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District Court 5 December 2019

Orr v LD Operations Pty Limited

[2019] NSWDC 727

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

Citation: Orr v LD Operations Pty Limited [2019] NSWDC 727
Court: District Court of New South Wales
Date: 5 December 2019
Judge: Russell SC DCJ

Background

LD Operations Pty Limited ("the offender") was a labour hire company contracted to supply workers to LakeCoal Pty Ltd at the Mannering Colliery, an underground coal mine at Doyalson, NSW. The offender employed Benjamin Pedersen as a mine operator at the site. Both companies formed part of the same corporate group.

On 22 January 2016, the first day a newly purchased transport vehicle (the "Driftrunner", SMV-003) was deployed underground, it struck a W-strap affixed to the mine roof on at least two separate occasions that morning. W-straps are metal strips bolted to the rooves of underground roadways for structural support. The drivers on each occasion failed to stop, inspect the roof, or report the contacts. The collisions fractured the W-strap and left it hanging into the roadway.

That afternoon, Mr Pedersen drove a separate piece of machinery through the same area. The damaged W-strap caught on his machine's canopy, was driven downward, and pierced the left side of his head, causing a severe laceration from above his left eye to his left ear. The offender pleaded guilty to failing to comply with its work health and safety duty under the Work Health and Safety Act 2011 (NSW), thereby exposing Mr Pedersen to a risk of death or serious injury.

  • What was the appropriate penalty for the offender's breach of its primary duty of care under s 19 of the Work Health and Safety Act 2011, contrary to s 32?
  • How should objective seriousness be assessed, including the significance of known but unimplemented risk controls?
  • What mitigating factors applied, including remorse, cooperation, and the guilty plea?
  • How should parity of sentencing be approached, given that the mine operator (LakeCoal) had been sentenced separately for the same incident?
  • Whether and how the offender's financial capacity to pay a fine was relevant.

Decision

The court found the offence was of low to moderate objective seriousness, but acknowledged several significant aggravating features. Both the 2014 and 2015 Workplace Risk Assessments and Controls had identified the very hazards that materialised, yet the recommended risk controls had not been implemented before the incident. The risk of vehicles colliding with roof infrastructure in a mine with undulating gradients and known clearance issues was foreseeable and had been formally documented. The offender also had contractual obligations under an Umbrella Agreement with LakeCoal to train workers, assess hazards, and comply with safety legislation independently of LakeCoal's own obligations.

The court identified several mitigating factors in favour of the offender. These included an early and unqualified guilty plea, genuine remorse expressed by the Managing Director, substantial cooperation with the investigation, the absence of prior convictions, and the implementation of remedial safety measures after the incident. The court also noted that the offender was not the mine operator and did not control the physical mine environment.

On parity, the court referred to its earlier decision in Orr v LakeCoal Pty Limited (In Liquidation) (No.3) [2019] NSWDC 402, in which LakeCoal had been fined for its role in the same incident. The court acknowledged that the offender bore a separate and non-transferable duty under ss 14 and 16 of the Act, but also recognised that the offender had substantially more mitigating factors in its favour than LakeCoal did, justifying a different penalty outcome.

The court assessed the appropriate fine at $160,000 before applying a 15 percent reduction for the guilty plea, arriving at a final penalty of $136,000. Pursuant to s 122(2) of the Fines Act 1996, 50 percent of the fine was ordered to be paid to the prosecutor.

Orders Made

  • The offender was convicted.
  • The offender was ordered to pay a fine of $136,000 (reduced from $160,000 by 15% for the guilty plea).
  • Pursuant to s 122(2) of the Fines Act 1996, 50% of the fine was directed to be paid to the prosecutor.
  • The offender was ordered to pay the prosecutor's costs as agreed or assessed.

Key Takeaways

  • A labour hire company employing workers at a mine site holds its own non-transferable WHS duty under the Work Health and Safety Act 2011, independent of any duty held by the mine operator, even where both entities are within the same corporate group.
  • Under ss 14 and 16 of the Act, the existence of a duty held by another party (such as the mine operator) does not discharge a separate duty holder's own obligations.
  • Documented but unimplemented risk controls are a significant aggravating factor in WHS sentencing: where a hazard has been formally identified and risk controls proposed, failure to implement those controls before an incident occurs weighs against the offender on objective seriousness.
  • Parity of sentencing requires the court to account for differences in mitigating factors between co-offenders arising from the same incident; a lesser penalty is justified where one offender has substantially more mitigating circumstances, even where the underlying duties are of equal legal standing.
  • In dismissing any argument about capacity to pay (no submission was made on this point), the court applied the principle that a substantial fine may still be warranted by offence seriousness and general deterrence regardless of an offender's financial position.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 14, 16, 19, 32
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Fines Act 1996 (NSW), ss 6, 122(2)

Cases
- Orr v LakeCoal Pty Limited (In Liquidation) (No.3) [2019] NSWDC 402
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
- Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
- Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- Mahdi Jahandideh v The Queen [2014] NSWCCA 178
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Green v The Queen [2011] HCA 49; (2011) 244 CLR 462
- Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465