Spectra Plumbing Pty Ltd (the offender) has pleaded guilty to an offence that being a person who had a health and safety duty pursuant to section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Christopher Ilioglou to a risk of death or serious injury contrary to section 32 of the Act.
The maximum penalty for the offence is a fine of $1.5 million.
[2]
Facts
The parties presented an Agreed Statement of Facts that can be summarised as follows.
[3]
Events prior to 21 November 2016
The offender conducted a business, which provided plumbing services.
Kayrouz Constructions Pty Ltd (Kayrouz Constructions) conducted a business, which provided construction services as a builder, and was engaged in the construction of a five storey residential apartment building, located on the corner of 183-187 Princes Highway and 71 Gray Street, Kogarah (the workplace).
Majenttas Pty Ltd (Majenttas), a related company to Kayrouz Constructions, was the developer of the building and Kayrouz Constructions was the principal contractor and builder.
The offender was engaged to carry out plumbing works at the workplace for the sum of $695,000. Under the scope of works provided in the quote, the offender was responsible for the supply and installation of hot and cold water pipe reticulation, drains and other associated plumbing.
The front façade of the building faced Gray Street and the right side of the building adjoined a lane identified as Princes Lane.
High voltage overhead power lines carrying 11,000 volts (11kv) were located parallel to the Gray Street façade and were approximately 10.4 metres minimum height from street level and approximately 3.3 metres from the balconies on the building façade. Low voltage power lines carrying 415 volts were located below the high voltage power lines on the Gray street side and were affixed with a yellow and black plastic visibility covering known as "tiger tails".
Kayrouz Constructions had in place a Work Health and Safety Management Plan (WHS Management Plan) for the workplace dated 19 September 2014, as required by clause 309 of the Work Health and Safety Regulation 2011 (the Regulation). The hazard of working near overhead power lines was identified in the WHS Management Plan and it incorporated the guidelines set out in the WorkCover NSW Work Near Overhead Power Lines Code of Practice (2006) (the Code). It also addressed work involving scaffolding near overhead power lines and referred to AS/NZS 4576 - Guidelines for Scaffolding.
Kayrouz Constructions was aware of the risks associated with the construction activities being carried out in close proximity to the high voltage power lines at the workplace. In correspondence dated 9 November 2015, from Ausgrid to Natalie Kayrouz, Ausgrid advised that the principal contractor and person responsible for scaffolding were required to comply with the Regulation and the Code. Ausgrid outlined the requirements to be taken when erecting and dismantling scaffolding near overhead power lines which stipulated the use of tiger tails and a risk assessment for the low voltage lines and for the high voltage power lines, to obtain an Ausgrid permit and to apply to Ausgrid to isolate the supply when working within the specified distance of them.
On 26 November 2015, Toufic Kayrouz and Ms Kayrouz sought and were granted Ausgrid access permits to erect scaffolding and hoarding near the high voltage power lines and signed off as acknowledging that they had been instructed in Ausgrid's access permit procedures.
Ausgrid installed the tiger tails on the low voltage power lines on 11 November 2015.
On 1 December 2015, from 9:30am to 5:00pm, to allow for the erection of the scaffolding, Ausgrid isolated the high voltage power lines. The scaffolding was around 2 metres from the high voltage power lines and 2.8 metres from the low voltage power lines on the Gray Street façade.
On 16 September 2016, Ausgrid isolated the high voltage power lines to allow for removal of the scaffolding.
[4]
The incident on 21 November 2016
At approximately 7.00am on 21 November 2016, three of the offender's employees, Mr Ilioglou, Mohieddine Derbas and Vlasios Zarkos arrived on site to finish installing cold water pipes on level 4 of the building.
Mr Derbas and Mr Zarkos decided to manually lift the copper pipes up on the Gray Street side having done so a couple of weeks earlier on the driveway side of the building. However, on the date of the incident, the driveway side of the building was inaccessible because of rubble and other construction debris.
The copper pipes were tubular, 50 millimetres in diameter and 6 metres in length.
Mr Zarkos stood on ground level and passed the copper pipes to Mr Derbas who was standing on a level 2 balcony. Mr Derbas then relayed the copper pipes to Mr Ilioglou who was standing on a balcony on level 4 of the building. All the balconies faced the Gray Street side.
