AI-generated summaries. Not legal advice. Always verify against the official judgment on NSW Caselaw.
← All decisions
District Court 23 September 2019

SafeWork NSW v MGK Constructions Pty Ltd

[2019] NSWDC 518

Public order & justice offences
CRIME PROSECUTION WORK HEALTH AND SAFETY DUTY OF PERSONS UNDERTAKING BUSINESS DUTY OF EMPLOYERS RISK OF SERIOUS INJURY

Citation: SafeWork NSW v MGK Constructions Pty Ltd [2019] NSWDC 518
Court: District Court of New South Wales
Date: 23 September 2019
Judge: Scotting DCJ

Background

MGK Constructions Pty Ltd was a small carpentry subcontractor engaged to install wall frames and roof trusses at a two-storey residential construction site in St Ives, New South Wales. The principal contractor, Provincial Homes Pty Ltd, had engaged MGK as a subcontractor since 2009. MGK's sole director, Matthew Keramea, supervised the four-person workforce, which included an apprentice named Vanikone Chanthavixay.

Between 10 and 14 May 2017, MGK cut an "L"-shaped stair void in the newly installed first floor. No protection was placed over or around the void. On 19 May 2017, while nailing roof trusses from a step ladder positioned adjacent to the unprotected void, Mr Chanthavixay fell approximately 3.6 metres onto the concrete ground floor below. He sustained a head laceration with haematoma, chest wall pain, a fractured finger, and a soft tissue ankle injury.

SafeWork NSW prosecuted MGK under section 32 of the Work Health and Safety Act 2011 (WHS Act), alleging that MGK, as a person conducting a business or undertaking, failed to comply with its primary health and safety duty under section 19(1), thereby exposing Mr Chanthavixay to a risk of death or serious injury. MGK pleaded guilty.

  • What was the appropriate sentence, including fine quantum, for MGK's guilty plea to a category 2 WHS offence under section 32 of the WHS Act?
  • How objectively serious was the offence, having regard to the nature of the risk, the foreseeability of harm, and the availability of control measures?
  • What weight should be given to mitigating factors, including the guilty plea, absence of prior convictions, remorse, and the size of the offender's undertaking?
  • Whether the court had power under section 237 of the WHS Act to make a restoration (compensation) order in favour of Mr Chanthavixay, and whether such an order was appropriate on the facts?
  • How should costs be allocated following the prosecution's unsuccessful statutory construction argument about the scope of section 237?

Decision

Objective seriousness: Scotting DCJ assessed the offence as above the mid-range of objective seriousness. The risk of falling through an unguarded stair void was obvious and well-known to MGK. The company's own Safe Work Method Statement identified "falls through stair voids" as a hazard and specified that void cover must be in place before any work above commenced. Despite this, MGK's director saw the void was unprotected on the day of the incident, adjusted the work system in one respect, but failed to instruct workers not to work near the void until protection was in place. Approved Codes of Practice under the WHS Act and Regulation 78 of the Work Health and Safety Regulation 2011 both required openings to be guarded immediately after being formed. The cost of compliance was low.

Mitigating factors: The court accepted several mitigating factors in MGK's favour. MGK had no prior convictions, expressed genuine remorse, cooperated with investigators, and had good prospects of rehabilitation. MGK was a small business, and the fine imposed would represent a significant proportion of its average yearly profit. Partial responsibility for the unsafe site also rested with the principal contractor, Provincial, which had failed to arrange or ensure temporary void protection and had not prevented workers from accessing the first floor while it remained unprotected.

Restoration order: The court declined to make a restoration order under section 237 of the WHS Act. Scotting DCJ found there was insufficient information about the extent of Mr Chanthavixay's loss to fashion an accurate order, and that any order risked either undercompensating or overcompensating him. The court also noted that an order could interfere with any civil rights Mr Chanthavixay may separately hold, and that there had been no recent contact with him to facilitate enforcement.

Costs: The prosecution had initially conceded limitations on the court's section 237 power, then sought to revisit that question at a relisted hearing, advancing a statutory construction argument on which it ultimately failed. Scotting DCJ held it would be inappropriate to penalise the offender in costs for a hearing prompted by the prosecution's own change of position. The costs order was adjusted to exclude costs relating to the 20 September 2019 appearance.

Orders Made

  • MGK Constructions Pty Ltd convicted of the offence under section 32 of the WHS Act.
  • Fine of $100,000, discounted by 25% for the guilty plea, resulting in a fine of $75,000.
  • Pursuant to section 122(2) of the Fines Act 1996, 50% of the fine to be paid to the prosecutor (SafeWork NSW).
  • MGK to pay the prosecutor's costs of the proceedings, except for costs of or incidental to the appearance on 20 September 2019, as agreed or assessed.
  • No restoration order made.

Key Takeaways

  • A subcontractor's own Safe Work Method Statement identifying a specific hazard and control measure can weigh significantly against it at sentencing when the control measure was not implemented and injury resulted.
  • Under section 237 of the WHS Act, a court may decline to make a restoration order where the injured worker's loss is insufficiently quantified, where an order could interfere with the worker's civil rights, or where enforcement may be impractical.
  • Partial responsibility by the principal contractor for a hazardous site condition does not relieve a subcontractor of its own primary duty under section 19(1) of the WHS Act, but can be a relevant factor in assessing the offender's culpability.
  • The District Court applied a 25% discount to the fine for an early guilty plea, consistent with the approach in R v Thomson & Houlton, bringing a $100,000 pre-discount fine to $75,000.
  • Where a prosecution pursues an unsuccessful statutory construction argument at a relisted hearing that was not raised by the offender, it is appropriate to exclude the costs of that hearing from any costs order against the offender.

Legislation and Cases Referenced

Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(1), 32, 237, 274
- Work Health and Safety Regulation 2011 (NSW), cl 78
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Fines Act 1996 (NSW), s 122(2)
- Victims Rights and Support Act 2013 (NSW)
- Interpretation Act 1987 (NSW)
- SafeWork NSW Code of Practice: Managing the Risk of Falls at Workplaces (April 2016)
- WorkCover NSW Code of Practice: Preventing Falls in Housing Construction (18 July 2014)

Cases:
- Nash v Silver City Drilling [2017] NSWCCA 96
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Borkowski (2009) 195 A Crim R 1
- R v Youkhana [2004] NSWCCA 412
- Boland v Kentucky Fried Chicken Pty Ltd [2017] SAIRC 16
- Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27
- Certain Lloyd's Underwriters v Cross (2012) 87 ALJR 131
- Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503
- Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
- Taylor v Owners of Strata Plan 11564 (2014) 253 CLR 531
- Re Bolton; Ex Parte Beane (1987) 162 CLR 514
- Wentworth Securities v Jones [1982] UKHL 5