Inspector Spence v Gauci & Stephensons Cranes Pty Ltd [2011] NSWIRComm 79 (16 June 2011)

Last Updated: 23 June 2011

Industrial Relations Commission New South Wales

Case Title:	Inspector Spence v Gauci & Stephensons Cranes Pty Ltd
Medium Neutral Citation:	[2011] NSWIRComm 79
Hearing Date(s):	31 May 2011
Decision Date:	16 June 2011
Jurisdiction:	Industrial Court of NSW
Before:	Marks J
Decision:	1) Each of the defendants is found guilty of each of the offences as charged and convicted accordingly. 2) I impose a penalty upon Stephensons Cranes Pty Ltd in the sum of $140,000 in matter no IRC 939 of 2010 and of $140,000 in matter no IRC 940 of 2010 with a moiety to the prosecutor in each case. 3) I impose a penalty upon Stephen John Gauci in the sum of $8,500 in matter no IRC 937 of 2010 and of $8,500 in matter no IRC 938 of 2010 with a moiety to the prosecutor in each case. 4) The defendants are to pay the costs of the prosecutor as agreed or assessed under the Legal Profession Act in the proportion that each of the penalties bears to the aggregate of all penalties imposed in these proceedings.
Catchwords:	OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(1) & s 8(2) of the Occupational Health and Safety Act 2000 by the corporate defendant -personal defendant deemed guilty of the same offence by virtue of s 26(1) - guilty pleas - objective seriousness - general and specific deterrence - commitment to occupational health and safety obligations - cooperation with the WorkCover Authority - contrition and remorse - good corporate citizen - prior conviction for corporate defendant - principle of totality - orders made
Legislation Cited:	Occupational Health and Safety Act 2000 - s 8(1), s 8(2), s 26
Cases Cited:	Inspector Waterhouse v Stephensons Cranes Pty Ltd [2005] NSWIRComm 103
Texts Cited:
Category:	Principal judgment
Parties:	Inspector Ron Spence of the WorkCover Authority of NSW (Prosecutor) Stephen John Gauci (Defendant in IRC 937 & 938 of 2010) Stephensons Cranes Pty Ltd (Defendant in IRC 939 & 940 of 2010)
Representation
- Counsel:	Mr D Chin of counsel (Prosecutor) Mr R Warren of counsel (Defendant in IRC 937 & 938 of 2010) Mr M Mead (Defendant in IRC 939 & 940 of 2010)
- Solicitors:	DLA Piper Australia (Prosecutor) Costa & Associates (Defendant in IRC 937 & 938 of 2010) AiGroup (Defendant in IRC 939 & 940)
File number(s):	IRC 937 of 2010IRC 938 of 2010IRC 939 of 2010IRC 940 of 2010
Publication Restriction:

Judgment

1. This judgment concerns four sets of proceedings in which the prosecutor, Inspector Ron Spence of the WorkCover Authority of New South Wales, has alleged two breaches each of the Occupational Health and Safety Act 2000 ("the Act") by the defendants Stephen John Gauci and Stephensons Cranes Pty Ltd. The proceedings arise out of an incident that occurred on 1 September 2008 in a residential street in Miranda. The owners of the property had retained Stephensons Cranes Pty Ltd ("Stephensons") to provide a hydraulic mobile crane and operators for the purpose of lifting a spa bath, which had been left on the footpath outside their property, onto a deck at the rear of their home. Whilst this crane operation was in process, the mobile crane tipped over, striking overhead powerlines, causing extensive damage to the home property and resulting in a slight injury to one of the crane operators.

2. Stephensons was prosecuted for a breach of s 8(1) and s 8(2) of the Act. These provisions are in the following terms:

8 Duties of employers

(1) Employees

An employer must ensure the health, safety and welfare at work of all the employees of the employer.

That duty extends (without limitation) to the following:

(a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health,

(b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used,

(c) ensuring that systems of work and the working environment of the employees are safe and without risks to health,

(d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work,

(e) (e) providing adequate facilities for the welfare of the employees at work.

(2) Others at workplace

An employer must ensure that people (other than the employees of the employer) 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.

