one edition of each of the publications amounts to a total cost of $11,500. Facility Management Magazine and INCLEAN Magazine are issued bi-monthly and the Facilities Management Industry Association of Australia official magazine is issued quarterly.

The Offender's Position as to the Adverse Publicity Order

The offender points out that the Regulator published a Safety Alert on 6 November 2015 drawing attention to the need to conduct major inspections on BMUs. The Safety Alert highlighted that the cause of the collapse was the failure between the winch and cradle caused by significant fatigue cracking. I note that the Safety Alert did not name the offender as the building manager.
On 10 December 2015 the Regulator issued a Media Release to similar effect. Again, the Media Release did not mention the identity of the offender.
The Safety Alert was reported twice in a third party Safety Subscription Service, OHS Alert.
The incident was also covered in the mainstream media. A number of examples of those articles was provided in the evidence. The first time the offender's identity was revealed in the mainstream media was in or about May 2019, after it was convicted of the offence.
Mr Kirszman's evidence was to the effect that there has been significant change in the industry as a result of the recognition of the risk posed by the lack of a major inspection of this particular BMU. Building managers and owners of BMUs have contacted Mr Kirszman to conduct major inspections or otherwise to seek his advice. Mr Kirszman gives evidence that there has been a significant change in attitude as to BMU safety.
In short, the offender submits that there has been sufficient publicity about the incident to serve the purpose of informing the relevant stakeholders of the risks posed by a failure to carry out major inspections on equipment such as BMUs or suspended scaffolding.

Determination of the Adverse Publicity Order Issue

The prosecutor's application for an adverse publicity order is specifically targeted towards informing the relevant stakeholders of the risk posed by BMUs that have not undergone a major inspection. The proposed costs of the adverse publicity order is relatively modest.
There has been limited references in the material already published to the identity of the offender.
I am satisfied that the adverse publicity order is warranted in this case for the following reasons. First, the objects of the Act include protecting workers through the elimination or minimisation of risks arising from work from specified types of substances or plant and securing compliance with the Act through effective and appropriate compliance and enforcement measures. One way of promoting those objects is to publicise how risks can be eliminated and where a risk exists, how the enforcement measures in the Act operate to deal with a non-compliant PCBU.
Second, the purposes of sentencing include deterrence and denunciation of the conduct of the offender. General deterrence cannot be achieved without some publication of the sentencing outcomes for similar offences. The proposed adverse publicity order is specifically targeted and a class of persons who are in a position to commit similar offences, by failing to ensure that plant such as BMUs or suspended scaffolding is maintained in accordance with the Australian Standard. Further, the adverse publicity order will denounce conduct of the offender. This is important in the ordinary way and also to indicate that in a strict liability offence even a comprehensive system needs to be reviewed to ensure that important safety measures do not slip through the cracks.
Third, whilst there may have been some publication of the circumstances of the incident, the message bears repeating. In addition, the adverse publication order serves to publicise the circumstances of the offence and its consequences, which is different information to what has already been disseminated.

Costs

On 25 June 2018 I reserved the costs of the interlocutory judgment contained in SafeWork NSW v Investa Asset Management Pty Limited [2018] NSWDC 173. The interlocutory judgment related to the vacation of an earlier hearing date because of the unavailability of the defence expert and due to the state of the brief of evidence. In the interlocutory judgment I found that it was reasonable to vacate the hearing date on both grounds. However, the case could not have proceeded by reference to the state of the brief of evidence alone. The interlocutory orders sought were resisted by the prosecution. In my view the defendant was wholly successful in the interlocutory application and should have its costs relating to the interlocutory application. I note that there will be some costs of the prosecution now payable, by reference to the preparation of witness statements that were ordered in the interlocutory judgment.

