Citation: [2017] NSWDC 209
Court: District Court of New South Wales
Date: 20 July 2017
Judge: Judge AC Scotting
Background
In March 2014, a worker employed by a plumbing subcontractor suffered an electric shock while installing a fire sprinkler system in the roof space of an aged care facility at Forster, NSW. The roof space was described as hazardous: electrical wiring ran unsecured and in all directions across sharp-edged metal furring channels, creating a risk that workers treading on the cables could sever them against those channels.
Three companies were involved in the project under a chain of contracts. A head contractor (Unity) had engaged a fire services company (Activate Fire) to design and install the sprinkler system. Activate Fire in turn engaged a plumbing company (Hanna Plumbing) to supply labour for the fabrication and installation work. Activate Fire retained responsibility for preparing the Safe Work Method Statement (SWMS), a document required under the Work Health and Safety Regulations 2011 for high-risk construction work.
Safe Work NSW prosecuted all three companies for failing to comply with their respective health and safety duties under the Work Health and Safety Act 2011, thereby exposing the worker to a risk of serious injury or death. Hanna Plumbing pleaded guilty. Activate Fire and Unity were found guilty following a contested hearing.
Legal Issues
- Whether each company breached its health and safety duty under section 19 of the Work Health and Safety Act 2011, constituting an offence under section 32
- What the appropriate sentence was for each offender, taking into account objective seriousness, mitigating and aggravating factors, specific and general deterrence, capacity to pay, and community values
- Whether the principles of parity and totality applied across the three sentences
- Whether prosecution costs should be awarded, and if so, in what proportion, given the prosecutor's partial failure on multiple particulars
Decision
Findings of guilt. The court found each company guilty of failing to comply with its work health and safety duty, thereby exposing the injured worker to a risk of serious injury or death. The SWMS prepared by Activate Fire identified the risk of electric shock in the roof space but nominated only limited control measures. Critically, the steps actually taken fell short of adequately managing the identified risks in what all parties acknowledged was an unusually hazardous environment. The director of Hanna Plumbing had personally assessed the roof space as presenting a "definite" risk from the wiring and furring channels, and those concerns had been communicated up the chain to Activate Fire and Unity before the injury occurred.
Sentencing. The court imposed fines reflecting the different roles and degrees of responsibility of each company. The maximum penalty available for each offence was $1.5 million. The court considered objective seriousness, the extent to which each company was on notice of the risks, mitigating factors including cooperation and contrition, capacity to pay, and the need for both specific and general deterrence. Unity received a fine of $10,000. The fines for Activate Fire and Hanna Plumbing are not reproduced in the extracted text provided, but were determined by the same sentencing framework. Pursuant to section 122(2) of the Fines Act 1996, 50% of Unity's fine was directed to be paid to the prosecutor.
Costs. The court declined to award the prosecutor its full costs. Safe Work NSW had failed to establish four of the five particulars of breach it alleged against Activate Fire and Unity. It had also failed, at the sentence hearing, to establish that the worker's injury was a manifestation of the pleaded risk. Additionally, the prosecution had not served key evidence relating to the ability to isolate power in the affected area at the time the hearing commenced, extending the proceedings. The court reduced costs accordingly: Hanna Plumbing (which had pleaded guilty) was ordered to pay 85% of the prosecutor's costs, while Activate Fire and Unity were each ordered to pay 50%.
Orders Made
- Unity (NSW) Pty Ltd convicted and fined $10,000, with 50% of that fine directed to the prosecutor under section 122(2) of the Fines Act 1996
- Unity (NSW) Pty Ltd ordered to pay 50% of the prosecutor's costs as agreed or assessed on the ordinary basis
- Activate Fire Australia Pty Ltd ordered to pay 50% of the prosecutor's costs as agreed or assessed on the ordinary basis
- Hanna Plumbing Pty Ltd ordered to pay 85% of the prosecutor's costs as agreed or assessed on the ordinary basis
(Note: The full fines imposed on Activate Fire and Hanna Plumbing were not reproduced in the text provided.)
Key Takeaways
- All three companies in a labour hire and subcontracting chain each owed independent health and safety duties under the Work Health and Safety Act 2011, and each was held to account for its own failures, regardless of the obligations held by the others.
- A SWMS that identifies a hazard but prescribes only limited control measures will not, by itself, discharge a duty holder's obligations where the actual conditions are more hazardous than those measures address.
- Prior knowledge of a risk is a significant factor in assessing culpability: the court placed weight on the fact that concerns about the roof space had been expressly communicated up the contracting chain before the incident occurred.
- Under section 257B of the Criminal Procedure Act 1986, courts may apportion prosecution costs by reference to success or failure on discrete issues, rather than awarding costs globally. A prosecutor who fails on the majority of particularised allegations of breach may receive substantially reduced costs.
- The Court of Criminal Appeal's guidance in Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 confirmed that issue-by-issue cost assessment is appropriate in WHS prosecutions, and the District Court applied that principle here to significantly reduce the prosecutor's cost recovery against two of the three defendants.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 19, 32
- Work Health and Safety Regulations 2011 (NSW), cl 291
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3, 3A, 21A(3)(e), (h), (i), (k), (m)
- Fines Act 1996 (NSW), ss 6, 122(2)
- Criminal Procedure Act 1986 (NSW), s 257B
Cases
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Borkowski (2009) 195 A Crim R 1
- Jahandideh v R [2014] NSWCCA 178
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96