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District Court 3 September 2019

Safework NSW v K & R Fabrications (W’gong) Pty Limited (No. 2)

[2019] NSWDC 457

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

Citation: Safework NSW v K & R Fabrications (W'gong) Pty Limited (No. 2) [2019] NSWDC 457
Court: District Court of New South Wales
Date: 3 September 2019
Judge: Russell SC DCJ

Background

The defendant, a steel fabrication and industrial maintenance company with over 50 years of operation and 88 employees, was engaged in maintenance work on a large industrial gearbox at a client site on the New South Wales south coast. During that work, an unrestrained bearing housing fell from the gearbox and seriously injured a worker. The incident occurred because the bearing housing was not secured when the backing plates of the housing were removed, and no Safe Work Method Statement (SWMS) or Job Safety Analysis (JSA) had been prepared for the specific task being carried out.

The defendant had been found guilty at trial in June 2019 (the Primary Judgment) of failing to comply with its work health and safety duty under section 19 of the Work Health and Safety Act 2011 (NSW), thereby exposing three workers to a risk of death or serious injury, contrary to section 32 of that Act. This sentencing judgment resolved the appropriate penalty, costs, and related matters.

The maximum penalty for the offence was a fine of $1,500,000.

  • What was the objective seriousness of the offence, and where did the defendant's conduct fall within the range of conduct covered by the provision?
  • What weight should be given to mitigating factors, including the defendant's prior safety record, post-incident remediation, and expressions of remorse?
  • Whether the third-party conduct of a specialist equipment supplier (FLSmidth) contributed to the incident and, if so, how that affected the defendant's culpability?
  • What fine was proportionate, having regard to general and specific deterrence?
  • Whether the defendant should bear the full prosecution costs, including costs associated with expert engineering reports that were not expressly relied upon in the Primary Judgment?

Decision

Objective seriousness: The court assessed the gravity of the offence by reference to the foreseeability of the risk, the potential consequences, and the availability of straightforward preventive steps. Applying the framework from Nash v Silver City Drilling, the court found that the risk of serious injury was foreseeable and that the steps needed to eliminate or minimise it, such as preparing a JSA or SWMS and restraining the bearing housing, were not burdensome. The conduct was therefore assessed as being of moderate to upper-moderate objective seriousness.

Mitigating factors: The court afforded significant weight to several mitigating factors. The defendant had an unblemished safety record over 50 years, had never previously been prosecuted or issued an improvement notice, employed two full-time safety officers, and had robust pre-existing safety systems. The general manager's prompt and compassionate personal response to the injured worker, along with comprehensive post-incident training and procedural reforms, were also given weight. The court noted that the conduct of FLSmidth, whose specialist representative did not provide installation guidance and whose manual was deficient, contributed to the circumstances, moderating the defendant's culpability to some degree.

Penalty: Balancing the objective seriousness against the substantial mitigating factors, and having regard to the purposes of general and specific deterrence, the court imposed a fine of $75,000. The court was also required under the Fines Act 1996 to consider the defendant's capacity to pay, though no submission on that issue was advanced. Fifty per cent of the fine was directed to be paid to the prosecutor, as required by section 122(2) of the Fines Act 1996.

Costs: The defendant sought to exclude from the costs order the costs of expert engineering reports prepared by Dr Robert Casey, on the basis that parts were objected to successfully and the Primary Judgment did not expressly rely on them. The court rejected that submission, noting that the majority of the reports were admitted into evidence without objection, contained relevant background engineering analysis, and need not have been expressly cited in the judgment to have been considered.

Orders Made

  • The defendant was convicted of the offence.
  • The defendant was ordered to pay a fine of $75,000.
  • Fifty per cent of the fine was ordered to be paid to the prosecutor, pursuant to section 122(2) of the Fines Act 1996.
  • The defendant was ordered to pay the prosecutor's costs as agreed or assessed.
  • Exhibits were ordered to be returned forthwith.

Key Takeaways

  • Under the Work Health and Safety Act 2011 (NSW), culpability for a Category 2 offence is assessed holistically, taking into account the foreseeability of the risk, the severity of potential consequences, and the burden of available preventive measures, rather than by any single factor in isolation.

  • A corporate defendant's long history of sound safety practice, prompt remedial action after an incident, and genuine expressions of remorse can collectively operate as significant mitigating factors, even where the offence is assessed as moderately serious.

  • The District Court confirmed that partial responsibility for an incident attributable to a third party, here a specialist supplier whose representative did not provide installation guidance, can reduce a defendant's culpability without eliminating it.

  • Expert reports tendered in evidence need not be expressly cited in a judgment for their costs to be recoverable; the court held that admitted evidence may be considered as part of the overall evidentiary picture even without explicit reference.

  • A fine well below the statutory maximum of $1,500,000 can still fulfil the purposes of general and specific deterrence where mitigating factors are substantial, though the court noted that the size and resources of a corporate defendant remain relevant to the deterrent effect of any penalty.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19, 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 3A
- Fines Act 1996 (NSW), ss 6, 122(2)

Cases
- SafeWork NSW v K & R Fabrications (W'Gong) Pty Limited [2019] NSWDC 238 (Primary Judgment)
- Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- 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
- BW v R [2011] NSWCCA 176
- R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566
- R v Wilkinson (No. 5) [2009] NSWSC 432
- Mahdi Jahandideh v The Queen [2014] NSWCCA 178
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338