As the first copper pipe was passed up to Mr Ilioglou from Mr Derbas, Mr Ilioglou took hold of the copper pipe with his left hand. Mr Ilioglou attempted to lift the pipe into the building by levering the pipe against the top rail of the balcony balustrade, where it came into contact with the energised high voltage power lines, while the pipe was still in his grasp.
The contact of the copper pipe with the high voltage power lines caused an electrical explosion and Mr Ilioglou was thrown back from the balcony towards the building.
Mr Derbas and Mr Zarkos heard a loud explosion and Mr Derbas ran into the building and found Mr Ilioglou conscious inside. Mr Derbas saw that Mr Ilioglou had red eyes and appeared to be in shock.
Mr Ilioglou sustained an electrical shock, arc flash injuries to his eyes and severe burns to his left hand and fingers.
The offender did not have in place a Safe Work Method Statement (SWMS) or safe work procedure in relation to the task of transporting copper pipes from the ground floor to level 4 of the building. Nor was a risk assessment conducted relating to the presence of the power lines.
There was no training, information or instruction provided by the offender to Mr Ilioglou in relation to working near the power lines at the workplace.
[5]
The Offender's Case on Sentence
The offender relied on an affidavit of Michel Ayoub, the sole director of the offender, affirmed 23 July 2019. Mr Ayoub was present in Court but not required for cross-examination. The content of his affidavit can be summarised as follows.
The offender was incorporated on 11 May 2011 and focused its business on residential work including plumbing, draining and gas fitting.
Initially, Mr Ayoub was the offender's sole employee but by 2016 the company had 10 employees and five contractors.
Prior to the incident, the offender's work health and safety system was based primarily upon Mr Ayoub or other site supervisors talking to workers about the work to be performed, any risks identified at the site and taking workers through site specific SWMSs. The offender also conducted fortnightly toolbox talks. Mr Ayoub would visit each site one to two times per week. During these visits he would carry out an informal risk assessment of the site and works to be performed.
Mr Ayoub stated that the offender encountered difficulties in undertaking its work at the workplace arising from the manner in which the project was being managed by Kayrouz Constructions. He described the workplace as unkempt and poorly maintained and there were often piles of building rubble around the site.
In September 2016, Mr Ayoub observed that the scaffolding at the workplace was being dismantled. He was concerned by this as the offender still required the scaffolding in order to transport copper pipes to the upper levels of the building. Mr Ayoub had a conversation with Mr Kayrouz in relation to this but the scaffolding was still removed.
After the scaffolding was removed, Kayrouz Constructions did not provide any on-site cranes for the transportation of the copper pipes to the upper levels of the building, which created difficulties for the offender.
The workplace was poorly secured at night, resulting in a number of thefts of the offender's equipment from the site. As a result, the copper piping was not delivered to site in one delivery, because Mr Ayoub was concerned it would be stolen. This necessitated in the multiplication of the number of times that the 6 metre lengths of copper piping had to be moved within the different levels of the building.
The offender had to develop an alternative means to transport the copper pipes to the upper levels of the building. Initially, some of the copper pipes were passed up to the balconies by hand on the driveway side of the building. There were no overhead power lines or other obstructions on this side of the building.
By the time of the incident, the growing amount of building rubble and rubbish stacked against the wall on the driveway side made passing the lengths of copper pipes up to the balconies by hand on the driveway side, virtually impossible. Mr Ayoub regularly complained to Mr and Ms Kayrouz about the rubbish and rubble around the site.
Mr Ayoub was not at the workplace when the decision was made to pass the copper pipes up to the balconies by hand on the Gray Street side of the building.
In response to the incident, the offender undertook a review of its control measures in relation to the risks of working near overhead power lines. As part of this review the offender amended its pro forma SWMSs to prepare a specific SWMS for the High Risk Activity of 'Working Near Overhead Powerlines' (Spectra SWMS). In addition, the offender instituted a procedure whereby it reviews all sites for overhead power lines before commencing work. Mr Ayoub stated that he has increased the number of site visits, focuses on face-to-face training on site and the amount of face-to-face sessions with senior staff to ensure they are well versed in risks.
