Workcover Authority of New South Wales (Inspector Waterhouse) v Newtown Developments Pty Limited and In-Ground Constructions Pty Limited [2006] NSWIRComm 209 (3 July 2006)

Last Updated: 3 July 2006

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : WorkCover Authority of New South Wales (Inspector Waterhouse) v Newtown Developments Pty Limited and In-Ground Constructions Pty Limited [2006] NSWIRComm 209

FILE NUMBER(S): IRC 217

218

240

HEARING DATE(S): 15/06/2006

DECISION DATE: 29/06/2006

PARTIES:

PROSECUTION:

WorkCover Authority of New South Wales (Inspector Waterhouse)

DEFENDANTS:

Newtown Developments Pty Limited

In-Ground Constructions Pty Limited

JUDGMENT OF: Staunton J

LEGAL REPRESENTATIVES

PROSECUTION:

Mr P Skinner of counsel

SOLICITORS:

Carroll & O'Dea

FIRST DEFENDANT:

Mr J Sleight of counsel

SOLICITORS:

Clinch Neville Long

SECOND DEFENDANT:

Ms C Ravenscroft of counsel

SOLICITORS:

Mark C Hennessy, Solicitor

CASES CITED: Abigroup Contractors Pty Limited v WorkCover Authority of New South Wales [2004] NSWIRComm 270

Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 99 IR 29

Crown in Right of the State of New South Wales (Department of Education and Training) v Keenan (2001) 105 IR 181

Ferguson v Nelmac Pty Limited (1999) 92 IR 188

Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464

Markarian v The Queen [2005] HCA 25: 18 May 2005

Pearce v The Queen (1998) 194 CLR 610

R v Gallagher (1991) 23 NSWLR 220

R v Thomspon; R v Houlton (2000) 49 NSWLR 383

R v Way [2004] NSWCCA 131

Thorneloe v Filipowski (2001) 52 NSWLR 60

WorkCover Authority of New South Wales (Inspector Mansell) v Jian Chen and Obing Pty Limited trading as Old But New [2004] NSWIRComm 247

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999

Fines Act 1996

Occupational Health and Safety Act 2000

JUDGMENT:

- 22 -

INDUSTRIAL RELATIONS COURT OF NEW SOUTH WALES

CORAM: Staunton J

DATE: 29/6/2006

Matter No's IRC 217 and 218 of 2005

WorkCover Authority of New South Wales (Inspector Waterhouse) v Newtown Developments Pty Limited

Prosecutions under section 8(1) and 8(2) of the Occupational Health and Safety Act 2000

Matter No IRC 240 of 2005

WorkCover Authority of New South Wales (Inspector Waterhouse) v In-Ground Constructions Pty Limited

Prosecution under section 8(2) of the Occupational Health and Safety Act 2000

JUDGMENT

[2006] NSWIRComm 209

1 The defendants in these matters have pleaded guilty to offences arising under ss 8(1) and 8(2) of the Occupational Health and Safety Act 2000 (the Act).

2 The first defendant, Newtown Developments Pty Limited (Newtown), was charged with two offences. The first arises under s 8(1) of the Act where it is said that the defendant:

Failed to ensure the health, safety and welfare at work of all of the employees of the Defendant employer and in particular Ken Hong, Philip Walzinski, Nivone Thipdavong and Adam Hong on 18 January 2003 and Tino Carfi on 19 January 2003.

3 The particulars of that charge state that the defendant:

(a) Failed to provide and maintain a safe system of work for the stabilisation of footings of the house and excavation of a trench on the site that was safe and without risk to health that ensured that the wall of the house was not at risk of collapse; and

(b) Failed to properly or adequately assess the stability of the wall, wall foundations and ground conditions of the house to ascertain the effect of the treatment and excavation work upon the wall so as to be safe and without risk to health.

4 In relation to the offence arising under s 8(2) of the Act, it is said that the defendant:

Failed to ensure that persons (other than employees of the Defendant employer), and in particular Kite Richards and Pauline Piper were not exposed to risks to their health or safety arising from the conduct of the Defendant’s undertaking while they were at the Defendant’s place of work.

5 The particulars of the s 8(2) charge are in the exact same terms as the offence charged under s 8(1) of the Act. The only difference between the two charges are the persons specifically identified as being exposed to risks to safety as a result of the defendant's particularised failures.

6 The second defendant in these matters, In-Ground Construction Pty Limited (In-Ground), was charged with an offence under s 8(2) of the Act where, it is said, the defendant:

Failed to ensure that persons (other than employees of the Defendant employer), and in particular Ken Hong, Phillip Walzinski, Nivone Thipdavong, Adam Hong, Tino Carfi, Kite Richards and Pauline Piper were not exposed to risks to their health of safety arising from the conduct of the Defendant’s undertaking while they were at the Defendant’s place of work.

