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District Court 4 October 2023

SafeWork NSW v Denbrok Constructions Pty Limited

[2023] NSWDC 407

Other
CRIMINAL LAW PROSECUTION WORK HEALTH AND SAFETY DUTY OF PERSONS UNDERTAKING BUSINESS RISK OF DEATH OR SERIOUS INJURY MAXIMUM PENALTY SENTENCE

Citation: SafeWork NSW v Denbrok Constructions Pty Limited [2023] NSWDC 407
Court: District Court of New South Wales
Date: 4 October 2023
Judge: Strathdee DCJ

Background

The defendant, a small residential building and renovation company operating in regional New South Wales, was the principal contractor for a renovation at a Deniliquin property. On 3 December 2020, an apprentice carpenter employed by the company was instructed to secure roofing sheets on the dwelling. Shortly before 7:00 am, he accessed the roof via an unsecured ladder, lost his footing on the corrugated iron surface, slid down the approximately 30-degree pitch, and fell approximately four metres to the ground. He was rendered unconscious and airlifted to Royal Melbourne Hospital.

At the time of the incident, there were no edge protection measures, no guardrails, and no scaffolding in place. Workers accessed the roof via an unsecured ladder. The company's Safe Work Method Statement was a generic document prepared for an entirely different project and not tailored to the site. Although harnesses may have been present on site, workers had not been instructed to use them and the injured worker stated they were not available to him. He had received no training in working at heights or in the use of harnesses.

SafeWork NSW prosecuted the company for failing to comply with its duty under section 19(1) of the Work Health and Safety Act 2011 (NSW), which requires a person conducting a business or undertaking (PCBU) to ensure the health and safety of workers so far as is reasonably practicable. The company pleaded guilty.

  • What was the appropriate base fine for a category 2 offence under section 32 of the Work Health and Safety Act 2011 (NSW), having regard to the objective seriousness of the offending?
  • What discount should be applied to reflect the utilitarian value of the guilty plea?
  • Whether the fine should be further reduced under section 6 of the Fines Act 1996 (NSW) given the defendant's limited financial capacity to pay.
  • Whether, and in what amount, the defendant should be ordered to pay the prosecutor's costs.

Decision

Strathdee DCJ assessed the objective seriousness of the offending as falling in the low to mid range. The risk of a fall from an unprotected roof was an obvious and foreseeable hazard, and the measures needed to address it, including scaffolding, guardrails, secured ladders, harnesses, and appropriate training and supervision, were well known and not particularly costly. The company had no adequate site-specific safe work method statement, provided no relevant training, and gave the apprentice no effective supervision. These failures were significant, and the fact that the injured worker was an unsupervised apprentice was a relevant factor weighing on the objective gravity of the offending.

In mitigation, the court accepted that the company cooperated with investigators, pleaded guilty at an early stage, and took extensive remedial action after the incident, including developing a site-specific safe work method statement, purchasing and installing roof barriers, hiring scaffolding, and providing training to workers. The sole director's affidavit demonstrated genuine remorse and contrition. The company had no prior relevant convictions. These factors collectively supported a meaningful reduction from a higher starting point.

The court set the appropriate base fine at $400,000, then applied a 25 per cent discount for the guilty plea, reducing the fine to $300,000. The court then exercised its discretion under section 6 of the Fines Act 1996 (NSW) to reduce that amount by a further 50 per cent, reflecting evidence of the company's constrained financial position. The company had traded at a loss in the financial year ending June 2022, held modest cash reserves, and achieved only a small net profit in the most recent financial year. The court noted that a crushing fine could threaten the viability of the business, and it also took into account that the defendant would be liable for the prosecutor's agreed costs of $26,000. The final fine imposed was $150,000.

Orders Made

  • The defendant was convicted of the offence.
  • The court determined the appropriate fine to be $400,000, reduced by 25 per cent for the guilty plea to $300,000.
  • That amount was further reduced by 50 per cent under section 6 of the Fines Act 1996 (NSW), resulting in a fine of $150,000.
  • Pursuant to section 122(2) of the Fines Act 1996 (NSW), 50 per cent of the fine is to be paid to the prosecutor.
  • The defendant is to pay the prosecutor's costs in the agreed sum of $26,000.

Key Takeaways

  • A PCBU's duty under section 19(1) of the Work Health and Safety Act 2011 (NSW) is positive and non-delegable: it requires active identification and elimination or minimisation of workplace risks, and cannot be discharged by producing a generic safe work method statement not tailored to the actual work being performed.

  • Where a defendant company demonstrates genuine financial hardship supported by financial records, a court may exercise its discretion under section 6 of the Fines Act 1996 (NSW) to reduce an otherwise appropriate fine, provided the reduction does not undermine the sentencing objectives of deterrence and denunciation.

  • The District Court confirmed that the prosecutor's costs order is compensatory rather than punitive, and that the defendant's exposure to costs is a relevant consideration when calibrating the monetary penalty, particularly where financial capacity is limited.

  • Extensive post-incident remediation, early cooperation with investigators, and genuine remorse by a director can carry meaningful mitigating weight in WHS sentencing, even where the objective circumstances of the breach are serious.

  • The presence of an unsupervised apprentice at the time of an incident is a factor that bears on the objective seriousness of a WHS offence, given the heightened vulnerability and reduced experience of apprentice workers.

Legislation and Cases Referenced

Legislation:
- Work Health and Safety Act 2011 (NSW), ss 7, 8, 19(1), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Criminal Procedure Act 1986 (NSW), s 257B
- Fines Act 1996 (NSW), ss 6, 122(2)

Cases:
- Kirk v Industrial Commission of New South Wales [2010] HCA 1
- Latoudis v Casey (1990) 170 CLR 534
- Markarian v The Queen (2005) 228 CLR 357
- Muldrock v The Queen (2011) 244 CLR 120
- Bulga Underground Operations Pty Ltd v Nash (2016) NSWLR 338
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610
- Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464
- McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310
- Ferguson v Nelmac Pty Ltd (1999) 92 IR 188
- Orbit Drilling v The Queen (2012) 35 VR 399
- Jahandideh v R [2014] NSWCCA 178
- R v Cage [2006] NSWCCA 304
- Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100
- Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153