3. Essentially, s 8(1) is directed to the safety of Stephensons' employees and s 8(2) is directed to the safety of the owners of the property, who were standing nearby at the time that the incident occurred.

4. The proceedings against Mr Gauci are brought by virtue of s 26 of the Act, which is in the following terms:

26 Offences by corporations-liability of directors and managers

(1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that:

(a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or

(b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation.

(2) A person may be proceeded against and convicted under a provision pursuant to subsection (1) whether or not the corporation has been proceeded against or been convicted under that provision.

(3) Nothing in subsection (1) prejudices or affects any liability imposed by a provision of this Act or the regulations on any corporation by which an offence against the provision is actually committed.

(4) In the case of a corporation that is a local council, a member of the council (in his or her capacity as such a member) is not to be regarded as a director or person concerned in the management of the council for the purposes of this section.

5. It was alleged that Mr Gauci was involved in the management of Stephensons. By virtue of s 26, he is deemed to have committed the same offences as committed by Stephensons, hence the charges brought against him under the same sections 8(1) and 8(2).

6. The defendants pleaded guilty to each of the charges and this judgment is concerned only with penalty.

7. Each of the proceedings is constituted by an amended application for order filed in Court at the commencement of the sentencing hearing on 31 May 2011. The defendants had earlier indicated to the Court that when the proceedings were amended they would plead guilty to the amended charges.

8. It is not necessary that I set out in detail the exact charges brought against each of the defendants because, obviously, there is an overlap. As against Stephensons, the charge brought under s 8(1) is that on 1 September 2008 at a named address in Miranda, it failed to ensure the health safety and welfare at work of two named employees, Ian McCue and Blake Gauci, contrary to s 8(1) of the Act. The particulars of the charge as contained in the amended application for order are as follows:

(1) The defendant failed to ensure a system of operating mobile cranes, in particular a Tadano TL-250M-5 hydraulic mobile crane (the crane) that was safe and without risks to health, in that the defendant should have, but did not, ensure that the employees complied with a prohibition against operating the crane when the weight of a load for the required lift and movement exceeds the capacity of the crane (the prohibition). The defendant should have, but did not, ensure such compliance by:

(a) regularly reiterating and reinforcing the prohibition to employees such as at tool box meetings;

(b) providing employees with a crane which has a lifting capacity for the required lift and movement that exceeds the load to be lifted;

(c) not providing a crane that is required to operate at or beyond its maximum lifting capacity for the load to be lifted; and/or

(d) conducting regular site audits to ensure that crane operators do not operate overloaded cranes and otherwise comply with an appropriate Safe Work Method Statement.

(2) The defendant failed to ensure that the crane provided for use by the employees at work was safe and without risks to health, in that the defendant should have, but did not:

(a) accurately measure and/or verify the weight of a load, namely a packaged spa pool (the load), and/or ensure that the required working radius of the crane (the working radius) was accurately measured and/or verified by the crane operator and/or dogman, for the purpose of selecting, providing and/or ensuring the use of a crane with sufficient capacity to perform the required lift and movement of the load;

(b) apply an appropriate load chart for the crane using an accurate load weight for the purpose of ensuring that the crane had sufficient capacity to perform the required lift and movement of the load;

(c) otherwise provide the employees with a crane which had sufficient capacity to lift and move the load according to the working radius;

(d) ensure that the safety device on the crane known as the "Automatic Moment Limiter" (AML), and in particular the "Load Moment Limiter", was accurately calibrated and/or functioning correctly; and/or

(e) otherwise regularly and adequately maintain the crane to ensure (d), including by carrying out and recording monthly inspections, and/or periodic inspections at intervals of no more than one year, and/or external inspections conducted by a third-party at intervals of no more than one (or, in the alternative, two) years, in which the AML device is inspected, tested and calibrated by: (i) using known weights to check the accuracy of the AML computer read-out as to load weight, (ii) extending and measuring the boom in several different positions to check the accuracy of the AML computer read-out as to the length of the boom, and (iii) lowering the boom in several different positions, and checking the gauge on the side of the boom (or another gauge that can measure the angle of the boom) to check the accuracy of the AML computer read-out as to the angle of the boom.

