Tyler v Feature Homes Pty Ltd [2002] NSWIRComm 39 (18 November 2003)

Last Updated: 18 November 2003

Industrial Relations Commission of New South Wales in Court Session

CITATION : Tyler v Feature Homes Pty Ltd [2002] NSWIRComm 39 revised - 09/12/2002

PARTIES : PROSECUTOR:Inspector Ian Tyler DEFENDANT:Feature Homes Pty Ltd

FILE NUMBER: IRC 2549 of 2001

CORAM: Wright J President

CATCHWORDS : Occupational health and safety - Plea of guilty - Gravity of offence - Principles to be applied - Subjective circumstances of defendant - Defendant ceased to trade - Deterrence - Fine imposed

LEGISLATION CITED : Crimes (Sentencing Procedure) Act 1999 s 10Fines Act 1996 s 6Occupational Health and Safety Act 1983 s 16

CASES CITED : Cameron v The Queen [2002] HCA 6 Ferguson v Nelmac Pty Limited (1999) 92 IR 188R v Radich [1954] NZLR 86R v Thomson and Houlton (2000) 49 NSWLR 383Regina v Rushby [1977] 1 NSWLR 594Workcover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (No. 2) (2000) 99 IR 163

HEARING DATES: 21/02/2002

EXTEMPORE JUDGMENT DATE : 21/02/2002

LEGAL REPRESENTATIVES: PROSECUTOR: Ms: L M McManus of counsel WorkCover Authority of New South WalesCarroll & O'Dea, Solicitors (Mr Gerard Phillips)

DEFENDANT: Mr A N Houen, Solicitor of Patterson Houen & Commins, Solicitors and Attorneys

JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

CORAM: WRIGHT J, President

Thursday 21 February 2002

Matter No IRC 2549 of 2001

INSPECTOR IAN TYLER v FEATURE HOMES PTY LTD

Prosecution under s.16(1) of the Occupational Health and Safety Act 1983

JUDGMENT

(Extempore)

[2002] NSWIRComm 39

1   

In the proceedings before the Court today a plea of guilty has been entered in respect of the charge laid by the prosecutor, Inspector Ian Tyler of the WorkCover Authority of New South Wales, against the defendant, Feature Homes Pty Ltd, pursuant to s 16 of the Occupational Health and Safety Act 1983.

2    The Court has been assisted by comprehensive yet succinctly put submissions from both Ms L M McManus, counsel for the prosecution, and Mr A N Houen, solicitor for the defendant. Nevertheless, the submissions, in addition to assisting the Court, served to emphasize the difficulties raised by the circumstances of the present matter in assessing appropriately the penalty to be imposed.

3    The defendant has not sought the benefit of s 10 of the Crimes (Sentencing Procedure) Act 1999 and, that was an entirely appropriate approach. The circumstances of this matter would not have made the application of that ameliorative provision appropriate. Section 16(1) of the Occupational Health and Safety Act, under which the proceedings have been brought, is in the following terms:

16.   Employers and self-employed persons to ensure health and safety of persons other than employees at places of work

(1)	Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work.

4    The offence charged contained the following allegations:

The defendant failed to ensure that persons not in its employment, and in particular, Drago Polak were not exposed to risks to their health or safety arising from the conduct of its undertaking, while they were at its place of work.

The particulars of the charge are:

a) The defendant at all material times had been contracted to undertake the construction of the residence on the property at Wooloondool, Maude Road, Hay in the State of New South Wales.

b) The defendant at all material times employed personnel in the construction of the residence at the said construction site.

c) The defendant at all material times contracted with Drago Polak for Drago Polak to undertake the painting of the interior and exterior of the house under construction at the said construction site.

d) The defendant failed to provide or maintain systems of work to wit systems for undertaking painting work at height that was safe and without a risk to health.

e) The defendant failed to ensure that scaffolding used for painting work at height was safe and suitable pursuant to either regulations 86(1) or 86(3)(a) of the Construction Safety Regulations.

f) The defendant failed to ensure that persons could not fall greater than 1.8m in height pursuant to regulation 73(3) of the Construction Safety Regulations.

g) The defendant failed to provide such supervision as may be necessary for persons undertaking painting work at the said construction site to ensure the health and safety of persons not in its employment at is place of work.

h) As a result of the said failures, Drago Polak was placed at risk of injury and suffered fatal injuries.

