WorkCover Authority of New South Wales (Inspector Dall) v R & D Enterprises

PROSECUTOR Mr P M Skinner of counsel Solicitor: Mr N A Correy Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANTS Mr R S Warren of counsel Mr G Kerr, Newcastle Master Builders' Association

JUDGMENT: - 21 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: HUNGERFORD J Tuesday, 11 December 2001 Matter No IRC 3973 of 2000 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR MICHAEL DALL) v DALE ANDREW GREEN Prosecution under s 50(1) of the Occupational Health and Safety Act 1983. Matter No IRC 3975 of 2000 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR MICHAEL DALL) v R & D ENTERPRISES (NEWCASTLE) PTY LIMITED Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2001] NSWIRComm 329

1 The two matters before the Court are prosecutions by Michael Dall, as an inspector of the WorkCover Authority of New South Wales, in respect of alleged breaches of the Occupational Health and Safety Act 1983 following an incident on 13 August 1998 on a construction site at Enterprise Drive, Holmewood Park Estate at South Beresfield in the State when a Lee Patrick Sales, a worker on the site engaged in the dismantling of scaffolding, fell onto a concrete floor and sustained severe injuries.

2 In the first matter (No IRC 3973 of 2000), Dale Andrew Green was charged with an offence under s 50(1) of the Occupational Health and Safety Act in that as a director and person concerned in the management of a corporation which contravened a provision of that Act he was deemed to have contravened the same provision. The provision said to be so contravened was the subject of the second matter (No IRC 3975 of 2000) concerning the stated incident on the construction site on 13 August 1998 in which R & D Enterprises (Newcastle) Pty Limited was alleged to have failed to ensure the health, safety and welfare at work of all its employees and, in particular, Mr Sales, contrary to s 15(1) of the Occupational Health and Safety Act. As both matters arose out of the same facts and circumstances they were, by consent, heard together and this judgment similarly deals with both matters.

3 A plea of guilty was entered by each defendant to the respective charge made. A statement of agreed facts was admitted into evidence in the following terms : 1. The Informant is and was at all material times an Inspector duly appointed and empowered by section 48 of the Occupational Health & Safety Act, 1983, to institute the within proceedings.

At all material times R & D ENTERPRISES (NEWCASTLE) PTY LIMITED [ACN 063 978 745] was a company duly incorporated with its registered office at c/- K H Chartered Accountants, Level 1, 285 Hunter Street, Newcastle 2300 in the State of New South Wales.

At all material times DALE ANDREW GREEN was a director of R & D Enterprises (Newcastle) Pty Limited and was the person in charge of the company's works at Lot 2, Enterprise Drive, Holmewood Park Estate, South Beresfield in the State of New South Wales ("the construction site") which works were being conducted by the company and as such was in a position to influence the conduct of the company.

The company at all material times employed Lee Patrick Sales ("the worker") as a labourer/roof plumber to work at the site.

The company prior to 13 August 1998 was engaged by D F McCloy Pty Limited (ACN 000 376 769) of 364 Pacific Highway, Belmont North 2280 in the State of New South Wales ("the principal contractor") to carry out works at the Fairfax Publishing construction site at Lot 2, Enterprise Drive, Holmewood Park Estate, South Beresfield in the State of New South Wales ("the site"), and to supply all labour, plant and material to complete the installation of roof cladding, wall cladding, gutters, flashings and downpipes at the site.

On or prior to 13 August 1998 the company had been engaged in the affixing of soffit sheeting on the underside of an awning situated near the front of the building at the western side of the site ("the workplace").

The awning referred to in paragraph 6 above was on a slope varying in height from about 9 metres at the front of the building down to about 6.5 metres at the back of the building.

Prior to 13 August 1998 the company had erected at the workplace an aluminium mobile scaffold ("the scaffold") which consisted of two individual bays with a third bay created by the gap between them, (the three bays hereinafter being referred to as the west, centre and eastern bays).

The scaffold measured approximately 1.35 metres in depth and 9.3 metres wide. It had an overall height of 7.7 metres approximately on the high side tapering down to 5.64 metres on the low side.

The company had used the scaffold to provide access to the awning to enable it to affix the soffit sheeting to the underside of the awning.

