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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



OSH Tracker

Ministry of Business, Innovation & Employment v Alliance Roof Solutions Ltd (DC, 13/12/13)

OSH Tracker

Defendant:
Alliance Roof Solutions Ltd
Control of workplace defined 
A roofing repairer owed a duty of care to a woman who was injured on one of its worksites, even though it was not itself carrying out the work. 
Alliance Roof Solutions Ltd was fined $30,000 under s16(1)(a) of the HSE Act, as a person in control of a place of work, and ordered to pay $1000 in reparations to the injured woman, who was struck on the head by a piece of waste timber thrown from the rooftop by an employee of a subcontractor (Auckland DC, 13 December 2013). 
In February 2012 Alliance was employed to replace the roof on a block of eight three-storey units. It ordered the materials, arranged for scaffolding to be put in place, and made provision for waste disposal, but engaged Fairhall Roofing Ltd to provide the labour for the job. 
In March an Alliance director visited the site and saw no warning signs or cordons to keep pedestrians away from an area where material was being thrown down from the roof. He climbed to the roof to raise the matter with his subcontractor but as he did so he heard screams from below and realised that someone had been struck. He found a visitor to the units had been hit on the head by a roofing batten, suffering a 7cm laceration. 
In court, Alliance challenged MBIE's view that it was in control of the workplace, saying that its agreement with the unit owners conferred only a right of access, and not the element of control that was required for a prosecution. It also claimed to lack the necessary association with the place of work because it was not itself running the job but acting as a link between its customer and the roofing contractor. The contractor, Fairhall, had been paid a specific sum to run the job, Alliance said, and it was its role to determine when and how the work was done. 
The company also questioned whether the victim was covered by the HSE Act, pointing out that she was not "in the vicinity" of a place of work, but within the workplace itself when she was hurt. Because she was there to visit a friend, it said, she was specifically excluded from cover under the act by s16(4), which exempts anyone in control of a place of work from "any duty in respect of any person who is in the place of work solely for the purpose of recreation or leisure." 
Judge Tony Fitzgerald rejected each claim. Despite the involvement of Fairhall, he said the contract for the roofing work gave the clear impression that Alliance was arranging every aspect of the job, and prominent signs on the site bore Alliance's name. 
On the question of coverage, he said that by taking s16 as a whole it was clear that the exemption applied only to situations where a person enters a workplace for recreational purposes without express or implied consent. 
The judge said warning signs and rope barriers would have been the bare minimum practicable steps. The use of a bin to collect the material thrown from the roof would have both contained the risk and required the person throwing it to look below as he threw, he said, while a 'spotter' on ground level would have further enhanced safety. 
Fairhall Roofing Ltd was also convicted under s16(1)(a) in relation to the incident, but was removed from the Companies Register before sentencing. 
Industry:
Construction
Sub-Industry:
General Construction
Risk:
Struck by falling object
Harm:
Injury
Penalty Amount:
$31000.00
Reparation Amount:
$1000.00
Appeared in Safeguard issue 145

