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OSH Tracker

WorkSafe New Zealand v Ngaha (DC, 26/04/17)

OSH Tracker

Defendant:
Jade Ngaha
P&M Demolition Specialists and its sole director Jade Ngaha were ordered to pay reparation of $36,000 in addition to $13,000 already paid towards clean-up costs after they ignored advice that there was asbestos present at three residential sites and went ahead with demolition without doing a risk assessment, a survey, or putting in place any controls to prevent exposure to workers or neighbours. The company pleaded guilty to three charges, while Ngaha pleaded guilty to four charges, including one laid under the rarely used section 56 of the HSE Act. The judge did not impose a fine due to the financial position of the defendants (North Shore DC, 26 April 2017). 
Industry:
Construction
Sub-Industry:
General Construction
Risk:
Hazardous substance exposure
Harm:
None
Penalty Amount:
$18000.00
Reparation Amount:
$18000.00
Appeared in Safeguard issue 163
Defendant:
P&M Demolition Specialists Ltd
P&M Demolition Specialists and its sole director Jade Ngaha were ordered to pay reparation of $36,000 in addition to $13,000 already paid towards clean-up costs after they ignored advice that there was asbestos present at three residential sites and went ahead with demolition without doing a risk assessment, a survey, or putting in place any controls to prevent exposure to workers or neighbours. The company pleaded guilty to three charges, while Ngaha pleaded guilty to four charges, including one laid under the rarely used section 56 of the HSE Act. The judge did not impose a fine due to the financial position of the defendants (North Shore DC, 26 April 2017). 
Industry:
Construction
Sub-Industry:
General Construction
Risk:
Hazardous substance exposure
Harm:
None
Penalty Amount:
$18000.00
Reparation Amount:
$18000.00
Appeared in Safeguard issue 163

