Citation: SafeWork NSW v All Seasons (Aust) Gourmet Produce NSW Pty Ltd; SafeWork NSW v Skevos Kakias [2022] NSWDC 12
Court: District Court of NSW
Date: 11 February 2022
Judge: Strathdee DCJ
Background
A fruit and vegetable wholesale business operated a facility in Marrickville, NSW, employing approximately 21 workers. On the night of 24 to 25 December 2018, a 21-year-old worker began his very first shift and was set to work operating a spinach-cutting machine. He had received only minimal instruction, and his supervisor was called away to another part of the site, leaving him unsupervised.
When spinach jammed the machine's infeed chute, the worker attempted to clear the blockage by hand. His right hand was drawn into the machine and forced into contact with the rotating blades. He suffered severe injuries, resulting in amputation of three fingers at the first knuckle.
The business was prosecuted by SafeWork NSW for failing to comply with its primary health and safety duty under s 19(1) of the Work Health and Safety Act 2011 (NSW) ("the Act"), contrary to s 32. The sole director was separately prosecuted for failing to exercise due diligence as an officer of the business to ensure compliance with that same duty, contrary to ss 27(1) and 32 of the Act.
Legal Issues
- Whether the business failed to comply with its primary duty to ensure, so far as reasonably practicable, the health and safety of workers, exposing the injured worker to a risk of death or serious injury
- Whether the sole director failed to exercise due diligence as an officer to ensure the business complied with its work health and safety duty
- What penalty was appropriate for each defendant, having regard to objective seriousness, aggravating and mitigating factors, capacity to pay, and the effect of a guilty plea
- Whether the costs order imposed on the defendants should be treated as a component of punishment when assessing the appropriate fine
Decision
Both defendants entered guilty pleas on 9 August 2021. The court was therefore focused entirely on sentence rather than determining guilt. Strathdee DCJ undertook an "instinctive synthesis" of all relevant sentencing factors, as required by Markarian v The Queen (2005) 228 CLR 357, weighing objective seriousness, mitigating and aggravating circumstances, deterrence, and the defendants' financial capacity.
The court found that the business had operated the machine without adequate guarding for several years. The distance between the infeed chute opening and the blades was 440mm, well below the 900mm minimum safety distance specified by Australian Standard AS 4024.1804-2014. No risk assessment had been conducted, no documented safe work procedure existed, and no adequate system for training or supervising new workers was in place. These were serious, systemic failures. The director personally knew of the work environment from daily attendance at the site and had delegated safety oversight to managers and supervisors without ensuring adequate systems were actually functioning.
On the role of costs in sentencing, the court followed the Court of Criminal Appeal's analysis in Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37. Costs orders are not punitive in nature; they compensate the successful party. Accordingly, it was an error to treat a costs order as a form of punishment or to reduce a fine simply because costs were being ordered. The court was instead required to consider the defendants' obligation to pay prosecution costs as a financial reality when assessing their capacity to pay the fine.
The court accepted mitigating factors including the early guilty pleas, the absence of prior convictions, genuine remorse, and the post-incident remediation, which included installation of new guarding (at a cost of approximately $1,000), new safe work procedures, and an improved induction and training system for new workers. The maximum penalty was $1,500,000 for the business and $300,000 for the director. The court assessed the appropriate pre-discount fines at $150,000 and $50,000 respectively, and applied a 25% discount for the early guilty pleas.
Orders Made
- The business, All Seasons (Aust) Gourmet Produce Pty Ltd, was convicted and fined $112,500 (base fine of $150,000 reduced by 25% for early guilty plea)
- The director, Skevos Kakias, was convicted and fined $37,500 (base fine of $50,000 reduced by 25% for early guilty plea)
- Under s 122(2) of the Fines Act 1996 (NSW), a moiety (half) of each fine is to be paid to SafeWork NSW
- Both defendants are to pay the prosecutor's costs as agreed or assessed
Key Takeaways
- A company operating unguarded machinery for several years, without risk assessments, safe work procedures, or adequate induction systems, represents a serious breach of the primary duty under s 19(1) of the Work Health and Safety Act 2011 (NSW), even where the maximum penalty is not reached.
- Where a director exercises personal, daily oversight of a workplace but delegates safety compliance to managers without verifying that adequate systems are actually in place, that conduct can ground a separate conviction under s 27(1) of the Act for failure to exercise due diligence.
- The District Court confirmed that prosecution costs orders are compensatory, not punitive, and that it is an error in sentencing to treat the imposition of costs as a substitute for, or an offset against, an otherwise appropriate fine. Any leniency warranted by financial hardship must be delivered through reduction of the fine itself.
- An early guilty plea attracted a 25% discount in each matter, consistent with the requirements of s 22 of the Crimes (Sentencing Procedure) Act 1999 (NSW).
- Post-incident remediation, including the installation of physical guarding and improved training systems, was treated as a mitigating factor, though the court noted the remedial steps could and should have been taken before the incident, given the long-standing availability of applicable guidance material and Australian Standards.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19(1), 27(1), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22
- Fines Act 1996 (NSW), s 122(2)
Cases
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37; (2016) NSWLR 338
- Capral Aluminium Ltd v WorkCover Authority (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
- Jahandideh v R [2014] NSWCCA 178
- Kirk v Industrial Court (NSW) (2010) 239 CLR 531
- Latoudis v Casey (1990) 170 CLR 534
- Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (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 Ltd (No. 3) (2005) 147 IR 117
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- R v Thomson & Houlton (2000) 49 NSWLR 383