Citation: SafeWork NSW v Auen Grain Pty Ltd and SafeWork NSW v Merrywinebone Pty Ltd [2015] NSWDC 229
Court: District Court of New South Wales
Date: 22 September 2015
Judge: Curtis J
Background
Two companies, Auen Grain Pty Ltd and Merrywinebone Pty Ltd, operated a farming partnership trading as Greentree Farming on a property near Narrabri, NSW. They employed both a farm manager, Mr Bradford, and a 16-year-old farm labourer, Mr Martin. On 21 July 2010, Mr Martin suffered catastrophic crush injuries when an 8.4-tonne counterweight fell from an excavator during its removal, ultimately requiring surgical amputation of his left leg below the knee.
Mr Bradford had decided to remove the counterweight without following the excavator's operator manual, despite both a written job safety analysis on site and a direct conversation with the partnership's senior director about the procedure. He incorrectly believed the counterweight would remain supported by the excavator once its mounting bolts were removed. When the final bolt was removed, the counterweight fell.
Both companies pleaded guilty to charges under s 8(1) of the Occupational Health and Safety Act 2000, which imposes a duty on employers to ensure the health, safety and welfare of their employees at work.
Legal Issues
- What level of culpability should be attributed to the employer companies for the failures of an individual farm manager, where senior management had taken reasonable precautionary steps?
- Whether a failure to require a written job safety analysis for the specific task amounted to a systemic failure by the employer.
- What penalty was appropriate, having regard to aggravating and mitigating factors, including the severity of the injury, the good character of the defendants, and their early guilty pleas?
- How to apportion a single penalty between two companies that were independently liable but engaged in a joint enterprise through the same partnership.
Decision
Curtis J found that Mr Bradford's failures were, as a matter of law, the failures of the defendant companies, because it was to Mr Bradford that the partnership had delegated the function of performing the work safely. To attribute liability to a corporate defendant, the court must identify the natural person whose act or state of mind relevantly constitutes the company's act or state of mind. Here, that person was Mr Bradford.
Despite that attribution, the court found that the gravity of the offence was reduced because the failures were not systemic. Senior management, in the person of the partnership's directing mind Mr Greentree, had prepared a relevant job safety analysis, ensured Mr Bradford was aware of it, and specifically asked Mr Bradford whether he had read the relevant section of the operator's manual. Mr Bradford falsely confirmed that he had. The court rejected the prosecution's submission that Mr Greentree was personally at fault for failing to require a written job safety analysis for the specific task, describing that contention as "absurd" given the steps already taken.
On penalty, Curtis J identified the youth and vulnerability of Mr Martin, the risk of death, and the gravity of his injuries as aggravating factors. In mitigation, the court accepted that the defendants were of good character, had no prior convictions, were unlikely to reoffend, had cooperated with authorities, and had expressed genuine remorse. The court noted that, but for the severity of Mr Martin's injuries, the matter might have been dealt with under s 10 of the Crimes (Sentencing Procedure) Act 1999 (a provision allowing conviction to be recorded without imposing a penalty or on conditions). The appropriate penalty before discount was set at $55,000, representing 10% of the $550,000 maximum, with a 25% reduction for the early guilty pleas and cooperation.
As both companies were independently liable but engaged in a single joint enterprise, the court held it was appropriate to impose only one financial penalty. That penalty was borne by Auen Grain. Merrywinebone was convicted but ordered to pay no fine, on the basis that the partnership had already been penalised once for the same conduct.
Orders Made
- Auen Grain Pty Ltd: convicted and fined $41,250 (being $55,000 less a 25% discount); WorkCover to receive a moiety (half) of the fine; defendant ordered to pay the prosecutor's costs of $20,677.98.
- Merrywinebone Pty Ltd: convicted; no financial penalty imposed, on the basis that the penalty had already been borne by Auen Grain as the other partner in the joint enterprise; defendant ordered to pay the prosecutor's costs of $20,677.98.
Key Takeaways
- A corporate employer bears legal responsibility for the work health and safety failures of the individual to whom it has delegated the relevant function, even where senior management acted reasonably and was deceived by that individual.
- The District Court confirmed that the gravity of an offence under the Occupational Health and Safety Act 2000 is reduced where the employer's failures were not systemic but arose from the unforeseeable conduct of one person, despite sound management systems being in place.
- Requiring employees to acknowledge safety documentation verbally is not, without more, a failure to discharge an employer's duty; the court rejected the proposition that only written instructions could satisfy the employer's safety obligations in these circumstances.
- Where two companies are independently liable as partners in a joint enterprise, it may be appropriate to impose a single penalty on one company and convict the other without further financial punishment, to avoid double punishment for the same underlying conduct.
- At 10% of the statutory maximum, the penalty reflected the confluence of significant mitigating factors, including good character, genuine remorse, early guilty pleas, and the absence of systemic failure, weighed against the severe and permanent injury suffered by a teenage worker.
Legislation and Cases Referenced
Legislation
- Occupational Health and Safety Act 2000 (NSW), s 8(1)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 10, 21A
Cases
- Arbroath v North Eastern Railway Co (1886) 11 App Cas 247 (on the attribution of acts and intention to a corporate entity)
- Bilta (UK) Ltd v Nazir [2015] WLR 1168 (UK Supreme Court discussion of corporate attribution principles)