Prior to 10 am on 13 August 1998 the soffit sheeting on the underside of the awning had been completed and the company had given instruction for the scaffold to be dismantled.

At about 10 am on 13 August 1998 the worker, while in the process of dismantling the scaffolding, was standing on a plank in the centre bay and was attempting to pass down a second plank which had formed the platform along with the plank upon which he was standing for the centre bay. The worker was lowering the plank down to another employee of the company, Benjamin Starkey, who was holding the bottom of the plank when the worker fell and landed on the cement floor below ("the incident").

The plank upon which the worker was standing at the time he was attempting to lower the other plank was situated approximately 5.2 metres above the cement floor.

At the time of the incident the centre bay of the scaffold was in the following condition: (i) It did not have any handrail, midrail or toeboard at the level of the plank upon which the worker was standing prior to the fall.

(ii) The height of the scaffold exceeded three times its minimum base width and the scaffold did not have outriggers on each corner to ensure its stability.

(iii) The scaffolding was not tied off or secured to ensure its stability.

(iv) There were no access ladders provided to enable access to the scaffold.

When the worker fell the upper part of his body took the initial impact with the concrete floor below and he sustained injuries including multiple fractures to the skull, fractures to both wrists, to the left cheekbone and the jaw, a severed optic nerve, brain damage, vertebrae damage, chest and other associated conditions.

As a consequence of the injuries sustained by the worker he was unable to resume employment for a period of in excess of seven days.

At all material times on and prior to 13 August 1998 the company did not have a scaffold work system in place in compliance with AS/NZS 1576.1:1995 for the scaffold as erected and used by its employees including the worker.

At all material times on and prior to 13 August 1998 the company, while dismantling the scaffold at the workplace, was carrying out scheduled work within the meaning of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996 in contravention of the requirements of the said regulations.

At all material times on and prior to 13 August 1998 [Dale Andrew Green], was the person responsible at the site for the works being conducted there on behalf of the company.

[Dale Andrew Green] was at all material times the holder of a Certificate of Competency in Basic Scaffolding.

[Dale Andrew Green] at all material times on and prior to 13 August 1998 was the person on behalf of the company who had responsibility to ensure that employees of the company working on the site were given appropriate instructions and supervised the way in which all work on behalf of the company was to be conducted.

At the time of the incident [Dale Andrew Green] was not present at the immediate workplace but working at another part of the site.

At the time of the incident [Dale Andrew Green] failed to comply with the provisions of section 26 of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996 in that he failed to provide appropriate supervision at the workplace.

At the time of the incident [Dale Andrew Green] failed to comply with the provisions of section 27(1) of the Occupational Health & Safety (Certificates of Competency) Regulations, 1996 in that he failed to ensure that any person supervising scheduled work at the workplace held a Certificate of Competency with respect to basic scaffolding.

At the time of the incident an employee of the company, Brett Arthur McDonald, was a foreman/leading hand in charge of the worker ("the supervisor").

The supervisor instructed the company's employees, being the worker, Benjamin Starkey, Matthew Thomas and Robert O'Sullivan, to dismantle the scaffold.

[Dale Andrew Green] on behalf of the company had authorised all of the company's employees engaged at the workplace to work from the scaffold notwithstanding its aforementioned deficiencies.

[Dale Andrew Green] on behalf of the company had authorised the supervisor to instruct the worker and the company's employees to dismantle the scaffold.

At all material times on and prior to 13 August 1998 neither the supervisor, the worker nor any of the aforementioned employees of the company were on a log book system as being trainees carrying out scaffolding work under supervision.

At all material times on and prior to 13 August 1998 neither the supervisor, the worker nor any of the aforementioned employees of the company held any certificates of competency with respect to scaffolding.

The work being conducted by the company at the time of the incident which required the use of scaffolding enabling access at a height of greater than 4 metres was conducted by the company in breach of section 8(2) of the Occupational Health & Safety (Certificates of Competency) Regulation, 1996.

The work being carried out at the workplace at the time of the incident was being carried out in contravention of: (i) Regulation 73(1) of the Construction Safety Regulations, 1950 in that the scaffolding was not suitable and safe for the purpose for which it was being used.

