Citation: SafeWork NSW v MHE-Demag Australia Pty Ltd [2023] NSWDC 261
Court: District Court of New South Wales
Date: 18 July 2023
Judge: Scotting DCJ
Background
MHE-Demag Australia Pty Ltd is a manufacturer and maintainer of industrial mechanical handling equipment, including overhead cranes. It employed around 145 workers in Australia at the relevant time. Through a labour hire arrangement, the company placed workers from Option One Construction Pty Ltd at its workshop, including Mishaal Prasad, a qualified boilermaker who had been working at the site since 1 May 2019.
On 6 July 2020, Mr Prasad was performing grinding work on two large steel box girders, each weighing nearly nine tonnes and standing upright side by side. To continue his work, a girder needed to be turned over. A permanent employee, David Gilbert, assisted by operating an overhead travelling crane to lift and rotate the girder using a chain and hook system. During the operation, the hook of a chain shortener caught the edge of the girder, causing it to become unstable and fall onto Mr Prasad, who was standing between the two girders. The falling girder then struck the second girder, causing it to topple as well. Mr Prasad died at the scene from his injuries.
The company pleaded guilty to a charge under section 32 of the Work Health and Safety Act 2011 (NSW), which criminalises a reckless or negligent failure to comply with a health and safety duty where that failure exposes a person to a risk of death or serious injury. The maximum penalty for such an offence is a fine of $1,766,130.
Legal Issues
- The appropriate level of objective seriousness of the offence, including the adequacy of the company's existing safety systems
- The weight to be given to aggravating and mitigating factors in sentencing
- The appropriate discount for the guilty plea and cooperation with the investigation
- The quantum of the fine, having regard to the maximum penalty and all sentencing considerations
Decision
The District Court found that the company had existing safety systems in place before the incident, including Safe Work Method Statements, hazard identification and risk assessments, crane operation procedures, and training logs. However, the company had no separate, documented system of work specifically addressing the task of turning large box girders that Mr Prasad was performing at the time of the incident. That gap was central to the offence.
In assessing objective seriousness, the court treated this as a significant failing, particularly given the obvious and foreseeable risk posed by the operation of heavy equipment near workers in close proximity to large freestanding steel structures. The court noted the irreversible harm caused: the death of a worker, the profound impact on his family (conveyed through a Victim Impact Statement from his mother), and the lasting effect on the company's own workforce and management.
On mitigating factors, the court accepted that the company had demonstrated genuine remorse, cooperated fully with the SafeWork NSW investigation, and taken extensive corrective steps after the incident. These included developing a specific Safe Work Procedure for turning large box girders, retraining workers, purchasing safety barriers, issuing a safety alert, and holding toolbox talks. The court also accepted the company's status as a good corporate citizen with no relevant prior record and good prospects of rehabilitation.
The court applied a 25% discount to the penalty to reflect the utilitarian value of the guilty plea, consistent with the principles in R v Thomson & Houlton and R v Borkowski. The pre-discount fine was set at $700,000, resulting in a final penalty of $525,000.
Orders Made
- MHE-Demag Australia Pty Ltd convicted of the offence under section 32 of the Work Health and Safety Act 2011 (NSW)
- Fine of $525,000 imposed (reduced from $700,000 by a 25% guilty plea discount)
- The offender to pay the prosecutor's costs of the proceedings, as agreed or assessed
- Pursuant to section 122(2) of the Fines Act 1996, 50% of the fine is to be paid to the prosecutor (SafeWork NSW)
Key Takeaways
- The District Court confirmed that the existence of general safety systems does not discharge a duty holder's obligations under the Work Health and Safety Act 2011 (NSW) if there is no specific documented procedure covering the particular task being performed when an incident occurs.
- A guilty plea entered at an appropriate stage attracted a 25% discount on the penalty, consistent with the established principles in R v Thomson & Houlton and R v Borkowski, and the court treated the plea as also reflecting remorse.
- Victim Impact Statements from family members of deceased workers are a recognised element of the sentencing process in WHS prosecutions, with the court taking the statement into account as evidence of harm to the community under section 30E of the Crimes (Sentencing Procedure) Act 1999.
- Post-incident remediation, including the development of task-specific procedures, retraining, safety alerts, and other corrective measures, carried meaningful mitigating weight, though such steps did not displace the seriousness of the underlying failure.
- Under section 122(2) of the Fines Act 1996, a court may direct that a portion of a WHS fine be paid directly to the prosecuting regulator, and the District Court ordered that 50% of the fine be paid to SafeWork NSW.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 19(1), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 21A(3)(i), 21A(3)(k), 21A(3)(m), 22, 30E
- Fines Act 1996 (NSW), s 122(2)
Cases
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- R v Borkowski (2009) 195 A Crim R 1
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Youkhana [2004] NSWCCA 412