Citation: SafeWork NSW v Orica Australia Pty Ltd [2024] NSWDC 140
Court: District Court of New South Wales
Date: 1 May 2024
Judge(s): Russell SC DCJ
Background
Orica Australia Pty Ltd operates an industrial chemical manufacturing facility at Kooragang Island, New South Wales. Part of that facility is a dedicated shed used to produce cobalt catalyst pellets. Two workers employed in that shed were exposed to cobalt dust generated during the manufacturing process.
One of those workers developed occupational asthma as a result of the exposure. SafeWork NSW prosecuted Orica under the Work Health and Safety Act 2011 (NSW) for failing to comply with its health and safety duty in a manner that exposed both workers to a risk of death or serious injury.
Orica pleaded guilty to a Category 1 offence under section 31 of the WHS Act. SafeWork relied on recklessness as the fault element, meaning it alleged Orica foresaw the possibility of the risk to those workers but continued its conduct regardless.
Legal Issues
- Whether Orica's conduct satisfied the recklessness element of a Category 1 offence under section 31 of the WHS Act
- The appropriate level of fine having regard to the objective seriousness of the offence, any aggravating and mitigating factors, and the purposes of sentencing
- The discount to be applied to the fine in light of Orica's guilty plea
- How costs should be dealt with, including costs reserved from an earlier interlocutory motion
Decision
Orica pleaded guilty to the charge, and the court proceeded to sentence. The prosecution case rested on multiple identified failures spanning several years. These included inadequate local extraction ventilation (LEV) in the cobalt shed, failure to act on findings from a 2014 risk assessment report and a 2019 occupational hygiene report, insufficient personal protective equipment protocols, the absence of a decontamination facility or process, and inadequate cleaning and training procedures.
The court assessed the objective seriousness of the offence by reference to the extended duration and multiplicity of the failures, the known and documented risks associated with cobalt dust, and Orica's failure to take corrective action following its own commissioned reports. The maximum penalty for the offence is a fine of $3,000,000.
The court determined the appropriate fine before discounting for the guilty plea was $1,500,000. A 20 percent discount was applied to reflect the utilitarian value of the plea under section 22 of the Crimes (Sentencing Procedure) Act 1999, producing a final fine of $1,200,000. The court also ordered, pursuant to section 122(2) of the Fines Act 1996, that 50 percent of the fine be paid to the prosecutor.
On costs, the court ordered Orica to pay SafeWork's prosecution costs generally. However, in relation to a Notice of Motion that Orica had filed in 2022 to set aside a subpoena, and which was dismissed without determination after SafeWork sought the relevant information from alternative sources, the court declined to conduct a "trial within a trial" to determine where the merits lay. Each party was ordered to bear its own costs of that motion.
Orders Made
- Orica Australia Pty Ltd convicted and ordered to pay a fine of $1,200,000
- 50% of the fine to be paid to the prosecutor (SafeWork NSW), pursuant to section 122(2) of the Fines Act 1996
- Each party to pay its own costs of Orica's Notice of Motion filed 28 July 2022
- Orica to pay the prosecutor's costs of the proceedings generally (subject to the costs order above)
Key Takeaways
- A Category 1 offence under section 31 of the WHS Act based on recklessness requires that the offender foresaw the possibility of a risk of death or serious injury to an individual through its conduct and continued that conduct regardless, following the High Court's formulation in Aubrey v R (2017) 260 CLR 305.
- Documented internal risk assessments and occupational hygiene reports that identify hazards but go unaddressed can form a significant part of the prosecution's case on objective seriousness, because they establish that the risk was known and the failure to act was sustained.
- The District Court applied a 20 percent guilty plea discount to a pre-discount fine of $1,500,000, resulting in a penalty of $1,200,000 out of a maximum of $3,000,000.
- Under section 122(2) of the Fines Act 1996, the court has power to direct that a portion of a WHS fine be paid to the prosecuting authority, and exercised that power here by allocating 50 percent of the fine to SafeWork NSW.
- Where an interlocutory costs question cannot be resolved without effectively conducting a mini-trial on the merits, a court may consider ordering each party to bear its own costs of that interlocutory step as the fairest available outcome.
Legislation and Cases Referenced
Legislation:
- Work Health and Safety Act 2011 (NSW), ss 3, 19, 31
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22
- Fines Act 1996 (NSW), ss 6, 122
Cases:
- Aubrey v R [2017] HCA 18; (2017) 260 CLR 305
- Baumer v R [1988] HCA 67; (1988) 166 CLR 51
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
- BW v R [2011] NSWCCA 176
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- Mahdi Jahandideh v The Queen [2014] NSWCCA 178
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Nash v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566
- R v Wilkinson (No. 5) [2009] NSWSC 432
- SafeWork NSW v Synergy Scaffolding Services Pty Ltd [2022] NSWDC 584
- Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
- Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465