(ii) Regulation 73(3) of the Construction Safety Regulations, 1950 in that no landings were provided at intervals on the scaffold to prevent persons from falling a distance of in excess of 1.8 metres.

4 Photographs of the accident site were taken by Colin Plowright, an inspector of the WorkCover Authority, shortly after it occurred showing the physical characteristics of the site, the scaffolding, work platforms and concrete floor concerned; the photographs were admitted into evidence and I found them to be of considerable assistance in understanding the circumstances of what occurred. A factual inspection report by Mr Plowright also was admitted into evidence and it set out details of the relevant area of the site in such a way as to enable a clear understanding by reference to the photographs.

5 The admitted facts satisfy me that the plea of guilty by each of the defendants was properly made and, therefore, I accept them. The offences have been proven and it remains to deal with the question of appropriate penalties. Importantly, the prosecutor accepted that the guilty pleas were entered at the first reasonable opportunity and he advised that neither defendant had any prior convictions for breaches of occupational health and safety legislation. It was common ground, with which I agree, that the maximum fine applicable, having in mind the date on which the offences were committed, was $55,000 in the case of the personal defendant and $550,000 as to the corporate defendant.

6 Counsel for the defendants, Mr R S Warren, called the personal defendant, Mr Green, to give evidence. Mr Green's evidence was based on a written statement made by him just before he gave evidence on 20 June 2001; the statement was admitted into evidence without objection from counsel for the prosecutor, Mr P M Skinner, and who did not challenge its contents by any cross-examination. Mr Green had been associated with the corporate defendant for nearly 8 years and both he and a Robert Hyland were the sole directors and shareholders. Mr Green was a married man with two young children aged one year and four years. The corporate defendant was engaged predominantly in the commercial roofing industry and it had employed 15 persons consistently for the last four to five years; it had no fewer than 10 employees at any one time during that period. Mr Green was a qualified roofing plumber with approximately 11 years' experience and who, having completed his apprenticeship in 1992, had experience in all aspects of roof plumbing in both commercial and domestic situations. He considered the corporate defendant to be well established and to enjoy a good reputation in the construction industry in the Newcastle area. However, and although it had had a regular annual turnover of about $2 million to $3 million, the corporate defendant had suffered a significant financial downturn in the last six months; poor cash-flow reflected a highly competitive market in the construction industry generally after the peak period of building projects associated with the Olympic Games.

7 As to the financial position of the corporate defendant, particularly relating to the effects of the incident here involving Mr Sales, Mr Green said in his statement : 30. The company's percentage profit on turnover for the financial year to date is approximately one percent. This compares with a profit on turnover of approximately three percent in the period prior to the incident in which Lee SALES was injured.

31. As a result of the current difficult trading conditions and the increased Workers Compensation premium detailed at paragraphs 33 and 34 below the company has had to make more extensive and sustained use of its one hundred thousand dollar overdraft facility.

32. In my opinion one substantial cause of the downturn in profit has been the increased Workers' Compensation Insurance premium to which the company has been subject since Lee Sales' fall.

The company's Workers' Compensation Premium increased from forty-seven thousand eight hundred and seventy-five dollars and forty-six cents ($47,875.46) for the Financial Year 1997/1998, prior to the incident in which Lee SALES was injured to seventy-one thousand and fifty-four dollars and twenty-eight cents ($71,054.28) for the Financial Year 1998/1999. The company's Workers Compensation premium has continued at approximately that level to date.

The increase includes an "experience premium" of thirty-two thousand and one hundred and sixty-one dollars and thirty-one cents ($32,161.31), which relates directly to Lee Sales' fall. This "experience premium" will continue to affect the company until 2002

In my opinion as a director of the company a substantial fine in the current trading environment would make trading difficult if not impossible. The only way to pay such a fine would be to increase the company's overdraft or raise other finance. The company does not have capital available to underpin such borrowings.

I am therefore concerned as to the company's future survival and its ability to meet its obligations to continue the employment of its current workforce.