(3) The defendant failed to ensure a system of operating the crane near overhead power lines that was safe and without risks to health, in that the defendant should have, but did not:

(a) consult with and obtain the written approval of the electricity network operator to operate the crane in the 'no go zone' directly above power lines, and comply with any conditions imposed by the network operator for the work;

(b) make arrangements with the electricity network operator for the overhead power lines to be de-energised, isolated or re-routed away from the work activity during the lift; and/or

(c) provide effective insulation on the overhead powerlines such as a sheath.

(4) The defendant failed to provide such information and instruction to the employees as was necessary to ensure their health and safety at work, in that the defendant should not have provided the employees with inaccurate information about the safe configuration of the crane for the required radius.

(5) As a result of the defendant's failures the employees were placed at risk to their health and safety, namely, the risk of electric shock and/or being struck or thrown by the crane, its load and/or falling debris as a result of the crane tipping over during the lifting and moving of the load.

9. The charge against Stephensons under s 8(2) is in relevantly identical terms save that in lieu of particular (3) dealing with the operation of the crane near overhead powerlines, particular (3) is in the following terms:

(6) The defendant failed to provide such information and instruction to the employees as was necessary to ensure that the occupants were not exposed to risks to their health or safety, in that the defendant should not have provided the employees with inaccurate information about the safe configuration of the crane for the required radius.

10. The charges and particulars brought against Mr Gauci reflect the charges and particulars in the proceedings brought against Stephensons, save that there is an assertion that Mr Gauci was "a person concerned in the management of" Stephensons.

11. There was tendered into evidence a prosecution tender bundle that consisted of an agreed statement of facts, photographs, certain material relating to the particular hydraulic crane and a site inspection report completed by Mr Gauci at the time that he first visited the premises. For the defendants, there were tendered into evidence two affidavits sworn by Mr Gauci.

12. The agreed statement of facts is in the following terms:

(1) At all material times the Prosecutor was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 ( the Act ) and empowered under Section 106(1)(c) of the Act to institute these proceedings.

(2) The proceedings relate to the investigation of an incident involving Ian McCue ( Mr McCue ) and Blake Gauci on 1 September 2008 while undertaking work as employees of Stephensons Cranes Pty Ltd ( Stephensons ) at or around a residential property at [details omitted] Miranda, in the state of New South Wales ( the premises ) occupied by Graham Stewart Leech and Jacqueline Francoise Antoinette Leech ( the occupants ).

Background

(3) At all material times, Stephensons:

(a) had a sole director, Ms Christine Adair, who was Mr Stephen John Gauci's ( Mr Gauci ) mother-in-law;

(b) was an employer and employed, inter alia, Mr McCue (as a crane operator) and Mr Blake Gauci (as a dogman);

(c) conducted a mobile crane hire business;

(d) leased a fleet of 14 cranes, 6 trucks and 10 cars for use in the conduct of its business ( the fleet ), including a Tadano TL250M-5-20101 (serial number 340786, and registration number YFW 995) hydraulic mobile crane ( the crane ); and

(e) leased the fleet from S.P. Gauci Holdings Pty Ltd ( SP Gauci ), the directors of which were Mr Gauci and his wife Ms Patricia Gauci.

(4) At all material times, Mr Gauci was a person concerned in the management of Stephensons in that he performed duties as, and occupied the position of, General Manager of Stephensons. Mr Gauci was solely responsible for the day-to-day running of the Stephensons' business, including responsibility for buying and selling assets, employment of staff and occupational health and safety.

(5) As at 1 September 2008, Stephensons had continuously employed Mr McCue as a crane operator for a period of about 7 years. Mr McCue was 52 years of age and had approximately 26 years of experience as a crane operator. He operated the crane on a daily basis. Mr McCue had a construction induction card, a heavy vehicle driver licence and a national certificate of competency. Mr McCue had completed a course titled 'Powerline Awareness for Non-Electrical Workers' a component of which was titled 'Guide for Operating Cranes and Plant near Power Lines' dated 26 August 2004.

