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District Court 17 May 2024

SafeWork NSW v Edstein Creative Pty Ltd

[2024] NSWDC 178

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 Edstein Creative Pty Ltd [2024] NSWDC 178
Court: District Court of New South Wales
Date: 17 May 2024
Judge: Strathdee DCJ

Background

The defendant, a stone masonry company operating across Taree, Sandgate, and Point Clare, fabricated and installed engineered stone products for residential and commercial clients in the Newcastle and Hunter regions. Engineered stone contains approximately 90% crystalline silica, a Category 1A carcinogen. A worker referred to as AB was employed by the company from 2007 and worked as an installation team leader from 2008, regularly travelling to customer premises to install pre-cut manufactured stone benchtops.

AB's installation work frequently required on-site dry cutting, drilling, trimming, and polishing of engineered stone using power tools. These tasks generated respirable crystalline silica (RCS) dust in his breathing zone. Between January 2012 and November 2018, the company's systems did not require workers to wear respiratory protective equipment, nor did they mandate a continuous water delivery system or effective extraction equipment during cutting.

SafeWork NSW prosecuted the company as a person conducting a business or undertaking (PCBU) under the Work Health and Safety Act 2011 (NSW). The charge was that the company failed to comply with its duty under section 19(1) of that Act to ensure, so far as reasonably practicable, the health and safety of its workers, and that this failure exposed AB to a risk of serious injury, contrary to section 32.

  • Whether the company, as a PCBU, failed its health and safety duty to workers under section 19(1) of the WHS Act
  • The appropriate level of objective seriousness to assign to the offence for sentencing purposes
  • What mitigating and aggravating factors applied, including the utility of a guilty plea
  • The appropriate fine, including the discount to be applied for the guilty plea
  • The question of costs payable to the prosecutor

Decision

The company pleaded guilty to the charge. Strathdee DCJ assessed the objective seriousness of the offence, having regard to the duration of the exposure risk (approximately six years), the known hazards of RCS and silicosis, and the fact that the company had received detailed safety information from its primary supplier, Caesarstone, as well as other suppliers, from as early as 2008. Safety data sheets and fabrication guides identifying RCS risks and recommended control measures had been provided to the company before and during the relevant period.

The court found that the company's control measures during the relevant period were inadequate. Informal practices, such as using a handheld vacuum and a water bottle to wet down cutting areas, fell short of what was required. The company had implemented some controls at its Taree facility but not consistently or effectively for its installation workers operating off-site.

In mitigation, the court considered the company's cooperation with SafeWork NSW during the investigation, character references from multiple individuals, the guilty plea, and evidence of remorse and contrition. The court also noted a stay of proceedings that had occurred while the particulars of the charge were being finalised, after which the plea was entered promptly. A 25% discount was applied for the utilitarian value of the guilty plea, consistent with the principles in R v Thomson & Houlton (2000) 49 NSWLR 383.

The court determined a base fine of $500,000 before applying the plea discount. It noted that costs are compensatory rather than punitive, and confirmed it had taken the company's liability for prosecutor's costs into account when fixing the monetary penalty. Costs questions were reserved due to unresolved interlocutory cost matters.

Orders Made

  • The defendant is convicted of the charge under section 32 of the WHS Act
  • A base fine of $500,000 was reduced by 25% for the guilty plea, resulting in a fine of $375,000
  • Pursuant to section 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 (order amended on 24 May 2024)
  • The question of costs is otherwise reserved, with parties directed to contact the judge's associate within seven days if costs cannot be agreed

Key Takeaways

  • A PCBU's duty under section 19(1) of the WHS Act extends to off-site installation workers exposed to RCS during dry cutting of engineered stone, not only to workers at fixed factory premises.
  • The District Court assessed the offence as objectively serious given the six-year duration of the risk, the high silica content of engineered stone, and the company's access to supplier documentation identifying both the hazard and recommended controls throughout the relevant period.
  • Informal dust control measures, such as a handheld vacuum and a water bottle, did not satisfy a PCBU's obligation to minimise RCS exposure; the court found these fell short of requiring either continuous water delivery systems or extraction equipment attached to cutting tools.
  • A 25% guilty plea discount applied where proceedings had been stayed pending finalisation of charge particulars and the plea was entered after an amended summons was filed, reflecting the utilitarian value of the plea under R v Thomson & Houlton and section 22 of the Crimes (Sentencing Procedure) Act 1999 (NSW).
  • Costs orders in WHS prosecutions are compensatory in nature, and a sentencing court may take into account the defendant's prospective liability for prosecutor's costs when determining the monetary penalty.

Legislation and Cases Referenced

Legislation
- Work Health and Safety Act 2011 (NSW), ss 19(1), 32
- Work Health and Safety Regulation 2011 (NSW); Work Health and Safety Regulation 2017 (NSW)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 21A, 22
- Criminal Procedure Act 1986 (NSW)
- Fines Act 1996 (NSW), s 122(2)
- Workers Compensation (Dust Diseases) Act 1942 (NSW)

Cases
- R v Thomson & Houlton (2000) 49 NSWLR 383
- Latoudis v Casey (1990) 170 CLR 534
- Environmental Protection Authority v Barnes [2006] NSWCCA 246
- Bulga Underground Operations v Nash (2016) 93 NSWLR 338
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Markarian v The Queen (2005) 228 CLR 357
- Muldrock v The Queen (2011) 244 CLR 120
- Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610
- Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464
- Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117
- Orbit Drilling v The Queen (2012) 35 VR 399
- Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39