8 Specifically as to the circumstances of the subject incident, Mr Green's statement noted : 8. The incident in which Lee SALES was injured on 13 August 1998 occurred while a mobile scaffold used to install soffit sheeting to the underside of an awning was being dismantled. I had erected the scaffold with the assistance of the other employees engaged on site. Those employees were Brett McDONALD, Matthew THOMAS, Lee SALES, Benjamin STARKEY, and Robert O'SULLIVAN. They were under my direct supervision at all times while the scaffolding was being erected.

9. On the morning of 13 August I gave instructions to Brett McDONALD, the company's leading hand on site, to dismantle the scaffold. To the best of my recollection I gave general instructions to him regarding the way in which the scaffold should be dismantled. There was also a toolbox meeting that morning at which to the best of my recollection there was discussion of the need to dismantle the scaffold once the work being done from it was completed.

10. I did not directly supervise the dismantling of the scaffold because I had to deal with a problem which had arisen with another part of the work in connection with a downpipe. I was engaged in working on this in the same general area but approximately fifteen to twenty metres away from the scaffold. At the time I was fully confident that Brett McDonald and the other employees were quite capable of dismantling the scaffold safely since all had extensive experience of working from and erecting and dismantling scaffolds.

11. Prior to the incident the main safety management system used by the company was the holding of regular "toolbox" meetings. These were held daily and run by the foreman or supervisor on each job. During these meetings the safety issues relevant to the work to be done that day were discussed. Further, if employees moved to a new site during the day, a toolbox meeting was held before the employees commenced work at the new site.

13. Scaffolding is used extensively in roofing work. In most cases the scaffolding used has been less than four (4) metres in height, which does not require workers engaged in its erection or dismantling to be certified. Where scaffolding over 4 metres in height was required the company's usual practice was to request the principal contractor in charge of the site to provide fixed steel scaffolding. The job on which Lee Sales was injured was unusual in respect of both the height of the scaffolding and the requirement for mobile scaffolding, which meant that steel scaffolding could not be used.

14. In my experience any person engaged in roof plumbing has to be experienced and competent in working from scaffolding as this forms a major part of the work.

15. Up to and including the time of the incident the company's employees would have erected and dismantled scaffolding approximately 3 times per month. The type of scaffolding used was a proprietary type of tubular aluminium scaffolding, "Instant Access Aluminium Scaffolding". The company has never supplied or erected steel scaffold.

16. The scaffolds that the company's employees had erected previously were less than four metres in height. If scaffold over that height was required it was erected by Robert Hyland or me or other company employees who held an appropriate qualification.

9 Mr Green said that since the occurrence on 13 August 1998 the corporate defendant had introduced the following safety system : (a) Monthly general safety meetings conducted by me and my co-director Mr Robert Hyland which all employees are required to attend. These meetings cover general site conditions, discussion of hazards and risks, safety issues arising during the previous month, and checks of tools and equipment.

(b) A Job Safety Analysis and Safe Work Methods Statements are prepared for each job undertaken by the company. These documents are prepared by the person responsible for measuring and quoting the job. They are based on standard documents but are amended as required to ensure that they reflect the circumstances of the particular site and work involved. The completed documents are then circulated to all employees on the job and are required to read and signed by each employee as having been received and understood. Samples of a representative Job Safety Analysis and Safe Working Method Statement as currently used by the company is annexed hereto and marked 'A'. (the annexure is not reproduced)

(c) Prior to work commencing each day a "toolbox" meeting is conducted on each site by the person responsible for the site. At these meetings the work to be done that day and the safety issues arising are discussed and all tools are checked.

(d) All company employees have completed a Safety General Induction course which meets the requirements of the WorkCover Code of Practice - Occupational health & safety induction training for construction work. The company requires employees to complete this training course even though most employees would be entitled to be exempted pursuant to section 162K of the Construction Safety Regulation 1950.

10 As to his personal position in the management of the corporate defendant, Mr Green's statement noted : 17. In 1996 at the same time as both Roberty Hyland and I obtained our Basic Scaffolding qualifications, 6 other company employees also gained the same qualification. This qualification authorised them to erect and dismantle scaffold over 4 metres in height. However, those employees left the company over time.

18. Prior to the incident, I was personally carrying out plumbing work on the company's sites almost every day. I therefore had a good opportunity to observe the skills and work practices of the company's employees on a regular basis, and to assess their competence and safety in working with scaffolding.