(6) As at 1 September 2008, Stephensons had employed Mr Blake Gauci (who was Mr Gauci's son) for a period of about 18 months. Blake Gauci had been employed by Stephensons as a dogman for about 6 months prior to 1 September 2008. Blake Gauci was 17 years old at the time of the incident, and was completing a logbook and had a General Induction ticket for Construction Work (dated 27 September 2006). Blake Gauci did not, as at 1 September 2008, have a dogging ticket, basic rigging ticket or powerline risk management training. Blake Gauci was not aware of the existence or requirements of the WorkCover 'Work Near Overhead Power Lines' Code of Practice 2006 ( the Code of Practice ).

The incident

(7) [Details omitted] in Miranda is and was at all material times, approximately 7.5 metres wide from gutter to gutter. The occupants' house was located on a steep block which fell away and downwards from the road.

(8) Overhead powerlines were situated between the kerb and the premises.

(9) On or about 27 August 2008 the occupants of the premises, Mr Graham Leech and Ms Jacqueline Leech ( the occupants ), engaged Stephensons to lift and move a spa bath ( the load ) onto a deck at the rear of their house situated at the premises. Stephensons subsequently agreed to perform the work at a cost of $800.

(10) Mr Gauci instructed Mr McCue to attend the premises to lift the load on 1 September 2008 pursuant to the aforesaid arrangement between Stephensons and the occupants.

(11) At about 10am on 1 September 2008, Mr McCue and Blake Gauci arrived at the premises to undertake the task of lifting the spa bath over the premises and onto the rear patio using the crane. Mr McCue and Blake Gauci spoke with the occupants, "stepped out" the distance between the location of the crane and the landing area to estimate the working radius of the crane (which Mr McCue estimated at between 28 to 29 metres), set up the crane, including attaching the 'fly' jib to the boom, extended and supported the outriggers or stabilisers, and conducted a test lift to ascertain the weight of the load as being between 700 to 800 kilograms (including the packaging and the hook and slings).

(12) The fly-jib attached to the boom of the crane was 8.7 metres in length. Mr McCue attached the jib at a 5 degree angle to the boom. The boom was elevated and fully extended to 33 metres, giving an overall length of 41.7 metres, with the fly-jib attached. This was the configuration of the crane at the time of the incident.

(13) Mr McCue and Blake Gauci slung, lifted and slewed the load towards the house. The boom was lowered, or 'jibbed down', to reach the required landing spot and in doing so, it passed over power lines. Once the load was over the residence, Blake Gauci returned to the rear of the residence with Mrs Leech.

(14) Blake Gauci and the occupants were standing on the deck at the rear of the house as the load approached that area. The load was intended to be placed on the deck.

(15) Blake Gauci was guiding Mr McCue via two-way radio contact. Immediately prior to the incident, Blake Gauci advised Mr McCue to stop. Blake Gauci then noticed that the load continued to move beyond the house and further advised Mr McCue to stop. When the load continued to move away from the house, Blake Gauci realised that Mr McCue was not in control of the load and that the load was falling.

(16) The crane tipped over.

(17) As the crane tipped over and the load fell:

(a) Blake Gauci states that he was nearly standing underneath the load.

(b) Graham Leech states that he was approximately 4 metres from the load; and

(c) Jacqueline Leech states that she was 2 to 2.5 metres from the load (although Blake Gauci states that she was 10 to 15 metres away).

(18) Blake Gauci and the occupants ran out of the way. The load then fell in an area below and beyond the patio-deck. The boom of the crane then fell through the roof of the house and onto the rear second storey balcony. The boom of the crane also fell onto the overhead power lines.

(19) The collapse of the crane's boom onto the power lines caused the fuses of the power line to rupture resulting in an electrical power outage to approximately 27 houses within the area for about 15 hours.

(20) Immediately after the boom fell, Blake Gauci ran to check that one of the occupants, Mrs Leech, was safe, and then ran to the front of the house to check the condition of Mr McCue. The occupants also ran to the front of the house.

(21) Mr McCue was situated within the cabin of the crane when it tipped over.

(22) Blake Gauci used an extension ladder provided by the occupants to assist Mr McCue to get out of the crane. Blake Gauci did not take any steps to ensure that the crane was not live as a result of the broken power lines.

(23) Mr McCue was at risk of electric shock and/or being struck or thrown by the crane as a result of the crane tipping over during the lifting and moving of the load.

