WorkCover Authority of New South Wales (Inspector Davidson) v Favro Constructions Pty Limited and Tony Favro - [2007] NSWIRComm 201 - NSWIRComm 2005 case summary — Zoe

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WorkCover Authority of New South Wales (Inspector Davidson) v Favro Constructions Pty Limited and Tony Favro

[2007] NSWIRComm 201

Industrial Relations Commission (NSW)|2005-05-18|Before: Staunton J

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At a glance

Source facts

Court

Industrial Relations Commission (NSW)

Decision date

2005-05-18

Before

Staunton J

Source

Original judgment source is linked above.

Judgment (50 paragraphs)

[1]

Background [4] At all material times, Edward Hall was an employee of the company. [5] At all material times, 9 Lindley Avenue, Narrabeen in the State of New South Wales ("the Lindley Avenue site") was the company's place of work. [6] The company was engaged in a construction project at the Lindley Avenue site. The company had been engaged by the owner of the premises to construct a two storey residential building on sloping land. The timeframe for the project was a period of 160 days with work scheduled to commence on 1 February 2005. [7] Edward Hall was employed as a labourer on the construction project at the 9 Lindley Avenue, Narrabeen. [8] Mr Hall's first day working at the Lindley Avenue site was 15 June 2005 (the date of the incident). Mr Hall had previously done work for the company, however that was several months before and at a different site. [9] Mr Hall's job on the Lindley Avenue site included laying and securing plyboard sheeting in the form of flooring.

[2]

The incident [10] Between 2pm and 3pm on 15 June 2005, Mr Hall was in the process of laying and securing plyboard sheeting on an upper level of the building works, when he apparently stepped onto an unsecured sheet of plyboard near the edge of building. The plyboard sheet tilted under Mr Hall's weight, resulting in him falling off the edge of the building, and landing on concrete steps below - a fall of approximately 5 metres. [11] At the time of the incident there was no fall prevention equipment in place on the front of the building where Mr Hall was working. Mr Hall was not wearing a harness or other personal fall prevention equipment. An incomplete scaffold was erected around the part of the building's perimeter, however this did not include the area where Mr Hall was working. Pieces of wood, made into a handrail, were apparently in place before the incident, however some of this had been removed resulting in a large gap and no edge protection in the vicinity of where Mr Hall was working. [12] As a result of the fall, Mr Hall received two cracked ribs, a laceration to the back of his head requiring several stitches, and a shattered scapula (one of the bones forming the shoulder blade) which subsequently required surgery. Mr Hall now has a metal plate and 8 screws inserted as a means of reshaping his scapula. He also sustained a chipped tooth and had a large laceration on his right calf muscle. Mr Hall has suffered back pain since the incident as well as some memory loss. Mr Hall's treating doctor also referred him for counselling for post-traumatic stress.

[19]

(8) Copy of Safe Working at Heights Guide 2004. 6 On behalf of the defendants, the affidavit of Mr Tony Favro was tendered without objection. Mr Favro's affidavit detailed the events that occurred on the day of the accident involving Mr Hall as well as the actions taken by the company and himself following the accident. Copies of various documents including the company's safety management plans which were implemented following the accident as well as financial documents relevant to both defendants were also attached. 7 Three testimonials as to Mr Favro's safe work record and good character were also tendered. They included as follows: (a) Mr Terry Taylor. Mr Taylor is a Structural Engineer and is the principal of TJ Taylor Consultants Pty Ltd, an engineering consultancy firm. (b) Mr Marc Tovo. Mr Tovo is the director of Tovo Lighting. (c) Mr Bruce Gaal. Mr Bruce Gaal is an accredited certifier and has known Mr Favro for 25 years through his involvement at the Long Reef Surf Life Saving Club. 8 No oral evidence was received in the proceedings. Relevant principles 9 The overall approach to be followed in relation to the determination of penalty is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 (CSPA) and in particular in relation to these proceedings, ss 3A Purposes of Sentencing, 21A Aggravating, mitigating and other factors in sentencing, 22 Guilty plea to be taken into account. 10 In R v Way [2004] NSWCCA 131 it was emphasised that the provisions of the CSPA referred to above are not to be construed as representing 'a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice'. As was said at [59]: ....it is clear that the legislative policy.......so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges...but rather were intended to provide 'further guidance and structure to judicial discretion.'

