Inspector Denis Macready v Mission Services Pty Ltd & Anor [2007] NSWIRComm 279 (26 November 2007)

Last Updated: 28 November 2007

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Inspector Denis Macready v Mission Services Pty Ltd & Anor [2007] NSWIRComm 279



FILE NUMBER(S): IRC173&174

HEARING DATE(S): 25/09/07

DATE OF JUDGMENT: 26 November 2007
PARTIES:
Prosecutor:
Inspector Denis Macready
Defendants:
Mission Services Pty Ltd
Jae Hoon Chang

CORAM: Kavanagh J


CATCHWORDS: Two charges under the Occupational Health and Safety Act 2000, one under s8(1) (by virtue of s26(1)) against the defendant director and one under s8(1) against the company - unsafe system of work - existing work procedures in place - failure to recognise Essential Services Distribution Board had separate power source from Main Switchboard - plan of wiring misleading - but warning signs on the Main Switchboard and Essential Services Distribution Board - Australian Standard for separate source of power to ensure essential services - fatality - contribution of third party - general and specific deterrence applicable - financial constraints on individual defendant - penalty imposed

LEGAL REPRESENTATIVES

Prosecutor:
Mr J.V. Agius SC with Ms P.E. McDonald of counsel
Solicitors:
Ms R. Panagoda
WorkCover Authority
Defendants:
Mr K.G. Bennett of counsel
Solicitors:
Dr S. Bridgeford
Bridgeford & Associates

CASES CITED: Alcatel Australia Limited v WorkCover Authority (Inspector Clyant) (1996) 70 IR 99
Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] 49 NSWLR 610
Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch’ng) (1999) 90 IR 464
Markarian v R [2005] HCA 25; (2005) 215 ALR 213
Millner v Raith [1942] HCA 21; (1942) 66 CLR 1
Morrison v Powercoal Pty Ltd and Anor (2004) 137 IR 253
R v Thomson; R v Houlton [2000] NSWCCA 383; (2000) 49 NSWLR 383
Winchester v Regina (1992) 58 A Crim R 345
WorkCover Authority of NSW v McDonald's Australia Ltd and Anor [1999] 95 IR 383
Workcover Authority of New South Wales (Inspector Farrell) v David Carl Schrader [2002] NSWIRComm 25

LEGISLATION CITED: Occupational Health and Safety Act 2000
Crimes (Sentencing Procedure) Act 1999



JUDGMENT:

- 16 -

INDUSTRIAL COURT OF NEW SOUTH WALES

CORAM: Kavanagh J

Monday 26 November 2007

Matter No IRC 173 of 2007
INSPECTOR DENIS MACREADY v MISSION SERVICES PTY LTD
Prosecution under s8(1) of the Occupational Health and Safety Act 2000


Matter No IRC 174 of 2007
INSPECTOR DENIS MACREADY v JAE HOON CHANG
Prosecution under s26(1) & 8(1) of the Occupational Health and Safety Act 2000

JUDGMENT

[2007] NSWIRComm 279

1 Inspector Denis Macready of the WorkCover Authority of New South Wales (the prosecutor) brings a prosecution against Mission Services Pty Limited (the defendant company) under s8(1) of the Occupational Health and Safety Act 2000 (the Act). A further prosecution is brought against Jae Hoon Chang (the individual defendant) under s8(1) of the Act by virtue of s26(1).

2 It is alleged in Matter No. IRC173 of 2007 the defendant company and in Matter No. IRC174 of 2007 the individual defendant (by virtue of s26(1)), contravened s8(1) of the Act in that each failed to:

ensure the health, safety and welfare at work of all its employees, in particular Joseph Scullino, contrary to Section 8(1) of the Occupational Health and Safety Act 2000.

In particular, the defendants:

(a) failed to ensure that the electrical work in the vicinity of the Main Switchboard and Essential Services Distribution Board at the site was carried out using a safe system of work;

(b) failed to ensure that the Essential Services Distribution Board was de- energised when its employees began disconnecting the existing sub main cables from the Main Switchboard.