(24) Blake Gauci was at risk of being struck by the load and/or falling debris as a result of the crane tipping over during the lifting and moving of the load.

(25) The occupants were at risk of being struck by the load and/or falling debris as a result of the crane tipping over during the lifting and moving of the load.

(26) Police notified the electricity distributor, Energy Australia, at 10.55am via the Energy Australia Outage Management System. Emergency services, which included the Police, Fire Brigade and Paramedics from the Ambulance Service arrived and proceeded to control the situation and to treat Mr McCue who had grazed his hand during the crane tipping over.

The systems failures

(27) Mr McCue has stated that he had been previously permitted to proceed with lifts despite loads reaching the maximum capacity of a crane, and that he had not been given an option whether or not to perform lifting jobs that had been so allocated to him.

(28) There was a computerised safety device on the crane known as the "Automatic Moment Limiter" ( AML ) that had recorded about 50 prior incidents of lifting overloads over the life of the crane. The AML does not record the reason for any instance of lifting overload.

(29) Stephensons had a generic Safe Work Method Statement that contained a prohibition against using a crane to lift while "overload" ( the prohibition ).

(30) Stephensons should have, but did not, ensure compliance with the prohibition by:

(a) regularly reiterating and reinforcing the prohibition to employees such as at tool box meetings;

(b) not providing a crane that is required to operate at or beyond its maximum lifting capacity for the load to be lifted; and/or

(c) conducting regular site audits to ensure that crane operators do not operate overloaded cranes and otherwise comply with an appropriate Safe Work Method Statement.

The plant failures

(31) The weight of the load, excluding the weight of the hook, slings and all load handling devices, was about 780 kilograms. The working radius of the crane at the premises was about 32 metres ( the working radius ).

(32) The load chart for the crane indicates the maximum weight loads (including the weight of the hook, slings and all load handling devices) for various working radii at which there arises a likelihood that the crane will become unstable and tip over: ( the load chart ). The point at which a risk of the crane tipping over arises at a working radius of 31.2 metres with a jib attached to the boom at a 5 degree angle is a load weight of 250 kilograms.

(33) The load chart thus demonstrated that the crane was incapable of safely lifting the load according to the working radius.

(34) Mr Gauci attended the premises and prepared a site inspection report on or about 29 August 2008. This report incorrectly noted the weight of the load as being 450-500 kilograms, with a total load weight (including the hook, slings and chains) of 600 kilograms. The weight of the load was provided by Mr Leech.

(35) Mr Gauci's site inspection report also noted that the working radius was 32 metres, and that a jib offset angle of 40 degrees would be required.

(36) According to the load chart, a working radius of 31.5 metres and a 45 degree jib offset angle (the jib of the crane could only be set at 5 degrees, 25 degrees or 45 degrees) indicated that the maximum safe load weight was 350 kilograms. [However, the site inspection report had instructed a fly and needle set up which if adhered to would have given a safe load weight of approximately 445 kilograms in accordance with the Australia Standard. The Australian Standard provides an additional further weight tolerance of 25 per centum.]

(37) Blake Gauci was given a copy of this site inspection report prior to performing the lift on 1 September 2008. Prior to attending the premises that morning, Mr Gauci told both Blake Gauci and Mr McCue that they would need to use a fly and needle.

(38) Mr McCue and Blake Gauci, in their assessment, were unable to erect the needle to the jib for the purpose of moving the load over the working radius, as instructed by Mr Gauci referred to in paragraphs 36 and 37 above, because the presence of overhead electrical wires running across the road resulted in insufficient room to do so.

(39) Prior to attending the premises on 1 September 2008, Mr McCue was told that the weight of the load was either about 350 or 450 kilograms.

(40) Pursuant to an inspection of the crane after the incident by CraneSafe Australia in January 2009, it was discovered that the AML device, and in particular the "Load Moment Limiter", was not calibrated in conformity with the load chart, such that the AML mechanism would not operate to stop the motion of the crane when it reached a dangerous point of overload or "tipping point". When functioning properly, the AML device would automatically stop the motion of the crane when it reached a dangerous point of overload or "tipping point"

(41) In addition, at the time of the incident on 1 September 2008 the AML device was overridden by the emergency AML switch.

