Citation: SafeWork NSW v JA Investment Group Pty Ltd [2021] NSWDC 569
Court: District Court of New South Wales
Date: 22 October 2021
Judge: Russell SC DCJ
Background
JA Investment Group Pty Ltd operated an automotive dismantling business in Smithfield, NSW. Its operations involved purchasing cars at auction, stripping them for parts, and sending the remainder for scrap. Daily operations routinely produced large quantities of extracted petrol and diesel, stored in unlabelled 20-litre drums in close proximity to the hoists where workers performed dismantling tasks.
On 15 December 2018, three workers were directed to spend the day cleaning the yard and hoist area. One of those workers, Mr Ali Al-Shihan, was cleaning the tray of a utility vehicle with an electric gurney when he switched the gurney on. An explosion and fire occurred, seriously injuring all three workers.
JA Investment pleaded guilty to a Category 2 offence under s 32 of the Work Health and Safety Act 2011 (NSW): as a person with a work health and safety duty under s 19, it had failed to comply with that duty and thereby exposed its workers to a risk of death or serious injury. The maximum penalty for the offence was a fine of $1,500,000.
Legal Issues
- What was the appropriate base penalty, having regard to the objective seriousness of the offence?
- What mitigating and aggravating factors applied to the sentence?
- What reduction, if any, was warranted for the early guilty plea?
- What was the defendant's capacity to pay, and how should that inform the fine?
- What costs order was appropriate?
Decision
The court assessed the objective seriousness of the offence as falling in the low to moderate range. The risk of fire and explosion from storing large volumes of unlabelled petrol and diesel in an enclosed, poorly ventilated space, adjacent to electrical equipment and without safe work procedures or adequate training, was both foreseeable and preventable. The measures that would have reduced or eliminated the risk were reasonably practicable and not unduly burdensome.
The harm caused was significant. Mr Al-Shihan sustained serious burn injuries and was left with lasting physical limitations, psychological injury, and dependence on multiple medications. The injuries affected his capacity to work, his personal relationships, and his financial independence. Victim impact material before the court described ongoing and likely permanent consequences.
The court identified several failures contributing to the offence: no risk assessment had been conducted, petrol and diesel drums were unlabelled and stored without separation from the work area, no safe work procedures governed the use of flammable liquids or electrical equipment in hazardous areas, and workers had received no information, instruction, or training about the relevant chemical hazards. The court noted the absence of any prior WHS convictions as a mitigating factor, together with the guilty plea and evidence of subsequent remediation steps taken by the company.
The court set the appropriate fine at $240,000 before applying a 25 per cent reduction for the early guilty plea, arriving at a final penalty of $180,000. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50 per cent of that fine was directed to the prosecutor, SafeWork NSW.
Orders Made
- JA Investment Group Pty Ltd convicted (conviction entered 15 October 2021)
- Fined $180,000 (being $240,000 reduced by 25% for early guilty plea)
- 50% of the fine to be paid to the prosecutor, pursuant to s 122(2) of the Fines Act 1996 (NSW)
- JA Investment Group Pty Ltd to pay the prosecutor's costs in the agreed amount of $30,000
Key Takeaways
- A failure to provide information, instruction, and training about flammable liquids and hazardous chemicals, combined with inadequate storage practices and no safe work procedures, can ground a Category 2 WHS offence even where no single measure was especially costly to implement.
- The District Court assessed objective seriousness in the low to moderate range, reflecting that the risk was foreseeable and the preventive measures readily available, while acknowledging the absence of prior contraventions and genuine post-incident remediation.
- Under s 32 of the Work Health and Safety Act 2011 (NSW), the prosecution does not need to establish that actual harm was intended; exposure of workers to a risk of death or serious injury is sufficient to establish the offence.
- A 25 per cent discount from the base penalty was applied for an early guilty plea, consistent with the approach under s 22 of the Crimes (Sentencing Procedure) Act 1999 (NSW) and principles established in cases such as Bulga Underground Operations Pty Limited v Nash.
- Victim impact material describing serious, ongoing physical and psychological harm to injured workers formed part of the sentencing assessment, even though the nature and extent of the harm is relevant to objective seriousness rather than as a separate aggravating factor in Category 2 WHS proceedings.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19, 32
- Work Health and Safety Regulation 2017 (NSW), cll 5, 34-36, 39, 342, 351, 355, 379
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22, 27, 28, 30A, 30B, 30D, 30E
- Fines Act 1996 (NSW), ss 6, 122
Cases
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
- Nash v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465
- SafeWork NSW v JPS Car Wash Management Pty Ltd [2021] NSWDC 148
- SafeWork NSW v MMP Industrial Pty Ltd [2019] NSWDC 854
- SafeWork NSW v Plasser Australia Pty Ltd [2021] NSWDC 441
- SafeWork NSW v CRS NSW Pty Ltd [2017] NSWDC 312
- R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566