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District Court 9 August 2019

Orr v LakeCoal Pty Limited (In Liquidation) (No. 3)

[2019] NSWDC 402

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

Citation: Orr v LakeCoal Pty Limited (In Liquidation) (No. 3) [2019] NSWDC 402
Court: District Court of New South Wales
Date: 9 August 2019
Judge: Russell SC DCJ

Background

LakeCoal Pty Limited (In Liquidation) operated an underground coal mine. In an earlier judgment (No. 2), the company was found guilty of failing to comply with its work health and safety duty under s 19 of the Work Health and Safety Act 2011 (NSW), thereby exposing a worker, Mr Benjamin Pedersen, to a risk of death or serious injury contrary to s 32 of that Act.

The incident arose from repeated collisions between a transport vehicle and roof infrastructure in the mine, which fractured a W-strap (a structural support component). Mr Pedersen, the transport vehicle driver, was injured by the damaged W-strap, suffering a serious laceration with ongoing scarring and pain.

This third judgment addressed sentencing only. The company's liquidator was on notice of the hearing but did not appear, and no evidence was put forward on behalf of the defendant.

  • What was the objective seriousness of the offence, and where did the offender's conduct fall within the range of conduct covered by the provision?
  • What aggravating and mitigating factors applied to the sentencing exercise?
  • What weight should general and specific deterrence carry in setting the penalty?
  • What fine was appropriate, given the maximum of $1,500,000?
  • Whether a costs order against the offender was appropriate.

Decision

The court assessed objective seriousness by applying the proportionality principle from Veen v The Queen (No. 2) and the guidance from Nash v Silver City Drilling on evaluating culpability under the WHS Act. That Court of Criminal Appeal authority directs sentencing courts to focus not on the probability that injury will result, but on the failure to respond to a known risk, taking into account the severity of potential harm and the ease with which protective steps could have been taken.

Applying those principles, the court found the offender's culpability at the mid-range. The hazard of vehicle-to-roof collisions was not merely foreseeable in the abstract: it had been identified by the offender itself in workplace risk assessment and control (WRAC) documents in 2013, 2014, and 2015. Despite those identifications, none of the controls the offender had determined were necessary had been implemented. Mr Pedersen received no instruction, training, or warning about roof heights or the risk of contact with overhead plant. Post-incident steps taken by the company demonstrated that the remedial measures were straightforward and relatively inexpensive.

General deterrence was treated as a significant factor, particularly in the context of underground mining operations, which carry serious inherent risks when safety precautions are not observed. The court noted that the mine remained operational under a new operator. Specific deterrence was given little weight, as the offender was in liquidation.

The single aggravating factor was the substantial injury, emotional harm, and loss caused by the offence. Mitigating factors were the absence of any prior convictions and the offender's full cooperation with the prosecutor, including prompt production of all documents requested.

Orders Made

  • LakeCoal Pty Limited (In Liquidation) is convicted of the offence.
  • The defendant is fined $180,000.
  • Pursuant to s 122(2) of the Fines Act 1996, 50% of the fine is to be paid to the prosecutor.
  • The defendant is to pay the prosecutor's costs as agreed or assessed.

Key Takeaways

  • A fine of $180,000 (12% of the maximum) was imposed where culpability was assessed at the mid-range, the hazard had been internally identified over three years without any control being implemented, and the offender was in liquidation.

  • Under the Work Health and Safety Act 2011, the objective seriousness of a safety offence turns on the failure to respond to a known risk, not on the statistical likelihood of injury actually occurring. The graver the potential harm and the simpler the available controls, the more serious the conduct.

  • Knowledge of a hazard, recorded in the offender's own risk assessment documents across multiple years, significantly heightened culpability. The absence of any explanation for the failure to act was a material feature.

  • General deterrence carries particular weight in underground mining prosecutions, given the severe risks inherent in those operations, and applies even where the offending company is in liquidation and specific deterrence has little practical role.

  • Co-operation with prosecutors, including prompt document production, was recognised as a mitigating factor under s 21A(3)(m) of the Crimes (Sentencing Procedure) Act 1999, though it did not substantially alter the overall sentencing outcome given the seriousness of the failure.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19, 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A
- Fines Act 1996 (NSW), s 122(2)

Cases
- Orr v LakeCoal Pty Limited (In Liquidation) (No. 2) [2019] NSWDC 360
- Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465
- Baumer v R [1988] HCA 67; (1988) 166 CLR 51
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566
- BW v R [2011] NSWCCA 176
- R v Wilkinson (No. 5) [2009] NSWSC 432