5    The history of the proceedings relevant to the plea of guilty are as follows. The proceedings were commenced on 6 April 2001 and returnable before the Court on 22 May 2001. At that stage, the prosecution brief had not been served but service occurred shortly thereafter. The matter subsequently came before the Registrar on 5 July 2001 and also on 2 August 2001, when the plea of guilty was entered. Notice of the plea was not given prior to the date on which it was entered. In the circumstances of this matter, I consider that the plea was entered at the earliest feasible time. See, for example, Cameron v The Queen [2002] HCA 6 at [19]. There has also been co-operation between the parties to ensure that the hearing was conducted in an efficient and expeditious way. That has included agreement between the parties on a comprehensive set of facts, which was tendered by consent.

6    Relevantly, the factual matters agreed are in these terms:

2. At all material times, the defendant, FEATURE HOMES PTY LTD [ACN: 008 653 870] was duly incorporated with its registered office located at Price Waterhouse Coopers, 53 Blackall Street, Barton, in the Australian Capital Territory.

3. At all material times the defendant conducted a house construction business at various locations in the Australian Capital Territory and in the State of New South Wales.

4. At all material times the defendant was undertaking the construction of a house (“the said house”) at a property known as Wooloondool on Maude Road, Hay, in the State of New South Wales (“the site”).

5. At all material times the defendant employed personnel and contracted with subcontractors to undertake the construction of the said house at the site.

6. At all material times the defendant entered into a subcontract agreement with D & M Polak, painting contractors, to providing painting services at the said house. Drago Polak, 52 years of age, was a principal of that firm.

7. The work of the painting contractor was largely complete and, by the 10^th of April 1999, Drago Polak was attending to remedial and touch-up work prior to finishing his work and leaving the site.

8. The site was in a remote location, and as at the 10^th of April 1999, no other trades were present.

9. On the 10^th of April 1999, Mr Drago Polak suffered severe head injuries at the site. The owner of the house, Mrs Elisabeth Maynard, found Mr Polak unconscious on the floor at about 1.00pm. He was bleeding from his left ear. The ambulance was called and Mr Polak was immediately taken to Hospital for treatment. He died on the 12^th of April 1999, as a result of the head injuries sustained.

10. On the 12^th of April 1999, Inspectors David Kidd and Stuart Larkin conducted an inspection of the said house. Photographs were taken and factual inspection reports compiled. Annexed hereto and marked “A1”, “A2”, and “A3” respectively, are copies of those reports and the photographs. A drawing of the accident site and a site sketch of the accident location were also prepared by Inspector Kidd. Annexed hereto and marked “B1” and “B2” respectively, are copies of those diagrams.

11. The inspection revealed a large private home under construction completed to approximately lock-up stage. The home was designed in an ‘L’ shape, with an entrance hall at the point of the ‘L’ and two wings of the home being predominantly bedrooms and amenities in one and family/living areas in the other.

12. The entry to the house was an almost triangular shaped room. Skylight windows were located along the full length of the northern wall at a height of approximately 3200mm. Set up in the room were two scaffold frames 2030mm apart and two high (2940mm above the ground). The eastern end frame was 2030mm from the end wall. The scaffold frames had cross bracing on the bottom and top of the northern side only.

13. At the long end of the room, two extension ladders were placed against the wall to support a series of planks, which crossed over to the scaffold frames. The planks were of varying lengths (2000mm to 4500mm approximately) and widths (170mm to 245mm in width). At the short end of the room another extension ladder was positioned and also supported a plank, which crossed to the frames. Across the two scaffold frames lay another three planks at various angles to the frame. None of these planks were secured to the frames. The planks from the ladders to and over the frames were approximately 4500mm in width. They did not have handrails or toeboards.

14. Drago Polak was found laying across the room almost parallel to the scaffold frame with his head positioned near the door on the northern side at the short end of the room.

15. In a room off the entry on the southern side was another plank, which had been placed there to allow the Ambulance officers room to treat Mr Polak. On one corner of the plank there were remnants of the plaster dust and some splintering. This plank appears to have gouged the wall to the left of the doorway near where Mr Polak was found.

