Safework NSW v Kukas Brothers Pty Limited

District Court of NSW|2019-10-17

Solicitors: SafeWork NSW (Prosecutor) Ryan and Payten (Defendant) File Number(s): 2019/27614

Judgment

Kukas Brothers Pty Limited (the offender) has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19(1) of the Work Health and Safety Act 2011 (NSW) (the Act) it failed to comply with that duty and thereby exposed its employee Lee Ryan Gallagher to a risk of death or serious injury contrary to s 32 of the Act.
The maximum penalty for the offence is a fine of $1,500,000.

The incident

At 7.00am on 31 January 2017 Mr Gallagher commenced work at the site. During the morning Mr Gallagher had been carrying out general cleaning up activities in an area known as "Stage 3".
At 4.00pm Mr Gallagher was directed by Robert Kukas to level out some gravel or blue metal aggregate at the bottom of the pit using a shovel. In order to perform the task Mr Gallagher was required to enter and exit the pit. There was no safe or appropriate means of access to and egress from the pit, such as scaffold steps or a ladder securely affixed to the sheet piling. Mr Gallagher entered the pit by means of a free standing aluminium extension ladder positioned against the interior wall of the pit. Mr Ehlefeldt also entered the pit via the ladder. At the same time Mr Kyle was operating the excavator to scoop water out of the pit.
Shortly afterwards Robert Kukas directed Mr Ehlefeldt to assist Mr Rumley with another task. Mr Ehlefeldt exited the pit via the ladder. Mr Ehlefeldt and Mr Rumley removed the ladder from the pit for use in their task, which was to hook up piping to a timber frame located adjacent to the pit.
Mr Gallagher asked Robert Kukas how he would get out of the pit. Robert Kukas directed Mr Kyle to lift Mr Gallagher out of the pit using the excavator when he had finished the task.
After completing his task Mr Gallagher attempted to exit the pit by riding in the bucket of the excavator. Mr Gallagher entered the bucket and was lifted out of the pit. As the bucket was lifted over the steel sheet piling it clipped the sheet piling and jolted, causing Mr Gallagher to be thrown out of the bucket.
As Mr Gallagher fell his left knee came in contact with the metal sheet piling. Mr Gallagher then fell into the pit. Mr Ehlefeldt and Mr Rumley used the ladder to access the pit to attend to Mr Gallagher.

Injuries

Mr Gallagher sustained serious injuries to his left knee and other minor lacerations. 80% of his left patella tendon was lacerated below the knee cap. Mr Gallagher has undergone surgery on his knee and has received ongoing physiotherapy. Mr Gallagher returned to work in or around late April 2019, over two years after the accident.

Systems of work before the incident

Kukas Brothers had a documented WHS Management System for the site. Under the heading "Supervisors & Foreman" the document stated: "Supervisors and Foreman lead by example and promote health and safety at every opportunity".
The WHS Management System provided as follows: 1. All supervisors at the workplace are to ensure so far as is reasonably practicable that all works are conducted in a safe manner by following a risk management process. 2. Appropriate control measures should be implemented, so far as is reasonably practicable by substituting (entirely or partially) the hazard giving rise to the risk with something that lessens the risk, isolating the hazard from any person who is exposed to it or implementing controls (such as engineering controls). 3. The business shall ensure, so far as is reasonably practicable, that a safe working environment is provided and that the environment does not give rise to a safety risk. 4. Kukas Brothers would manage risks associated with a fall by a person from one level to another that is reasonably likely to result in or cause injury to the person. 5. Kukas Brothers would ensure that its obligations as principal contractor were met, so far as was reasonably practicable, by ensuring: 1. all risks associated with works (including excavation works) on the construction site were managed; 2. Safe Work Method Statements (SWMSs) were prepared, complied with, maintained and reviewed and held on site; and 3. management of all risks associated with working at heights in the workplace. 1. Kukas Brothers would ensure, so far as was reasonably practicable that works were undertaken as set out within SWMSs.
As the principal contractor, Kukas Brothers provided inductions to workers who undertook work at the site.
Kukas Brothers also undertook toolbox talks. Prior to the incident, toolbox talks were conducted on 16 September 2016, 30 September 2016, 14 October 2016, 28 October 2016 and 11 November 2016. A toolbox talk was scheduled to take place on 3 February 2017, three days after the incident.
Kukas Brothers had a Safe Work Method Statement (SWMS) for working at heights, which was dated 28 August 2015.
Dynomite had a SWMS for the activity of "Excavator Operation." The SWMS provided the following information: 1. Ensure no persons are working within 15m (or distance specified by manufacturer) during operation of excavator. Place physical barriers and caution signs where required. 2. Work must cease if a person enters designated work zone. 3. Never use equipment or attachments to lift persons.
Mr Kyle (under the name Tom Smith) signed Dynomite's SWMS on 23 September 2016.