(42) Stephensons did not maintain complete maintenance records for the crane. Stephensons did not have any records of periodic/annual inspections of the crane, as required under Australian Standard 2550.1 - 2002, Section 7.3.1(c) and 7.3.4.1. Stephensons did have monthly inspection reports, but not for the life of the crane.

(43) Stephensons failed to ensure that the crane provided for use by the employees at work was safe and without risks to health, in that Stephensons should have, but did not:

(a) accurately measure and/or verify the weight of the load, and/or ensure that the required working radius of the crane ( the working radius ) was accurately measured and/or verified by the crane operator and/or dogman, for the purpose of selecting, providing and/or ensuring the use of a crane with sufficient capacity to perform the required lift and movement of the load;

(b) apply an appropriate load chart for the crane using an accurate load weight for the purpose of ensuring that the crane had sufficient capacity to perform the required lift and movement of the load;

(c) otherwise provide the employees with a crane which had sufficient capacity to lift and move the load according to the working radius;

(d) ensure that the AML device on the crane, and in particular the "Load Moment Limiter", was accurately calibrated and/or functioning correctly; and/or

(e) otherwise regularly and adequately maintain the crane to ensure (d), including by carrying out and recording monthly inspections, and/or periodic inspections at intervals of no more than one year, and/or external inspections conducted by a third-party at intervals of no more than one (or, in the alternative, two) years, in which the AML device is inspected, tested and calibrated by:

(i) using known weights to check the accuracy of the AML computer read-out as to load weight,

(ii) (extending and measuring the boom in several different positions to check the accuracy of the AML computer read-out as to the length of the boom, and

(iii) lowering the boom in several different positions, and checking the gauge on the side of the boom (or another gauge that can measure the angle of the boom) to check the accuracy of the AML computer read-out as to the angle of the boom.

The power lines failures

(44) The Code of Practice and various Australian Standards, such as "Cranes, hoists and winches - Safe use (Part 5: Mobile cranes) AS 2550.5-2002" ( the Australian Standard ), requires, inter alia, crane operators to obtain prior written permission from the electricity distributor to operate a crane above power lines, comply with any conditions specified by the electricity distributor, and to observe a hierarchy of safety controls including making arrangements to isolate or de-energise power lines before commencing work near them.

(45) Stephensons did not comply with the Code of Practice or the Australian Standard on 1 September 2008.

(46) Stephensons should have, but did not:

(a) consult with and obtain the written approval of the electricity network operator to operate the crane in the 'no go zone' directly above the power lines, and comply with any conditions imposed by the network operator for the work;

(b) make arrangements with the electricity network operator for the overhead power lines to be de-energised or isolated during the lift or re-routed away from the work activity during the lift; and/or

(c) provide effective insulation on the overhead powerlines such as a sheath.

The information, instruction and training failures

(47) As noted above, Mr Gauci's site inspection report on or about 29 August 2008 incorrectly recorded the weight of the load as being 600 kilograms. The report also noted that a jib offset angle of 40 degrees would be required. According to the load chart, a working radius of 31.5 metres and a 45 degree jib offset angle (the jib of the crane could only be set at 5 degrees, 25 degrees or 45 degrees) indicated that the maximum safe load weight was 350 kilograms.

(48) Stephensons, through Mr Gauci, provided Mr McCue and Blake Gauci with inaccurate information as to the load weight and the safe configuration of the crane for moving the load over the working radius on 1 September 2008.

(49) Mr McCue did not himself apply the load chart at the premises, and could not recall how to use one as at July 2009.

(50) Mr McCue and Blake Gauci were not provided with site specific Safe Work Method Statement.

(51) As a result of Stephensons' failures the occupants were placed at risk to their health and safety, namely, the risk of being struck by the load and/or falling debris as a result of the crane tipping over during the lifting and moving of the load.

The exclusion failure

(52) Stephensons' failed to prevent or otherwise prohibit the occupants from being near or in the vicinity of the crane and/or the landing area for the load during the process of lifting and moving the load.

System of work after the incident

(53) Following the incident on 1 September 2008, Stephensons engaged an Occupational Health and Safety Officer, Mr Andrew Westwood, and has instituted a system of recording tool box meetings and conducting regular site audits.