19. In respect of the employees who were engaged on site at the time of the incident my knowledge of each is as follows: · Benjamin STARKEY: Qualified Roof Plumber. Employed by the company for approximately 4.5 years. Did basic training in scaffolding as part of trade training, but not certificated for such work. Has had extensive experience in building and working on scaffolding up to four metres in height. · Brett McDONALD: Qualified Roof Plumber. Employed by the company for approximately 6 years. Has had extensive experience in building and working on scaffolding up to four metres in height. · Matthew THOMAS: Qualified Roof Plumber. Employed by the company for approximately 3.5 years. Has had extensive experience in building and working on scaffolding up to four metres in height. · Robert O'SULLIVAN: Qualified Roof Plumber. Employed by the company for approximately 2 years. Has had some experience in building and working on scaffolding up to four metres in height. · Lee SALES: Qualified Sheet Metal Worker. Employed by the company for approximately 2.5 years. Has had extensive experience in building and working on scaffolding up to four metres in height.

20. In my experience Lee Sales was a very competent worker and safety conscious in his approach. I never had occasion to reprimand him for unsafe work practices. Also in my experience if he believed that something was unsafe and should be done in another way he would speak up.

24. The company currently has 6 employees certified to Basic Scaffolding level. They are: Robert Hyland, William Fullerton, Gary Pellow, Brent Lyall, Aaron Rollings and me. Those employees carry out all scaffolding work required by the company.

25. However, since the time of the incident the company has phased out the use of scaffolds over four metres in height. Where possible the company uses mechanical lifting devices such as scissor lifts, boom lifts or cherry pickers for work above four metres in height.

26. The company has also spent approximately forty thousand dollars ($40,000.00) on safety equipment during the past three years.

27. This includes an amount of nine thousand eight hundred and fifty dollars ($9,850.00) for purchase of fittings and materials for fabrication of edge protection, much of which can only be used for a specific project and must then be recycled or disposed of.

28. Also included is approximately thirty thousand dollars ($30,000.00) for the purchase of harnesses, inertia reels, and cable required for fall arrest systems. These harnesses and reels are required to be checked every twelve months, and the cables replaced if they are found to be unsafe. Cable is cut to length to provide anchor points on specific projects. Once used it is usually discarded unless it can be cut to shorter lengths for use on other projects.

11 It appeared from Mr Green's oral evidence that the corporate defendant for some years had been regularly engaged in charity work, in particular with the Westpac Rescue Helicopter and for local schools in the Newcastle area. That attitude of assisting others in need extended to support for the family of Mr Sales after his injuries during his period in hospital and while undergoing rehabilitation. It seems, however, that Mr Sales has continued to be absent from work since the incident on worker's compensation benefits; he is presently 38 years of age.

12 In addressing on sentence, Mr Skinner directed attention to Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 99 IR 29 at pp 51-52 in pars [53]-[54] in which a Full Bench of the Court indicated the general approach to sentencing under the Occupational Health and Safety Act was now settled and referred to recent authoritative statements by Full Benches reciting the relevant principles. In particular, reference was made to Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at pp 472-476 where the issue was dealt with extensively. For present purposes, the following passage from Lawrenson Diecasting (90 IR at p 475) may be noted : As we have observed, the primary factor to look at in relation to the penalty to be imposed is the objective seriousness of the offence. Particularly in cases involving a serious breach of the OH&S Act, subjective factors, such as a plea of guilty, co-operation with the investigation and subsequent measures taken to improve safety, must play a subsidiary role in the determination of penalty to the gravity of the offence itself. While the Court must keep in mind not only facts which establish the seriousness of the offence, but also those which tend to mitigate that seriousness or exculpate the offender (see Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P), the presence of the subjective factors referred to should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence.

13 Mr Skinner emphasised in terms of assessing the nature and quality of the offences here the fact that the scaffolding was "a pretty flimsy structure" from which Mr Sales "fell quite a distance and was severely injured". Significantly too, counsel pointed out that the workers concerned with the scaffolding did not hold appropriate certificates of competency for the work. Nevertheless, Mr Skinner acknowledged that the circumstances showed the defendants made early pleas of guilty which should sound in mitigation of any penalties imposed against them. To the extent it may be relevant, Mr Skinner advised that the prosecutor had laid two other charges in connection with the subject incident but those charges were not proceeded with and had earlier been dismissed. I take it that those charges were against persons other than the present defendants, perhaps D F McCloy Pty Limited as the principal contractor and Mr Hyland as a director of the corporate defendant, but no further details were provided or submissions made about such other charges - I therefore ignore Mr Skinner's advice.

