Due Diligence defence to charges

Due Diligence defence to charges

14th July 2006 - Source: OHS Alert

A NSW company demonstrated to a court that it had put key procedures in place to show it stayed informed of work methods at a site under its control has successfully defended ohs charges that came as a result of the (ulitmately fatal) actions of a subcontractor.

Brambles Australia Ltd had contracted with BHP Limited (the head contractor) to demolish boilers at a site near Newcastle. Brambles then subcontracted some of the work to Demtech Pty Ltd - a company that had been set up by two of its former employees for that particular purpose.

In September 2002, Demtech began to demolish a boiler at the site, but instead of an induced collapse, an uncontrolled collapse occurred because engineering calculations didn't take into account that the boiler's major cross beams had been removed, which meant supporting columns weren't totally in alignment. Demtech workers then "just arrived between [them]" at the conclusion of where to adjust the points to be cut.

The 300-tonne structure then collapsed unexpectedly, striking a cherry picker that contained two workers who were cutting the columns. One of them was killed while the other, along with the engineer on the ground, suffered injuries.

WorkCover charged Brambles under s10(1) of the NSW OHS Act 2000 for failing to ensure safety at a site under its control.

In the NSW Industrial Court, Justice Trish Kavanagh heard that there had been an uncontrolled collapse at the site (in which no-one was injured) in July 2002, and Demtech had agreed from then on to notify Brambles (which would then notify BHP) of the time, place and methodology of any future demolition. The first collapse was also due to faulty engineering calculations.

Justice Kavanagh heard that the work method submitted to and approved by WorkCover was not the one that was ultimately used (a decision was made to collapse the boiler in a different direction, due to the unavailability of particular equipment). A job safety analysis was general in nature and didn't outline any specific work method, nor did it risk assess any particular proposed methodology.

Justice Kavanagh heard that Brambles wasn't aware until after the boiler collapsed that Demtech had planned to demolish it that day. It hadn't received any paperwork or the permit for demolition, despite having protocols in place for it to be kept informed.

Guilty of failing to ensure safety

Justice Kavanagh rejected Brambles's argument that it didn't have control of the site. She found the factors that pointed to it being a controller included that it visited the site regularly, required information from Demtech on the demolition methods, issued directions to Demtech and had the power to terminate work.

She found that Brambles had failed to:

• ensure an adequate work method was prepared for the demolition of the boiler;
• ensure the appropriate permit was obtained;
• investigate the proposed methodology (including checking the calculations);
• ensure a risk assessment was performed; and
• ensure a secondary system of restraint to prevented the unexpected collapse (in accordance with the Australian Standard).

(Justice Kavanagh found Brambles was not guilty of failing to ensure that redundant demolition material was removed from the site and failing to ensure a suitably qualified and experienced engineer was engaged.)

Defences successful

Justice Kavanagh noted that Brambles had a complete defence to the charge under s28 of the Act if it could prove that it wasn't reasonably practicable for it to comply with the Act, or that the offence was due to causes over which it had no control and against which it was impractical to make provision.

WorkCover argued that Brambles "had every possible means of finding out what was happening at the site" but that it "chose to look in the other direction and take no action".

Justice Kavanagh rejected this. She found Brambles had no reasonably practical way of knowing the demolition was to take place and it could not have reasonably foreseen that Demtech would undertake the works in the circumstances that it did.

"While a breach of paper protocol is not sufficient to establish a defence under the Act, I find the defendant acted with all due diligence and was to be assured the protocol would be observed. I find it was not foreseeable that the subcontractor, whether it was under time constraints or through sheer negligence, would act, without a permit from WorkCover, and therefore without an approved work method and without following its agreed procedures, to conduct a major demolition on 19 September 2002."

Justice Kavanagh found the defence was established and dismissed the charge.

Inspector Michael Dall v Brambles Australia Ltd [2006] NSWIRComm 213 (7 July 2006)

Directors of Demtech each fined $18,000

WorkCover also charged the directors of Demtech, which is in liquidation. Both pleaded guilty and they were fined $18,000 each (out of a maximum $55,000).

Inspector Michael Dall v Gregory Banks & Jeffrey Britton [2006] NSWIRComm 216 (7 July 2006)

Engineer also fined

The engineer engaged by Demtech to perform calculations and obtain the relevant WorkCover permits was charged under s9 of the Act (duties of self-employed persons) and pleaded guilty.

Justice Kavanagh fined him $22,500 out of a maximum $55,000.

Inspector Michael Dall v William Caesar Porta trading as Western Pacific Engineers [2006] NSWIRComm 214 (7 July 2006)