By Michael Selinger
In a recent Victorian Court of Appeal decision, the issue of what constitutes ‘reckless conduct’, as distinct from mere ‘negligence’, was an important factor in reducing the penalty imposed on a structural engineering company and its sole director.
Mr Aldo DiTonto was a structural engineer and the sole director and sole owner of AM Design & Construction Pty Ltd (the Company). He completed structural drawings for the basement excavation works for a mixed commercial and residential development.
Mr DiTonto had failed to include in the structural drawings for the development of a concurrent installation of a site retention system.
Sometime during the night of 13-14 July 2015, part of the excavation collapsed in the south-east corner of the development site. On the night of 15 July 2015 a further, and much larger, collapse occurred. The police advised the residents of the front townhouse to immediately evacuate.
Both Mr DiTonto and the Company pleaded guilty to charges for breaching health and safety laws, being the failure of the Company to ensure the safety of other persons.
Mr DiTonto was charged as being an officer of the Company to whom the contravention was attributable to a failure to take reasonable care.
The sentencing judge noted that there was a serious risk that persons in the vicinity of the excavation pit could be seriously injured or killed by being engulfed in a collapse of the pit, or falling into the pit.
A fine of $380,000 was imposed on the Company and a fine of $100,000 imposed on Mr DiTonto.
The Company and Mr DiTonto successfully appealed the fines on the basis that they were manifestly excessive, and they were reduced by half.
An important factor that the Court of Appeal noted was to emphasise that the conduct did not involve the element of recklessness:
“In our view, the fines imposed in this case, particularly when considered in the aggregate, were wholly outside the range properly open to the sentencing judge. For these appellants the offending, serious as it undoubtedly was, did not merit fines of this magnitude. We note that Mr Di Tonto’s culpability was to be assessed on the basis that he at least did his best to ensure that those potentially close by the excavation for which he prepared structural drawings, were not exposed to risk. He was, in that sense, negligent, rather than reckless. Moreover, when regard is had to current sentencing practice for offences of this type, it can readily be seen that these fines seem to be out of kilter.”
Lessons for employers
The decision is a clear example that negligent behaviour by an engineer or other professional that exposes others to a risk of serious harm will result in significant penalties.
The statement from the Court of Appeal also supports a view that where there is an element of reckless conduct, being indifference to the safety of others, then a larger penalty is warranted.
That was not the case here, although around the country there are increasing numbers of prosecutions that are now alleging such reckless conduct on the part of individuals.
It is important that all businesses, but particularly individuals, ensure that their actions are reasonable and justified.
In particular, if there is knowledge of a reasonable control that can be implemented to manage a serious risk of harm, a failure to implement it will result in a significant penalty.