(c) failed to ensure that the electrical modifications to the main switchboard at the site were carried out using an adequate safe system of work;

(d) failed to ensure that its employees were aware of the probability that the Essential Services Board was separately isolated and would not be isolated by turning off or isolating the general supply:

(i) The Main Switch Board indicated on its face that the Essential Services Board was separately fused to the general supply by means of a red and white label which read "Essential Services Distribution Board Current Limiters Behind This Cover";

(ii) The Australian Standard AS 3000-1991 indicated in substance that each part of the installation supplying essential services should be controlled by a main switch, separate from those used to control the remainder of the installation. Clause 2.19.4.1 provided that the supply to essential Services should be taken from a point on the supply side of all general installation main switches; and not be subject to the control of any general installation main switches. Thus if the switch board had complied with this Australian Standard or the subsequent Australian and New Zealand Standard 3000-2000 the Essential Services part of the board would have not been isolated ( and remained live and a potential hazard to health and safety through contact) if only the general supply main switch was isolated.

(e) failed to carry out checks to ensure that the supply to the “Essential Services Distribution Board” was de-energised before work commenced;

(f) failed to take adequate measures to eliminate or control the risks to its employees carrying out the work of inadvertently contacting parts of the main switchboard, in particular the “Essential Services Distribution Board”, that remained energised;

(g) failed to have a site specific Safe Work Method Statement for carrying out work at the site, in particular the modifications to the main switchboard.

(h) failed to carry out a written risk assessment on the modification work to be done on the main switchboard, and failed to provide that risk assessment to the principal contractor, Taylor Projects Group Pty Ltd.

(i) As a result of the abovementioned failures on 14 February 2005 Joseph Scullino suffered fatal injuries.

3 Each defendant pleads guilty to the charge.

4 Mr J.V. Agius, SC, with Ms P.E. McDonald, of counsel, appeared for the prosecution. The prosecution against each defendant relied upon a tender bundle of documents including an Agreed Statement of Facts; diagram of all entities; three colour photographs of the labelled Main Switchboard; photographs taken by Inspector Macready; an Energy Australia Report dated 28 February 2005 including three photographs of the Main Switchboard; photographs provided by John Paul Village - post-incident modifications made to the Main Switchboard; a Factual Inspection Report of Inspector May dated 29 March 2005; a Factual Inspection Report of Inspector Macready dated 17 March 2005 and diagrams; Statement of Colin Price dated 5 February 2007; diagram of Jim Lawson dated 13 September 2007; Low Voltage electrical Work Code of Practice; Australian Standard AS 3000-1991 and the Australian and New Zealand Standard Wiring Rules 3000-2000; pre-incident and post work method statements of Mission Services; NECA Guide; Safety Alert issued by WorkCover after the incident; prior conviction records; Electrical Services Performance Specification Document; Extracts from Statement of James Campanella dated 10 May 2005; and Extracts from Statements of Jae Chang dated 13 May 2005 and 10 November 2005.

5 Mr K.G. Bennett, of counsel, represented each defendant. The defendants relied upon two affidavits sworn by Mr Chang both dated 25 September 2007. Mr Chang was called to give evidence and he was cross examined.

6 The Agreed Statement of Facts relied upon is similar for each defendant and relevantly reads:

4. During 2003 – 2005 John Paul Village, a retirement village at 15, The Avenue, Heathcote, was redeveloped.

5. On 30 July 2004 John Paul Village engaged the services of Taylor Projects Group Pty Limited (Taylor Projects Group) to act as principal contractor for the proposed works at John Paul Village.

6. On 30 July 2004 Taylor Projects Group issued a Letter of Intent to Enter into a subcontract to the defendant as electrical Sub-contractor for the John Paul Village Project. The work to be undertaken by the defendant included electrical installation works.

7. On about 10 August 2004, the defendant started preliminary work at the site of the John Paul Village and submitted a generic set of Safe Work Method Statements to Taylor Projects Group. The defendant did not rewrite a site-specific set of Safe Work Method statements for the work that it undertook at the site.

14 February 2005

8. On 14 February 2005 at John Paul Village, the defendant was on site carrying out electrical installation works on the redevelopment project of the retirement village.

