Citation: [2015] NSWDC 295
Court: District Court of New South Wales
Date: 11 December 2015
Judge: Judge AC Scotting
Background
A small hydroponics farming company and its sole director faced sentencing after each pleaded guilty to breaching section 32 of the Work Health and Safety Act 2011. The company employed five farmhands and grew greenhouse tomatoes at a property in Austral, NSW. The director supervised all employees and directed day-to-day work on the farm.
On 7 March 2013, the director instructed a farmhand to remove damaged plastic sheeting from the curved roof of a greenhouse. No instruction, training, risk assessment, or fall prevention equipment was provided. The farmhand climbed onto the roof using an unsecured, damaged domestic ladder and stood on the gutter to perform the task. He lost his balance and fell approximately 2.5 metres.
The farmhand suffered a spinal fracture causing tetraplegia, a catastrophic injury requiring high-level care. He remained hospitalised until his death in late August 2014 from respiratory failure and related complications. The prosecution did not allege that the fall caused his death, but his passing formed part of the sentencing background.
Legal Issues
- What penalty was appropriate for the company, which faced a maximum fine of $1.5 million for its failure as a person conducting a business or undertaking to comply with its health and safety duty?
- What penalty was appropriate for the director, who faced a maximum fine of $300,000 for failing as an officer to exercise due diligence to ensure the company's compliance?
- How should the court weigh each offender's limited capacity to pay against the objective seriousness of the offending and the need for general deterrence?
- How should prosecution costs be allocated given the company's precarious financial position?
Decision
Judge Scotting identified several factors going to the objective seriousness of the offences. The risk of serious injury from working at height on a curved greenhouse roof without fall protection was obvious and foreseeable. No risk assessment had been conducted, no safe work procedure existed, no adequate supervision or assistance was provided, and the equipment used (a domestic ladder) was inappropriate for industrial use. A relevant Code of Practice published by Safe Work Australia in December 2011 set out clear obligations that had not been followed.
The court accepted several mitigating factors in respect of the director. He had a close personal relationship with the injured worker, having known him since refugee camps in Asia decades earlier. He expressed genuine remorse, described the worker as his best friend, visited him in hospital, and cooperated with investigators. He had no prior convictions and entered an early guilty plea, attracting a 25% discount. The court also accepted that the incident had caused him significant ongoing psychological distress.
On capacity to pay, the court found that both the company and the director had very limited means. The company had effectively ceased trading and any substantial fine was likely to lead to its winding up. Imposing a large fine on the director would risk financial ruin and would significantly affect his wife, a result the court described as unjust. Nonetheless, the objective seriousness of the offending and the need for general deterrence required the imposition of a meaningful penalty. The court determined that the director should bear the agreed prosecution costs of $20,000, and took that liability into account in setting his fine at a lower level than the prosecution had suggested.
Orders Made
- Austral Hydroponics Pty Ltd: convicted and fined $150,000 (being $200,000 reduced by 25% for early guilty plea), with 50% of the fine to be paid to the prosecutor pursuant to section 122(2) of the Fines Act 1996.
- Eang Lam: convicted and fined $15,000 (being $20,000 reduced by 25% for early guilty plea), with 50% of the fine to be paid to the prosecutor pursuant to section 122(2) of the Fines Act 1996.
- Eang Lam to pay the prosecutor's costs in the agreed sum of $20,000.
Key Takeaways
- The District Court confirmed that a meaningful fine remains warranted in work health and safety prosecutions even where an offender has limited capacity to pay, because the objective seriousness of the offence and general deterrence are independently significant sentencing considerations.
- Capacity to pay is relevant but not decisive: an offender who relies on limited financial means bears the evidentiary onus of satisfying the court that its discretion to limit the fine should be exercised.
- Where a company is unlikely to be able to satisfy a costs order, a court may direct that an individual co-offender bear the prosecution costs, and may then account for that liability when calibrating the individual's fine.
- An early guilty plea attracted a 25% discount on the starting penalty for each offender, consistent with established sentencing principles.
- Personal mitigating factors, including genuine remorse, a close prior relationship with the injured worker, cooperation with investigators, and psychological consequences of the incident, can materially reduce the penalty imposed on an individual officer, even where the underlying offending is objectively serious.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), s 32
- Work Health and Safety Regulation 2011 (NSW), cl 78(3)
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 21A
- Fines Act 1996 (NSW), ss 6, 122(2)
- Superannuation Industry (Supervision) Regulations 1994 (Cth)
- Safe Work Australia, Managing the Risk of Falls at Workplaces Code of Practice (December 2011)
Cases
- Veen v R (No 2) (1988) 164 CLR 465
- R v McNaughton (2006) 66 NSWLR 566
- Baumer v R (1988) 166 CLR 51
- BW v R [2011] NSWCCA 176
- R v Wilkinson (No 5) [2009] NSWSC 432
- Capral Aluminium Limited v Workcover Authority of New South Wales (2000) 49 NSWLR 610
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Borkowski (2009) 195 A Crim R 1
- Environmental Protection Agency v Barnes [2006] NSWCCA 246
- Jahandideh v R [2014] NSWCCA 178