7 The particulars of that charge state the defendant:

(a) Failed to provide and maintain a system of work for applying and testing sodium silicate grout treatment that was safe and without risk to health to ensure uniformity in the application of the treatment and that the footings of the house would not move, shear, collapse or subside so that the wall of the house was not at risk of collapse; and

(b) Failed to provide any or any adequate information, instruction or advice about the specifications and curing times of sodium silicate grout treatment at the site to ensure that the trimming of the foundation of the house and the excavation of a trench at the site was safe and without risk to health so that the wall of the house was not at risk of collapse.

8 The failings of both defendants arise out of the same factual circumstances. The prosecutor has tendered agreed statements of fact in relation to the offences.

9 With respect to Newtown, the following is agreed:

[1] At all material times, the Defendant was a duly incorporated company with a registered office at Level 10, 153 Walker Street, North Sydney in the State of New South Wales.

[2] At all material times the Defendant was an employer in the State of New South Wales.

[3] At all material times the Defendant undertook the business of development, building and construction work of residential terrace houses at 162 – 184 Belmont Street, Alexandria in the State of New South Wales (“the site”).

[4] At all material times the Defendant employed Ken Hong, Philip Walzinski, Tino Carfi, Nivone Thipdavong and Adam Hong to undertake work at the site.

[5] On or about 27 March 2002, the Frank Stanisic Architects Pty Limited submitted a development application to South Sydney Council (“the Council”), to develop and build terrace houses at the site on behalf of Newtown Belmont Street Pty Limited, a company associated with Newtown Developments Pty Limited (“the Defendant”) who was the building and head contractor at the site. On 31 July 2002, Development approval DA 302/2002 (“the DA”) was determined by the Council. In particular the DA required excavations to be properly guarded and protected to prevent danger to life or property and where excavation extended below the footings of an adjoining building such excavation must underpin and support the building to preserve the building from damage.

[6] On or about 16 March 2004, the Council issued a construction certificate No J02430.

[7] Located adjacent to the site and abutting the boundary at 160 Belmont Street Alexandria, was a single storey residential dwelling (“the house”), constructed of brick which was occupied by Kite Richards and Pauline Piper. The boundary wall was an “English Bond” style nine (9”) inch solid wall (“the wall”).

[8] Prior to the commencement of building work at the site it was necessary to undertake soil stabilisation under the footings and piers of the house to consolidate its foundations and prevent structural damage from the excavation of a trench along the length of the wall which was to be used for pouring the footings of the new terraces. The Defendant made no assessment of the condition of the foundations of the house or the wall prior to the excavation work.

[9] On about 13 January 2003, Tino Carfi, Construction Manager for the Defendant decided to use a Sodium Silicate Injection System (“the grout”) to underpin the footings of the house. Mr Carfi had had experience using the grout at a previous development undertaken by the Defendant known as Spectrum Apartments at McEvoy Street, Alexandria. There had been no problems associated with the work in McEvoy Street.

[10] At all material times In-Ground Constructions Pty Ltd (“In-Ground”) was contracted to the Defendant to undertake grouting to underpin the footings of the house by using a Sodium Silicate Injection System to a soil depth of one (1) metre below the footing levels of the house over a length of twenty-six (26) metres, by creating interlocking columns of treated soil 600mm in diameter spaced at 500mm centres.

[11] The grouting was to be undertaken by injecting a lance flushed into the soil adjacent to the footings to the design depth and then withdrawn in equal increments with a measured volume of grout being injected at each increment. In-Ground’s quote was based on the assumption that the composition of the soil was consistent readily permeable sand not containing an excessive proportion of fines greater than twenty percent (20%) that would inhibit permeation nor contain voids which would allow the grout to flow away. The grout required 600mm to 1m of over-burden to optimise the results.

[12] The grout mixture comprised fifty percent (50%) sodium silicate, three percent (3%) ethylene glycol diacetate a hardening agent and forty-seven percent (47%) water.

[13] The In-Ground quotation did not specify the time required for the grout to cure before excavation commenced nor include any provision for testing the compatibility or nature of the soil for such treatment nor any method for testing and proving the permeation or adequacy of the grout before excavation began.

[14] On 15 January 2003 In-Ground undertook two (2) penetrometer tests to a depth of fifteen hundred millimetres (1500mm) on grids nine (9) and eight (8) at the site to determine the bearing capacity of the sand foundation of the house. A penetrometer measures the density and to some degree, the nature of the soil being measured. The penetrometer tests indicated that the strength of the ground improved over the depth of one (1) metre. The Defendant did not obtain the penetrometer test results from In-Ground nor did the Defendant provide any geotechnical information of known bore logs of the site to In-Ground.

[15] On about 15 January 2003, William Paterson from Paterson Wholohan Grill Pty Limited (“Paterson”), Consulting and Civil Construction Engineers and Naval Architects had discussions with Peter Bradley a Director of In-Ground concerning the grouting. From those discussions, Peter Bradley understood that the minimum set time for the treatment as recommended by William Paterson was 48 hours.

[16] On 15 January 2003 William Paterson wrote to Tino Carfi, Construction Manager for the Defendant concerning the use of the grout. William Paterson confirmed that he had discussed the matter with Peter Bradley indicating the nature of the work to be carried out by In-Ground. William Paterson did not specify the curing time to for the grout noting that Peter Bradley would confirm such with the Defendant.

[17] In-Ground commenced the grouting work at about 11:00am on 16 January 2003 and completed the work at about 11:30am on 17 January 2003. The grouting was undertaken by Peter Bradley, assisted by Bernie Dreske. Prior to leaving the site Peter Bradley informed Tino Carfi that excavation was not to be commenced for 48 hours.

[18] On 17 January 2003, Tino Carfi informed Nivone Thipdavong at a tool box talk, that he could proceed with the excavation of the trench along the boundary the next day. Nivone Thipdavong had not been involved in discussions with Peter Bradley or William Paterson about the grouting. He was not familiar with the process. Tino Carfi assured Nivone Thipdavong that he had previously used the grouting and that it worked well in sand and was cost effective.

[19] On 17 January 2003, employees of the Defendant commenced excavation work of the footings and trench beside the garage area of the house. During this work the sand foundations began to sink away. Nivone Thipdavong the site Forman subsequently shored up the area with roofing material and star pickets. Despite this knowledge no assessment was made of the soil conditions along grids 8 and 9 where the excavation of the house foundations was to occur.

[20] On the completion of the grouting on 17 January 2003, Tino Carfi claims he was informed by Bernie Dreske that the excavation of the foundations could take place on Saturday, 18 January 2003 provided such was undertaken by hand. This was contrary to the position understood by Peter Bradley and as discussed with Tino Carfi for the excavation work not be undertaken until at least 48 hours after the grouting had been completed.

[21] At approximately 7:00am on 18 January 2003, employees of the Defendant commenced excavation work of the footings and trench beside the wall of the house. The excavation work as instructed by Tino Carfi was carried out manually using picks and shovels and crow bars. Nivone Thipdavong was the foreman on site. The excavation work was completed at approximately 2:30pm the same day. During the course of the excavation there was no visible sign of movement of the wall of the house.

[22] During the excavation, Nivone Thipdavong noticed that the silicone grout was quite soft between grid 8 and 9 on the site plan. The residential main section of the house was located between grids 8 and 9 on the site plan and accordingly the underpinning between grids 9 and 8 being the residential area of the house was particularly important.

[23] Nivone Thipdavong made an entry in his diary that the silicone was quite soft between grid lines 8 and 9 but he did not report it to Tino Carfi or anybody else. In addition, Nivone Thipdavong noticed some areas of black silt in that area had not bonded will with silicone grout. Due to the presence of silicone in the sand in some areas the grout had not properly permeated and bonded before setting. Notwithstanding these observations the excavation proceeded.

[24] The Defendant did not carry out any formal risk assessment or develop and implement safe work methods or safe operation procedures for undertaking the excavation work at the site.

[25] In a letter dated 10 March 2003, William Paterson summarised his views following an inspection with representatives of Douglas Partners Pty Ltd, the Defendant and Inspector Waterhouse. William Paterson concluded:

“Permeation of the sub-foundations in the sand is less complete than intended. The foundation block about twelve metres from Belmont Street, the apparent (it is not certain that some permeated material was not removed by the collapse) lack of enough permeation to this block alone would be in my view unlikely to have been sufficient in itself to have initiated the beginnings of the collapse. If one or two foundation blocks either side of this block were only 60% grouted then the risk of failure would have markedly increased. The possible poor permeation under this twelve metre foundation block if in fact it was poor, appears to be due to an unusually high local concentration of substances in the sand which are unlikely to have been capable of taking up the permeation. Had there been some systematic post-grouting check of whether permeation was at least 80% complete is certain that the defects would have been discovered. Subsequently, the third part of grouting and some local underpinning could have compensated for the unacceptable level of permeation. There was apparently no attempt to prove the completeness of the permeation after installation by drilling, spoon testing or the like.

As the successfully permeated sand has tested on average at better than the nominal intended strength the earlier than recommended excavation of the permeated sand next to an below the foundation blocks has reduced the safety factor. Although it is possible that the foundation blocks would have been stable had the incomplete permeation been allowed to age further before the excavation commenced. The early excavation ensured that the failure occurred”.

[26] In a record of interview to the Inspector on 14 January 2005 Terry Wiesner of Douglas Partners outlined his view of the shortcomings of the circumstances from his inspections and investigations:

“I understand that the excavation occurred fairly soon after the grouting plus the level of permeation of the grouting was not what it should have been. As I previously mentioned and I also think a third possibility that it would have been better if the excavation had been done in panels with a little more care and underpinning approach so that they could just check that the grouting had been done properly”.

[27] The Defendant understood that the In- Ground quotation warranted that the grouting would be carried out in accordance with established procedures and that the results of the grouting would depend on the ground conditions. The Defendant did not make any formal arrangements with In-Ground or have in place any tests or procedures to test the extent to which the grout had been applied or the level of permeation.

[28] The Defendant was aware that the methodology to be undertaken as well as soil permeability was a significant factor in successful application of the grout. Given the scope of the works and the warranties made by In-Ground to the Defendant did not check the bore logs to ascertain the nature of the soil conditions prior to the commencement of grouting and excavation.

[29] Between about 7.00pm and 7:30pm on 18 January 2003, Kite Richards and Pauline Piper arrived at the house. They had trouble opening the front door and observed a thin crack approximately one (1) metre long in the outside wall of the hallway.

[30] At about 5:30am on 19 January 2003, Kite Richards was woken from his sleep by strange noises in the house. He undertook an inspection and observed a crack approximately 1.5 centimetres wide along the length of the hallway where the wall meets the roof. He also observed a crack in an archway. He immediately phoned Tino Carfi to inform him of the situation.

[31] At about 6:10am on 19 January 2003, Tino Carfi arrived at the site and observed a crack in the wall approximately 20mm wide. On entering the house he observed that the timber floor in the hallway had fallen approximately 20mm. Whilst he was in the kitchen of the house he heard the first part of the wall collapse. He and Kite Richards then went to inspect the site.

[32] On arrival at the site Kite Richards and Tino Carfi observed that a portion of the bottom of the wall about 1.5 x 1.0 meters had collapsed into the excavated trench.

[33] Tino Carfi then contacted William Paterson, Foong Takounlao Manager of Newtown and Steve Hats of Hats Excavation, who had a small excavator on site, to attend the site. Between 6:30am and about 10:00am, cracks in the wall started to widen and extend as the wall collapsed into the excavated trench. At approximately 10:00am a decision was made to have the excavator remove the remaining part of the collapsing wall to render it safe.

10 The substantive facts relating to In-Ground are in the same terms as those filed in relation to Newtown. I do not propose to repeat them here. However, it should be noted there are minor differences in the agreed facts for In-Ground. Relevantly, they are as follows:

[1] At all material times, the Defendant was a duly incorporated company with a registered office at 18 Yarrabin Street, Belrose in the State of New South Wales.

[2] At all material times the Defendant was an employer in the State of New South Wales.

[3] At all material times the Defendant undertook the business of soil stabilisation and in-ground injection grouting work at 162 – 184 Belmont Street, Alexandria in the State of New South Wales (“the site”).

[4] At all material times the Defendant employed Peter Bradley and Bernie Dreske to undertake work at the site.

11 In addition to the agreed statements of fact, the prosecution has tendered an identical bundle of documents related to both defendants, which includes the following:

(a) A Factual Inspection Report by Inspector Waterhouse dated 23 January 2003;

(b) A statement by Inspector Waterhouse dated 6 January 2004;

(c) A facsimile from Bill Paterson to Newtown dated 16 January 2003;

(d) A letter from Paterson Wholohan Grill Pty Ltd to WorkCover dated 23 January 2003;

(e) A letter from Paterson Wholohan Grill Pty Ltd to WorkCover dated 11 February 2003;

(f) A letter from Paterson Wholohan Grill Pty Ltd to WorkCover dated 10 March 2003;

(g) Plan A.102 dated 21 August 2002;

(h) A diagram of the Belmont Street houses;

(i) A letter from In-Ground to Newtown dated 13 January 2003;

(j) A handwritten note by Mr Peter Bradley;

(k) Newtown's site diary dated 15 January 2003;

(l) Diary pages of Mr Nivone Thipdavong dated from 15 January 2003 to 19 January 2003. Mr Thipdavong was the site foreman for Newtown at the Belmont Street site.

(m) Record of Interview of Mr Terry Wiesner dated 14 January 2005;

(n) PAYG statements of employees of Newtown for 2003 financial year; and

(o) Prior conviction records.

12 Also tendered by the prosecutor, without objection, were a number of photos. The photos consisted of shots of the building site at 162 Belmont Street and of the collapsed boundary wall of the house at 160 Belmont St, Alexandria as well as the excavated trench running alongside the boundary line. Those photos have assisted me in gaining an understanding of the layout and nature of the respective properties and the incident giving rise to the offences.

13 On behalf of In-Ground, an affidavit of Mr Peter Bradley together with annexures, was tendered without objection. Mr Bradley was the sole director and shareholder of In-Ground between 1999 and 2004, with day-to-day carriage of the business. During this time he was also employed by In-Ground. Mr Bradley qualified as a chartered engineer in the United Kingdom in 1973 and has had over 18 years experience in grouting and anchoring work using the method of injecting sodium silicate solution.

14 In his affidavit, Mr Bradley described the background whereby Newtown engaged In-Ground to carry out the sodium silicate injection process. He detailed the process that occurs upon injection of the sodium silicate solution and the stabilisation work that was performed on behalf of Newtown as discussed with Mr Paterson from Paterson Wholohan Grill. In-Ground's financial details are also set out in Mr Bradley's affidavit. He was not required for cross examination.

15 On behalf of Newtown, an affidavit of Mr Foong Takounlao together with annexures was tendered without objection. Mr Takounlao commenced employment with Newtown in February 1997 and is currently employed by the defendant as a manager. He graduated from the University of New South Wales with a Bachelor of Building Construction Management in 1997 and has held a building contractor licence since 1999.

16 In his affidavit, Mr Takounlao, inter alia, outlined the occupational health and safety policies of Newtown in place prior to the accident as well as new policies and procedures implemented subsequently. Copies of Newtown's policies and procedures were annexed to Mr Takounlao's affidavit.

17 Mr Takounlao gave evidence in support of his affidavit going to aspects of Newtown's financial circumstances.

Relevant principles

18 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.

19 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.'

20 It is well settled that the starting point for considerations as to penalty is the objective seriousness of the offence charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474.

21 The principle of foreseeability as a factor in determining the objective seriousness of an offence was considered and affirmed in the Full Bench decision of Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 99 IR 29 at 62-63.

22 On the issue of foreseeability, the Full Bench in Capral also stated:

The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209-210) in these terms:

... reliance on 'hindsight' must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy.

23 The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken on that issue has also been dealt with in some detail in Capral at 60-61. Without detailing all that the Full Bench had to say on those issues I believe the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at [74] as follows:

... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43] we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.

24 In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A (1) of the CSPA relevant to the defendant. As was said in R v Way at [56]:

... it is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the 'relative seriousness' of the offence, they are expressly preserved by s 21A(1)(c).

25 Ultimately, all of the above factors must be considered as part of 'a complex of inter-related considerations' (See R v Gallagher (1991) 23 NSWLR 220). Having said that, as was said by Spigelman CJ in Thorneloe v Filipowski (2001) 52 NSWLR 60 at 69, it still remains for the sentencing judge to ensure:

... that a sentence should be proportionate to the objective gravity of the offence. This necessarily requires a sentencing judge to consider, at some stage in the reasoning process, the sentence that is appropriate for the particular circumstances of the crime without reference to the subjective case of the particular offender.

26 In Markarian v The Queen [2005] HCA 25: 18 May 2005, the High Court, by majority (Kirby J dissenting) generally disavowed the sequential or two tiered approach to sentencing. In doing so, their Honours did not entirely reject the proposition that, in some circumstances, 'an arithmetical process' would be appropriate. As they said at [39]:

Following the decision of this Court in Wong it cannot now be doubted that sentencing courts may not add and subtract item by item from some apparently subliminally derived figure, passages of time in order to fix the time which an offender must serve in prison. That is not to say that in a simple case, ... indulgence in arithmetical deduction by the sentencing judges should be absolutely forbidden. ... The law strongly favours transparency. Accessible reasoning is necessary in the interests of victims, of the parties, appeal courts, and the public. There may be occasions when some indulgence in an arithmetical process will better serve these ends. ... (emphasis added)

27 On that point, McHugh J also acknowledged the need, where appropriate, for the awarding of a nominated discount for 'some factor'. As he said at [74]:

... The distinction between permissible and impermissible quantification of "discounts" on a sentence will usually be found in whether the quantification relates to a sentencing purpose rather than some other purpose. So, the quantification of the discount commonly applied for an early plea of guilty or assistance to authorities is offered as an incentive for specific outcomes in the administration of criminal justice and is not related to sentencing purposes. The non-sentencing purpose of the discount for an early guilty plea or assistance is demonstrated by the fact that offenders are ordinarily entitled to additional mitigation for any remorse or contrition demonstrated with the plea or assistance, aside from the discount for willingness to facilitate the course of justice...

28 Overall, I observe nothing in Markarian that precludes me, properly in my view, from identifying a discount for the entry of an early plea of guilty. Additionally, to the extent that there are subjective and mitigating features relevant to the defendant, they are matters which also should be considered in accordance with the provisions of the Crimes (Sentencing Procedure) Act 1999, in particular s 21A(1) earlier referred to.

Relevant considerations

29 Both defendants have no prior convictions. Accordingly, the maximum penalty that can be imposed with respect to each offence is $550,000. In relation to Newtown, it will be necessary to apply the principle of totality in relation to it's two offences noting the clear overlap between the offence failures particularised.

30 Between them, the defendants had an obligation to put in place a safe system of work in order to do two things. The first was to stabilise the footings of the house at 160 Belmont Street. Once that was done and only when the grouting had been assessed as having hardened and stabilised could the next step be safely undertaken. That was the excavation of the trench running alongside the boundary adjoining 160 and 162 Belmont Street.

31 The Full Bench in Capral held at 650 that ‘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’.

32 Further, as was stated in Capral, the presence of foreseeability ‘will necessarily result in the offence being more serious in nature’. As such, the starting point for the determination of foreseeability within the context of the objective seriousness of an offence is whether there was 'an obvious or foreseeable risk to safety against which appropriate measures were not taken'. (Lawrenson Diecasting at 476).

33 It is abundantly clear, in my view, it was reasonably foreseeable that a failure to ensure the stabilisation of 160 Belmont Street was properly done would render that property structurally unsound and pose a risk to safety to the persons within it. Given that the excavation of the adjoining trench at 162 Belmont Street was undertaken well short of the minimum set time as required for the stabilisation process to take full effect, that risk to safety was not only reasonably foreseeable but obvious. Further, the risk to safety extended to those workers on site at 162 Belmont Street involved in the excavation of the adjoining trench.

34 On behalf of Newtown, Mr Tino Carfi, construction manager, contracted with Mr Bradley of In-Ground to undertake the stabilisation task using a sodium silicate injection grouting system. As well, between them, Mr Carfi on behalf of Newtown together with Mr Bradley on behalf of In-Ground consulted with Mr William Paterson, a consulting civil engineer, about the appropriateness of the grouting process. Mr Paterson confirmed, inter alia, that the minimum set time for the treatment was forty eight hours. Mr Paterson confirmed that in writing to Mr Carfi. Mr Bradley was also aware of that minimum set time.

35 Central to the offences and the incident that arose giving rise to the offences was the decision taken by Mr Carfi on behalf of Newtown to proceed with the excavation of the trench well before the forty eight hour minimum set time as advised to him by both Mr Paterson and Mr Bradley. It is worth emphasising two paragraphs from the agreed facts as to this issue as follows:

[17] In-Ground commenced the grouting work at about 11:00am on 16 January 2003 and completed the work at about 11:30am on 17 January 2003. The grouting was undertaken by Peter Bradley, assisted by Bernie Dreske. Prior to leaving the site Peter Bradley informed Tino Carfi that excavation was not to be commenced for 48 hours.

...

[20] On the completion of the grouting on 17 January 2003, Tino Carfi claims he was informed by Bernie Dreske that the excavation of the foundations could take place on Saturday, 18 January 2003 provided such was undertaken by hand. This was contrary to the position understood by Peter Bradley and as discussed with Tino Carfi for the excavation work not be undertaken until at least 48 hours after the grouting had been completed.

36 Mr Carfi either forgot or ignored the advice given to him by both Mr Paterson and Mr Bradley. As well, he obviously took no steps to refer to either Mr Paterson or Mr Bradley when he was allegedly told by Mr Dreske that it was okay to proceed with the excavation work well within the minimum set time that had been earlier advised to him.

37 Counsel for In-Ground submitted that it was unclear how the application of the grout itself was unsafe or presented a risk to safety. Counsel pointed to comments made by Mr Wiesner in an interview with Inspector Waterhouse where he maintained that despite of the presence of silt or other objects in the soil that would affect the permeability of the grout, had the grout had been given sufficient time to set properly, the incomplete permeation would have been of little consequence.

38 The failure to conduct testing to assess the stability of the soil was predominantly due, it was said, to the action of the early excavation.

39 Further, Mr Bradley maintained, in undertaking the work, he had conducted himself in accordance with industry standards and expectations. That Mr Carfi would ignore his directions as to the minimum set time was, it was submitted, not foreseeable.

40 Notwithstanding that, Mr Bradley acknowledged that he could have (indeed should have) taken additional steps. As he stated:

With the benefit of hindsight, I accept now that I could have taken preventative measures additional to verbal instruction, to try and ensure that the grouting was not interfered with before it had time to cure and strengthen properly.

41 Ultimate responsibility for overseeing safety at the site and ensuring that the work was done safely and in accordance with a proper risk assessment rested with Newtown. In-Ground was also under a duty to ensure that the grouting work was carried out in a safe manner and that the relevant information pertaining to the grouting work, including matters such as minimum set times, was clearly communicated and reinforced.

42 Counsel for Newtown stated that the defendant had a "culture of safety" and pointed to an occupational health and safety manual which was attached to Mr Takounlao's affidavit in support of that submission. Mr Takounlao deposed that Newtown had implemented an Occupational Health and Safety Management System manual utilising the services of an occupational health and safety consultant in 2002.

43 The manual included a Risk Management strategy. The strategy sets out in some detail methods for identifying risks and the need to devise job safety analysis related to risks identified in tasks to be undertaken. Also included in the manual was a Sub Contractor Safety Plan, which included a requirement that contractors submit an agreed safety plan and work method statements, inclusive of risk and hazard assessments for a task to be undertaken.