13. The site inspection request sheet, which Mr Gauci had initially completed, and the calculation sheet, by which the maximum safe load that could be lifted using this particular hydraulic crane could be ascertained, were tendered into evidence.

14. It is clear on the evidence, and as conceded by the defendants, that Mr Gauci miscalculated the configuration of the hydraulic crane necessary to lift the particular load on the particular occasion, even assuming that the load was about 600kgs after taking into account the weight of the hook, slings and chains as well as the fly-jib. As the prosecutor submitted, the crane that was provided was simply too small and unsuitable for the lift.

15. The defendants' problems were compounded by the fact that the employees on site, one of whom was clearly very experienced, decided without reference back to Mr Gauci not to use the needle, and to insert the fly-jib at an angle of 5 degrees rather than the 40 degrees that had been instructed by Mr Gauci. In this latter regard, I note that the fly-jib could only be set at an angle of 45 degrees. This situation was compounded further by the fact that the Stephensons' employees knew before they commenced the lift that the weight of the load, including its packaging, was between 700 and 800kgs, substantially in excess of that which Mr Gauci had originally been told by one of the owners of the property. Again, the employees concerned did not refer to Mr Gauci for further instructions.

16. Notwithstanding, however, the apparent deficiencies in the conduct of the employees (which I infer from the only available evidence, which does not include any statements taken from either of them), the initial deficiency as admitted by the defendants was in the calculations originally formulated by Mr Gauci, which were incorrect.

17. The other significant matter upon which the prosecutor based his case was the failure of Stephensons to ensure that the automatic cut-off device had been correctly calibrated and would therefore operate to stop the crane from attempting to lift anything that was beyond the safe operating weight. Although there was evidence that Stephensons undertook maintenance of the crane, that evidence is to the effect that such maintenance was not undertaken on a regular basis prior to the incident occurring.

18. The starting point for the determination of an appropriate penalty is the objective seriousness of the offences. The operation of the mobile hydraulic crane, as described in the agreed statement of facts and as depicted in photographs, indicate that the operation being undertaken by Stephensons using this crane was an inherently dangerous one in that it involved lifting a heavy object over powerlines for a distance of about 30 metres. It is essential for the safe operation of this type of machinery that the weight of the load and the circumstances in which it was being lifted be carefully considered to ensure that there was no risk created to the health and safety either of the employees or persons who were not employees, such as the owners of the property. Because of the inherent potential problems involved in the operation of the hydraulic mobile crane, it was fitted with a number of safety devices, one of which would have precluded the load being lifted at all once it exceeded the safe weight. The failure to have calibrated the equipment to ensure that this failsafe mechanism would operate is also a serious matter.

19. Overall, I would assess the objective seriousness of the offence as being high although, obviously, not in the worst category of case.

20. In assessing penalty it is also necessary that the Court take into account the general deterrent effect that any penalty imposed will have as well as the specific deterrent effect on these defendants. There is nothing in the evidence to suggest that the defendants do not remain in the business of supply and operation of hydraulic cranes. However, there is evidence that after the incident Stephensons took positive and constructive steps to improve its commitment to its occupational health and safety obligations, which would have the effect of ameliorating the need to take specific deterrence into account.

21. As against this, the prosecutor pointed to one of two earlier prosecutions of Stephensons, which was ultimately the subject of proceedings before a Full Bench of this Court in Inspector Waterhouse v Stephensons Cranes Pty Ltd [2005] NSWIRComm 103. Stephensons had pleaded guilty to the charge brought against it in those proceedings. It involved the use of a mobile crane manufactured by the same manufacturer of the crane that is involved in these proceedings. Whilst the crane was being operated and in the course of lowering a load, it tipped over and fell. A computer cable, which allowed for the operation of an automatic failsafe cut-out switch, had not been installed. It seems that the incident occurred because of a failure to properly calculate the radius of the crane to safely undertake the lift. Even though the precise defect that caused the crane to tip in the circumstances of the proceedings brought by Inspector Waterhouse was different from the defect in these proceedings, there is nevertheless a history of an earlier incident that occurred in March 2002 involving the tipping over of a mobile crane which, so the prosecutor submitted, would be indicative of a need for continuing caution to ensure that an incident of this general kind did not occur again. I shall take this matter into account as representing one element of what needs to be considered in providing for specific deterrence in assessing an appropriate penalty.

