L&N Properties Pty Ltd (the offender) appears for sentence after it pleaded guilty to two offences pursuant to s 32 Work Health and Safety Act 2011 (the Act), in that it failed to ensure:
1. the health and safety of workers at work in the business or undertaking, pursuant to s 19(1) of the Act and thereby exposed Reza Aghakhani to a risk of death or serious injury, and
2. the health and safety of other persons was not put at risk from work carried out as part of the conduct of the business or undertaking, pursuant to s 19(2) of the Act and thereby exposed Emmanuel Savalakis to a risk of death or serious injury.
The maximum penalty for each offence is a fine of $1,766,130.
[2]
Facts
The parties tendered an Agreed Statement of Facts that can be summarised as follows.
The offender conducted a business involved in the construction of residential and commercial buildings. Nicholas Tarquinio was the offender's sole director and secretary.
The offender was the principal contractor engaged to remove and replace external cladding on a five-storey building at St Leonards (the site).
The offender engaged Z-Fellinni Faulkner as site supervisor and leading hand on the site.
The offender subcontracted Think Tank Building Solutions Pty Ltd (Think Tank) to project manage the site, including engaging and managing subcontracted trades to perform work at the site. There was no formal or documented agreement between the offender and Think Tank. Rather, they had a verbal agreement to each retain 50% of any profits made from the project.
Daniel Hafshejani, Think Tank's sole director and secretary, was the project manager of the site and his duties included ensuring that the subcontractors understood the scope of the works and were provided with adequate labour and resources to carry out their work. Mr Hafshejani had 18 years' experience in the construction industry.
Think Tank subcontracted Mr Aghakhani to work as a labourer on the site. He commenced working on the site on 2 October 2020. He had 15 years' experience working as a labourer and held a white card.
Think Tank also engaged Site-Wide Labour Services Pty Ltd (Site-Wide) to supply, install and dismantle scaffolding at the site.
[3]
The Site and Work Conducted
The building was comprised of commercial shops on the ground floor and five levels of residential units and office spaces above. The public entry to the building was accessed through glass doors on the ground level, which opened onto a foyer covered by a glass atrium roof 4.4 metres above the ground.
The offender was required to remove existing non-compliant façade cladding and replace the façade with compliant cladding material. Work on the site commenced on 12 August 2020. The removal and replacement of the external cladding was completed on 4 November 2020.
On 5 November 2020, Site-Wide was advised by both Mr Hafshejani and Mr Faulkner that the cantilevered scaffolding system that Site-Wide previously supplied and assembled at the site was ready to be dismantled. Due to staff shortages and inclement weather the dismantling of the scaffolding did not commence until 9 November 2020. It was expected to take approximately five days to complete.
[4]
The Incident
On the morning of 12 November 2020, Mr Faulkner directed Mr Aghakhani as to the work to be performed on the day, which included the removal of flashing and panels over the glass atrium roof. This work arose specifically as a result of a variation of contract between the offender and the owner of the building. It was expected that this would take two days to complete.
Mr Aghakhani attended the site early in the morning to check the flashing and remove some panels over the roof of the glass atrium before the scaffolders began working above. Once the scaffolders commenced work, Mr Aghakhani along with Mr Faulkner continued working in another area on the site, away from the glass atrium.
On or around 12:30pm, Mr Aghakhani moved onto the glass atrium roof to collect tools and rubbish. This area had been declared an exclusion zone. At the same time, scaffolders on the fourth level of the scaffolding were stacking materials when a vibration or movement caused a 3.2m scaffold standard to fall off the scaffolding bay and onto the atrium four storeys below. The atrium shattered and Mr Aghakhani fell 4.4 metres to the ground floor. At the same time, Mr Savalakis, a courier, was walking through the glass atrium on the ground floor. Mr Savalakis was struck by large shards of glass.
The glass atrium was not protected by impact protection material such as plywood or metal cladding. Such protection had previously been installed over the glass atrium, but had been removed some time prior to the incident.