16. Mr David Elphick, a director of the Defendant Company, was interviewed by WorkCover inspectors on 22 April 1999; 6 September 1999, and 12 October 2000. Annexed hereto and marked with the letters “C1”, “C2”, and “C3” respectively, are copies of those statements. Mr Elphick stated that the scaffold frames and planks used by Mr Polak on the day of the accident were owned by the Defendant Company. He also stated that Mr Polak was a very experienced tradesman who was authorised to use the Company’s materials and equipment in the conduct of his work but that, so far as he was aware, no safety training or instruction was necessary or had been given to Mr Polak prior to commencing work at the site. The only instruction given to Mr Polak was that from Mrs Elisabeth Maynard when she discussed the colour scheme. Mr Elphick was unaware if Mr Polak had any formal qualifications in scaffolding. The defendant did not employ any persons who held Certificates of Competency in scaffolding, but did engage persons having in excess of 30 years experience in the house building industry.

17. A landing off the rear of the entry, from which stairs led to ground, was 2500mm to 2900mm above natural ground. There was no handrail around this landing to prevent persons from falling a distance of more than 1800mm. A further landing at the rear of the house also did not have a handrail.

18. If intended for that purpose, the scaffold that had been assembled in the entry of the said house by Drago Polak was not appropriately constructed to ensure a safe work area.

. . .

20. In relation to these allegations, the defendant says the following (which is not agreed by the prosecutor, but is acknowledged):

(a) It admits that it, at all material times, had been contracted to undertake the construction of the residence on the property at Wooloondool, Maude Road, Hay in the State of New South Wales.

(b) It contends that paragraph 19(b) is irrelevant to the matters currently before the tribunal in this matter.

(c) The defendant admits that, at all material times, it contracted with D & M Polak, Painting Contractors, of which Mr Drago Polak was a Principal to undertake the painting of the interior and exterior of the house under construction of the said site and, for that purpose, permitted Drago Polak unfettered access to the site for the performance of his work, and a general discretion as to how the work was to be performed.

(d) The defendant says that it was, at all times, prepared to but otherwise relied upon Drago Polak, to provide or maintain systems for undertaking painting work at height that was safe and without risk to health.

(e) The defendant says it directed and instructed Drago Polak to establish his own requirements for work, but took no other steps to ensure that scaffolding used for painting work at height was safe and suitable pursuant to either regulations 86(1) or 86(3)(a) of the Construction Safety Regulations.

(f) Apart from relying upon the skill and experience of Drago Polak, the defendant admits it took no further steps to ensure that persons could not fall greater than 1.8m in height, pursuant to regulation 73(3) of the Construction Safety Regulations.

(g) The defendant admits that apart from relying upon the skill and experience of Drago Polak, it did not provide any other supervision for persons undertaking painting work at the construction site to ensure the health and safety of persons not in its employment at its place of work.

(h) It admits that Drago Polak sustained fatal injuries at the said construction site.

[Paragraph 19 has not been set out as it is in the same terms as the charge set out in paragraph [4] above; documents annexed have not been included]

7    In response to the material relied upon by the prosecution, the defendant tendered an affidavit from Mr David James Elphick, the sole director of the defendant and, in effect, its working proprietor. I shall return to that evidence in due course. The defendant has also tendered:

(a) A special purpose financial report prepared as at 30 June 2000 (Exhibit 2);

(b) A certificate from PriceWaterhouseCoopers Canberra as to certain matters, to which reference will be made subsequently (Exhibit 3); and finally

(c) Exhibit 4, which is an advice from the Housing Industry Association confirming that the defendant “has been a member in good standing of the HIA from 10 February 1981”.

8    The explanation for the date included in the last document is that, although the defendant was not incorporated until approximately 1989, the incorporation at that time was of a partnership which had traded since the early 1980’s. The advice from the HIA in substance refers to the membership of the firm or partnership and then that of the incorporated body. It is therefore common ground that the defendant either as a corporation or pre-existing partnership had, prior to the incident in question, worked in the industry for almost twenty years and had not had a previous conviction under occupational health and safety laws.

9    Before I return to the affidavit of Mr Elphick, reference should now be made to the advice from PriceWaterhouseCoopers in Canberra. Exhibit 3 is in short terms. Relevantly it provides as follows:

We act as tax accountants for Feature Homes Pty Limited.

We have been informed by the director of Feature Homes Pty Limited, Mr David Elphick, that the company has ceased trading.

As at 30 June 2001, the financial statements of the company disclose total assets of $142,727 and total tangible assets of $11,932 excluding goodwill. The total liabilities amount of $290,716 leaves a net tangible unit deficiency of $278,784.