22. It was the evidence of Mr Gauci that Stephensons was established in 1992 and is a family-owned and operated business. At the time of the incident it employed around 21 fulltime employees and a small number of casual employees.

23. Since the incident, Stephensons has introduced a number of measures designed to increase the awareness of its staff about occupational health and safety matters and to ensure regular and consistent maintenance and servicing of its equipment. Furthermore, greater attention is now given to the assessment of risks associated with individual jobs and the operations of the company.

24. There are a number of other subjective matters that the Court is entitled to take into account in favour of the defendants when assessing penalty. Pleas of guilty were entered at the earliest appropriate opportunity, there was co-operation with the WorkCover Authority in and about its investigation of the incident, the defendants have expressed contrition and remorse for what has occurred and Stephensons has demonstrated that it is, in general terms, a good corporate citizen.

25. The prosecutor sought orders for costs and a moiety, which were not opposed.

26. The maximum penalty for each of the offences with which Stephensons is charged is $825,000 because that company has two prior convictions for offences against the Act. The maximum penalty that may be imposed on Mr Gauci with respect to each of the offences is $55,000. However, the proceedings brought under s 8(1) and 8(2) respectively arise out of the very same incident, albeit they relate to risks to the safety of different persons who were in the vicinity of the site where the crane was operating. There is, accordingly, a large overlap in terms of each of the offences that would require the application of the principle of totality to ensure that there is no double counting in the assessment of penalty.

27. The prosecutor agreed that the principle of totality would clearly apply but pointed to two matters that precluded the Court from approaching each of the charges brought against each of the defendants as if there was a substantial overlap. In the proceedings brought under s 8(1), one of the particulars of the charge is that Stephensons failed to make arrangements with the electricity network operator for the overhead powerlines to be de-energised, isolated or rerouted away from the work activity or provide effective insulation on the overhead powerlines such as a sheath. This particular is not present in the proceedings brought under s 8(2). On the other hand, the proceedings under s 8(2) contain a particular of breach to the effect that Stephensons should not have permitted the occupants of the premises to have been in the vicinity of the lift at the time that it occurred and that this created a risk of injury when the crane tipped over. I shall take both these matters into account when considering the application of the totality principle.

28. Having regard to the objective seriousness of the offences with which Stephensons is charged and the need to provide for both general and specific deterrence, but taking into account also all of the subjective features in favour of the defendant to which I have referred, I would assess an appropriate penalty in the case of each of the offences as $200,000. However, applying the principle of totality I would reduce the overall penalty to $280,000. The overall result is that I intend imposing a penalty in the case of each of the offences against Stephensons of $140,000.

29. The maximum penalty that applies to each of the offences with which Mr Gauci is charged is $55,000. His culpability is, in all the circumstances, identical to that of Stephensons. This approach reflects the provisions of s 26 of the Act and is consistent also with the fact that on the evidence Mr Gauci was the person involved in the overall management of the corporate defendant. Applying the same approach, therefore, to the assessment of penalty, I would intend imposing a penalty against Mr Gauci for each of the offences of $23,000, reduced after the application of the totality principle to $8,500 for each offence.

30. The prosecutor sought orders for a moiety and the payment of costs, which were not opposed.

Orders

31. I make the following orders:

1) Each of the defendants is found guilty of each of the offences as charged and convicted accordingly.
2) I impose a penalty upon Stephensons Cranes Pty Ltd in the sum of $140,000 in matter no IRC 939 of 2010 and of $140,000 in matter no IRC 940 of 2010 with a moiety to the prosecutor in each case.
3) I impose a penalty upon Stephen John Gauci in the sum of $8,500 in matter no IRC 937 of 2010 and of $8,500 in matter no IRC 938 of 2010 with a moiety to the prosecutor in each case.
4) The defendants are to pay the costs of the prosecutor as agreed or assessed under the Legal Profession Act in the proportion that each of the penalties bears to the aggregate of all penalties imposed in these proceedings.