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District Court 20 February 2018

Safe Work NSW v Modern Touch Marble and Granite Pty Ltd; Safe Work NSW v Johnne Khouri

[2018] NSWDC 20

Other
CRIMINAL LAW PROSECUTION WORK HEALTH AND SAFETY DUTY OF PERSONS UNDERTAKING BUSINESS DUTY OF EMPLOYERS MITIGATING FACTORS

Citation: Safe Work NSW v Modern Touch Marble and Granite Pty Ltd; Safe Work NSW v Johnne Khouri [2018] NSWDC 20
Court: District Court of NSW
Date: 20 February 2018
Judge: Judge AC Scotting

Background

A stone masonry company operating from Yennora in western Sydney conducted a business cutting, storing, and transporting marble, granite, and quartz sheets. Its sole director managed day-to-day operations and employed a small team including a factory offsider who performed manual handling and delivery duties.

In late September 2015, 94 quartz sheets were delivered to the company's premises inside a shipping container, which was left on a cambered public road outside the site. Each sheet weighed 280 kilograms. They were stored on an A-frame designed for use on level ground. The camber of the road negated the protective angle of the A-frame, meaning sheets could fall forward onto any worker standing in front of them.

On 2 October 2015, the director and the offsider began unloading the container using a forklift. After 24 sheets had been removed, the offsider entered the container and stood in the fall zone. The remaining 23 sheets, with a combined weight of over 6,400 kilograms, collapsed onto him, pinning him against the container wall and causing serious crush injuries including a tension pneumothorax and rib fractures. No risk assessment had been conducted, no Safe Work Method Statement existed for this work, and no traffic management was in place. The director also lacked a valid forklift licence in NSW.

  • Whether the company, as a person conducting a business or undertaking, failed to comply with its primary health and safety duty under section 19(1) of the Work Health and Safety Act 2011, thereby exposing the worker to a risk of death or serious injury contrary to section 32
  • Whether the director, as an officer of the company, failed to comply with his duty of due diligence under section 27(1) of the Act, contrary to section 32
  • Whether the director contravened section 43 of the Act by operating a forklift without the required high-risk work licence
  • What penalties were appropriate, having regard to objective seriousness, mitigating factors (including guilty pleas, remorse, and capacity to pay), and the sentencing principles of deterrence, parity, and totality

Decision

Both the company and the director pleaded guilty to their respective offences, and the court proceeded to sentence. The court assessed the offending as serious. The company had made no attempt to conduct a risk assessment before unloading the container, had no Safe Work Method Statement in place for the task, and failed to implement readily available control measures such as a slab rack. The risk of serious injury or death from the unloading method adopted was objectively foreseeable.

In assessing the director's culpability, the court took into account a number of mitigating factors. These included the guilty plea (attracting a 25 per cent discount), genuine remorse evidenced by his support of the injured worker during recovery, the psychological impact the incident had on him, his subsequent steps to address safety practices, and the absence of prior convictions. The court also noted that the director had obtained his forklift licence shortly after the incident.

Regarding the forklift licence offence under section 43, the court recorded a conviction but imposed no further penalty. This reflected the totality principle, which requires that the overall penalty fairly reflects the totality of the offending without being oppressive when multiple offences are sentenced together.

On capacity to pay, the court accepted that both the company and the director had a limited ability to pay, noting the company's modest profits, its liabilities, and the fact that the director's personal financial position was closely tied to the company's fortunes. The court exercised its discretion to reduce the fines below the post-discount starting points on that basis, while acknowledging that general deterrence remained relevant.

Orders Made

  • Modern Touch Marble and Granite Pty Ltd convicted and fined $75,000 (starting point $150,000, reduced by 25% for guilty plea and further reduced for limited capacity to pay)
  • 50% of the Modern Touch fine directed to be paid to the prosecutor pursuant to section 122(2) of the Fines Act 1996
  • Modern Touch ordered to pay the prosecutor's costs as agreed or assessed
  • Johnne Khouri convicted of the section 32 offence and fined $12,500 (starting point $30,000, reduced by 25% for guilty plea and further reduced for limited capacity to pay)
  • 50% of Khouri's fine directed to be paid to the prosecutor pursuant to section 122(2) of the Fines Act 1996
  • In relation to the section 43 (forklift licence) offence, no further penalty imposed pursuant to section 10A of the Crimes (Sentencing Procedure) Act 1999
  • Khouri ordered to pay the prosecutor's costs as agreed or assessed

Key Takeaways

  • A company's failure to conduct any risk assessment, implement control measures, or prepare a Safe Work Method Statement before undertaking a non-routine and physically hazardous task will weigh heavily on objective seriousness in WHS sentencing.
  • Under section 27(1) of the Work Health and Safety Act 2011, an officer's personal culpability is assessed separately from the company's liability. Mitigating factors such as genuine remorse, post-incident remediation, and psychological harm to the offender are relevant to the individual's penalty.
  • Capacity to pay is a relevant but not determinative factor in fixing a WHS fine. A court retains discretion to impose a substantial penalty even where financial constraints exist, particularly where general deterrence demands it.
  • The totality principle applies in WHS proceedings where an individual faces multiple charges. Recording a conviction with no further penalty for a lesser offence can be an appropriate outcome where the overall sentence already reflects the full criminality of the conduct.
  • Guilty pleas in WHS matters attracted a 25 per cent discount in this case, consistent with the approach in R v Thomson and Houlton and the general framework for utilitarian discount in NSW criminal sentencing.

Legislation and Cases Referenced

Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19, 27(1), 32, 43
- Work Health and Safety Regulation 2011 (NSW), cl 81
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3, 3A, 10A, 21A
- Fines Act 1996 (NSW), ss 6, 122(2)

Cases:
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- R v Thomson and Houlton (2000) 49 NSWLR 383
- R v Borkowski (2009) 195 A Crim R 1
- Jahandideh v R [2014] NSWCCA 178
- R v Youkhana [2004] NSWCCA 412