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District Court 6 November 2020

R v EK Fabrication Pty Limited; R v Rafayel El-Khoury

[2020] NSWDC 679

Other
CRIME PROSECUTION WORK, HEALTH AND SAFETY DUTY OF PERSONS UNDERTAKING BUSINESS DUTY OF EMPLOYERS RISK OF DEATH OR SERIOUS INJURY

Citation: R v EK Fabrication Pty Limited; R v Rafayel El-Khoury [2020] NSWDC 679
Court: District Court of New South Wales
Date: 6 November 2020
Judge: Strathdee DCJ

Background

A structural steel fabrication and installation company was engaged to work on a residential construction site in Kellyville, NSW. The company's site supervisor instructed a worker to help manually install a steel beam weighing approximately 119 kilograms, approximately 8 metres in length, using a mechanical Genie lift and ladders rather than waiting for a crane that was due on site the following working day. The decision was made despite the worker explicitly raising safety concerns and despite wet conditions on the day.

During the lift, one end of the beam became unstable and fell, transferring the full weight of the beam onto the worker's shoulder. The worker fell approximately 3 metres from the ladder to the concrete floor and suffered an acute vertebral fracture. He has been permanently disabled and has been unable to return to work.

Both the company and its officer, who held the role of site supervisor and participated in decisions affecting the business, were charged under the Work Health and Safety Act 2011 (NSW). Both pleaded guilty on 21 July 2020.

  • What were the appropriate base fines for the company and its officer for breaching their respective duties under ss 19(1) and 27(1) of the Work Health and Safety Act 2011 (NSW)?
  • What discount, if any, applied for the early guilty pleas?
  • To what extent did the defendants' capacity to pay fines affect the penalty?
  • How should the court weigh general deterrence against the defendants' financial circumstances when considering a costs order?

Decision

The court convicted both defendants. On the question of objective seriousness, the court found that the risk of serious injury was obvious and foreseeable: the beam was heavy, conditions were wet, the company's own Safe Work Method Statement (SWMS) contemplated the use of cranes and limited manual lifting to 20 kilograms per person, and the worker had expressly warned the supervisor that the beam was too heavy to lift by hand. The decision to proceed without the crane, under pressure to meet a schedule, was a clear departure from the documented safety systems the company itself had put in place.

The court took into account mitigating factors including the absence of prior convictions, evidence of remorse and contrition, updated safety procedures introduced after the incident, and cooperation with the prosecution. Both defendants were assessed as unlikely to reoffend. These factors reduced the otherwise significant weight given to general deterrence, but did not eliminate it.

On financial capacity, the court accepted that both defendants had some difficulty in paying fines, though noted that the onus rests on a defendant to demonstrate incapacity. The court balanced the need for general deterrence against that limited capacity by declining to make any order for prosecution costs, rather than reducing the fines themselves. The court held that a meaningful fine remained necessary to convey to employers the seriousness of obligations to protect workers from injury.

A 25% discount was applied to each defendant's base fine to reflect the utilitarian value of the early guilty plea.

Orders Made

  • Both defendants convicted.
  • EK Fabrication Pty Limited fined $240,000 (base), reduced by 25% to $180,000.
  • Rafayel El-Khoury fined $20,000 (base), reduced by 25% to $15,000.
  • Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of each fine is to be paid to the prosecutor.
  • No order as to costs.

Key Takeaways

  • The District Court confirmed that a defendant seeking a reduction in fine on the basis of financial incapacity bears the onus of demonstrating that incapacity to the court's satisfaction.
  • Where some financial hardship is established, the court may give effect to that consideration by waiving prosecution costs rather than reducing the fine, preserving the general deterrent message of the penalty.
  • A company's own documented SWMS can be used against it at sentencing: departure from safety controls the company had itself designed and approved was a significant aggravating feature in assessing objective seriousness.
  • General deterrence remains a weighty consideration in WHS sentencing even where the defendants are remorseful, cooperative, have no prior convictions, and are unlikely to reoffend, particularly where a worker has suffered permanent disability.
  • Under the Work Health and Safety Act 2011 (NSW), an officer of a company who participates in decisions affecting a substantial part of the business can be personally liable under s 27(1) where their conduct exposes workers to a risk of death or serious injury, even where a separate corporate entity is also convicted.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 19(1), 27(1), 32
- Work Health and Safety Regulations 2011 (Cth)
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Fines Act 1996 (NSW), s 122(2)

Cases
- Bulga Underground Operations v Nash [2016] NSWCCA 37
- Capral Aluminium Limited v WorkCover Authority of NSW (2000) 49 NSWLR 610
- Environmental Protection Authority v Barnes [2006] NSWCCA 246
- Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384
- Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100
- Inspector Howard v Baulderstone Hornibrook Pty Ltd [2009] NSWIRComm 92
- Jahandideh v R [2014] NSWCCA 178
- Kirk v Industrial Commission of New South Wales [2010] HCA 1
- Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464
- Markarian v The Queen (2005) 228 CLR 357
- McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310
- Morrison v Powercoal Pty Limited & Anor (No 3) [2005] NSWIRComm 61
- Nash v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- Orbit Drilling v The Queen; Smith v The Queen [2012] VSCA 82
- R v Cage [2006] NSWCCA 304
- R v Miria [2009] NSWCCA 68
- SafeWork NSW v Emu Group Pty Limited [2019] NSWDC 537
- SafeWork NSW v HCM Building Pty Limited [2019] NSWDC 632
- Veen v R (No 2) (1988) 164 CLR 465
- WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700