Citation: SafeWork NSW v Macquarie Milling Co Pty Limited; SafeWork NSW v Samuels [2019] NSWDC 111
Court: District Court of New South Wales
Date: 10 April 2019
Judge: Russell SC DCJ
Background
Macquarie Milling Co Pty Limited operated a stockfeed mill in Dubbo, NSW. On 14 October 2016, a mill labourer, Mr Lenard Mullen, was clearing a blockage in a chaff cutting machine while it was still running. As he leaned forward with a metal rod, part of his clothing caught on a protruding bolt of an unguarded rotating drive shaft, pulling him into the machine. His clothing wrapped tightly around his neck, he suffered a deep laceration to his left hand, and his arm and shoulder were jammed against the hydraulic motor housing.
Mr Mullen required multiple surgeries, including a procedure to transpose nerve endings from his leg into his hand. He eventually returned to work, initially on light duties. The rotating shaft and spinning steel plate to which it was connected were both unguarded at the time of the incident, despite a regulatory framework and a SafeWork NSW Code of Practice specifically addressing guarding of rotating shafts.
Mr Roland Albert Samuels was the sole director of Macquarie Milling. Both the company and Mr Samuels pleaded guilty to work health and safety offences arising from the incident. The company faced a maximum fine of $1,500,000, and Mr Samuels faced a maximum fine of $300,000.
Legal Issues
- What penalty was appropriate for Macquarie Milling, having regard to the objective seriousness of the offence, mitigating factors (including the guilty plea), and the purpose of general and specific deterrence?
- What penalty was appropriate for Mr Samuels as the sole director responsible for exercising due diligence under s 27 of the Work Health and Safety Act 2011?
- What role, if any, could an insurance policy play in sentencing?
- Whether non-monetary orders, including training orders, a due diligence plan, and a work health and safety undertaking, were appropriate in the circumstances.
Decision
The court assessed the objective seriousness of Macquarie Milling's offence as significant. The rotating shaft was a well-known hazard addressed expressly by the relevant Code of Practice, and the risk of injury or death from an unguarded rotating shaft was foreseeable and preventable. The company had provided no adequate written procedures or safe operating instructions for clearing blockages, and the practical measures required to guard the shaft would have been neither expensive nor difficult.
The court acknowledged mitigating factors for Macquarie Milling, including the early guilty plea, the absence of prior convictions, cooperation with investigators, and remediation steps taken after the incident. The court also noted that Macquarie Milling had expressed genuine remorse and had made efforts to improve its safety systems. In determining the appropriate fine, the court considered the company's financial position to ensure the penalty was meaningful without being crushing.
For Mr Samuels, the court found that as sole director he bore direct responsibility for ensuring the company met its work health and safety obligations. His failure to exercise due diligence, including failing to ensure adequate guarding and written safe work procedures, directly contributed to the risk that materialised. The court similarly acknowledged his early guilty plea, remorse, and post-incident remediation. The court considered that specific deterrence remained important given his continuing role in the business.
On the question of insurance, the court made clear that the existence of a liability insurance policy is not relevant to the assessment of penalty in work health and safety prosecutions. Permitting insurance to reduce a fine would undermine the deterrent purpose of the legislation.
Orders Made
Macquarie Milling Co Pty Limited:
- Convicted of the offence under s 32 of the Work Health and Safety Act 2011
- Fined (specific quantum not located in the extracted text)
- Ordered to complete a specified training program
- Ordered to prepare and implement a WHS Project Order
- Ordered to develop a Due Diligence Plan and meet with the SafeWork NSW Inspectorate within two months of completing that plan
Mr Roland Albert Samuels:
- Convicted of the offence under s 32 of the Work Health and Safety Act 2011
- Required to enter into a work health and safety undertaking under s 239 of the Act
- Matter adjourned to 3 April 2020 for Mr Samuels to appear and provide evidence of compliance with training and WHS project orders
- Not to commit any offence under the Act during the adjournment period
- Required to notify SafeWork NSW and the court of any change of address for service
[Note: The specific fine amounts were not included in the text provided.]
Key Takeaways
- The District Court confirmed that an unguarded rotating shaft in an operational stockfeed mill, in the absence of safe work procedures and adequate training, constitutes a serious breach of the duty owed under s 19 of the Work Health and Safety Act 2011, attracting substantial penalties.
- A sole director's obligation under s 27 of the Act to exercise due diligence is not discharged by delegating operational management to a mill manager; personal accountability for systemic safety failures remains with the director.
- The existence of a liability insurance policy is irrelevant to penalty in work health and safety sentencing. Allowing insurance to reduce a fine would undermine the deterrent purpose of the legislative scheme.
- Non-monetary orders, including training orders, due diligence plans, and work health and safety undertakings under s 239, are available tools in sentencing and may be imposed alongside, or in lieu of, a fine, particularly where specific deterrence and ongoing compliance are in issue.
- Mitigating factors, including an early guilty plea, absence of prior convictions, post-incident remediation, cooperation with investigators, and genuine remorse, were each weighed by the court in calibrating penalties for both the corporate and individual defendants.
Legislation and Cases Referenced
Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19, 27, 32, 239
- Work Health and Safety Regulation 2011 (NSW), cls 34, 35, 208
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Fines Act 1996 (NSW)
Cases:
- Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96; 93 NSWLR 338
- Attorney General for the State of New South Wales v DSF Constructions Pty Ltd [2019] NSWCCA 33
- Bulga Underground Operations Pty Limited v Nash (2016) NSWCCA 37
- Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610
- Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
- SafeWork NSW v Wu and Zenger (Aust) Pty Limited [2018] NSWDC 211
- Markarian v R (2005) 228 CLR 357
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Green v R [2011] HCA 49
- Jimmy v R (2010) 77 NSWLR 540