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District Court 7 June 2022

SafeWork NSW v Akkari Group Pty Ltd

[2022] NSWDC 197

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

Citation: SafeWork NSW v Akkari Group Pty Ltd [2022] NSWDC 197
Court: District Court of NSW
Date: 7 June 2022 (amended 10 August 2022)
Judge: Strathdee DCJ

Background

The defendant, a construction company acting as principal contractor, was engaged to build a multi-storey mixed-use building at Gosford. On 25 May 2019, workers were pouring approximately 200 cubic metres of concrete onto a Level 1 transfer slab when the formwork and supporting falsework collapsed, creating a crater roughly 8 metres across and 6 metres deep. Three workers were trapped in the collapsed structure and had to grab onto reinforcement steel to avoid falling in, though fortunately no serious injuries resulted.

Expert investigation identified multiple failures in the falsework system. The construction involved an inadequate mix of a conventional formwork system with a Kwikstage scaffold system, lacking horizontal and diagonal bracing. The fixing method between the falsework frame legs and the concrete ramp slab also failed, and the overall installation quality fell well short of good industry practice. Critically, no engineer had inspected or certified the completed formwork before the concrete pour commenced.

The defendant also failed to notify SafeWork NSW immediately upon becoming aware of the incident, doing so only two days later on 27 May 2019. The company pleaded guilty to three offences under the Work Health and Safety Act 2011 (NSW).

  • Whether the defendant breached its duty as a person conducting a business or undertaking under s 19(1) of the WHS Act by failing to ensure, so far as reasonably practicable, the health and safety of workers
  • Whether the defendant breached s 26(2) of the WHS Act, which imposes duties on a person with management or control of a workplace
  • Whether the defendant breached s 38(1) of the WHS Act by failing to notify SafeWork NSW immediately of a notifiable incident
  • What sentence was appropriate having regard to objective seriousness, mitigating and aggravating factors, the utilitarian value of the guilty pleas, and the purposes of general and specific deterrence

Decision

The defendant's guilty pleas were accepted, and the court proceeded to sentencing. The court assessed the objective seriousness of the s 19(1) and s 26(2) offences as significant. The risk of death or serious injury was real and foreseeable: workers were on the slab during a large concrete pour, no engineer had certified the formwork before loading, and the system was improperly mixed and inadequately braced. That serious injuries did not occur was a matter of good fortune rather than any safeguard put in place by the defendant.

Several aggravating factors were present. The defendant had prior convictions under work health and safety legislation. The offences involved a foreseeable and preventable risk, there was a failure to engage an engineer to certify the formwork, and the relevant guidance materials and standards were publicly available and simply not followed. The breach of the notification obligation under s 38(1), while less serious in isolation, compounded the overall picture of non-compliance.

The court allowed a 25% reduction on each fine to reflect the utilitarian value of the early guilty pleas. No reduction was granted for remorse or financial hardship. On remorse, the court found the evidence insufficient to establish genuine contrition beyond what was implicit in the pleas themselves. On financial hardship, the absence of any supporting financial records, such as balance sheets, bank statements or company accounts, meant the court declined to accept that the defendant or its associated family members warranted leniency on that basis.

The original orders were subsequently revoked on 18 July 2022 and replaced with revised orders that applied separate fines to each offence rather than a single combined penalty. The total fines, after the 25% plea discount, amounted to $600,000.

Orders Made

  • The defendant is convicted on all three charges.
  • For the s 38(1) offence: a base fine of $50,000, reduced by 25% to $37,500.
  • For the s 19(1) offence: a base fine of $375,000, reduced by 25% to $281,250.
  • For the s 26(2) offence: a base fine of $375,000, reduced by 25% to $281,250.
  • 50% of each fine is to be paid to the prosecutor under s 133(2) of the Fines Act 1996 (NSW).
  • The defendant is to pay the prosecutor's costs as agreed or assessed under s 257B of the Criminal Procedure Act 1986 (NSW).

Note: The original orders imposed a single combined fine of $600,000 (reduced from $800,000). Those orders were revoked on 18 July 2022 and replaced by the disaggregated fines listed above. The total after discount is the same.

Key Takeaways

  • A 25% reduction in the applicable fine is available for the utilitarian value of an early guilty plea, but this does not automatically attract additional reductions for remorse or financial hardship without adequate evidentiary support.
  • Where a defendant seeks leniency based on financial circumstances, unsupported assertions are insufficient: the District Court declined to afford any concession in the absence of company records, bank statements or balance sheets.
  • The presence of prior work health and safety convictions operates as an aggravating factor at sentencing, reinforcing the need for both specific and general deterrence.
  • Failure to obtain engineering certification of completed formwork before a concrete pour, where relevant Australian Standards and codes of practice clearly required such certification, goes directly to the objective seriousness of a WHS breach.
  • Under s 133(2) of the Fines Act 1996 (NSW), a court may direct that 50% of a fine imposed in WHS proceedings be paid to the prosecuting authority.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 7, 8, 19(1), 26(2), 32, 38(1), 46
- Work Health and Safety Regulation 2017, cll 34, 35
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Criminal Procedure Act 1986 (NSW), s 257B
- Fines Act 1996 (NSW), s 133(2)

Cases
- Bulga Underground Operations v Nash (2016) 93 NSWLR 338
- Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610
- Director of Public Prosecutions v Dalgleish [2017] HCA 41
- Environmental Protection Authority v Barnes [2006] NSWCCA 246
- Kirk v Industrial Court (NSW) (2010) 239 CLR 531
- Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464
- Markarian v The Queen (2005) 228 CLR 357
- Morrison v Powercoal Pty Ltd (No. 3) (2005) 147 IR 117
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Postiglione v The Queen (1997) 189 CLR 295
- R v Thomson & Houlton (2000) 49 NSWLR 383