9. The defendant’s employees, Joseph Scullino, James Campanella, Jeng (Tony) Wook Jang and Robert Sydenham, arrived on site at approximately 7:00am.

10. Between the hours of approximately 7:00am and 11:00am Joseph Scullino, James Campanella, Jeng (Tony) Wook Jang and Robert Sydenham worked on running cables for power points and lights in the new buildings. Joseph Scullino was the foreman on site and supervising the employees of the defendant.

11. At approximately 1:30pm Jae Chang arrived at the site and met Joseph Scullino; they walked around the site to assess the work they were going to have to complete.

12. The work to be done at John Paul Village during that afternoon involved the upgrading of the existing sub main, which ran from the Main Switchboard, located in the Main Switch Room, to the Nursing Home Main Distribution Board, located approximately 84m to the north of the Main Switchboard. This work involved the disconnection of the existing sub main cables from the Main Switchboard, and from the Nursing Home Main Distribution Board. The existing sub main was to be pulled out and the existing underground conduit was to be used to run new, larger size cables.

13. Jae Chang with Joseph Scullino was supervising the work to be done that afternoon.

14. At approximately 1:40pm Jae Chang contacted Stephen Baldwin, site supervisor for the principal contractor, Taylor Projects Group and notified him that he was going to disconnect the power at approximately 2:00pm.

15. At approximately 2:00pm Jae Chang and Joseph Scullino went to the Main Switchboard, discussed the work to be undertaken and the allocation of work amongst the employees.

Main Switchboard

16. Just after 2:00pm James Campanella arrived at the Main Switchboard and observed that two front panels on the eastern side of the Main Switchboard had been removed (See Figure 3).

17. One of the panels removed was the Cable Zone panel located at the eastern end of the Main Switchboard and directly above the Essential Services Distribution Board. Figure 2 is a photograph of the Main Switchboard with labels identifying relevant panels and switches.

18. The other panel removed was located immediately to the right of the Cable Zone panel, and directly below the sub main switch labelled “Sub main Control Nursing Home”.

19. The sub main cables to be replaced were connected to the sub main switch labelled “Sub main Control Nursing Home” (See Figure 4).

20. At approximately 2:10pm Joseph Scullino turned off the two (2) main switches located approximately in the centre of the Main Switchboard and the sub main switch labelled “Sub main Control Nursing Home”.

21. The two (2) main switches located approximately in the centre of the Main Switchboard were positioned one above the other.

22. The top main switch was labelled as follows: (See Photographs 19 & 20)

Three labels mounted directly above each other, directly above the switch operating handle;

Top label: White background with the words “FUSE SIZE 160 AMP” in black letters / numbers.

Middle label: Red background with the words “ESSENTIAL SERVICES DISTRIBUTION BOARD CURRENT LIMITERS BEHIND THIS COVER” in white letters.

Bottom label: White background with the words “GENERAL SUPPLY RATE MAIN SWITCH” in red letters.

A fourth label was mounted below the switch operating handle, red background with the words “WARNING BUS – BARS & TERMINALS ALTHOUGH COATED ARE TO BE TREATED AS BARE TERMINALS” in white letters.

23. The bottom main switch had a label, white background with the words “UNMETERED MAIN SWITCH SELF CONTAINED UNITS”. The label was mounted directly above the switch-operating handle (See Photographs 21 & 22).

24. A red label with white writing appeared above the general supply rate Main Switch on the Main Switchboard. The label read "Essential Services Distribution Board Current Limiters Behind This Cover". (See Photograph 19)

25. After 2:10pm the bus bar cover panel, located on the immediate right of the sub main switch labelled “Sub main Control Nursing Home”, was removed by Joseph Scullino. The front escutcheon panel, on the sub main switch labelled “Sub main Control Nursing Home”, was opened about this same time. (See Figure 2)

26. At approximately 2:15pm James Campanella carried out a series of tests using his multi meter to determine if power had been turned off to the area he was about to work on.