14 In mitigation of penalty, and in explanation of what was said to be a somewhat unusual situation leading to this incident, Mr Warren stressed that although the scaffold exceeded four metres in height it was being dismantled at the time; the absence of safety handrails, outriggers, access ladders and other devices to secure the scaffold's stability were to be seen in a context where it was being dismantled. So, submitted counsel, "it was not a situation that was either endemic or usual that the employees would be left alone to dismantle scaffolding of this size". Even so, it was accepted that the scaffold was not completely safe but it was relevant in assessing the quality of the offence to recognise the unusual situation which was affected at the time by Mr Green being distracted by other work. In what I took to be a fairly frank and realistic submission of the situation, but without attempting to minimise the seriousness of what occurred, Mr Warren submitted : Your Honour, this company has an excellent record with respect to occupational health and safety matters and it continues to have that record up until today. It is engaged in an industry which does attract risks and it has worked with those risks, and we say worked with safety with those risks. The situation pertaining to this occasion was unusual, and your Honour is correct in the observation that it is usually the unusual that leads to some sort of a difficulty and people do not foresee the unusual, and with tragic results; and that is what has happened here. But this is not the case of a company which has been blatantly ignoring occupational health and safety issues and has finally been caught.

This is a situation where you have a company which has been placed in an unusual situation and did not properly cater for it, and now does cater for it, and has learned from this most unfortunate occurrence, but, your Honour, the company cannot retract from the situation that the accident happened, and it happened as a result of its failure, and it comes before the Court and says that, and it expresses contrition through Mr Green in his statement, contrition for the injured worker, and sets out what the company did for its employees immediately following the accident and the visits, attended to the worker in hospital, et cetera, et cetera.

The company does not suggest that this was a worker who was in any way foolhardy. In fact, Mr Green says this was a good worker and he was a safe worker, and in the past Mr Green's experience with him was that if this particular employee saw something he thought was unsafe, he would bring it to his attention; and with that sort of philosophy within the employees of the company it is a tragedy this happened, but that also shows this is a company and its employees who are not acting in disregard for their safety as a general rule. And if your Honour is looking at deterrence, which your Honour clearly has to, your Honour could be satisfied that this was a tragic glitch in the company's normal safe operations, and it has continued safe operations and its operations now, with the extensive changes they have brought to their work practices in addition to those that they had in the past, would hopefully ensure, using the words of the statute, that this does not happen again.

And Mr Green has set out in his evidence the not insignificant money that the company has spent also on hardware to ensure that this does not happen again, so they have looked at the need for safety apparel, the need for courses to be done by their employees, all employees, and the need for ongoing safety education of their employees. They have done that.

All that is done not resiling from the fact that this accident should not have happened, and we do not come here before your Honour today saying that this is an accident that should not have happened - it should not have happened if there had been a safe system of work in place, and the company and Mr Green come before your Honour in full contrition of that.

15 Mr Warren as to the position of the personal defendant, Mr Green, asked the Court to apply the provisions of s 10 of the Crimes (Sentencing Procedure) Act 1999 by not proceeding to conviction and making an order that either the charge be dismissed or discharging Mr Green on condition that he enter into a good behaviour bond for a term not exceeding two years.

16 In determining the issue of penalty against the present two defendants, Mr Warren submitted that any penalty imposed against the corporate defendant would in fact be paid directly out of the resources of the personal defendant and in a situation where the corporate defendant itself was only a small company. Mr Warren put it this way :

Your Honour would be aware that quite clearly this is not a large company where, if the director does something wrong and the company is penalised, it is the company's shareholders that bear the brunt of it, and if the director is a shareholder too, then certainly that person does as well, but not to the dramatic and significant effect that will occur here. The company has had significant cost increases in workers compensation and that, of course, has directly impacted upon Mr Green. Any penalty that your Honour imposes on the company will directly impact upon Mr Green.