[45]

43 Copies of financial statements for the 2006 tax year and to 31 May 2007 for Favro were attached to Mr Favro's affidavit. In 2006, after expenses and taxes, the company's retained profits were $44,408.22 as compared to $8119.51 for the previous year. The financial statement as of 31 May 2007 revealed the company's total income before expenses and tax payable was $53,348.85. The company's net profit for that period was $8,940.63. Its liabilities as set out in the balance sheet for 31 May 2007 was $150,872.81 including payables, interest bearing liabilities and current tax liabilities. 44 Mr Favro deposed in his affidavit that the income generated by the company as shown in the 2006 Tax Return was unusually high as a result of income derived from a large project in Mosman which took two years. The majority of the income was generated in the first half of the project. 45 Mr Favro also stated that the company predominantly undertakes building work with a contract value less than $200,000 and has only undertaken work in excess of $200,000 on five prior occasions. The Lindley Avenue job where Mr Hall's accident occurred was contracted at $397,000 including GST. 46 The individual 2005 and 2006 tax returns of Mr and Mrs Favro were also attached. Mr Favro's individual 2005 tax return revealed his total taxable income to be $49,429. After assessment of tax payable and payment of the Medicare levy, he was entitled to a tax refund of $87.87. His 2006 individual tax return revealed his taxable income to be $39,646 but after deductions for interest and dividend deductions he had net capital losses carried forward to later income years of $20,628. 47 Mrs Favro's individual 2005 tax return revealed her taxable income was $49,429. After tax payable and the Medicare levy, she was entitled to a refund of $99.87. Mrs Favro's 2006 tax return revealed that her taxable income was $26,219. 48 What is clear, based on the material before me, is that the company is essentially a small company that trades profitably but on a relatively modest basis. As detailed in the financial statements for the company, the profits generated are not large. On the evidence, the business is essentially a small, family run business with Mr Favro as the sole director of the company. Mrs Favro is also involved in the business in the capacity of secretary. Both Mr and Mrs Favro draw income from profits generated by the company and as their tax returns reveal, that income is modest. 49 Based on the material put before me, it would appear that the company does not have large reserves to draw upon to meet any fine imposed. Indeed, counsel for the defendants indicated it would probably be necessary for the corporate defendant to raise a loan to pay the penalty imposed. Mr Favro is the alter ego of the corporate defendant and any fine imposed upon the corporate defendant would fall upon him to meet in addition to any fine imposed upon him personally. Counsel for the defendants stated that the imposition of a heavy fine upon the company would also impact directly upon the family. I would accept that.

[48]

52 The prosecutor conceded that there were additional mitigating factors that were in favour of the defendants. The plea was entered at an early opportunity and the defendants cooperated with WorkCover during the investigations. 53 Counsel for the defendants submitted that the defendants had expressed remorse and contrition for the events which culminated in Mr Hall's accident. That much is evident in Mr Favro's affidavit, where he stated: [7] I was extremely affected and upset by the accident and more importantly the injuries suffered to Edward Hall, the guilt of which I will carry for the rest of my life. I fully accept responsibility for the accident... 54 Mr and Mrs Favro kept in regular contact with Mr Hall following the accident and tracked his recovery with the GIO Workers Compensation Rehabilitation officer. Mr Favro also gave Mr Hall financial assistance. Mr Favro deposed that he had spoken with Mr Hall where he: ... indicated that he was struggling financially with his weekly compensation and in particular in view of medical accounts associated with his girlfriend's pregnancy. I arranged for the company to send him an ex gratia payment of $600 to assist him. 55 As already discussed above, the defendants sought assistance from the HIA to implement a safety management plan. The company now actively conducts work site inductions for employees and sub-contractors and obtains safe work method statements from sub-contractors. Counsel for the defendants submitted that the adoption of these measures displayed a commitment and change to a culture of safety on the part of the defendants. I would agree with that proposition. 56 A number of testimonials were tendered on behalf of the corporate defendant and Mr Favro. They were tendered without objection and referred to the good character, reliability and professionalism of both defendants. I accept that they reflect the high regard in which Mr Favro and his company are held in by his peers and that Mr Favro personally is of good repute. 57 Taking into account all the matters I have referred to, I determine a penalty in these matters, reflected in the orders I now make, as follows: