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District Court 15 December 2023

SafeWork NSW v B & E Foods Pty Ltd & Ors

[2023] NSWDC 569

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 B & E Foods Pty Ltd & Ors [2023] NSWDC 569
Court: District Court of New South Wales
Date: 15 December 2023
Judge: Strathdee DCJ

Background

A wholesale food and meat supply business operated three imported roll meat slicing machines at its Blacktown premises. The machines used a guillotine blade to slice frozen meat, and at the time of their importation and installation, no fixed guarding existed at either the front or rear of the machines to prevent worker access to the blade.

In January 2020, a labour hire worker suffered a thumb amputation after contact with one of the machine blades. SafeWork NSW issued prohibition notices, and the business installed front tunnel guards as a temporary measure. Improvement notices followed in February 2020, requiring further guarding at the rear of the machines. Despite those notices and a subsequent inspection regime, a second serious injury occurred: a production worker supplied by a labour hire company was exposed to a risk of serious injury through ongoing inadequate guarding of the machines.

Four defendants faced sentencing: the host business (the primary operator), its sole director (as an officer of the business), a related importer that had purchased and brought in the machines on the operator's behalf, and the labour hire company that had supplied the injured worker to the host site. All four pleaded guilty to offences under section 32 of the Work Health and Safety Act 2011 (NSW).

  • What was the appropriate sentence for each defendant, having regard to the objective seriousness of the offence and each defendant's individual culpability?
  • What discount should be applied to reflect each defendant's guilty plea and the utility of that plea?
  • How should the closely related corporate structure of the defendants affect the parity of sentences across them?
  • What weight should be given to mitigating factors, including remorse, cooperation, post-incident remediation, and good corporate citizenship?
  • Should each defendant be ordered to pay the prosecutor's costs, and how should the prospect of costs liability affect the quantum of the fine?

Decision

Strathdee DCJ convicted all four defendants and imposed fines calibrated to reflect each party's degree of direct involvement in the failures. The court accepted the defendants' submission that, although each was a separate legal entity, the operator was the primary business and the importer and labour hire company were composite parts of that enterprise. As a result, strict parity was not required: the operator bore the greatest culpability, and the importer and labour hire company were treated as materially less culpable.

The court identified several aggravating features, including that a prior amputation incident in January 2020 had prompted prohibition notices and improvement notices, yet adequate rear guarding was still not in place when the second worker was exposed to risk. The fact that the operator had been placed on formal notice of the hazard and had not fully remedied it elevated the objective seriousness of the offending.

Mitigating factors acknowledged by the court included the guilty pleas, expressions of remorse and contrition, post-incident remediation steps, the defendants' otherwise good compliance records, and cooperation with the regulator. Each defendant received a 25% reduction on the base fine to reflect the utilility of the guilty plea, consistent with the approach in R v Thomson & Houlton (2000) 49 NSWLR 383.

The court also noted that each defendant would bear both the prosecutor's costs order and its own legal costs, and took those financial burdens into account when fixing the base fines, in accordance with Environmental Protection Authority v Barnes [2006] NSWCCA 246. Fifty percent of each fine was directed to be paid to the prosecutor pursuant to section 122(2) of the Fines Act 1996 (NSW).

Orders Made

  • B & E Foods Pty Ltd convicted; base fine of $500,000 reduced by 25% to $375,000; 50% of fine payable to the prosecutor; costs payable to the prosecutor as agreed or assessed.
  • Xu Chun Dong (sole director) convicted; base fine of $50,000 reduced by 25% to $37,500; 50% of fine payable to the prosecutor; costs payable to the prosecutor as agreed or assessed.
  • E & J International Pty Ltd convicted; base fine of $350,000 reduced by 25% to $262,500; 50% of fine payable to the prosecutor; costs payable to the prosecutor as agreed or assessed.
  • NL Workforce Solutions Pty Ltd convicted; base fine of $350,000 reduced by 25% to $262,500; 50% of fine payable to the prosecutor; costs payable to the prosecutor as agreed or assessed.

Key Takeaways

  • The District Court confirmed that where multiple closely related corporate defendants are sentenced together for WHS offences, strict sentencing parity is not required: relative culpability and degree of direct involvement in the conduct are legitimate bases for differentiating fines between entities.
  • A prior incident resulting in a prohibition notice, followed by improvement notices requiring further remediation, substantially elevated the objective seriousness of subsequent WHS breaches arising from the same unguarded machinery.
  • Under the WHS Act 2011 (NSW), duties extend across the supply chain: the importer of plant, the host business operating that plant, and the labour hire company supplying workers to the host site each carried separate, enforceable health and safety duties.
  • A 25% guilty plea discount was applied consistently across all four defendants, reflecting the utilility of the pleas at the stage they were entered.
  • Costs orders against defendants under section 257B of the Criminal Procedure Act 1986 (NSW) are a relevant consideration when fixing the quantum of the fine, and the court took both the prosecutor's costs and each defendant's own legal costs into account in setting the base penalty.

Legislation and Cases Referenced

Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(1), 25(2), 27(1), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Criminal Procedure Act 1986 (NSW), s 257B
- Fines Act 1996 (NSW), s 122(2)

Cases:
- Bulga Underground Operations v Nash (2016) 93 NSWLR 338
- Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610
- Environmental Protection Authority v Barnes [2006] NSWCCA 246
- Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384
- Latoudis v Casey (1990) 170 CLR 534
- 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
- Muldrock v The Queen (2011) 244 CLR 120
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Orbit Drilling v The Queen (2012) 35 VR 399
- R v Cage [2006] NSWCCA 304
- R v MA [2004] NSWCCA 92
- R v Miria [2009] NSWCCA 68
- R v MMK [2006] NSWCCA 272
- R v Thomson & Houlton (2000) 49 NSWLR 383
- R v Youkhana [2004] NSWCCA 412
- SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398
- SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632
- SafeWork NSW v Poletti Corporation [2019] NSWDC 491