10    The situation is that the defendant ceased trading at the beginning of 2002 and Mr Elphick, because the company in which he worked is no longer operating, is carrying out small jobs in the building industry, in which he has worked for some time. The situation is that, since the incident the subject of the charge, the company has ceased trading and the underlying partnership between Mr Elphick and his brother-in-law has also ceased operation.

11    Returning to Mr Elphick’s affidavit, because of its significance to the defendant’s plea, the substance of it should be set out. It relevantly provides:

2. Feature Homes is a small company. Its only business is that of a builder. It carries out residential building projects in the Australian Capital Territory and southern New South Wales and constructs approximately five dwellings per year.

3. I am also a sole trader contracting carpentry services to the industry.

4. In or about October 1998, Feature Homes entered into a contract with Elizabeth and Martin Maynard to build a house at their property known as “Wooloondool” Maude Road via Hay.

5. Feature Homes commenced work on the property in about November 1998.

6. Feature Homes engaged a number of subcontractors to deal with plastering, tiling and painting aspects of the contract (other subcontractors for plumbing, drainage and electrical were engaged directly by the property owner, Martin Maynard). These subcontractors were chosen through a tender system, and all had in excess of thirty years experience in the building industry.

7. D & M Polak, Painting Contractors were chosen to paint the new residence. Drago Polak was a principal of the business. The reason for Feature Homes’ choice of Mr Polak’s business was his long standing relationship with the company and his significant experience as a painter. Mr Polak had worked for Feature Homes, on and off, as a contractor for approximately 13 years, and had been a painter in the industry for over thirty years.

8. Mr Polak commenced work at the site in or around March 1999, and worked on site as necessary until the accident on 10 April 1999.

9. There were a number of other persons on the site during this time, including myself, an electrical contractor, a plumbing contractor and an apprentice carpenter who was an employee of Feature Homes.

10. I was in charge of the site and organised the subcontractors in respect to various aspects of the construction. I did not otherwise give instruction to Mr Polak because:

(a) He was an independent contractor, and it was not necessary;

(b) He had significant experience as a painter which Feature Homes relied upon; and

(c) Instructions in respect to colour schemes for the house were given to him by the owner, Mrs Elizabeth Maynard.

11.	On this basis, Mr Polak was given unfettered access to the site for the performance of his work, and a general discretion as to how the work was to be performed.

12.	By 9 April 1999 almost all of the work on the house had been completed. In particular:

Work Status

External Cladding Completed

Gyprock and cornice Completed

External Painting Completed

Internal Fixing 80% complete

Internal Painting 50% completed

13.	On Wednesday 7 April 1999, I erected a scaffold in the entry foyer of the house to facilitate completion of the internal fixing to the highlite windows. Mr Polak then used the scaffold platform to paint the ceiling and windows.

14.	The scaffold frames and planks were owned by Feature Homes, and upon completion of the internal fixing by myself on Wednesday, were left at the site pending their removal.

15.	On Friday 9 April 1999, I completely dismantled the scaffold and moved all components outside. This was to allow the joiner to install wall units in the foyer of the house, and to facilitate removal of the scaffolding in due course.

16.	At about 1.00pm on that day, I left the site and travelled home to Canberra. There was no scaffolding erected at the site at the time of my departure.

17.

In the afternoon of Saturday 10 April 1999, I received a telephone call from the property's owner, Mr Martin Maynard. Mr Maynard advised me that Mr Polak had fallen from a scaffold in the foyer of the house, and that he had been taken to Griffith Hospital. He was not aware of how Mr Polak had fallen or of Mr Polak's precise injuries.

18.	I was unaware that Mr Polak was using a scaffold to access the ceiling and window frames in the entry of the house, and did not know that he had erected a scaffold until I was advised of the accident.

19.

So far as I am aware, Mr Polak had been the only person on the site at the time, and therefore the only person to erect the scaffolding. No-one had instructed him to erect the scaffold, and it was not expected that any instruction would be given. Mr Polak was a very experienced and qualified tradesman, contracted to use his knowledge and skills to complete his job in a safe and professional way.

20.