Judgment Text

NOTES OF JUDGE L I HINTON ON SENTENCING 
Judge L I Hinton
[1]
P&M Demolition Specialists Limited and Mr Jade Ngaha are before the Court in relation to six charges proferred by WorkSafe New Zealand. Briefly, each of the company, P&M Demolition and Mr Ngaha have entered pleas of guilty; the company to three charges of failing to take all practicable steps to ensure that its contractors were not harmed while doing work they were engaged to do, namely asbestos demolition work, while they were working at height and failing to take all practicable steps to ensure that no hazard in the place, namely asbestos, harmed people in the vicinity. Mr Ngaha is charged in effect as the director and sole principal of P&M Demolition. He pleaded guilty to three charges of directing, authorising, assenting to or acquiescing in the failure of the company to ensure that no hazard harmed people, to ensure that contractors were not harmed whilst working at height and to ensure that contractors were not harmed while doing asbestos demolition work. The maximum penalty for each of those offences is $250,000. 
[2]
Briefly, P&M Demolition was contracted to do some demolition work at a property owned by Ms Parsons and Mr Kernohan in Belmont, Auckland. The contracting party appears to have been P&M Demolition which was to demolish three buildings, being a house, sleep-out and garage, on that residential site. In effect the job was done suboptimally, to put it mildly. There were substantial cleanup costs and associated loss incurred by the owners of the property. The cleanup costs and so forth ran to around $100,000. There has been a restorative justice conference at which Mr Ngaha appears to have accepted responsibility for the cleanup costs incurred by the contracting parties with his company. 
[3]
For the prosecutor, reasonably detailed submissions have been filed by Ms Jeffs. It is submitted that a substantial reparation award in the region of $80,000 is warranted to reflect the damage to property suffered by Mr Kernohan and Ms Parsons by means of the offending. It is suggested, at least in the original written submissions, that there may have been other affected victims in the vicinity. Those might at the least include contractors who worked for P&M Demolition, in respect of which there is conflicting authority in this Court. No view is required from me on that because no reparation is sought apart from in respect of the landowners. 
[4]
The brief factual background includes these matters. Prior to accepting the contract P&M Demolition was provided with the results of initial asbestos testing. This testing indicated there was some asbestos containing material, which I will refer to as “ACM”, in the exterior cladding cement board of the garage. The supervisor for P&M had no relevant experience or training in respect of identifying or demolishing structures with ACM. The workers had no experience or training in demolition work involving ACM or working at height. There was no comprehensive hazard assessment. The workers were not provided with wetting down or dust control equipment to control large quantities of dust. There was no sufficient personal protective equipment or decontamination facilities to remove any ACM before leaving the work site. The site itself was not fenced off. The demolition of the buildings on site broke the ACM down into a friable stage and created large amounts of dust. Neighbours reported the dust from the demolition work came over onto their properties. An independent survey conducted by CEDA Environmental Services Limited on 23 August 2015 found 16 of 20 samples taken from the site and surrounding area were positive for asbestos, including samples taken from the pile of free firewood and public area in front of the property. 
[5]
I have considered significant material in relation to today's sentencing exercise. There had been, as I mentioned, some detailed submissions from the informant, for which I thank Ms Jeffs. Mr Ngaha on behalf of himself and the company has provided some material also. That material has never been as complete as I first contemplated when I required Mr Ngaha to provide it. I have on several occasions asked him to provide detailed financial information concerning his company and himself. The Court's hands presently are tied and I must deal with the materials, such as they are, that Mr Ngaha has provided. In addition I have had the benefit, if I may put it that way, of evidence from Mr Ngaha before me recently. I took the view that he should be called to give evidence to confirm the meagre material that he had provided and to supplement his knowledge of both his and the company's financial position orally before me in answer to my questions. There were some questions also of him by Ms Jeffs on that occasion. I should note, in case I overlook saying it later, that on that occasion I also heard briefly from Mr Kernohan whom I gave the opportunity of addressing the Court. 
[6]
There are obvious purposes and principles here of the Sentencing Act 2002 which the sentencing Judge must take into account. Overlaid with that is the significant public interest component that attaches to sentencings of this nature. The community as a whole has a deep interest in work and safety matters. That is particularly the case when one deals with the noxious, toxic asbestos substance. There are very good reasons, from a policy and principle perspective, why the Courts should examine closely culpability and sentencing in this area. It rolls off the tongue in standard usual sentencing exercises that accountability, responsibility and deterrence and the like are matters that the Court should be intimately concerned with. That is heightened, I suggest, in this area of work and safety sentencings. It is particularly the case with the instant situation that I deal with here. 
[7]
The reality here is, and I have confirmed this with Ms Jeffs in discussions with her this afternoon, that the Court must here fix an amount of reparation to which the victims are entitled having regard to the parlous financial position that both Mr Ngaha and the company are in. Ms Jeffs as counsel for WorkSafe realistically and properly accepts that that is the situation. Nevertheless, it behoves the Court in a situation such as this to refer to the principles that would otherwise apply in relation to this factual situation. 
[8]
Of course sentencings in work and safety matters must be approached in accordance with the well known steps described in Department of Labour v Hanham & Philp Contractors Ltd1
| X |Footnote: 1
Department of Labour v Hanham & Philp Contractors Ltd (2009) 9 NZELC 93,095; (2008) 6 NZELR 79 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  
