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District Court 1 September 2023

SafeWork NSW v Carbon BMC Pty Ltd (ACN 630 546 833)

[2023] NSWDC 349

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

Citation: SafeWork NSW v Carbon BMC Pty Ltd [2023] NSWDC 349
Court: District Court of New South Wales
Date: 1 September 2023
Judge: Strathdee DCJ

Background

A small waterproofing company was engaged to carry out waterproofing works at a residential construction site in Seaforth, NSW. On 2 December 2020, two workers, a 22-year-old subcontracted sole trader and a 21-year-old second-year apprentice, were applying a highly flammable contact adhesive inside an internal laundry with no natural ventilation. The mechanical ventilation blower the company had provided was unavailable because its batteries were flat and charging at the time.

A hot air welding tool, set to maximum heat and reaching approximately 700 degrees Celsius, had been left heating up near the laundry entrance. Approximately ten minutes after the workers began applying the adhesive, an explosion occurred, igniting the laundry and projecting burning adhesive onto both workers. A container of solvent outside the laundry also caught fire.

Both workers suffered catastrophic burns. The subcontracted worker sustained burns to 58% of his total body surface area across all four limbs, chest, back, abdomen and face, requiring nine surgical procedures. The apprentice sustained burns covering 30 to 39% of his body surface area and required five surgical procedures, as well as treatment for bacterial infection and blood loss. Neither worker was wearing appropriate personal protective equipment at the time.

  • Whether the defendant contravened its primary duty under s 19(1) of the Work Health and Safety Act 2011 (NSW) by failing to ensure the safety of workers so far as reasonably practicable, thereby exposing them to a risk of serious injury or death contrary to s 32 of that Act.
  • The appropriate sentence, having regard to the objective seriousness of the offending, mitigating and aggravating factors, the plea of guilty, and the purposes of general and specific deterrence.
  • The defendant's capacity to pay a fine, and whether that capacity warranted leniency in the quantum imposed.
  • The appropriate discount for the guilty plea and the exercise of discretion under s 6 of the Fines Act 1996 (NSW).
  • Whether the prosecutor was entitled to an order for costs.

Decision

The defendant pleaded guilty and was convicted. Strathdee DCJ assessed the offending as having a moderate to high level of objective seriousness. The hazards associated with the flammable adhesive were clearly identified on both the product label and the Safety Data Sheet, requiring adequate ventilation, the exclusion of ignition sources, and appropriate personal protective equipment. The defendant had provided a mechanical blower for ventilation but failed to ensure it was operational and failed to supervise or attend the site on the day. The working directors were not present, the apprentice was not provided adequate oversight, and the subcontractor was expected to supply his own PPE.

In mitigation, the court accepted that the defendant had no prior convictions, had cooperated with investigators, had expressed genuine remorse and contrition, and had implemented corrective measures after the incident. The defendant was a small business with limited financial capacity, and evidence indicated that a substantial fine risked collapsing the company, with significant personal consequences for its directors and their family.

On penalty, Strathdee DCJ assessed the appropriate pre-discount fine at $600,000, representing a meaningful proportion of the maximum of $1,766,130. That figure was reduced by 25% to reflect the utility of the guilty plea, producing $450,000. The court then exercised its discretion under s 6 of the Fines Act 1996 to apply a further one-third reduction, having regard to the defendant's limited financial capacity and the additional burden of costs. The final fine imposed was $300,000.

Regarding costs, the court confirmed that costs orders in favour of a successful prosecutor are the normal rule and serve a compensatory rather than punitive function, following Latoudis v Casey (1990) 170 CLR 534. The court took into account the defendant's exposure to costs when calibrating the monetary penalty, as permitted by the authorities.

Orders Made

  • The defendant is convicted of the offence under s 32 of the Work Health and Safety Act 2011 (NSW).
  • A fine of $300,000 is imposed (calculated from a base fine of $600,000, reduced 25% for the guilty plea to $450,000, then reduced by a further one-third under s 6 of the Fines Act 1996).
  • Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine is to be paid to the prosecutor.
  • The defendant is to pay the prosecutor's costs, as agreed or assessed, pursuant to s 257B of the Criminal Procedure Act 1986 (NSW).

Key Takeaways

  • The District Court confirmed that a defendant's limited financial capacity, including the risk that a heavy fine would cause company collapse, is a relevant consideration when calibrating the quantum of a WHS penalty, provided the fine still satisfies the requirements of general deterrence and reflects objective seriousness.

  • A guilty plea attracted a 25% discount in this case, reflecting its utilitarian value; the court assessed the discount by reference to the plea's practical benefit to the prosecution and the justice system rather than as a fixed entitlement.

  • Under s 6 of the Fines Act 1996 (NSW), a sentencing court retains a discretion to reduce a fine by up to one-third, and that discretion can be exercised cumulatively with a guilty plea discount where financial circumstances warrant.

  • Costs orders in favour of a successful WHS prosecutor are the ordinary outcome, consistent with Latoudis v Casey, and the court may account for that costs exposure when setting the monetary penalty where capacity to pay is genuinely constrained.

  • Clear product labelling and Safety Data Sheets identifying explosion and fire risks from flammable adhesives were treated as notice to the defendant of the hazards it was required to control, supporting a finding of moderate to high objective seriousness even in the absence of prior convictions.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 19(1), 32, 242B
- Work Health and Safety Regulation 2017 (NSW)
- Fines Act 1996 (NSW), ss 6, 122(2)
- Criminal Procedure Act 1986 (NSW), s 257B
- Crimes (Sentencing Procedure) Act 1999 (NSW)

Cases
- Latoudis v Casey (1990) 170 CLR 534
- Markarian v The Queen (2005) 228 CLR 357
- Muldrock v The Queen (2011) 244 CLR 120
- Kirk v Industrial Commission of New South Wales [2010] HCA 1
- Bulga Underground Operations Pty Ltd v Nash (2016) NSWLR 338
- Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Environmental Protection Authority v Barnes [2006] NSWCCA 246
- Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117
- Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464
- Jahandideh v R [2014] NSWCCA 178
- R v Cage [2006] NSWCCA 304
- McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310
- Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100
- Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153
- Orbit Drilling v The Queen (2012) 35 VR 399