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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Department of Labour v Icon Projects Ltd (DC, 26/07/12)

OSH Tracker

Defendant:
Icon Projects Ltd
Icon Projects Ltd was fined $13,000 under s15 after a contractor’s employee was injured in a fall from a roof. The company was project manager for a major accommodation refit on behalf of Victoria University. It contracted part of the work to a company without advising the university. The contractor’s solution required roof work but no fall prevention measures were taken (Wellington DC, 26 July). 
Industry:
Construction
Sub-Industry:
Construction Trade Services
Risk:
Fall from height
Harm:
Injury
Penalty Amount:
$13000.00
Reparation Amount:
$0.00
Appeared in Safeguard issue 136

Judgment Text

DECISION OF JUDGE C M WAINWRIGHT 
C M Wainwright Judge
Introduction 
[1]
In court today I gave a sentencing indication to Icon Projects Limited in relation to the charge it faces under section 15 and section 50(1)(a) of the Health and Safety in Employment Act 1992. Following that indication, I granted leave to the company to change its plea to guilty. This decision follows. 
The facts 
[2]
Victoria University engaged the defendant to provide project management services for the upgrade of international student accommodation at several properties in Wellington in 2010. One of the properties was 75 Fairlie Terrace. 
[3]
The defendant was to manage a tender process to appoint a main contractor for the project. The contractor was to be subject to the University's health and safety requirements. A main contractor was duly appointed. However, the defendant also engaged another contractor called Francetemp Limited to carry out project work separately from the main contractor. Evidently, the defendant did not tell the University that Francetemp's services were to be retained, and this effectively left Francetemp outside the University's health and safety system. 
[4]
On 17 February 2011, an employee of Francetemp, Mr Allen, was carrying out work at 75 Fairlie Terrace when he fell from the roof and suffered injuries to his knee and ankle. The Department of Labour prosecuted Francetemp separately in relation to its health and safety failures at the site of the accident (no fall protection measures had been put in place), and more generally in its policy and practice. I ordered that company to pay reparation of $12,000, and a fine of $15,000. The amount of the fine was reduced because of the demonstrated financial incapacity of the defendant company. 
[5]
The informant acknowledges that Francetemp were primarily responsible for Mr Allen's health and safety. However, the defendant failed in the way it managed the contracts for the University: it did not ensure that Francetemp was taking the necessary steps to ensure that its employees could work safely on the University's project. No site-specific health and safety plan was obtained from Francetemp; Francetemp was not brought under the umbrella of the University's health and safety requirements; and it failed to monitor what Francetemp was doing such as to ensure that it had and used necessary safety equipment for work at height. The informant identified four practicable steps that the defendant should have taken to ensure that Francetemp was operating its own, and within a broader, health and safety system. 
The Law 
[6]
Counsel for both parties agree that the leading case for sentencing the defendant is Department of Labour v Hanham and Philp Contractors Limited & Ors (2008) 6 NZELR 79 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow] . The approach settled in that case is that the sentencing court must (1) assess the reparation; (2) fix the fine; and (3) undertake an overall assessment of the proportionality and appropriateness of the total imposition of reparation and fine. 
[7]
No order for reparation is sought against this defendant. As to fine, the parties differ on the appropriate starting point. 
[8]
The starting point is determined by reference to culpability. Hanham & Philp sets out a scale where certain dollar amounts are associated with assessment of culpability: low culpability attracts a fine of up to $50,000; medium culpability attracts a fine between $50,000 and $100,000, and high culpability proceeds from there. 
[9]
The defendant argues that its culpability lies in the middle of the low band, with a starting point of between $22,500.00 and $27,500; the informant says it's at the low end of the middle band, with a starting point between $50,000 and $60,000. 
[10]
I take the view that culpability lies more or less in the area contended for by the defendant. I agree that the defendant's culpability is lower than that of Francetemp: this defendant was at one remove from the activities of Francetemp's employee, and was not in nearly as good a position to ensure his health and safety. It follows that the potential harm from Francetemp's poor practice is greater than the potential harm from the defendant's. Nevertheless, its role as project manager should have involved it in upholding professional standards of health and safety on behalf of the University. It failed to do that. Mr Allen's accident was arguably a result, but the nexus is not so direct. 
[11]
I note though that the defendant did look at Francetemp's health and safety policy in late 2010. Mr Couch, director of the defendant company, did not think that the policy was good enough and told Francetemp that their policy was not what he would normally expect. Unfortunately, though, he did not follow through to require Francetemp to put right its shortcomings. 
The sentence 
[12]
When I gave a sentence indication today in court, I said that I considered that an appropriate starting point for the company's level of culpability was $28,000. Various reductions followed, bringing the fine ultimately to $15,000. Mr Couch, for the defendant, decided to change the plea to guilty as a result. 
[13]
However now reviewing the documents filed and reflecting on the submissions made in court, I consider that it is appropriate that I set a slightly lower starting point. In my estimation, a starting point of $26,000 better responds to the situation of this defendant in relation to the health and safety issues of this case, and especially as compared with the role that Francetemp played. 
[14]
The balance of my analysis is, however, exactly as outlined in court. From the starting point, a deduction of 25% appropriately reflects the defendant's cooperation in remedial action, its remorse, and its preparedness to make amends. This is agreed as between the parties, and they also agree that a reduction of 15% is appropriate for the defendant's guilty plea at this stage. 
[15]
Finally, however, I must engage in step three of the three-step process to which I referred earlier: an overall assessment of the proportionality and appropriateness of the total imposition of reparation and fine. There is no reparation here, so I am looking only at the fine, which I consider responds appropriately to the defendant's level of culpability. The overall situation, though, requires me to have regard also to the financial position of the defendant company. I have looked at the Declaration of Financial Capacity filed for the defendant, along with financial statements and an assessment given by the defendant's accountant. This outlines an adverse financial performance for this company, exacerbated by the recent heart attack of its director Stephen Couch. Although Mr Couch anticipates a return to full health in due course, his ability to contribute to the company is likely to be compromised for some little while yet. I am satisfied that the defendant is in some financial difficulty at present. I accordingly make a further discount that reduces the fine payable to $13,000. 

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