. The exercise for the Court is to assess an amount of reparation, fix the fine and then broadly make an overall assessment of proportionality and appropriateness of the total imposition of reparation and fine. There must, as it is put, be an assessment of the overall burden before the Court makes final orders in this area. 
[9]
Turning then first to the question of reparation, WorkSafe's position is the owners of the site on which the demolition work was undertaken are entitled to reparation. There is a victim impact statement filed by Mr Kernohan on behalf of himself and Ms Parsons. This refers to asbestos contamination and cleanup costs for the property and for a neighbouring property. The victim impact statement attaches relevant invoices in relation to the total claim which is made. Mr Kernohan refers in his victim impact statement to an agreement with Mr Ngaha and the company on 22 November to pay $5000 off “the debt” each month. That agreement refers in its terms to email communications dated 26 and 28 September 2015 to the effect that Mr Ngaha and P&M Demolition were unable to pay for the decontamination. The agreement recites that Mr Ngaha and P&M Demolition accept they are liable to pay the net sum of $106,064. The agreement is to pay by instalments of $5000 monthly starting November 2015 until May 2016 with a balance of $76,000 to be paid in full by 30 June 2016. The relevant emails of 26 and 28 September refer to the liability of P&M Demolition, which I understand was the contracting party, and not the liability of Jade Ngaha. 
[10]
That agreement of 22 November 2015 has been supplemented or altered by an “agreement” at a restorative justice conference on 4 October 2016 where it was stated that Mr Ngaha would pay $5000 per month and $10,000 at the anniversary of each year (ie, a minimum payment of $16,000 per annum). The total of the claim made is $90,931 less amounts paid since December 2015 of $13,967, making a claim now of $76,964. Since 30 September 2016 the total sum of $19,067 has been paid over a roughly seven month period. 
[11]
Now the Court may impose a sentence of reparation if an offender has, through or by means of an offence of which the offender is convicted, caused a person to suffer loss of or damage to property or loss or damage consequential on any loss of or damage to property. As observed by the Court of Appeal in R v Donaldson2
| X |Footnote: 2
R v Donaldson CA 227-06, 2 October 2006 
“[37]
The statutory phrase is in two disjunctive parts. The first is damage or harm caused ‘through’ an offence. And the second is damage or harm caused ‘by means of’ an offence. ‘Through’ conveys a more direct connection between the offence and the damage or harm. In the present case, for example, damage to the premises in obtaining entry, or loss arising from the theft of items, would be caused through the offence itself. 
[38]
By contrast, the words ‘by means of’ the offence contemplate a less direct association …  ”
[12]
Only “victims” in terms of s 4 Sentencing Act are entitled to reparation. A “victim” includes a person who through or by means of an offence committed by another person, suffers physical injury, or loss of, or damage to, property. Section 10 Sentencing Act provides that the Court must take into account any agreement between the offender and victim as to how the offender may remedy the wrong, loss, or damage caused by the offender and any measures taken to make compensation to the victim when determining an appropriate sentence. A Judge, however, is not bound to incorporate a s 10 agreement into a sentence of reparation, nor bound by the amount agreed to. It is for the sentencing Judge to determine the appropriate level of reparation in the particular case. As summarised by the High Court in Hanham & Philp Contractors Ltd
“[45]
… The court may impose a reparation order for a greater sum than the offer or agreement or for a lesser sum (if, for example, the court reaches the view that the offer made is unrealistic having regard to the financial circumstances of the offender). ”
[13]
And of course a person's right to recover by civil proceedings any damages in excess of the amount recovered under a sentence of reparation is not affected, and that is by virtue of s 38(2). 
[14]
Here the Court cannot assume that any total sought is payable simply by virtue of an agreement having been entered into. The “agreement” appears constituted by discussions at the restorative justice conference supplemented by the earlier written document. I have noted that Mr Ngaha was not a party to this contract. The company was the party. On one view there is insufficient information to satisfy the Court that loss or damage is because of, or caused by, failure to take all practicable steps to ensure contractors were not harmed or that no hazard harmed persons in the vicinity. So that a technical view of these charges might preclude reparation being payable in relation to the particular victims here. The Court should, however, take a broad and non-technical view and it seems to me that that is consistent with the authorities. 
[15]
On the face of it, there must be a question mark over Mr Ngaha's personal liability, at least with respect of any “agreement” already entered into. He has, nevertheless, pleaded guilty to an offence and I have taken the view that broadly Mr Kernohan and Ms Parsons can be considered victims of his personal failures. Indeed, having heard Mr Ngaha's submissions and evidence in relation to the company as a separate entity and his own role, I do not consider it a giant leap as a matter of policy and principle to conclude that Mr Ngaha should be personally liable. The question of the extent of his liability, as with the company, is of course another matter. There appear to be no other persons for whom reparation is sought other than Mr Kernohan and Ms Parsons. I have reached the view that an award of $50,000 is appropriate having regard to the $13,000 which has already been paid. This seems to me to be a substantial contribution to what is stated to be outstanding. 
[16]
So far as then the question of a quantum of fine is concerned, I have considered that overall the informant's submissions are, with respect, sound. Ms Jeffs refers to WorkSafe's investigations revealing a litany of failings and the absence of obvious practicable steps that the defendants should have and could have taken, including ensuring a comprehensive hazard assessment on site, engagement of a competent person to directly supervise the removal and demolition of the buildings, developing a safe work plan in respect of the hazard of working height, providing appropriate fencing, signage and site security and so forth. The risk of harm from exposure to asbestos fibre is significant and the risk of harm from a fall from height is also significant. The risks involved in working with asbestos are well known to the demolition industry and there are comprehensive guidelines publicly available on WorkSafe's website. 