In order to complete the work at the workplace safely, a meeting was held with the workers where the Spectra SWMS was discussed and procedures for working near power lines were discussed and reinforced. Each of the offender's workers, who were required to continue working at the workplace, had to read through the Spectra SWMS and sign it. A direction was given to workers that they were not to take any further copper pipes up the Gray Street side of the building due to the proximity of the overhead power lines.
Mr Ayoub expressed remorse, personally and on behalf of the offender, for the physical and emotional injuries suffered by Mr Ilioglou. He accepted responsibility on behalf of the offender for the company's failures that led to Mr Ilioglou being exposed to the risks on the day of the incident.
The offender fully cooperated with SafeWork's investigation after the incident.
[6]
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.
[7]
Objective Seriousness
The offence is one of some objective gravity.
The risk presented by manually lifting 6 metre lengths of copper pipe in close proximity to high voltage power lines was reasonably foreseeable. The precise method adopted by the workers of levering the copper pipes against the handrail of the balcony, made contact with the high voltage power lines inevitable. At the time of conducting the task Mr Ilioglou could not see the high voltage power lines because the sun was in his eyes. However, it was accepted by the offender that he should have been warned of the presence of the high voltage power lines and instructed not to undertake the task that he did on the Gray Street side of the building in close proximity to the high voltage power lines.
The offender was aware of the presence of the power lines but Mr Ayoub was unaware that the workers had previously performed the task in the way that they did. The offender did not perform a risk assessment in order to develop a safe work method for the task involved in lifting the copper pipe into the building.
The task undertaken by the workers was made more difficult by the removal of the scaffolding and the positioning of waste in the alternate location where the task could have been safely undertaken. These matters were outside the control of the offender. These issues had been raised with the principal contractor by Mr Ayoub to no avail. The principal contractor also failed to provide an alternate safe method of lifting the pipes into the building.
The likely consequence of the risks was obvious and serious as demonstrated by the incident. The risk involved a risk of death. The injuries sustained by Mr Ilioglou were not serious and he returned to full duties after a few months.
The offender had in place a number of pro forma SafeWork Method Statements in respect of the work to be undertaken at the site. These included some statements of the risk posed by overhead power lines but were not specific to the work at the site and did not countenance the particular and additional risk posed by the presence of high voltage power lines.
The likelihood of the risk occurring was high.
The means to have prevented the risk were inexpensive. The alternate means were to some extent made more difficult by the actions of the principal contractor.
I have had regard to the maximum penalty for the offence.
[8]
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 but it is reduced.
The offender had in place some safety systems prior to the incident. It had adopted as part of its safety system a number of professionally developed SafeWork Method Statements (SWMS). After the incident the offender took a number of steps to improve its work health and safety systems by adopting more regular toolbox talks, specific procedures relating to overhead power lines, increasing site visits by Mr Ayoub to its construction sites, increasing its focus on face-to-face training and more detailed consideration of access arrangements in the preparation of new quotes for contracts. The offender has also decreased the size of its operation after the incident.
[9]
Aggravating Factors
There are no relevant aggravating factors.
[10]
Mitigating Factors
The offender does not have any previous convictions: section 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender was incorporated in 2011.
The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has taken timely steps to improve its safety systems. In particular, the offender has formally integrated the need to take precautions for the particular risks that arose in this case. I accept Mr Ayoub's evidence that the offender is committed to continuous improvement of its safety systems.
The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. Mr Ayoub, on behalf of the offender, took a number of steps to assist the injured worker including visiting him in hospital. The offender facilitated the injured worker's return to work on light duties and his subsequent employment. Mr Ayoub has expressed contrition and remorse in respect of the offence which I accept are genuine. I am satisfied on the balance of probabilities that the offender has accepted responsibility for its actions and demonstrated remorse.
The offender entered a plea of guilty: section 21A(3)(k) and section 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%.
The offender co-operated with the SafeWork investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
[11]
Penalty
The offender is convicted.
The appropriate fine is one of $200,000 which will be reduced by 25% to give effect to the plea of guilty.
I impose a fine of $150,000.
I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
The offender is to pay the prosecutor's costs as agreed in the sum of $23,000.
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Decision last updated: 13 August 2019