[5]
Injuries
Mr Aghakhani was admitted to Royal North Shore Hospital, where he underwent emergency surgery.
As a result of the incident, he sustained the following injuries:
1. fracture and dislocation of the right hip and acetabulum;
2. fractured nose and crushed teeth;
3. dislocated left 4th finger (plate and screws inserted);
4. severed nerve below the left 4th finger; and
5. laceration to the right knee patella and partial laceration to the left patella.
He was discharged from Royal North Shore Hospital on 3 December 2020 and then transferred to Greenwich Hospital for rehabilitation. He was there for four months and was discharged on 1 April 2021. He was visited by Mr Tarquinio once at Royal North Shore and once at Greenwich Hospital.
Mr Savalakis was admitted to Royal North Shore Hospital on 12 November 2020. He sustained numerous cuts to his body and required stitches to his shoulder, right knee, right index finger and right knuckle. He was discharged from hospital on 13 November 2020 and was unable to return to work for three weeks following the incident.
[6]
Inspection Following the Incident
SafeWork Inspector Preston attended the site to conduct an inspection on 12 November 2020.
Inspector Preston made the following observations:
1. there were multiple areas of missing scaffold components and unsecured scaffold components stacked at various locations, including on the working decks in and around where the scaffold standard fell;
2. there were no toe boards in place on the scaffolding;
3. there were no perimeter sheeting/shade cloths covering the scaffolding;
4. there was no edge protection on the atrium roof, with only a single plastic bollard indicating the edge of the roof boarding the Pacific Highway;
5. there were multiple tools and pieces of aluminium flashing scattered on and around the glass atrium roof; and
6. there was no evidence of covering to protect the glass atrium roof from falling objects.
[7]
Systems of Work Prior to the Incident
Prior to Mr Aghakhani commencing work on the atrium roof, the scaffolders had provided the offender with a Safe Work Method Statement (SWMS) which did not refer to persons walking on the roof of the glass atrium.
Mr Faulkner, who was supervising Mr Aghakhani at the time, watched and allowed Mr Aghakhani to enter the exclusion zone, knowing that scaffolding work was being carried out above him.
The offender failed to ensure that steps were taken to have impact protection replaced prior to Mr Aghakhani commencing work on the roof, or to direct that scaffolding work cease during the period in which he was required to enter the exclusion zone. The offender also failed to ensure that the edge of the atrium roof was equipped with adequate edge protection. At the time of the incident, only a single plastic bollard lay at the edge of the roof. Neither Mr Faulkner nor Mr Hafshejani communicated with Site-Wide to inform them that work was being carried out below where the scaffolding was being dismantled.
The offender relied upon Mr Faulkner to fulfill the obligations of the principal contractor even though it did not provide any formal training to him, instead relying upon his on-the-job performance to assess his suitability and competency to perform a supervisory role.
Site-Wide had a SWMS for scaffold work, but it did not address how to dismantle a scaffold. The SWMS also failed to consider exclusion zones and the presence of the glass atrium as a risk or hazard related to the work. In addition, Site-Wide did not show the SWMS to labourers it engaged through Momentum Consulting Group Pty Ltd, who were assisting with dismantling the scaffolding at the time of the incident. After the incident, Site-Wide asked these workers to sign the SWMS.
Site-Wide removed the shade cloth from the entire scaffold prior to dismantling the scaffold rather than removing it level by level. Site-Wide also removed toe boards prematurely and stacked scaffolding materials and components on scaffolding bays, rather than passing each component down the chain to a collection point at the bottom of the scaffold.
[8]
Systems of Work After the Incident
On 12 November 2020, SafeWork NSW issued two Prohibition Notices to the offender, one which required it to minimise the risk of falls from the glass awning by implementing a safe system of work to complete necessary works on the glass awning, and another which required it to minimise the risk of falling objects through the glass roof. In compliance with the Prohibition Notices, the offender installed a timber frame and plywood across the entire glass atrium and built aluminium guardrails along the edge of the roof of the glass atrium. It created a SWMS for the remedial works to the flashing over the glass atrium roof.