[17]
The prosecutor submits the defendants' culpability is high having regard to failure to identify the appropriately controlled two obvious hazards, namely asbestos and fall from height, the fact that the defendants held themselves out to be capable of removal of ACM but did not have any of the necessary processes in place and that the defendants had been put on notice that the exterior of the garage contained ACM. Ms Jeffs concludes that this offending falls at the high end of the medium culpability band with a starting point of $80,000 and, frankly, I could not argue too much with that. Certainly a starting point of $70,000 appears justified. 
[18]
There are mitigating factors. The defendants have co-operated with WorkSafe's investigation. Mr Ngaha was willing to attend, and did attend, restorative justice. To a degree, Mr Ngaha has taken responsibility and entered into an agreement in principle to pay cleanup costs and has paid some amount towards that. A discount of around 25 percent would be appropriate to reflect mitigating factors with an adjusted starting point then below $60,000 for the entry of early guilty pleas. I would have had a discount of 25 percent resulting in a fine of $40,000. Of course the reality here is that the real question is step 3 of the analysis, the apportionment, financial capacity and totality issues. 
[19]
The prosecution accepts that P&M Demolition: “is a small company which is directed solely by Mr Ngaha and of which he is the sole shareholder.” The fact of the matter is, as I have mentioned, that Mr Ngaha and the company both are in a parlous financial position. Section 12(1) Sentencing Act requires reparation to be imposed unless the Court is satisfied that the sentence would result in “undue hardship” for the offender. The amount of reparation to be awarded should be realistic having regard to means. As it has been put, the sentencing Judge has to have a “reasonable amount of confidence” that payment of reparation is able to be made. 
[20]
I have little confidence that the company or Mr Ngaha are in any position at all to pay a fine or any substantial amount of reparation. That is so, in my view, notwithstanding Mr Ngaha's aspirations to pay more and diligently see to this situation being put right vis-à-vis Mr Kernohan and Ms Parsons. Those sentiments that I there express are evident in reported statements made by Mr Ngaha at the restorative justice conference, alluded to in his letters to the Court, and also confirmed in clarifying evidence before me. I accept that Mr Ngaha wishes to see substantial reparation paid to Mr Kernohan and Ms Parsons, but the legal position is simply this. I cannot make an award of reparation here unless I am satisfied that there is some means of payment of it. 
[21]
Mr Ngaha produced various documents which purported to deal with his financial position and the financial position of the company. I have serious doubts that Mr Ngaha appreciates that the company is a separate person from him, has a separate life of its own, has separate responsibilities in terms of its status, existence and so forth. I am in no doubt that both Mr Ngaha and the company are, if not insolvent, in precarious financial straits. 
[22]
Mr Ngaha gave some evidence before me recently regarding the financial material filed by him. I do recall his advice to the effect that the company had no assets apart from a vehicle which was subject to financing, that it may have had a debt of $45,000 that was owing to it, and that it had liabilities that exceeded those bare minimal assets. So far as his personal position is concerned, I think in summary that Mr Ngaha now had a job and he was earning $600 per week but that out of that he was paying rent of $450, which seemed to me to jar at the time with a statement I think regarding his wife who was contributing to or paying the rent. But certainly Mr Ngaha confirmed his status as an employee of a new company and that was a gross weekly amount of $600 that he was earning. It is quite clear from the summary statement in Ms Jeff's supplementary submissions, which include an email from Mr Kernohan that the payments made over the last 10 months or so have been reasonably minimal, certainly over the last several months there has not been any payment at all made by Mr Ngaha, notwithstanding his earnest aspiration to see payments made. So there is no purpose in fining either Mr Ngaha or the company. There is no utility served by that and WorkSafe New Zealand accepts that that is the position. 
[23]
Reparation is a different matter. I must take into account Mr Ngaha's wish to see some reparation paid. I have concluded that if reparation were to be ordered it would be a sum in the region of $63,000 but recognising that I think $13,000 has already been paid. It is unrealistic, however, to make an order that $50,000 be paid. 
[24]
The other question is against whom a reparation order should be made. Again I have taken a practical view on that. Whilst a purist might say that no order should be made against the company, it seems to me that there are good reasons for making an order against both the company and Mr Ngaha on a joint and several liability basis. For one thing, throughout recent history with Mr Ngaha I have found it difficult to distinguish Mr Ngaha from the company and vice versa. I am concerned that there may be a lacuna here in terms of information available to the Court. I am concerned to see that as realistic an order is made on as realistic a basis as is possible taking into account the legitimate interests of Mr Kernohan and Ms Parsons that I have concluded should be met, albeit on the broad interpretation I have of their status and the loss that may have been suffered taking into account the contracting parties and the nature of the charges, matters to which I have referred earlier. 
[25]
So that the result is as follows. Each of the company and Mr Ngaha are convicted. They must pay the sum of $36,000 to Mr Kernohan and Ms Parsons at the rate of $300 per month commencing 1 June 2017, payable consecutive monthly for a period of six years, on the basis that at the end of each 12 months during that period a payment of $2400 must be made, so that the total paid each year is $6000 over a six year period. 


Department of Labour v Hanham & Philp Contractors Ltd (2009) 9 NZELC 93,095; (2008) 6 NZELR 79 (HC)Has partially negative history or cases citing, but has not been reversed or overruled[Yellow]  
R v Donaldson CA 227-06, 2 October 2006 

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