Penalty

The offender is convicted.
I have taken into account the VIS.
I impose a fine of $400,000.
I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
The offender must publish the Notice set out in Annexure "A" by causing it to be published on or before 19 September 2019, or the first edition of the relevant publication after that date, in one edition of each of: 1. Facility Management Magazine; 2. Facility Perspectives; 3. INCLEAN Magazine.
The Notice must: 1. be of a size no less than a full page in the Magazine or at least 28 cm x 5 columns in size; 2. use a minimum type size of 12 point Times New Roman or equivalent; and 3. be in full colour.
The offender must publish the Notice by causing it to be published for a period of one month on or before 19 September 2019 on all the websites for: 1. Facility Management Magazine; 2. Facility Perspectives; 3. INCLEAN Magazine.
The Notice on the websites must be viewable by clicking through a tile or icon (the Tile) located in a central position of the first page accessed on each of the websites. The Tile must contain the words "IMPORTANT PUBLIC NOTICE ORDERED BY THE DISTRICT COURT OF NSW" in capital letters and a minimum type size of 16 point Times New Roman or equivalent and predominantly in red on a contrasting background. The Notice, when accessed through the Tile, must occupy the entire webpage displayed.
The offender is to notify the prosecutor on or before 5pm on 19 September 2019 with evidence that the adverse publicity order has been complied with.
The offender is to pay the prosecutor's costs of the proceedings as agreed or assessed.
The prosecutor is to pay the offender's costs of the interlocutory application, including any costs thrown away by the adjournment, as agreed or assessed.

ADDENDUM - 5 September 2019

To comply with material deadlines and publication dates in the relevant magazines/websites I will replace 19 September 2019 in [142] and [144] above to the following dates in each respective magazine/website: Facility Management Magazine: Hardcopy and website notices to be published on 21 October 2019. Facility Perspectives: Hardcopy and website notices to be published on 2 December 2019. INCLEAN Magazine: Hardcopy and website notices to be published on 18 November 2019.

Annexure "A" IMPORTANT PUBLIC NOTICE In proceedings brought by SafeWork NSW, the District Court of New South Wales has found that INVESTA ASSET MANAGEMENT PTY LTD contravened its health and safety duty under section 19(1) of the Work Health and Safety Act 2011 (NSW) ("the Act"), as it failed to comply with that duty and thereby exposed workers to a risk of death or serious injury contrary to section 32 of the Act. The offence relates to an incident in October 2015 when two workers were left permanently disabled after a suspended platform or building maintenance unit fell about 30 metres down the facade of a Sydney CBD building. INVESTA ASSET MANAGEMENT PTY LTD was the building manager and arranged for the workers to carry out window cleaning work from the building maintenance unit. When the load bearing bolts of the building maintenance unit suddenly failed, the building maintenance unit fell and crashed into the street awning below. One worker was trapped inside the building maintenance unit while the other worker went over the awning's edge, hanging by his safety harness. The District Court found that INVESTA ASSET MANAGEMENT PTY LTD breached the Act by failing to arrange a 10-year major inspection of the building maintenance unit complying with Australian Standard AS 2550.13-1997 ("AS 2550.13-1997"), thereby exposing the two workers to a risk of death or serious injury in that:
The incident occurred due to extensive fatigue cracking in the load bearing bolts of the building maintenance unit, which arose from the rocking backwards-and-forwards of the building maintenance unit during its normal operation over the preceding 15 years, resulting in the sudden failure without visible warning signs;
The purpose of a 10-year major inspection was to identify cracking in critical components of a building maintenance unit, such as the load bearing bolts, that could not be identified from inspection by the naked eye or routine servicing but which could cause catastrophic failure, and this was known by INVESTA ASSET MANAGEMENT PTY LTD;
The building maintenance unit was overdue for a 10-year major inspection, and the longer it was overdue, the greater the likelihood of a catastrophic incident occurring;
Prior to the incident INVESTA ASSET MANAGEMENT PTY LTD was advised of the need for a 10-year major inspection complying with AS 2550.13-1997 by the building maintenance unit service provider, and failed to ensure that this important safety information was passed on to its facilities manager and senior facilities manager for the building;
There was no cost to INVESTA ASSET MANAGEMENT PTY LTD in arranging a 10-year major inspection as this cost would have been met by the building's owner, and it was part of the facilities manager's job to obtain quotes for this type of inspection work from reputable service providers. The District Court has imposed upon INVESTA ASSET MANAGEMENT PTY LTD:
a conviction for a failure that exposed two workers to a risk of death or serious injury;
a monetary penalty of $400,000 for the offence;
an order that it pay the costs of the proceedings; and
an obligation to publish the details of the order of the Court. This Notice is published and paid for by INVESTA ASSET MANAGEMENT PTY LTD in accordance with the Order of the District Court of New South Wales made on 19.8.19 in the proceedings brought by SafeWork NSW. 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: 06 September 2019

At a glance

Court

Decision date

Source

Judgment (21 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (7)

Cited By (1)