[9]
Offender's Case on Sentence
The offender relied upon an affidavit of Nicholas Tarquinio affirmed on 15 November 2023, which can be summarised as follows.
Mr Tarquinio is the sole director of the offender and has held this position for 21 years.
The offender does not employ any full-time staff but does engage casual labourers and subcontractors for specific jobs.
Since the COVID-19 pandemic, Mr Tarquinio has encountered challenges as a result of lockdowns and restrictions, labour shortages and the increased price of materials. The offender has also had many jobs that have been cancelled or postponed as a result of uncertain economic conditions.
[10]
Work at the Site
Mr Tarquinio's role was to manage supply of materials, check on the quality of the materials and the work being done, and to help analyse any technical construction issues.
Think Tank was subcontracted to manage the project and was required to to visit the site regularly, establish site safety documentation, and coordinate subcontractors and progress of works. The offender was not in charge of the day-to-day operations at the site. The offender was available to provide input in relation to technical issues that arose relating to construction or the supply of materials. Mr Faulkner was the site supervisor and always on site.
Think Tank and the offender verbally agreed for the project as a joint venture, and they had had similar arrangements in the past. They agreed to share the profits upon completion of the job.
At the beginning of the job, Mr Tarquinio delivered bollards and danger tape to the site after a discussion with Mr Faulkner, in which they agreed that they were to be placed on the street-side edge of the awning work platform, even though the workspace was contained to the glass balustrading and the building. The area outside of the workspace was only used by the scaffolders for storage when erecting and dismantling scaffolding. He and Mr Faulkner agreed that the glass atrium was to be covered and protected whenever work was being done. Every time Mr Tarquinio attended the site, the atrium was always covered with protective sheeting.
Prior to the incident, the scaffolders had been falling behind schedule because of inclement weather.
The remedial work on the glass atrium was not part of the original contract but was agreed to about a month prior to the incident. The remedial work involved removal of flammable cladding underneath the cap flashings surrounding the glass atrium. This involved lifting the flashings around the glass awnings.
The remedial works to the glass atrium were to take place when scaffold works were not. There was a verbal agreement to that effect between Mr Tarquinio, Mr Faulkner and Think Tank.
Mr Tarquinio was not present for the remedial works, but he spoke with Mr Faulkner and Mr Aghakhani on the morning of the incident, who told him that the cladding would be removed and the scaffolders were not on site.
Neither Mr Tarquinio nor Mr Faulkner were told that a scaffolder arrived later that morning to start dismantling the scaffolding. Mr Tarquinio stated that, had he known, he would never have allowed this to occur. The scaffolders were not on site when Mr Aghakhani and Mr Faulkner started working on the atrium.
Mr Tarquinio opined that the primary cause of the incident was that the method that he, Mr Faulkner and Think Tank agreed to for completing the remedial works was not followed. He recognised that this method should have been documented in a SWMS.
Since the incident, the offender has employed a safety officer, Byron Comninos of Better Safety to review, update and enlarge its safety systems. The offender has spent $6,000 for Mr Cominos' assistance.
Mr Tarquinio apologised on behalf of the offender for the injuries caused to Mr Aghakhani.
The offender has limited capacity to pay a fine. The offender's profit for the 2022-2023 financial year was $29,314. If a significant fine was imposed, the offender would have to cease trading.
Mr Tarquinio currently lives between his mother's house and his partner's house. He owes money to family members who have loaned him money in order to meet his own financial obligations. He financially supports his three children, who live with their mother.
[11]
Consideration
I have had regard to the objects of the Act set out in s 3 and the purposes of sentencing set out in s 3A Crimes (Sentencing Procedure) Act 1999.
[12]
Objective Seriousness
The risk of falling objects to workers and other persons was actually known to the offender. The protective covers had been in place over the glass atrium roof for an extended period while the work was being undertaken.