Judgment Text

NOTES OF SENTENCING OF JUDGE A J FITZGERALD 
Judge A J Fitzgerald
[1]
On 16 August 2013 I found the charges against Alliance and Fairhall proved for reasons set out in written decisions delivered on 23 August 2013. 
[2]
Both defendant companies were due to be sentenced on 11 December 2013. However counsel advised that Fairhall was struck off the Company's Register on 13 August 2013 and so the information relating to it was withdrawn by leave. 
[3]
The sentencing proceeded in relation to Alliance. My comments now should be read together with my earlier decision to properly appreciate the full context. In particular I do not intend covering the facts again other than to the extent necessary to explain how I have arrived at the sentence imposed. 
[4]
The maximum penalty faced by Alliance is a fine not exceeding $250,000. 
[5]
The approach I must take is described in Department of Labour v Hanham and Philp Contractors Ltd [2008] 6 NZELR 79. There are three steps: 
(a)
Assess the amount of reparation; 
(b)
Assess the amount of a fine; 
(c)
Carry out an overall assessment of the penalty to be imposed. 
[6]
In carrying out that exercise the relevant provisions of the Sentencing Act must be taken into account. In particular the purposes and principles of sentencing in s 7 and 8 of the Sentencing Act 2002 are important considerations as are the aggravated and mitigating factors in s 9. 
1.
Reparation 
[7]
Reparation is to be considered in accordance with s 32 of the Sentencing Act. 
[8]
In the victim's witness statement dated 30 April 2012, she refers to being hit on the top of her head by a piece of wood and being covered in blood. She then goes on to say, 
“I went to Auckland Hospital A & E in the ambulance and got stitches in my head. I had four days off work because of the accident. My GP said I should have more but they were busy at work. My husband drove me to work for three days. My head felt heavy and I was still a bit dizzy. I also had some headaches so I didn't drive. I am still aware of the injury, especially when the weather is damp and my scalp gets tight. I get really upset when I think about what could have happened. I think about my family without me and get upset. ”
[9]
That statement was made less than two months after the accident. No updated victim impact statement or information is available. Ms Carr advises that the victim is currently overseas but her husband has apparently reported that she still feels some pain from the head injury when the weather is cold. 
[10]
There is no dispute about reparation being ordered but counsel are a long way apart on quantum. For the informant Ms Carr suggests a figure of $10,000 based on Department of Labour v Pumpcrete NZ Ltd (District Court Auckland, CRI-2011-039-000499, 2 March 2012). A copy of that decision is not provided; there is simply a three page summary of the decision which does not contain sufficient detail to properly understand how the figure was arrived at. 
[11]
For Alliance Mr White points to several cases in support of suggesting a reparation figure somewhere in the range between $1,000 and $1,500. Those cases are: 
(a)
DOL v BBL Contracting Limited (DC Gisborne CRI 2009-01601603 [2010] NZHSE 5) — fractured shoulder resulting in an award of $1,500 for emotional harm; 
(b)
DOL v JMP Engineering Ltd (CRI 2009-004-023434 DC Auckland, 10 May 2010) - $2,500 for emotional harm in the context of broken bones and hospitalisation for five days but no victim impact statement; 
(c)
DOL v Middlemore Carparking Limited and Counties Manukau District Health Board (CRI 2011-092-000863 DC Manukau 16 August 2011) - $3,000 reparation for broken ankle requiring surgery and a week-long hospital stay. 
[12]
Mrs Carr's submission is that reparation in this case is about compensating the victim for emotional harm suffered; the cases referred to above provide compensation for physical injury suffered and the Court should not be drawn into dealing with reparation on that basis. 
[13]
Whilst I accept the need for caution in that regard there often will be some link between the physical harm suffered and emotional harm, at least one aspect of which will often be some loss of enjoyment of life as a result of injury. Here the victim's injuries were able to be treated on the same day at hospital and the victim was back at work four days later. In April 2012 the victim was understandably upset about what had happened and the thought of what the consequences might have been was fresh in her mind. There is no evidence provided of any ongoing emotional trauma or loss of enjoyment of life. 
[14]
Based on the information available I fix the reparation payment at $1,000. 
2.
The fine 
[15]
In fixing the fine, the approach set out in the Court of Appeal decision in Taueki [2005] NZCA 174 is required. That is, fixing a starting point based on culpability and then making an adjustment up or down for aggravating and mitigating factors relating to the defendant. 
[16]
Fixing a starting point requires an assessment of the culpability by reference to the following scale set out in the Hanham and Philp case
(a)
Low culpability: a fine up to $50,000; 
(b)
Medium culpability: a fine between $50,000 and $100,000; 
(c)
High culpability: a fine between $100,000 and $175,000. 
[17]
On this issue, counsel are also a long way apart. Mrs Carr submits that the culpability is on the cusp between medium and high and an appropriate starting point therefore $100,000. 
[18]
For Alliance Mr White submits that the culpability is in the middle of the low range and suggests a starting point of $25,000. 
[19]
The assessment of culpability includes consideration of these factors: 
(a)
Identification of the operative acts or omissions at issue. In relation to that factor, the comments in paragraph [76] of my judgment of 16 August 2013 are relevant. 
(b)
The nature and seriousness of the risk of harm occurring as well as the realised risk. Here the informant says that the risk of harm included potentially fatal injuries. Although there was potential for injuries more serious than those suffered by the victim, I do not find the risk of fatal injuries in this case was high. Thankfully the realised risk and the injuries actually suffered by the victim here were relatively minor. 
(c)
There was complete departure from standards prevailing in the relevant industry by failing to have any safeguards in place at the time of the accident; 
(d)
The hazard was obvious; 
(e)
The means of avoiding the hazard were readily available, cheap and effective; 
(f)
It is a matter of common sense that injuries of the type suffered by the victim here could result from the lack of adequate steps taken; 
(h)
Again there was common knowledge of the means available to avoid the hazard and mitigate the risk. 