27. James Campanella tested the following points on the Main Switchboard: (See Figure 3)

(i) Three (3) bus bars behind the panel located to the right of the sub main switch labelled “Sub main Control Nursing Home”. James Campanella tested between each of the three phases as well as between each phase to earth. All tests gave a zero reading on his multi meter;

(ii) Cables coming from “Cable Zone” connected to Sub main switch labelled “Sub main Control Nursing Home”

(iii) Sub main switch labelled “Sub main Control Amenities”.

28. The multi meter that James Campanella used to carry out the tests was less than twelve months old.

29. Both Joseph Scullino and Jae Chang observed James Campanella carrying out the tests. Jae Chang then touch tested one of the bus bars with the back of his hand and said “Yeah it’s not live”.

30. James Campanella assisted by Jae Chang proceeded to work on the bus bars and disconnect the sub main cables to be replaced from the sub main switch labelled “Sub main Control Nursing Home”. (See Figure 4)

31. Two sub mains were connected to the same sub main switch (Sub main Control Nursing Home) via the same nuts and bolts. This meant that both sub mains had to be removed and then one sub main reconnected.

Nursing Home Distribution Board

32. At about this stage of the work Joseph Scullino left the Main Switchboard area and went to the nursing home main distribution board, located approximately 84m to the north of the Main Switchboard. It was at this distribution board that Joseph Scullino proceeded to disconnect the sub main cables to be replaced and reconnect the sub main cables to be retained. These were the same cables that James Campanella was disconnecting at the Main Switchboard.

33. Before reconnecting the retained sub main at the main Switchboard, Joseph Scullino and Jae Chang tested this sub main to ensure that Joseph Scullino had made the correct disconnections and reconnections at the nursing home main distribution board.

34. Joseph Scullino and Jae Chang worked out which sub mains had to be reconnected to the sub main switch at the Main Switchboard, and instructed James Campanella which sub main cables were to be reconnected.

35. At about this time James Campanella joined Joseph Scullino, for a short time at the nursing home main distribution board, and then returned to the Main Switchboard.

The Incident

36. Joseph Scullino returned from the nursing home main distribution board and joined Jae Chang and James Campanella at the Main Switchboard.

37. At this point Tony Jang, another electrician employed by Mission Services Pty Ltd, arrived at the Main Switchboard. Tony and James proceeded to drill mounting holes in the Main Switchboard for an additional circuit breaker. Having completed drilling the mounting holes, Tony left the Main Switchboard area and went to another part of the site.

38. James Campanella and Jae Chang replaced the bus bar cover panel and the sub main switch “Sub main Control Nursing Home” escutcheon panel. (See Figure 3)

39. Jae Chang suggested that they pull the disconnected sub main cables out from underneath the Main Switchboard, while the power was still off.

40. The sub main cables to be pulled out were attached by cable ties to a cable tray, which ran down the back of the Cable Zone area. The sub main cables continued down through the Essential Services Distribution Board area and into the cable pit underneath the Main Switchboard (see Figures 3 and 4).

41. The Essential Services Distribution Board was located directly below the Cable Zone area. (See Figure 2) At the top of the Essential Services Distribution Board were two labels, one directly below the other, consisting of red background with white lettering. The top label stated “ESSENTIAL SERVICES DIST. BOARD”. The label directly below stated “ALL SWITCHES ON THIS DIST BOARD ARE MAIN SWITCHES”. (See Photographs 32, 33 & 34)

42. Two (2) metal floor plates in front of the left hand end of the Main Switchboard were removed to gain access to the pit underneath the Main Switchboard. (See Photographs 35 & 36)

43. No testing to determine whether the Essential Services Distribution Board was de energised was undertaken.

44. Jae Chang went down into the pit in front of the Essential Services Distribution Board and began removing cable ties to release the sub main cables.

45. James Campanella and Joseph Scullino walked over to the open Cable Zone panel area to cut the cable ties holding the sub mains to the back cable tray.

46. James Campanella had to straddle the pit where Jae Chang was working. Using his pliers or side cutters, James cut about four (4) cable ties off the back cable tray. Joseph Scullino was standing next to James Campanella. (See Photographs 29 & 30)

47. James Campanella grabbed hold of the sub main cables and tried to push them down. At the same time Jae Chang was down in the pit directly below, and pulling down on the same sub main cables, however the cables were not moving.

48. At this stage Joseph Scullino stepped over next to James Campanella, James Campanella moved to one side. James Campanella had both hands on the sub mains and Joseph Scullino had his right hand on the sub main cables and held onto the side of the switchboard with his left hand. Together they pushed down on the cables however the cables still would not move.

49. At this point Joseph Scullino leaned over and looked down inside the bottom of the Cable Zone area of the Main Switchboard. Joseph Scullino was able to see another cable tie down below the bottom of the Cable Zone area, behind the Essential Services Distribution Board.

50. Joseph Scullino reached into his back pocket and pulled out his pliers, reached down into the into the area below the Cable Zone area of the board to try and break the cable tie but was unable to break it.

51. James Campanella asked Joseph Scullino if he needed side cutters and Joseph Scullino said yes. James Campanella handed his own side cutters to Joseph Scullino.

52. Joseph Scullino held onto the outside board of the Cable Zone area of the Main Switchboard to get his balance and stood with one foot on the concrete floor and the other foot on the other side of the pit. Joseph Scullino reached down behind the Essential Services Distribution Board.

53. At approximately 3:10pm in reaching down behind the Essential Services Distribution Board Joseph Scullino came into contact with the live terminals of the bus bars supplying the Essential Services Distribution Board. Mr Scullino was electrocuted.

54. At the time of the incident James Campanella was standing behind Joseph Scullino.

55. Jae Chang, at the time of the incident was in the pit directly below Joseph Scullino.

56. Both James Campanella and Jae Chang pulled Joseph Scullino back off the Main Switchboard and onto the area outside the main switch room doors.

57. Jae Chang remained with Joseph Scullino and provided first aid whilst James Campanella went for help.

58. Nursing staff from John Paul Village arrived at the Main Switchboard site shortly after the incident and commenced CPR.

59. Nursing staff continued CPR until Ambulance officers arrived and took over, at approximately 3:35pm.

60. No adequate risk assessment was undertaken by the defendant of the work to be done in the vicinity of the Main Switchboard and the Essential Services Distribution Board.

Action taken after the Incident

61. Subsequent to the inspection carried out by Inspectors Denis Macready and Phillip May at John Paul Village on 14th February 2005, the following opinions were formed by the Inspectors and actions taken.

62. The labelling on the Main Switchboard did not adequately identify the areas that were not de-energised when the main switches were turned off. As a result, Prohibition Notice 7-76717 was issued to Brian Fitzgerald, CEO of John Paul Village. The Notice effectively prohibited all work on the Main Switchboard until the areas not controlled by the main switches were identified and labelled accordingly.

63. John Paul Village subsequently engaged the services of consulting electrical engineers, Northrop Building Services Pty Ltd and electrical switchboard manufacturers, F. E. Anderson Electrical.

64. F.E. Anderson advised that the following action be taken:

(i) “...additional labelling of the Essential Services Supply at the Main Switch, on the front escutcheon of the Essential Services Distribution Board & inside the cable zone near the Essential Services Distribution Board”;

(ii) “...a P.V.C. shroud to limit access to the Essential Services Section should be fitted. (i.e. Near circuit breaker chassis connections)”; and

(iii)“...replacement of the two (2) sets of open type Fault Current Limiters ( 1 for Essential Services & 1 for House Services) with fully enclosed type”.

65. The electrical work was being carried out in the areas of the Main Switchboard, which had not been de-energised. As a result, Prohibition Notices 7-76877 and 7-76895 were issued to Jae Chang – Director, Mission Services Pty, and Mark Taylor – Director, Taylor Projects Group Pty Ltd, respectively.

66. The Notices effectively prohibited all electrical work on site until a Safe System of Work was provided to ensure that work was not carried out on live installations or apparatus, and checks included in the Safe System of Work to ensure that the installation circuits and apparatus remain de-energised until work is completed.

67. The Safe Work Method Statement provided by Mission Services Pty Ltd to the Principal Contractor, Taylor Projects Group Pty Ltd was deficient in that it did not adequately:

(i) Describe how the work was to be carried out;

(ii) Identify the work activities assessed as having safety risks;

(iii) Assess the safety risks;

(iv) Describe the risk control measures that would be applied to the work activities.

68. As a result, Improvement Notice 7-76797 was issued to Jae Chang – Director, Mission Services Pty Ltd. The notice effectively stopped all electrical work on the site until an adequate Safe Work Method Statement was developed and provided to the Principal Contractor. As a result, an adequate Safe Work Method Statement was developed by Mr Chang and provided to the Principal Contractor to WorkCover’s satisfaction.

69. On 10th May 2005 Workcover issued a Safety Alert titled “Electrical Work near Live Electrical Equipment”. The Safety Alert drew the attention of all electrical contractors and electricians to the requirements of the Occupational Health and Safety Amendment (Electrical Work) Regulation 2004; and the practical guidance given in the Code of Practice: “Low Voltage Electrical Work”.

The Defendant

70. The Defendant fully co-operated with WorkCover in its investigation of this matter.

71. The Defendant has no prior convictions under the Occupational Health and Safety Act 2000 or associated legislation.

Relevant Principles

7 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213. In that case, their Honours were of the view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case, s8(1) & (2) of the Occupational Health and Safety Act 2000 with ss21A, 22, 23, 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the “instinctive synthesis” approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor. The court could (but not should) give a degree of deduction in penalty to some element in the consideration, in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea).

8 Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 383; (2000) 49 NSWLR 383, correctly, given the consideration in Markarian, recognised this “instinctive synthesis” approach to sentencing saying at [57]:

The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole.

Proper regard is had to express legislative provisions and to the relevant statutory regime (Markarian at [27]). The object of the Act is to compel attention to occupational health and safety issues so that persons are not exposed to risks to their health, safety and welfare at the workplace.

Consideration

9 In consideration of penalty, the Court must examine the objective seriousness of the offence or, as has been said "the nature and quality of the offence" (see Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch’ng) (1999) 90 IR 464 ad idem with the view expressed in Markarian (at 474)).

10 The agreed facts reveal the principle contractor, Taylor Projects, issued the defendant company with an electrical design drawing made by its engineer. This document was inaccurate. It showed the Essential Services Distribution Board to be connected to the Main Switchboard. The Essential Services Distribution Board had an independent source of power and could not be disconnected if the Main Switchboard was disconnected. Such an electrical arrangement was in accordance with the requirement set down in Australian Standard AS 3000 - 1991. Essential Services in this retirement village would continue if the Main Switchboard was disconnected.

11 In accordance with the safe work method statement completed before the incident, the two main switches and the sub-main switch to control the electricity supply to the nursing home from the main switchboard were turned off by an employee. Under instructions from Mr Chang, a series of tests using a multi-meter were then carried out by another employee to verify if the power from the Main Switchboard to the work area had indeed been turned off. Additional tests were carried out. It was determined those connections were no longer live. Work was performed and then attention went to the job of changing the sub-main cables.

12 The sub-main cables ran out of the bottom of the main switchboard, through the Essential Services Distribution Board and then down into the cable pit beneath the switchboard area. No tests were done to determine whether the Essential Services Distribution Board was de-energised. A warning label on the Main Switchboard read: "Essential Services Distribution Board Current Limiters Behind This Cover". The Essential Services Distribution Board had a warning notice on it which read: "All Switches on This Dist. Board are Main Switches". These notices should have warned qualified electrical workers the Essential Services Distribution Board was fused to a separate source of power than that of the Main Switchboard.

13 The Emergency Services Distribution Board was therefore still live even after the workers had thought they had disconnected it as a result of switching off the power supply to the Main Switchboard.

14 When an effort to pull the sub-main cables from below the Main Switchboard did not succeed, Mr Scullino, seeing a cable tie behind the Essential Services Distribution Board, applied cutters to the cable. He came in contact with the live terminals supplying the Essential Services Distribution Board. He was fatally electrocuted.

15 As to the criminal responsibility of the individual defendant, Starke J in Millner v Raith [1942] HCA 21; (1942) 66 CLR 1 said of a provision similar to s8(1) and s26(1) (at 5):

They make a director or person concerned in the management of a body corporate responsible as a principal for any act or fact specified in those sections merely because of his relation to the body corporate.

and the Full Bench in Morrison v Powercoal Pty Ltd and Anor (2004) 137 IR 253 said at [170]:

It is quite apparent why the legislature included s 50 in the Act; without it those natural persons who direct a corporation's acts or omissions that are contrary to the requirements of the Act would avoid prosecution. The section recognises that it is not only directors who may be the guiding lights of corporations but also "persons concerned in the management".

Section 26(1) of the Occupational Health and Safety Act 2000 has a similar effect to s50 of the Occupational Health and Safety Act 1983. The individual defendant, Mr Chang, the sole director and controlling mind of the defendant company, bears a burden for this serious breach of the Act. He was at the worksite with the employees performing the task. He designed the work safe procedures followed on the day. The plea of guilty acknowledges that burden.

16 In Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] 49 NSWLR 610, the Full Bench held at [82]:

The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature.

There was an element of foreseeability to the offence in the defendant company, through its controlling mind the individual defendant, Mr Chang, failed to adequately check whether the wiring diagram provided was accurate; failed to recognise the Essential Services Distribution Board was separately fused from Main Switchboard; failed to understand the warning label in a circumstance where electrically qualified persons ought to have understood; failed to recognise as a qualified electrician under the relevant Australian Standard such an Essential Services Board always has a separate source of power from the Main Switchboard. These failures constituted an unsafe system of work and are serious breaches of the Act.

17 While in hindsight further checks should have been conducted to ascertain whether or not the Essential Services Distribution Board was in fact switched off, the company did have safety checking procedures which were followed. However, given the design of the switchboards, a qualified electrician should have recognised there needed to be checks on the feed wires to both boards. There were indicators (for example, the sign on the Essential Services Board) that further checks were necessary.

18 The contribution of other parties to the offence is a matter to be weighed into a consideration as to the objective seriousness of the offence (see WorkCover Authority of NSW v McDonald's Australia Ltd and Anor (2000) 95 IR 383 per Walton J, Vice President (at 434 and 437) and Workcover Authority of New South Wales (Inspector Farrell) v David Carl Schrader [2002] NSWIRComm 25 per Walton J, Vice President at [61].) The electrical design drawings given to Mr Chang by Taylor Projects misled him in his design of the work method and contributed in a minor way to the risk. Given his qualification as an electrician, I accept such a contribution should only effect a minor mitigation to the nature of the defendants' offences.

19 Electrical work is inherently dangerous. Given there were two sources of power through the switchboards and warning signs, a check of the power source to the Essential Services Distribution Board should have been made, especially by a person qualified as an electrician. There is therefore an element of foreseeability to the offences which makes them more serious.

20 A level of deterrence must be factored into a consideration as to penalty. The Full Bench in Capral Aluminium Limited v WorkCover Authority of NSW (Insp Mayo-Ramsay) (2000) 49 NSWLR 610 said at [74]:

. . . the . . . 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 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 Limited (No. 2) [2000] NSWIRComm 39 at 40-43) we would expect such cases to be very rare . . .

The defendant company continues to work as an electrical contractor in the building industry. So does its director, Mr Chang. He continues to operate in a supervisory capacity over other electrical workers. Therefore, elements of both specific and general deterrence are required in both considerations of penalty. It must be reiterated that in the performance of tasks within this dangerous industry, the highest degree of vigilance and rigor must be exercised in the application of safe work procedures.

21 Each defendant is entitled to the benefit of subjective factors that mitigate the objective seriousness of the offence. In Alcatel Australia Limited v WorkCover Authority (Inspector Clyant) (1996) 70 IR 99, the Full Bench (Hungerford, Marks and Schmidt JJ) observed (at 106):

We accept that there are good policy reasons for the encouragement of early pleas of guilty and the giving of assistance to the WorkCover Authority in its investigation of suspected breaches of the OH&S Act. ...