Mr Polak had completed many jobs as a contractor for Feature Homes (approximately three a year on average for the last 13 years), and had built his own scaffolds and work platforms on many occasions. On this occasion, it is alleged that Mr Polak had used steel frames which had been owned by Feature Homes, some scaffolding planks (some owned by Feature Homes and some by Mr Polak), his own ladders and some site surplus timbers which were not intended for scaffolding. I have no direct knowledge of this.

21.	The cyclone-scaffolding frames owned by Feature Homes were in a satisfactory condition, and had been used by Feature Homes in excess of 15 years without failure.

22.	Feature Homes is a small building company with a turn-over of around $800,000.00 per year, and at the time of the accident had only one employee (being an apprentice carpenter). Feature Homes does not currently have any employees.

23.	Feature Homes has never had any compensable accidents with employees or contractors on any of its worksites since its commencement as a business in 1979.

24.	Feature Homes has been a member of the Housing Industry Association ('HIA') since 1981, and is considered a member in good standing.

25.

Feature Homes is also considered in good standing in respect to on-site safety amongst its subcontractors. Annexed and marked "A" are copies of references from various subcontractors attesting to Feature Homes' consistent safety record over the last twenty-five years. [Note: The documents in Annexure "A" are not reproduced]

26.	It is my understanding that at no time prior to the accident has Feature Homes been made aware of any failure on the part of the Company nor any need to update its practices to comply with the Occupational Health and Safety Act.

27.	It is also my understanding that WorkCover saw no need to re-visit the site in question during completion of the residence, and that on this basis believed the matters complained of to have been satisfactorily rectified.

28.	It is my belief and experience that the practices of Feature Homes were safe and typical for the cottage construction industry.

...

30. This incident has also had a detrimental effect on my health. I have known since April 1999 that I have suffered from mestatic melanoma, which is a life-threatening condition. In April 1999, I had my first surgical procedure in respect to this condition. I have had two further operations since, and am under continuous medical review.

12    It will be noted from the terms of Mr Elphick’s affidavit that he has provided a number of references from colleagues in the building industry and associated trades, such as electrical contracting. In those documents, his colleagues speak of his efficiency, the organisation of his business and the safety concerns exhibited in the way in which his business has been operated. In a real sense, such matters lay at the nub of the matters which are to be considered in these proceedings.

13    In addition, there has been some debate as to the significance of paragraph 29. It is said by the prosecution that the paragraph was relevant to subjective considerations, perhaps not so much as to the extent of contrition but also failure to take steps after the incident. Paragraph 29 indicates that:

29. Feature Homes [is] currently undertaking a review of its legislative obligations, and will ensure that the appropriate up-to-date Occupational Health and Safety practices and risk management principles are adopted on all its sites. In this regard, I have recently completed a WorkCover course on Occupational Health and Safety practices.

14    I consider that statement does not detract from the significant factors in favour of the defendant, but rather represents some measure of confusion in relation to relevant matters. The reason I have come to that conclusion is that at the time the affidavit was sworn earlier this month, the defendant had ceased trading and clearly the paragraph was not intended to be referring to a current process. Similarly, the WorkCover Authority, as noted in paragraph 27 of Mr Elphick’s affidavit, did not feel it necessary to re-attend the site after the matters which had led to the tragic accident had been remedied. It is also known that immediately after the incident WorkCover provided Mr Elphick with certain safety information as to occupational health and safety, and related matters, which he read and acted upon and, indeed, he attended a course conducted by WorkCover as to workplace safety in the construction industry, which he completed in November last year.

15    I do not consider that there is any basis to minimise the contrition shown by the defendant in this matter which, notwithstanding the difficulties attendant upon its assessment, is often seen as arising from the plea of guilty itself.

16    As I have found, the plea of guilty has been entered at the earliest possible time. In addition, the defendant has comprehensively co-operated with WorkCover not only, as earlier observed in relation to the proceedings before this Court, but also in WorkCover’s investigation. I do not, therefore, consider it likely that the recognition and acceptance by the defendant of its legislative obligations as to occupational health and safety was put to one side, as it were, as paragraph 29 might appear to indicate.

17    Before I turn to the subjective factors in more detail, I should observe that I consider the circumstances here are quite unusual or perhaps more correctly, represent a combination of events which, taken together represent a most unusual situation although they cannot be given precedence over objective matters to which substantial weight has to be given.

18    Perhaps the starting point for the consideration of this aspect is paragraph 30 of the affidavit and the reference to the serious medical condition suffered by Mr Elphick. He has given evidence here today that there has been some recurrence of that condition, which has led to further surgery.