I am saying those things, your Honour, in preparation for a submission to you that your Honour should, if your Honour can, consider the provisions of section 10 of the Crimes Sentence and Procedure Act with respect to Mr Green. I am aware, and I have informed Mr Green, of this Court's stated position on the past section 556A and now section 10, and that it is only to be used in exceptional circumstances. Your Honour, these circumstances I would submit are quite unique. I certainly do not recall in my experience any small company director being prosecuted under section 50, and that prosecution being maintained at the same time as the company being prosecuted. I am pointing to my experience.

It is a most unusual circumstance, particularly if you bear in mind that I am not talking about a director or a company who have flagrantly ignored warnings, flagrantly ignored inspections from the WorkCover Authority and directions saying, "Fix this and fix that". That is not the situation here. It is not a situation where you have a director who has knowingly and deliberately ignored occupational health and safety warnings or provisions. It is not a situation where the company was brought before this Court on one occasion and was warned or was penalised and then they have done it again, and so now the director is lined up because the director has clearly ignored the warning from this Court to get their act together.

... I am putting this in the context of a company which has never had more than fifteen employees, it is a company that is clearly in financial difficulty, it is a company that is clearly going to suffer a substantial fine from your Honour. It is a situation where Mr Green has never been in a court before. I would submit it is a one-off offence, it is a situation where I would submit what is imposed on the company is imposed on Mr Green.

In all of those circumstances, we are not suggesting using the words from the Act that it is a trivial offence that has been committed by the company, but in all of those circumstances I am submitting your Honour may give some consideration to exercising your discretion under section 10, and if not that, then you should exercise the maximum leniency that your Honour can consider in the alternative, as here we have once against a working director, and I hesitate to use the word, battler, but he is a person who is with his co-director providing work for people and, other than this most unfortunate incident, has been providing work safely and continues to do so.

17 In my view, the essence of the corporate defendant's failure to ensure a safe workplace was the absence from the workplace of Mr Green as the only qualified scaffolder and holder of a certificate of competency at a critical stage during the dismantling of the mobile scaffold and where the system of work itself was so deficient as to enable Mr Sales to fall a distance of just in excess of five metres and thereby sustain serious injuries. I accept, indeed understand, Mr Warren's submission that the work situation was somewhat unusual for the corporate defendant but, even so, on construction sites it is often the case where the unusual leads to risks to workers' safety. That situation, together with the financial position of the corporate defendant, makes it apt, in my view, to repeat what I said in WorkCover Authority of New South Wales (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at p 333, as follows : In addressing the approach to penalty under the Occupational Health and Safety Act , a Full Bench (Fisher P, Peterson and Schmidt JJ) of the Court succinctly put it in the following way in Warman International Ltd v WorkCover Authority of New South Wales (1998) 80 IR 326 at 339: "The approach to the determination of penalty in cases such as these is now well settled. The penalty must reflect the nature and quality of the particular offence; the level of penalty must, on the one hand, compel attention to occupational health and safety risks in order to ensure that persons are not exposed to such risks at their workplaces but, on the other, must not be oppressively high." In a sense, it seems to me that that approach to the determination of penalty receives statutory acknowledgement in s 6 of the Fines Act 1996 which requires a court in fixing the amount of any fine to take into account in the exercise of discretion the defendant's means to pay. I accept Mr Warren's submission that in this case any fine imposed on the corporate defendant would essentially be paid by the personal defendant so as to justify a fine substantially less than it would otherwise be: see Haynes v C I & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 at p 457. I would assess the objective seriousness of the offence against the corporate defendant at the lower end of the range in the amount of $40,000.

18 I accept Mr Warren's submission to the effect that the corporate defendant has modest financial means. In mitigation of the amount so assessed, I have had very much in mind the early plea of guilty, co-operation of the corporate defendant with the investigation by the WorkCover Authority, absence of prior convictions for breaches of occupational health and safety legislation, remedial action promptly being taken at not inconsiderable expense to implement safe work practices and, importantly, full measure of contrition for what occurred. I propose, therefore, to allow a discount of the fine against the corporate defendant of 25 per cent, thus resulting in a fine of $30,000.

