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District Court 2 May 2023

SafeWork NSW v AGL Macquarie Pty Ltd

[2023] NSWDC 133

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

Citation: SafeWork NSW v AGL Macquarie Pty Ltd [2023] NSWDC 133
Court: District Court of New South Wales
Date: 2 May 2023
Judge: Strathdee DCJ

Background

AGL Macquarie Pty Limited operated Liddell Power Station near Muswellbrook, NSW. In December 2020, an employee working as an Assistant Plant Controller was seriously injured when a generator transformer exploded while he was attempting to bring an oil cooler back into service.

The explosion occurred because the oil cooler had developed a slow, undetected leak over several weeks, which drained it of oil and filled it with air. Introducing air into a transformer tank is a known hazard: it can cause an arc fault, which rapidly increases pressure inside the tank and can rupture it, releasing and igniting hot oil. That is precisely what happened.

SafeWork NSW prosecuted AGL Macquarie under the Work Health and Safety Act 2011 (NSW). The defendant pleaded guilty. The proceedings before Strathdee DCJ concerned sentencing, including the appropriate fine and the costs order.

  • What was the objective seriousness of the offence, having regard to the nature of the risk, the availability of guidance material, and the systems of work in place?
  • What weight should be given to mitigating factors, including the early guilty plea, co-operation with investigators, good character, remorse, and support provided to the injured worker?
  • What discount applied to the fine in recognition of the utilitarian value of the early plea?
  • What costs order was appropriate?

Decision

The court assessed the objective seriousness of the offence in the context of a known and serious hazard. The risk of air entering transformer tanks was well understood, manufacturer instructions expressly warned that oil mixed with air creates an explosive mixture, and relevant codes of practice were available to the defendant. An existing procedure (ISAP 132) addressed the return to service of a drained oil cooler, but it had been treated as redundant for operational purposes and was only used by maintenance personnel. The court found that these features bore on the adequacy of the defendant's systems of work.

On the mitigating side, the court accepted a range of favourable findings. The defendant had no prior convictions, co-operated with the SafeWork investigation, demonstrated genuine remorse through the affidavit of its representative, and went to considerable lengths to re-employ and support the injured worker after the incident. The imminent closure of Liddell Power Station reduced the weight of specific deterrence for that site, though the court noted that general and specific deterrence remained relevant across the defendant's other operations.

The court fixed the appropriate base fine at $600,000 before discount. Given the early guilty plea, which itself was treated as evidence of remorse, the court applied the maximum 25% utilitarian discount in accordance with the principles in R v Thomson & Houlton (2000) 49 NSWLR 383. That reduced the fine to $450,000.

Orders Made

  • The defendant was convicted of the offence.
  • A fine of $450,000 was imposed (reflecting a base fine of $600,000 reduced by 25% for the early guilty plea).
  • Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine is to be paid to SafeWork NSW as prosecutor.
  • The defendant is to pay the prosecutor's agreed costs of $40,617.86.

Key Takeaways

  • The District Court confirmed that where a known hazard is well-documented in manufacturer instructions and codes of practice, the availability of that guidance material is a relevant factor in assessing the objective seriousness of a WHS offence.
  • A procedural document that addressed the precise risk (here, ISAP 132 on returning a drained oil cooler to service) being treated as operationally redundant was a feature the court considered when evaluating the adequacy of the defendant's systems of work.
  • An early guilty plea attracted the maximum 25% utilitarian discount, consistent with R v Thomson & Houlton, and was treated as independent evidence of remorse alongside other mitigating conduct.
  • The imminent closure of a facility can reduce the weight given to site-specific deterrence, but the court noted that broader specific and general deterrence obligations remain relevant where a defendant operates across multiple sites.
  • Post-incident conduct, including re-employing and actively supporting an injured worker, was accepted as a mitigating factor going to character under s 21A(3)(f) of the Crimes (Sentencing Procedure) Act 1999 (NSW).

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW)
- Work Health and Safety Regulation 2017 (NSW)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 21A(3)(e), (f), (h), (i), (k), (m)
- Criminal Procedure Act 1986 (NSW), s 257B
- Fines Act 1996 (NSW), s 122(2)

Cases
- R v Thomson & Houlton (2000) 49 NSWLR 383
- Bulga Underground Operations v Nash (2016) 93 NSWLR 338
- Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Markarian v The Queen (2005) 228 CLR 357
- Muldrock v The Queen (2011) 244 CLR 120
- Veen v R (No. 2) (1988) 164 CLR 465
- Morrison v Powercoal Pty Ltd (No. 3) (2005) 147 IR 117
- SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398
- SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632