19    There seems little doubt that the incident has had a significant impact on Mr Elphick personally and also on the viability of the company. It is also, of course, fair to say that the company was a small scale operation, which did not have a significant turnover and which largely conducted its business by the use of a small number of employees. Specifically, Mr Elphick says it consists of himself and his apprenticed son and is otherwise operated by his sub-contractors. The reliance on the use of sub-contractors was clearly part of the problem which led to the breach of the statute to which the plea of guilty has been entered.

20    It is not the situation that, as a rule, the question of the penalty to be imposed will be directly related to the personal circumstances of its controlling director or of its major officer. However, Mr Elphick played not only the management role but virtually a single handed role in the work of the company; in those circumstances, the impact of his illness on the future of the company, because of the close correspondence between the company and Mr Elphick personally, will be significant. Therefore, in terms of assessing the appropriate penalty it is relevant to look to those matters and particularly so where the company, on the face of it, is insolvent in a significant way.

21    The principles relevant to the question of sentencing for occupational health and safety offences are now quite well established and, indeed, the parties are at one that a useful synthesis of them is to be found in the judgment in Workcover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited (No. 2) (2000) 99 IR 163 particularly at 185. It is unnecessary here to repeat the detailed considerations to be found in that case, however, see particularly the passages at 185 - 187 and also at 192 - 193. It is sufficient to note, for example, that the primary factor to be considered in determining the appropriate sentence or penalty is the objective seriousness of the offence charged and that the proper consideration of subjective matters is that they are to rank in importance well behind the nature and quality of the offence. It was said, for example in that judgment that:

[22] The primary factor to be considered in determining the appropriate sentence is the objective seriousness of the offence charged. This has been expressed in various ways. For example, by observing that "the true measure of penalty lies in the nature and quality of the offence": Independent Cargo & Wool Services Pty Ltd v Mingare (unreported, Fisher CJ, Glynn and Peterson JJ, CT92/1041, 10 March 1994) at 4; Inspector Hannah v Wonar Pty Limited (unreported, Fisher CJ, Glynn and Cullen JJ, CT90/1214, 30 June 1992) at 9; WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89 at 96 citing Haynes v James Glass and Aluminium Pty Limited (unreported, Fisher CJ, CT91/772 - 775, 20 May 1994); Inspector Hannah v Albury City Council (1999) 90 IR 397 at 409 - 411; Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 208; and Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474 - 475. The proper approach involves initially considering the gravity of the offence viewed objectively with the Court ensuring that the allowance for subjective factors does not produce a sentence which fails to take account of the objective gravity of the offence: R v Dodd (1991) 57 A Crim R 349 at 354; R v Gordon (1994) 71 A Crim R 459 at 468; R v Allpass (1993) 72 A Crim R 561 at 563; Lawrenson Diecasting Pty Limited at 476. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5; Inspector Hannah v Wonar Pty Limited at 9; Watson v Southern Asphalters Pty Limited (1996) 83 IR 446 at 456; Wong v Melinda Group Pty Limited (1998) 82 IR 118 at 131; Albury City Council at 408 - 409; Lawrenson Diecasting Pty Limited at 476; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (unreported, Walton J, Voce-President, IRC98/1104 and 1106, 4 February 2000) at 90 - 91.

[23] The proper consideration of subjective matters such as "previous good industrial citizenship and the absence of prior convictions", rank in importance well behind "the two primary aspects of the matter namely the nature and quality of the offence and the clear policy of the Act in relation of the establishment of safe standards and the protection of the workforce": Waugh at 96 - 97; Albury City Council at 408 - 409; Lawrenson Diecasting Pty Limited at 474 - 475; Dowling v Overtop Pty Limited (1998) 86 IR 319 at 333. The maximum penalty available for an offence reflects the "public expression" by parliament of the seriousness of the offence; a large penalty indicates the gravity of the offence as perceived by the community. The task of the Court is thus to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the penalty scale of penalty set by the legislature from zero to the maximum: Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 698 - 699; Nesmat Pty Limited v WorkCover Authority (NSW) (1998) 87 IR 312 at 321; and Albury City Council at 407 - 408. Although some cases have referred to the consideration that a penalty should not be "oppressively high", such dicta should not be considered as qualifying the approach to balancing subjective and objective factors expressed in Waugh: see Albury City Council at 411; Lawrenson Diecasting Pty Limited at 474 - 475; Dowling v Overtop Pty Limited at 333; Ferguson v Nelmac Pty Limited at 208 - 209; Fletcher Construction Australia Limited v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 78 - 79.