[20]
There are other factors to consider in assessing culpability here. An aggravating one is how little value was placed on health and safety in the budget for the job. Only $100 was provided for a “supervision/inspection allowance” in the money Alliance paid to Fairhall to do the roofing work. From the point of view of Alliance, that might have been on the basis that it expected Fairhall to have signs and ropes available and therefore little added expense needed to have those minimum safety steps in place. 
[21]
A mitigating factor is the extent to which Alliance was a step removed from the actual work site. In Mr White's submissions he puts it this way, 
“Overall, the factors addressed above to elucidate the blameworthiness of the offending. The key factors reducing Alliance's blameworthiness in this case is that it was in the process of addressing the omissions when the harm occurred; and had commenced addressing the issue as soon as it was aware of its contractor's deficiencies. 
Alliance was also a step removed from the day to day activities on site and had an experienced roofing contractor present. Some similarities in that regard can be drawn with the principal (which was not found guilty) in Department of Labour v Ross Roofing Ltd, (CRN 5044011919, 6 December 1995, Judge Joyce QC). The culpability of a defendant will typically be less where there is an experienced contractor on site doing work that is the immediate source of harm. ”
[22]
In this regard the informant submits that steps taken by Alliance were too late to avoid the accident and it was wrong for Alliance to assume the contractor would have taken steps. To make such an assumption runs contrary to the focus of the Act which requires proactive steps to be taken to avoid accidents. 
[23]
In the informant's written submissions it was said that evidence given by Mr Van der Wende, that Alliance was no more than a broker or a marketing company who connects up contractors, was deceitful and a deliberate attempt to mislead the Court. This was initially put forward as an aggravating factor to justify an uplift from the starting point. Although the submission that this was an aggravating factor was not pursued at the hearing, it is important I think to clarify and expand on some of the findings made in my earlier decision, that are relevant to culpability. 
[24]
I assessed Mr Van der Wende to be an honest witness and do not consider any of his evidence to have been deceitful or a deliberate attempt to mislead the Court. In my assessment he was mistaken as to the responsibility Alliance had regarding health and safety issues rather than incompetent or neglectful of them. As noted in my earlier judgment at para [65] I found he was not aware that warning signs and ropes were not in place until he arrived at the site very shortly before the accident. He was concerned about that situation and on his way to see Mr Fairhall to fix it when the accident occurred. 
[25]
In my view it is appropriate to take such issues, and the factors addressed by Mr White, into account when assessing culpability and fixing the starting point. Alliance's culpability in this matter is less than that of Fairhall. Although it should have taken further steps to ensure that minimum safety standards were put in place by Fairhall, Alliance had a basis for believing those steps would have been taken, based on its previous dealings with that company which had an unblemished safety record. 
[26]
Unlike Alliance, through its director Mr Van der Wende, Fairhall through its director did not give an honest account at the hearing and tried to cover up its serious safety shortcomings. Both companies had a responsibility for ensuring adequate safety measures were in place but Fairhall's culpability for failing to do so was greater than Alliances. 
[27]
However I do not accept Mr White's suggestion that the culpability is in the middle range of low. That simply cannot be the case in a situation where there were shortcomings in relation to all of the factors referred to in para [19] above. 
[28]
Having found that the risk of fatal injury was low, as was the realised risk and actual harm, I find the starting point to be in the middle range of medium culpability, not at the top and set the starting point at $70,000. That would have been the starting point for Fairhall in relation to culpability, before taking into account aggravating and mitigating factors. 
[29]
The factors I have mentioned regarding Alliance's reduced culpability justify a reduction from the starting point of 25%. The starting point for Alliance is therefore $52,250. 
[30]
I find there to be no aggravating factors in this case to warrant an increase from the starting point. 
[31]
It is a matter of agreement between counsel that a 15% discount should be provided for reparation to be paid. In my view there should be a further 10% discount for Alliance's blemish-free safety record. 
[32]
Therefore from the $52,250 starting point there should be a 25% deduction made; ie $13,062.50 producing a fine of $39,437.50. $1,000 reparation is to be added to that bringing the total of reparation and fine to $40,437.50. 
3.
Overall assessment 
[33]
The final step is an overall assessment of the burden that reparation and a fine will have, to ensure that it is proportionate and appropriate to the circumstances of the offending, taking into account the statutory purposes and principles of sentencing. 
[34]
Alliance does have insurance which will cover the reparation. The reparation figure is relatively low although Alliance is now responsible for all of it given that Fairhall cannot be required to contribute. That justifies some small reduction to the fine. As well as that, I must have regard to Alliance's ability to pay. 
[35]
Mr White submitted that any total figure much in excess of $20,000 would cause problems and if the total figure was too much higher the company would have to decide whether to continue trading. Financial and Bank account statements were provided to illustrate that Alliance is effectively a one man company operating with a small trading surplus. Taking that information into account I accept that a fine nearly twice that amount would impose an unreasonable hardship in the circumstances of this case but and satisfied Alliance is capable of meeting a fine greater that suggested by Mr White. 
[36]
I fix the fine at $30,000 which the company will be able to withstand given the ability to pay over time. 
Result 
[37]
Alliance is convicted and ordered to pay reparation of $1,000 and a fine of $30,000. 
[38]
Arrangements to pay over time to be made with the Registrar within 28 days. 

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