Citation: SafeWork NSW v ADN Investments Pty Limited; SafeWork NSW v Adnan Yassine [2019] NSWDC 469
Court: District Court of New South Wales
Date: 6 September 2019
Judge: Russell SC DCJ
Background
A residential and commercial development in Enfield, NSW required deep excavation across two basement levels. The developer engaged a principal contractor, who in turn subcontracted the demolition and excavation work to ADN Investments Pty Limited, trading as ADN Earthworks. ADN's director, Mr Adnan Yassine, supervised operations on site.
The adjacent property at 254 Liverpool Road was a 1935 brick building housing a ground-floor hair salon and a first-floor residential apartment. The structural engineer's plan provided to the principal contractor was explicit: the size and extent of the adjacent building's foundations had to be determined and verified before any excavation began, and excavation was not to extend below a line dipped at 45 degrees from the nearest underside corner of the adjacent footings. ADN was given the geotechnical report and technical drawings but was not provided with the full Residential Development Plan containing those requirements.
Despite those constraints, excavation proceeded under time and cost pressures without the required investigative steps or support mechanisms being put in place. The adjacent building eventually suffered structural damage and was ultimately demolished. Four people, including the building's co-owners, the salon operator, and the residential tenant, were exposed to a risk of death or serious injury.
Legal Issues
- Whether ADN Investments, as a person conducting a business or undertaking (PCBU) under s 19(2) of the Work Health and Safety Act 2011 (NSW), failed to comply with its health and safety duty in a way that exposed others to a risk of death or serious injury, contrary to s 32.
- Whether Mr Yassine, as an officer of ADN under s 27 of the Act, failed to exercise due diligence to ensure ADN complied with its duty, in a way that likewise exposed those four people to such risk.
- The appropriate penalty for each offender, having regard to objective seriousness, mitigating factors (including early guilty pleas, assistance to the prosecutor, and capacity to pay), and the principles of general and specific deterrence.
Decision
Both defendants pleaded guilty on agreed facts. The court proceeded to sentence on that agreed material without hearing evidence or making independent findings of fact. The court treated the offending as falling in the low-to-mid range of objective seriousness, noting that the risks were foreseeable, the hazards were well-known in the industry, and clear engineering guidance had been produced but not followed. Time and cost pressures had driven the decision to proceed without the required precautions.
In assessing penalty for ADN, the court identified a fine of $240,000 as appropriate before discounts, against a maximum of $1,500,000. A 25% reduction was applied for the early guilty plea, producing a final fine of $180,000. For Mr Yassine, the court set a starting point of $50,000 against a maximum of $300,000, then applied a total reduction of 40%: 25% for the guilty plea, 5% for assistance already provided to the prosecution, and a further 10% for a demonstrated willingness to give evidence for the prosecution. His final fine was $30,000.
The court acknowledged that general deterrence carries significant weight in work health and safety prosecutions, particularly where commercial pressures override known safety obligations. Specific deterrence was also relevant given Mr Yassine's supervisory role and decision-making authority over the company's safety practices. No submission was made about capacity to pay, so the court did not consider that issue.
Each defendant was ordered to pay agreed costs of $15,000 to the prosecutor. Under s 122(2) of the Fines Act 1996, 50% of each fine was ordered to be paid to SafeWork NSW as the prosecuting authority.
Orders Made
ADN Investments Pty Limited:
- Convicted of the offence under ss 19(2) and 32 of the Work Health and Safety Act 2011.
- Fine of $180,000 (reduced from $240,000 by 25% for guilty plea).
- 50% of the fine to be paid to the prosecutor pursuant to s 122(2) of the Fines Act 1996.
- Prosecutor's costs of $15,000.
Mr Adnan Yassine:
- Convicted of the offence under ss 27 and 32 of the Work Health and Safety Act 2011.
- Fine of $30,000 (reduced from $50,000 by 40% for guilty plea, assistance provided, and willingness to give evidence).
- 50% of the fine to be paid to the prosecutor pursuant to s 122(2) of the Fines Act 1996.
- Prosecutor's costs of $15,000 (separate from and in addition to those ordered against ADN).
Key Takeaways
- An early guilty plea, assistance already provided to the prosecution, and a demonstrated willingness to give further evidence can together produce a substantial discount: the District Court applied a combined 40% reduction to Mr Yassine's fine, compared with the 25% reduction for the guilty plea alone that was applied to ADN.
- Under s 27 of the Work Health and Safety Act 2011, a company director or officer who exercises decision-making authority over safety policies carries a personal due-diligence duty that is assessed and penalised separately from, and independently of, the company's own liability.
- General deterrence is a weighty factor in WHS sentencing where the offending involved a known, foreseeable hazard and where commercial pressures were found to have displaced compliance with clear engineering and safety requirements.
- The maximum penalty available (here, $1,500,000 for the corporate offender and $300,000 for the individual) sets the outer boundary, but the court calibrated the starting fine by reference to the objective seriousness of the particular offending rather than applying the maximum mechanically.
- Where an offender raises limited capacity to pay as a basis for reducing a fine, the evidentiary onus rests on that offender to persuade the court; where no such submission is made, the issue does not arise.
Legislation and Cases Referenced
Legislation:
- Work Health and Safety Act 2011 (NSW), ss 4, 8, 19(2), 27, 32
- Corporations Act 2001 (Cth), s 9
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Fines Act 1996 (NSW), ss 6, 122(2)
- Environmental Planning and Assessment Act 1979 (NSW), ss 81(1)(a), 149(2) & (5)
- State Emergency and Rescue Management Act 1989 (NSW)
Cases:
- Baumer v R [1988] HCA 67; (1988) 166 CLR 51
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
- BW v R [2011] NSWCCA 176
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- Mahdi Jahandideh v The Queen [2014] NSWCCA 178
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Nash v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566
- R v Wilkinson (No. 5) [2009] NSWSC 432
- Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
- Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465