Citation: SafeWork NSW v Campbelltown Hardware Pty Ltd and Khalid [2021] NSWDC 217
Court: District Court of NSW
Date: 31 May 2021
Judge: Scotting DCJ
Background
Campbelltown Hardware Pty Ltd operated a timber and building materials business in Campbelltown. Muhammad Jawad Khalid was a director responsible for the day-to-day running of the business. Delivery trucks attended the premises daily to drop off stock, and a single licensed forklift operator was employed to unload them.
On 5 December 2017, a truck driver arrived at the premises carrying an overloaded and unusually stacked timber delivery. While the forklift operator began unloading the truck, the truck driver was on the passenger side of the vehicle, out of the operator's line of sight and in no designated exclusion zone. The forklift tines dislodged timber packs, one of which struck the driver. He suffered catastrophic injuries and died from cardiac arrest caused by extensive head injuries.
SafeWork NSW prosecuted both the company under s 19(2) of the Work Health and Safety Act 2011 and the director under s 27 of the same Act. Both pleaded guilty. The proceedings before the District Court concerned sentencing only.
Legal Issues
- What was the appropriate penalty for the company, given its limited capacity to pay a fine, its guilty plea, and the steps taken following the incident?
- What was the appropriate penalty for the director, given his personal financial incapacity, his guilty plea, genuine remorse, and the low risk of reoffending?
- How should the court weigh objective seriousness, deterrence, and mitigating factors under the Work Health and Safety Act 2011 and the Crimes (Sentencing Procedure) Act 1999?
- Whether a Work Health and Safety undertaking was appropriate as part of the penalty for the director in lieu of a fine.
Decision
The court found the offending carried moderate to high objective seriousness. The premises lacked a documented safe work procedure for truck unloading, a formal traffic management plan, and a dedicated spotter for the forklift operator. The truck driver was given no site induction and was left in an uncontrolled area while the forklift operated nearby with no line of sight to him. Both the company and its director were aware of the hazards associated with falling loads and the need for spotters, yet neither had taken adequate steps to formalise or enforce safe systems of work.
The court acknowledged significant mitigating factors for both defendants. Both pleaded guilty at an early stage, warranting a 25% discount. Both demonstrated genuine remorse. The company had promptly implemented documented procedures, an exclusion zone, additional spotters, and a traffic management plan after the incident. The director had cooperated fully with authorities and the incident had caused him lasting psychological harm. Neither party had any prior record of offending.
For the company, the court identified limited financial capacity as a further consideration in calibrating the penalty. The starting point fine was reduced from $100,000 to $75,000 after the guilty plea discount, and 50% of that amount was directed to the prosecutor under the Fines Act 1996. The court observed that the maximum penalty of $1.5 million reflects the high legislative priority placed on the protection of workers.
For the director, the court found that his complete lack of financial capacity meant that imposing a fine would serve no practical purpose. Instead, and in light of the low need for specific deterrence, the court convicted him and imposed no further penalty under s 10A of the Crimes (Sentencing Procedure) Act 1999, while also requiring him to enter into a two-year Work Health and Safety undertaking. The undertaking carries consequences for breach and was considered sufficient to address the need for specific deterrence.
Orders Made
Campbelltown Hardware Pty Ltd:
- Convicted of the offence under s 32 of the Work Health and Safety Act 2011
- Fined $75,000 (being $100,000 reduced by 25% for the guilty plea)
- 50% of the fine directed to be paid to the prosecutor (SafeWork NSW)
- Ordered to pay the prosecutor's costs of the proceedings, as agreed or assessed
Muhammad Jawad Khalid:
- Convicted of the offence under s 32 of the Work Health and Safety Act 2011
- No further penalty imposed (s 10A, Crimes (Sentencing Procedure) Act 1999)
- Required to enter into a Work Health and Safety undertaking under s 239 of the Work Health and Safety Act 2011 for two years
- Conditions: to appear before the court if called upon; not to commit any offence under the WHS Act during the adjournment period; to notify the court registry of any change of address
- No order for costs against the director
Key Takeaways
- A company's limited financial capacity is a relevant consideration in setting the quantum of a WHS penalty, but the court must still reflect the gravity of offending that causes a worker's death.
- Where a defendant has no capacity to pay a fine, conviction without further penalty under s 10A of the Crimes (Sentencing Procedure) Act 1999 can be combined with a WHS undertaking to give effect to specific deterrence without imposing a penalty that is unenforceable in practice.
- Prompt and comprehensive post-incident remediation, including implementing documented exclusion zones, safe work procedures, and additional spotters, was treated as a meaningful mitigating factor in both penalty assessments.
- The absence of formal systems, such as a documented safe work procedure, a traffic management plan, a site induction process for visitors, and a spotter assigned to each forklift operator, were each identified as distinct failures contributing to the objective seriousness of the offending.
- Under s 32 of the Work Health and Safety Act 2011, a duty holder's awareness of a known hazard, combined with a failure to implement available and well-documented controls, weighs against the defendant in assessing the seriousness of the breach.
Legislation and Cases Referenced
Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(2), 27, 32, 239
- Work Health and Safety Regulation 2017 (NSW), cls 34–38
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 10A
- Fines Act 1996 (NSW), s 122(2)
- Australian Standard AS 2359.2-2013 (safe loading and unloading of trucks)
Cases:
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- Jahandideh v R [2014] NSWCCA 178
- R v Borkowski (2009) 195 A Crim R 1
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Youkhana [2004] NSWCCA 412