The likelihood of the risk coming home was high when activities like the dismantling of the scaffold were taking place.
The steps that could have been taken by the offender to eliminate the risk were known to it, simple and convenient.
The risk to workers and other persons included a risk of death. There was potential for a number of other persons to be exposed to the risk because the glass atrium roof was located above a public entry/exit to a shopping centre.
The failure of the offender occurred on one day against a background of undertaking additional work where inclement weather had delayed the attendance of Site-Wide to remove the scaffolding. The failure of the offender to prevent the scaffolding from being dismantled while the protective covers were not in place and while Mr Aghakhani was working underneath, created a risk carrying serious consequences for Mr Aghakhani and any member of the public entering or leaving the shopping centre.
Whilst the offender and Think Tank had agreed to share the profit from the project and thereby shared the risk, the offender was the principal contractor for the site and had the obligations of the principal contractor imposed on it by the Work Health and Safety Regulation 2017. Further, it had control of the site through the presence and actions of Mr Faulkner.
The injuries sustained by Mr Aghakani were substantial. Mr Savalakis also suffered less serious injuries.
I have taken into account the maximum penalty for each offence.
[13]
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 in this case because the offender still operates a construction business that potentially exposes workers and other persons to risks as a result of its operation. Conversely, the offender has taken steps to improve its safety systems.
[14]
Aggravating factors
The injury, harm and loss caused by the s 32 offences was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. 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. In this case, the injuries sustained by Mr Aghakhani were sufficient to establish the aggravating factor.
[15]
Mitigating factors
The offender does not have any record of previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999 (NSW). The offender has been in operation under the control of Mr Taraquinio for 21 years.
The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has demonstrated by reference to the steps that it has taken, to address the failures involved in this case that it has good prospects of rehabilitation.
The offender has demonstrated remorse: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender has accepted that the cause of the incident was a failure to follow its intended course and a failure to develop and implement a SWMS for work on the glass atrium roof. Mr Taraquinio has also expressed remorse for the injury sustained by Mr Aghakhani and has taken steps to check on his welfare.
The offender entered a plea of guilty: s 21A(3)(k) and s 22 Crimes (Sentencing Procedure) Act 1999. It is entitled to a discount on penalty that reflects the utilitarian value of that plea: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The appropriate discount is 25%.
[16]
Capacity to Pay a Fine
The Court is required to have regard to s 6 Fines Act 1996 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: Jahandideh v R [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.
The offender is a relatively small company with no employees. It engages contractors to undertake work for it. Mr Taraquinio draws a wage of about $60,000 per annum from the operation of the offender's business. I am satisfied that it has a limited capacity to pay a fine.
I have considered the principle of totality. The two offences arise from the same incident. The offence relating to the breach of s 19(2) of the Act potentially exposed a number of people to a risk of death or serious injury. The offence relating to the breach of the s 19(1) duty resulted in more serious harm, but the s 19(2) breach potentially exposed more persons to risk. I will nominate the appropriate fine for each offence but will reduce the fines imposed to reflect the just and appropriate measure of the total criminality involved.
[17]
Penalty
L&N Properties Pty Ltd is convicted.
For the s 32 offence involving the breach of the s 19(1) duty, the appropriate fine is one of $200,000 which I will reduce by 25% to reflect the discount for the plea of guilty.
For the s 32 offence involving the breach of the s 19(2) duty, the appropriate fine is one of $160,000 which I will reduce by 25% to reflect the discount for the plea of guilty.
Taking into account the principle of totality and the offender's limited capacity to pay, I impose fines of $50,000 for each offence.
The total fines payable amount to $100,000.
I order pursuant to s 122(2) Fines Act 1996 that 50% of the fines are to be paid to the prosecutor.
The offender is to pay the prosecutor's costs of the proceedings in the sum of $30,000.
[18]
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Decision last updated: 23 November 2023