44 It is not apparent that the measures set out within that manual were actually adopted in a practical sense by Newtown. Aside from the tender of the manual itself, there was no evidence to suggest the defendant actually implemented the requirements set out in the manual. A submission that Newtown had a culture of safety is difficult to reconcile in the absence of any evidence that Mr Carfi conducted any sort of risk assessment prior to ordering excavation of the trench or that he heeded the instructions given to him by Mr Bradley and Mr Paterson as to the minimum set time for the grouting.

45 The duty of an employer is to ensure safe work practices are in place that are communicated to and understood by employees. The mere existence of an occupational health and safety manual does not, without more, discharge that obligation and does not substantiate the claim that Newtown had a culture of safety in it's day to day work practices.

46 At no time was In-Ground asked by Newtown for a safe work statement for the task of applying or testing the sodium silicate grout treatment.

47 It is relevant to the objective seriousness of an offence to consider if there were readily and easily available remediation steps which could have been undertaken by the defendant before the accident to prevent injury occurring. To put it another way, one should have regard to remediation or the extent of remediation that is done post the accident, as an indication of the extent to which foreseeability of injury was readily identifiable.

48 Newtown now ensures that site specific registers and safety programs are in place prior to work commencing and that they are then implemented. As well, Newtown also requires third party contractors to provide a safety plan and work method statement prior to undertaking work on site.

49 On behalf of Newtown, counsel submitted that the incident was a “wake up call” for Newtown and that its current safety methods have been implemented to ensure that an accident of this type does not occur again.

50 Having considered all the above, I assess the offence with respect to In-Ground as being in the low range of seriousness. In relation to Newtown, I assess it's offences as being in the mid range of seriousness. It follows from that assessment that I consider the culpability of Newtown as being greater than that of In-Ground. I say that because Newtown had ultimate responsibility for ensuring the stabilisation and excavation work at 160 and 162 Belmont Street was done in accordance with safe systems of work including the submission by In-Ground of a safe work method statement and to ensure the stabilisation work was properly assessed before excavation work began. For reasons that are unclear, Mr Carfi chose to ignore or failed to remember what had been clearly communicated to him in writing by Mr Paterson and, as asserted by Mr Bradley, was verbally reinforced by him.

51 The decision of the Full Bench in Capral clearly indicates that general and specific deterrence are factors that should be given weight in all but exceptional circumstances. The Full Bench said at 643-644 that:

We consider that the extract from the judgment of Hungerford J in Fisher v Samaras Industries Pty Limited accurately states the approach that members of this Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that those aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process.

52 In respect of specific deterrence, the Full Bench held in Capral at 644-645:

In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The court may form such a view as a result of the rehabilitation of the offender: R v Corner (unreported, Court of Criminal Appeal, 19 December 1997) or because the offender will not have the opportunity to commit a similar offence in the future: R v Macdonell (unreported, Court of Criminal Appeal, 8 December 1995). However, we think it unlikely that the weight to be attached to specific deterrence could be reduced to zero in cases of offences under the Act.

53 Considerations of general and specific deterrence are relevant to Newtown as the risks presented in the building industry which the defendant continues to operate in are ever present. The defendant has acknowledged those risks by implementing the remedial steps as outlined above as part of it's occupational health and safety regime.

54 In relation to In-Ground, I consider general deterrence is of limited weight in this instance. Further, the defendant's likelihood of re-offending is non-existent given that In-Ground ceased to trade in September 2004 and Mr Bradley is now employed as a marketing manager. In all the circumstances, I do not consider specific deterrence to be a relevant factor in my sentencing considerations in relation to In-Ground.

55 On behalf of In-Ground, documents setting out it's financial position between 2003 and 2005 were provided relevant to it's capacity to pay. These included a statement of financial performance for the year ending 30 June 2004 and balance sheets for 2004 and 2005. The statement of financial performance set out the following details:

· Net profit attributable to members of the company for 2003: $50,559.62

· Total profit from ordinary activities before income tax for 2003: $65,336.12

· Net profit attributable to members of the company for 2004: $31,337.31

· Total profit from ordinary activities before income tax for 2004: $48,852.51

56 It should be noted that Mr Bradley was the only shareholder in the company.

57 The balance sheets for In-Ground for 2004 and 2005 revealed net assets of $9660.27 and $7482.18 respectively.

58 In considering a defendant's capacity to pay a fine, s 6 of the Fines Act (1996) provides as follows:

In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider:

(a) such information regarding the means of the accused as is reasonably and practicably available to the Court for consideration, and

(b) such other matters as, in the opinion of the Court, are relevant to the fixing of that amount. (emphasis added)

59 In WorkCover Authority of New South Wales (Inspector Mansell) v Jian Chen and Obing Pty Limited trading as Old But New [2004] NSWIRComm 247 the Full Bench said:

... where a defendant desires to plead incapacity to pay as a determinative issue in the imposition of penalty, it behoves the defendant to discharge the onus that such a submission invokes by placing before the Court all of the information it relies upon in support of that submission in order for the Court to give that information proper consideration in the exercise of its sentencing discretion.