It is also established (see Walco Hoists (No 2) at 192 in paragraph [40]) that the Court is obliged, both pursuant to s 6 of the Fines Act 1996 and traditional approaches as to sentencing, to consider “such information regarding the means of the accused as is reasonably and practicably available to the court for consideration.”

22    A related consideration is that expressed subsequently in the judgment of Walco Hoist (No 2) where, at 192 - 193 in paragraph [42], where there is a lengthy extract from the judgment of the Court of Criminal Appeal in Regina v Rushby [1977] 1 NSWLR 594 at 598 of what was said in that case by Sir Laurence Street CJ by reference to R v Radich [1954] NZLR 86 at 87. The relevant passage is in the following terms:

If a Court is weakly merciful, and does not impose a sentence commensurate with the seriousness of the crime, it fails in its duty to see that the sentences are such as to operate as a powerful factor to prevent the commission of such offences. 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.

23    That passage usefully emphasises the importance of having regard to the personal circumstances of the defendant and, in doing so, to ensure that there is an appropriate balancing of all relevant considerations. This Court must nevertheless ensure that sentences are such as will operate as a deterrent, and there is an important obligation on the Court (see Walco Hoist (No 2) at 185) to ensure that the allowance for subjective factors does not produce a sentence which fails to take account of the gravity of the offence, because to do so would not give sufficient weight to the question of deterrence, particularly if the offence is one, as is the present offence, where deterrence is of particular importance.

24    Nevertheless, one of the difficulties in this matter is the need to attempt, notwithstanding the significant weight that the financial circumstance of this defendant must be given, to fix a penalty which has some prospect of being paid. To impose a penalty which has little prospect of being met by the defendant would not be likely to have any practical deterrent effect at all. As earlier indicated, the particular set or combination of circumstances in this matter seem to make it truly unique and that may mean that, in balancing the relevant factors, it will be necessary in assessing the sentence to give more weight to the requirements of s 6 of the Fines Act and similar considerations than traditionally has occurred.

25    Before turning in some short detail to the seriousness of the offence, I should note that the defendant accepts, correctly in my view, that the offence is a serious offence which is consistent with the submissions of the prosecution. The maximum penalty for the offence is agreed as $550,000. The nature of the offence is set out in detail in the agreed facts and counsel for the prosecutor and the solicitor for the defendant have provided to the Court helpful written submissions which will be left in the papers and which will obviate the need to set those matters out here. Suffice it to say that detailed regard has been paid to the matters in the parties' written submissions.

26    The solicitor for the defendant argues that this is not:

"a case of wilful breach involving a conscious disregard for worker safety. Rather this is a case of a negligent or careless omission in the form of a failure to properly control and supervise activities on the construction site involving a failure to ensure a safe system of work on the site arising from a failure to become properly acquainted with the relevant statutory requirements for OH&S. The facts disclose poor judgment on the part of the Defendant by its placement of undue trust in and reliance upon the skills and experience of Mr Polak as an independent contractor of long standing.”

That submission is essentially correct but regrettably it does not take fully into account the qualitative aspects of the breaches of safety, which are highlighted by the prosecution’s submissions, which refer to the failure to ensure safe scaffolding in terms of the relevant safety regulations and the apparent ignorance by the defendant's proprietor of such matters notwithstanding his long work in the industry and notwithstanding the defendant's safe record.

27    I consider that the defendant does appreciate, and Mr Elphick does appreciate, that the defendant's failures to take individual or personal responsibility for the safety requirements arising from the statutory obligations, did have an important effect not only in relation to breach of safety, but in respect of the accident which occurred. It must be acknowledged that the defendant's submissions involve no retreat from that responsibility but rather the acceptance of it.

28    Clearly, as the prosecution has submitted, the defendant had an obligation to be pro-active in its approach to safety in the workplace and that did not occur. A factor in that situation, in turn, was its failure to ensure it had relevant knowledge as the requirements of the statute. This is not the situation to explore whether the statutory requirements in the Australian Capital Territory, where the defendant was based, are different to those under the New South Wales Occupational Health and Safety Act and whether that represents a practical problem which may explain why the defendant had the level of ignorance that it did have.