19 As to the position of the personal defendant, I propose to apply the provisions of s 10 of the Crimes (Sentencing Procedure) Act by dismissing the charge against Mr Green. I have to say I have reached that conclusion with some hesitation but, on balance, and consistent with the terms of that section, I consider in the circumstances it would be inexpedient to convict him and to impose a fine. I regard the fine against the corporate defendant as sufficient to meet the ends of justice for the identified risks to safety in the incident here concerning Mr Sales on 13 August 1998. In R v Rushby [1977] 1 NSWLR 594 at p 598, the balancing process involved in sentencing was dealt with by Street CJ by reference to what the Court of Appeal in New Zealand said in R v Radich [1954] NZLR 86 at p 87 as follows: On the other hand, justice and humanity both require that the previous character and conduct, and probable future life and conduct of the individual offender, and the effect of the sentence on these, should also be given the most careful consideration, although this factor is necessarily subsidiary to the main considerations that determine that appropriate amount of punishment.

20 Mr Green has had no prior convictions of any nature and during evidence he presented as a sincere, hard-working tradesman who was endeavouring to build and maintain a small business in difficult commercial circumstances. In a sense, his brief departure from the scene of the incident at the time it occurred to attend a pressing problem elsewhere on the site was no excuse for the safety detriment which thereby arose but, I am prepared to accept, it was a casual omission which should not result in a criminal record being created against Mr Green. I think to do so, in the circumstances where the corporate defendant is to be convicted and fined accordingly, would be neither suitable nor judicious. I should record that in reaching this conclusion I am very well aware the exercise of discretion under s 10 (and under the similar provisions of the former s 556A of the Crimes Act 1900) is rarely allowed for offences against the Occupational Health and Safety Act: see WorkCover Authority of New South Wales (Inspector Hopkins) v Profab Industries Ltd (2000) 49 NSWLR 700; (2000) 100 IR 64 and cases cited therein. Further, in Department of Mineral Resources (Chief Inspector McKensey) v Berrima Coal Pty Ltd (2001) 105 IR 348 at pp 393-396 in pars [166]-[176], Walton J, Vice-President reviewed the application of s 10 by reference to the authorities and in applying it in the circumstances of that case observed (105 IR at p 400 in pars [198]-[202]) : [198] The second defendant has no prior convictions and entered a plea of guilty at an early time. He actively co-operated with the prosecutor.

[199] Furthermore, the second defendant should be given credit for the efforts to improve safety after the incident and for the overall good industrial citizenship of the first defendant.

[200] The second defendant has had an impeccable record as a manager in the mining industry. His continued career in that industry is threatened by any conviction under this Act. Further, he is 60 years of age and will thereby reasonably soon look to retirement. These are also factors relevant to the consideration of the application of s 10 of the Crimes (Sentencing Procedure) Act 1999 with respect to the second defendant.

[201] I have had the opportunity of observing the second defendant giving evidence in these proceedings. He was genuinely contrite. He has suffered remorse, shock and distress over the incident. Four days after the incident he started to develop chest pains and ultimately suffered a heart attack. In my view, this had a direct connection to the death of Mr Fraser. The second defendant did not return to work for two months, yet continues to suffer, in my view, at a personal and psychological level as a result of the incident.

[202] In all these circumstances, I consider that extraordinary and highly exceptional circumstances do exist in the case of the second defendant to warrant the exercise of the Court's discretion pursuant to s 10 of the Crimes (Sentencing Procedure) Act 1999.

21 In this case before me, I similarly consider the circumstances sufficiently extraordinary as concerning the personal defendant to justify the exercise of discretion in his favour pursuant to s 10 of the Crimes (Sentencing Procedure) Act and I propose to do so.

22 I make the following orders - Matter No IRC 3973 of 2000 Pursuant to s 10 of the Crimes (Sentencing Procedure) Act 1999, the charge against the defendant is dismissed without any conviction recorded against him; no order as to costs. Matter No IRC 3975 of 2000 1. The defendant is convicted of the offence as charged. 2. The defendant is fined an amount of $30,000, with a moiety thereof to the prosecutor. 3. The defendant is to pay the prosecutor's costs of the proceedings. ________________

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