Legislation and Guidance Material

Clause 305 of the Work Health and Safety Regulation 2011 (the Regulation) relevantly provides: "305 Management of risks to health and safety associated with excavation work (1) A person conducting a business or undertaking must manage risks to health and safety associated with excavation work, in accordance with Part 3.1. Note. WHS Act - section 19 (see clause 9). (2) The risks this clause applies to include the following: (a) a person falling into an excavation, (b) ... (c) ... (d) ... (3) In complying with subclause (1), the person must have regard to all relevant matters, including the following: (a) the nature of the excavation, (b) the nature of the excavation work, including the range of possible methods of carrying out the work, (c) the means of entry into and exit from the excavation, if applicable."
Kukas Brothers had a duty under Part 3.1 of the Regulation to: 1. identify reasonably foreseeable hazards that could give rise to risks of health and safety; 2. eliminate the risk to health and safety so far as reasonably practicable, and if not reasonably practicable to do so, minimise the risk so far as reasonably practicable by implementing control measures in accordance with the hierarchy of risk control under clause 36 of the Regulation; 3. maintain the implemented control measure so that it remains effective; and 4. review and, if necessary, revise all risk control measures.
Clause 78 of the Regulation relevantly provides: "78 Management of risk of fall (1) A person conducting a business or undertaking at a workplace must manage, in accordance with Part 3.1, risks to health and safety associated with a fall by a person from one level to another that is reasonably likely to cause injury to the person or any other person. (2) Subclause (1) includes the risk of a fall: (a) in or on an elevated workplace from which a person could fall, or (b) in the vicinity of an opening through which a person could fall, or (c) in the vicinity of an edge over which a person could fall, or (d) on a surface through which a person could fall, or (e) in any other place from which a person could fall. (3) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, that any work that involves the risk of a fall to which subclause (1) applies is carried out on the ground or on a solid construction. (4) A person conducting a business or undertaking must provide safe means of access to and exit from: (a) the workplace, and (b) any area within the workplace referred to in subclause (2)."
The SafeWork publication, Excavation Work Code of Practice, July 2015 (Excavation Code) is an approved Code of Practice under s 274 of the Act. The Excavation Code is admissible in proceedings as evidence of whether or not a duty or obligation under the Act has been complied with.
Prior to and at the time of the incident, the Excavation Code was published and was available to Kukas Brothers.
The Excavation Code provides the following relevant information: 1. The first step in the risk management process is to identify the hazards associated with excavation work. Examples of excavation specific hazards include falls from one level to another. 2. The Excavation Code lists "falls" as a common hazard associated with excavation work and provides as an example control measure "ramps, steps or other appropriate access into the excavation". 3. The Excavation Code identifies that a measure for controlling the risk of a fall from one level to another is "securing ladders to trench shields". 4. In respect of manual work the Excavation Code provides: "For some trench excavations manual work, such as trimming by hand, will be required. Trimming can often be accomplished from outside the trench by shovelling or pushing the material with a long handed tool or shovel to the bottom of the excavation where it can be picked up by the excavation plant. Risks associated with falls and working with powered mobile plant must be controlled."
The SafeWork publication, Managing the risks of falls at workplaces, April 2016 (Falls Code) is also an approved Code of Practice under s 274 of the Act and is admissible in proceedings as evidence of whether or not a duty or obligation under the Act has been complied with. The Falls Code outlined a number of ways to control the risk of falls, including a combination of control measures that can minimise a risk of a fall and therefore maintain a safe system of work.
The SafeWork publication, Construction Work Code of Practice, July 2014 (Construction Code) is also an approved Code of Practice under s 274 of the Act and is admissible in proceedings as evidence of whether or not a duty or obligation under the Act has been complied with. The Construction Code relevantly provides: 1. The first step in the risk management process is to identify the hazards associated with construction work. Examples of hazards include the construction workplace itself, including its location, layout, condition and accessibility. 2. The means of entry and exit to and from all areas of the workplace must be safe.
At the time of the incident Kukas Brothers did not comply with the Regulation or the relevant guidance material because: 1. it did not manage the health and safety risks associated with the means of entry into and exit from the pit in accordance with Part 3.1; 2. it failed to provide and maintain a safe means of access for entering and exiting the pit such as a ramp, steps or other appropriate access into the excavation (eg. scaffold steps or a ladder securely affixed to the steel sheet piling); 3. it failed to ensure that Dynomite followed its SWMS; 4. through Robert Kukas it directed Mr Kyle to lift Mr Gallagher out of the pit using an unsafe method, namely travelling in the excavator bucket.

Systems of work following the incident

Following the incident Kukas Brothers engaged a contractor to install scaffold steps to allow a safe means of entering and exiting the pit. The cost of installation of the scaffold steps was $792.
Kukas Brothers directed Robert Kukas to complete a WHS training course. Robert Kukas completed a Certificate IV in WHS over three days in March 2017. The cost of the training course was $1,195.
Kukas Bros also: 1. Purchased additional extension ladders from Bunnings Trade for use at the site. 2. Reviewed and updated its SWMS Working at Heights. 3. Reviewed and updated its WHS Management System. 4. Conducted a toolbox talk on 3 February 2017.

The offender's evidence

Mladen Stan Kukas swore an affidavit on 10 October 2019. He is a director of the offender. He was the Project Manager between July 2014 and March 2019. The company is presently dormant, but has a $700,000 project to complete in 2020. The offender has had no convictions or any other reportable incidents in New South Wales.
However, in 2006/2007 the offender pleaded guilty in Victoria to two breaches of the Occupational Health and Safety Act 2004 (VIC), involving working at heights and the use of scaffolds. No convictions were recorded, but the offender was put on a good behaviour bond and was ordered to pay $5,000 to a community hospital.
The offender sent Robert Kukas for a safety education course, which he completed. The offender reviewed its SWMS for working at heights. The offender purchased extra ladders and a set of scaffold steps.
Through the deponent, the offender accepted full responsibility for the injury to Mr Gallagher. A suitable position was found for him on his return to work. The accident led to the offender reforming and improving its safety practices.
In oral evidence Mr Kukas said that the company paid for Mr Gallagher to retrain and obtain certification as a tower crane operator.

Consideration

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

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].
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].
The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] NSWSC 432 at [61].
The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.
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.
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 para 34, under the heading "Assessment of Risk" said: "The sentencing judge commenced his consideration with the proposition that 'greater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely'. However the truth of that proposition depends upon other considerations including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk, and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors."
Further at para 42 his Honour continued: "The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step‑by‑step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs."
At para 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."
My findings about the offender's level of culpability are based upon the following: 1. The risk was not only foreseeable, but it was foreseen by the offender, as recorded in the offender's documented safety system. 2. The risk was highly likely to occur. It was an accident waiting to happen. Counsel for the offender described the actions of Robert Kukas as "foolish", "reckless", "cavalier" and "extraordinary". That is putting it mildly, particularly as Robert Kukas was a supervisor who was required to "lead by example and promote health and safety at every opportunity". 3. The potential consequences of the risk were very significant, and included death or serious injury. 4. There were simple and easily obtainable means of eliminating or minimising the risk. Some of the equipment could even be bought at a suburban hardware store. 5. The cost of the scaffolding steps and the ladders was low, particularly having regard to the value of the work being done by the offender. 6. The harm done was a serious leg injury to Mr Gallagher, which kept him away from work for over two years. 7. The maximum penalty for the offence is a fine of $1,500,000, which reflects the legislature's view of the seriousness of the offence. 8. The offender did have a well-documented written safety system in place. However it was not followed in two respects: firstly by not having scaffold steps or a secured ladder to get into and out of the pit; and secondly by the extremely unwise direction given by Robert Kukas to lift Mr Gallagher out of the pit in the bucket of the excavator. 9. This case is not one where sufficient protection was not provided to a labourer doing a task. This was a case of a supervisor actually creating a risk and putting a worker in harm's way.
I find that the offender's level of culpability is in the mid range.

Deterrence

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].
The penalty must reflect the need for specific deterrence. The offender is still conducting a business. Its operations involve high risk construction work and the continuing engagement of workers.

Aggravating factors

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

Mitigating factors

The offender has no record of previous convictions: s 21A(3)(e) of the Crimes (Sentencing Procedure) Act 1999.
The offender is otherwise of good character: s 21A(3)(f) of the Crimes (Sentencing Procedure) Act 1999. The steps which the offender took after the incident demonstrate this.
The offender is unlikely to re-offend: s 21A(3)(g) of the Crimes (Sentencing Procedure) Act 1999.
The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has taken positive steps to guard against the risk of an incident such as this ever happening again. The offender has brought its documentation and its procedures and equipment into line with those which, on all the evidence, should have been in place before this accident occurred.
The offender has shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender has provided evidence that it has accepted responsibility for its actions and has acknowledged that the injury to Mr Gallagher was caused by its actions.
The offender entered a plea of guilty: s 21A(3)(k) Crimes (Sentencing Procedure) Act 1999. The court must take into account the fact that the offender has pleaded guilty, when 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. It is appropriate to give the offender a 25% discount for an early plea.
The offender gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. The offender co-operated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to pay a fine

I am required to have regard to s 6 of the Fines Act 1996 (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.
In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 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."
There was no submission about capacity to pay, so this issue does not arise.

Costs

The parties have agreed to an order that the offender is to pay the prosecutor's costs agreed in the amount of $25,000.

Penalty

My orders are: 1. The offender is convicted. 2. The appropriate fine is $160,000 but that will be reduced by 25% to reflect the plea of guilty. 3. Order the offender to pay a fine of $120,000. 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 to pay the prosecutor's costs agreed in the amount of $25,000.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 October 2019

Work Health and Safety Regulation 2011(NSW)

At a glance

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Catchwords

Judgment (18 paragraphs)

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Legislation Cited (5)

Cases Cited (17)