29    Perhaps that is a relevant matter which the authorities, including the WorkCover Authority, could look at as it seems to be a not unusual situation, that building companies located in the Australian Capital Territory conduct work in New South Wales not only in other urban areas, such as Queanbeyan, but apparently also in rural areas such as Hay where this accident occurred.

30    I also consider that it was the situation, however, that in a subjective sense there was no actual expectation of the defendant or of Mr Elphick that Mr Polak would carry out work in the business of the defendant in a way which would lead to a safety risk. That acknowledgment, however, because of the strict nature of the liability under the Act, does not operate to affect the objective seriousness of the breach or to mitigate to any real degree its objective seriousness.

31    I now turn more particularly to deal with the subjective considerations. I have already found that there was the highest level of co-operation with the authorities, that the plea of guilty was entered at the earliest possible time, that there is no reason to qualify the contrition or actual remorse expressed by the defendant as to what happened to the deceased worker, or the defendant's recognition of its legal responsibility and Mr Elphick's recognition of his own responsibility in those respects.

32    Appropriate consideration has to be given to the defendant's safety record at work both in its corporate form and pre-corporate form which stood for almost 20 years and the lack of any earlier convictions. It has to be recognised that in view of the lack of very elementary knowledge in the defendant as to safety matters that some of that record may have been to a degree fortunate, but nevertheless the defendant is entitled to rely on it.

33    The more troubling difficulty in this matter is the most unfortunate personal circumstances of Mr Elphick and the effect that has had on the defendant corporation such that there must be limited scope for specific deterrence in this matter certainly as to the defendant, and to the extent it might have been relevant to Mr Elphick (and I make no finding that it is), the nature of the work he is now doing makes it doubtful that deterrence could even be significant as to him.

34    Paragraph 28 of his affidavit provided that it was his belief and experience that "the practices of Feature Homes were safe and typical for the cottage construction industry"; which if accepted requires significant weight to be given general deterrence in this matter.

35    I have earlier referred to the complex and thus quite difficult interplay of the individual and personal circumstances of the defendant in this matter, that it has ceased to operate, its insolvent situation with a net financial debt of over a quarter of a million dollars, and the unfortunate health circumstances of the personal manifestation of the company, that is, of Mr Elphick, and the need in those circumstances to have regard to the capacity of the defendant to pay. I have discussed this dilemma at least in principle in earlier cases, such as Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209 and (Walco Hoist (No 2)) at 192 and discussed the resolution of such dilemmas, and the difficulty in this case is even more difficult than it was in those.

36    As was said in those judgments, although there is an obligation to take into account the financial circumstances of the defendant that does not necessarily mean that a significant fine should not be imposed. I do not however consider that a imposition of a very large fine would be appropriate in this matter because of the complex set of circumstances I have already referred to. Giving the greatest possible weight to subjective circumstances which would be considered to be appropriate would not however produce a result which gave appropriate weight to the individual circumstances I have earlier referred to. I should however formally record that I have taken the approach in terms of the principles set out in the Court of Appeal guideline judgment in R v Thomson and Houlton (2000) 49 NSWLR 383 at [160] to [162] and that has occurred on the basis of an overall discount in the order of one third taking into account the utilitarian value of the plea and all other subjective considerations. It is however necessary to give some further discount because of questions associated with capacity to pay and related matters. There is however a limit as to the extent which such matters might operate because although the fine to be imposed will be much less than it would have been but for those circumstances, it nevertheless must be a penalty of substance otherwise it would be unlikely to have any deterrent effect at all.

37    Weighing those various factors, as best as may occur in the present case, it is considered that the appropriate penalty to be imposed is $20,000, and it is, therefore, proposed to make formal orders as follows. If there be any matters of detail which have been overlooked, the legal representatives may raise them in due course.

38    The Court makes the following orders:

1. Verdict of guilty entered against the defendant as to the offence charged in Matter No IRC 2549 of 2001.

2. Penalty in the sum of $20,000 imposed in respect of that offence.

3. A moiety of that penalty be paid to the prosecutor.

4. The defendant shall pay the prosecutor's costs of the proceedings and the Court grants liberty to apply should it be necessary for a specific sum to be fixed as to costs.

[Parties indicated there was no application as to the detail of the orders made]