A plea of guilty may attract a greater degree of leniency in penalty. In Winchester v Regina (1992) 58 A Crim R 345, Hunt CJ at CL held (at 350):

A plea of guilty is always a matter which must be taken into account when imposing sentence. The degree of leniency to be afforded will be determined upon many different factors. The plea may in some cases be an indication of contrition or of some other quality or attribute, which is regarded as relevant for sentencing purposes independently of the mere fact that the person has pleaded guilty.

An early plea of guilty was entered by both defendants and I accept it should attract the maximum deduction for the utilitarian value of the plea in accordance with the principles of R v Thomson; R v Houlton [2000] NSWCCA 383; (2000) 49 NSWLR 383. There shall be a 25 per cent discount allowed on penalty for both offences.

22 Other subjective features can warrant mitigation as to penalty. The defendants co-operated with WorkCover Authority. Evidence reveals that Mr Chang has re-educated himself as to the requirements under the Occupational Health and Safety Act. He has re-developed his work practices and requires an adequate risk assessment of each task. He also implemented further safety management processes, including NECA Safe Management System into the corporation's practices. He participated in a Small Business Occupational Health and Safety Advisors Programme. Additional evidence was provided to the court that since the incident, Mr Chang has been active in the Korean Electrical Contractors Association raising awareness of occupational health and safety issues.

23 As a result of this incident, on 10 May 2005, WorkCover issued a Safety Alert titled "Electrical Work near Live Electrical Equipment". The alert drew to the attention of all electrical contractors and electricians the requirements of the Occupational Health and Safety Amendment (Electrical Work) Regulation 2004. I accept however such a warning notice is a formal reiteration of the required Australian Standard, rather than indicating a change to those standards.

24 I further accept Mr Chang has exhibited genuine contrition and remorse. He personally paid for the funeral expenses of the deceased. I accept the incident was immediately reported to the WorkCover Authority and there was co-operation with the WorkCover Authority.

25 Mr Chang's personal situation reveals he supports a wife and children. He submitted he recently made poor investment decisions and as a consequence had to sell the family home. He owns few assets other than a car and work tools. He has a MasterCard debt to the Commonwealth Bank of $16,244.75 and a Visa debt to the National Australia Bank of $9,968.00. To his credit Mr Chang appears to move where the work is in order to provide adequately for his family. The defendant company, however, while not trading in profit has a turnover of approximately $800,000.

26 I take into account the financial status both of the defendant company and the individual defendant in my consideration of penalty. However, I do so in the context that I have found these breaches to be most serious offences.

27 The maximum penalty against the defendant company is $550,000 and against the individual defendant is $55,000 for each offence.

28 I consider the Victim Impact Statement by Belinda Scullino according to s30 of the Crimes (Sentencing Procedure) Act 1999.

29 I take into account the subjective features of the offence but give weight to the objective seriousness of the offence. I find the defendant company and the individual defendant (by virtue of s26(1)) guilty of breaches of s8(1) of the Occupational Health and Safety Act 2000. I give special consideration to the financial status of the individual defendant but consider his company has a significant turnover. I do not find this is an appropriate matter for the application of s10 of the Crimes (Sentencing Procedure) Act 1999 for either defendant.

30 In Matter No. IRC173 of 2007 for the breach of s8(1) of the Act, the defendant company is fined in the sum of $50,000.

31 In Matter No. IRC174 of 2007 for the breach of s8(1) of the Act, the individual defendant is fined in the sum of $10,000

32 The prosecution shall have one order as to costs.

Orders

33 Accordingly, the Court makes the following orders:

1. In Matter No. IRC173 of 2007, I find the defendant company guilty of the offence as charged.

The defendant company is fined in the sum of $50,000 with a moiety to WorkCover Authority of New South Wales.

2. In Matter No. IRC174 of 2007, I find the individual defendant guilty of the offence as charged.

3. The individual defendant is fined in the sum of $10,000 with a moiety to WorkCover Authority of New South Wales.

4. There shall be one order as to costs. Leave to re-list at short notice if no agreement is reached.



LAST UPDATED: 26 November 2007