60 I accept that In-Ground was a small company with a limited financial base. It has also ceased trading. The modest financial status of the company is reflected in the financial documents tendered on behalf of In-Ground. Mr Bradley was the sole director, employee and shareholder of In-Ground and any penalty imposed will fall upon his shoulders. Accordingly, the approach I propose to adopt is as expressed by Wright J, President in Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 210 where his Honour observed:

... whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty ... the penalty should reflect the objective seriousness of the offence.

61 Newtown did not provide any documentation as to its financial circumstances but Mr Takounlao gave evidence of financial matters relating to the defendant. On behalf of Newtown, it was submitted that the purpose of Mr Takounlao's evidence was not to put forward the inability of the defendant to pay but rather to highlight the scale of it's operations.

62 Newtown employs eight people. Mr Takounlao gave evidence that the total management fee income of the defendant over the last two and half years was derived from two projects. That included the Belmont Street project which earned the defendant an income of $500,000 and another project which provided an income of $700,000. No documentation was provided in support of that assertion and it was not challenged by the prosecution.

63 No other information by way of direct evidence from Mr Takounlao or in affidavit form was tendered as to Newtown's current financial status or to it's corporate history. The scant evidence which Mr Takounlao gave does not greatly assist me in coming to a concise view as to the size of Newtown's operations and it's overall financial position.

64 Both defendants entered an early plea and the prosecution has acknowledged their respective entitlement to the benefit of a discount as a result. In assessing the impact of the plea, the Court is guided by the decision of R v Thomspon; R v Houlton (2000) 49 NSWLR 383, the principles of which are well settled and need no elaboration. I award a discount in favour of each defendant of twenty five per cent and in relation to Newtown with respect to each offence.

65 Both of the defendants have cooperated with the investigating authorities and have expressed remorse for the incident.

66 On behalf of Newtown, it was submitted, additional mitigating factors existed in it's favour. These included making full restitution for the damage caused by the collapsed wall and additional compensation payments to the individuals affected by the collapse. Mr Richards and Ms Piper were provided with alternative accommodation owned by an associate company of Newtown on a rent-free basis and Newtown also paid rent on the 160 Belmont Street house while it was unoccupied and covered the costs of moving from the premises.

67 On behalf of In-Ground, Mr Bradley's considerable experience, record of safety and reputation as a careful worker amongst his colleagues in terms of the grouting work was also raised as mitigating factors.

68 Overall, I am satisfied that the relevant subjective features identified with respect to each defendant warrants a further discount in relation to each offence.

69 Finally, as earlier indicated, the principle of totality is applicable to the offences in relation to Newtown: See Pearce v The Queen (1998) 194 CLR 610 and the application of that principle in offences before this Court in Crown in Right of the State of New South Wales (Department of Education and Training) v Keenan (2001) 105 IR 181 at 192-193 and Abigroup Contractors Pty Limited v WorkCover Authority of New South Wales [2004] NSWIRComm 270. Counsel for the prosecution acknowledged such an approach was appropriate.

70 Taking into account all the matters I have referred to, I determine penalty as follows:

(1) (a) Matter No IRC 217 of 2005: WorkCover Authority of New South Wales (Inspector Waterhouse) v Newtown Developments Pty Limited.

Prosecution arising under s 8(1) of the Occupational Health and Safety Act 2000: I determine a penalty in this matter of $50,000.

(b) Matter No IRC 218 of 2005: WorkCover Authority of New South Wales (Inspector Waterhouse) v Newtown Developments Pty Limited.

Prosecution arising under s 8(2) of the Occupational Health and Safety Act 2000: I determine a penalty in this matter of $50,000.

(c) In applying the principle of totality in relation to the above offences, I determine a penalty with respect to both offences of $60,000. I apportion that penalty equally between the two offences. Accordingly, I order as follows:

(i) Matter No IRC 217 of 2005: a penalty of $30,000.

(ii) Matter No IRC 218 of 2005: a penalty of $30,000.

(iii) I allocate a moiety to the prosecution on the usual terms with respect to each offence.

(2) Matter No IRC 240 of 2005: WorkCover Authority of New South Wales (Inspector Waterhouse) v In-Ground Constructions Pty Limited.

Prosecution arising under s 8(2) of the Occupational Health and Safety Act 2000:

(i) I determine a penalty in this matter of $26,000.

(ii) I allocate a moiety to the prosecution on the usual terms.

(3) I order the defendants to pay the costs of the prosecutor as agreed or assessed equally between them. Failing agreement, the matter may be referred to the Registrar for assessment.

LAST UPDATED: 29/06/2006