Citation: SafeWork NSW v Buildmark Developments Pty Ltd [2024] NSWDC 439
Court: District Court of NSW
Date: 20 September 2024
Judge: Scotting DCJ
Background
A construction company engaged to build two semi-detached dwellings in Leichhardt excavated a trench adjacent to the brick wall of a neighbouring property in June 2021. The trench was left uncovered and filled with rainwater after works paused due to rainfall. In early July 2021, a large section of the neighbouring wall collapsed, sending debris onto the construction site and into the adjoining property.
The company's director also served as site supervisor and was involved in carrying out the excavation works directly. The company held structural engineering plans that specified the conditions under which excavation near existing footings could proceed, but those specifications were not followed. No risk assessment was conducted, the Safe Work Method Statement did not address structural integrity risks, no competent person was consulted when the sandstone footings of the neighbouring property were exposed, and no monitoring of the trench or adjacent wall occurred after excavation ceased.
Four tenants were present at the neighbouring property on the day of the collapse. None were injured. The property was subsequently declared uninhabitable. SafeWork NSW prosecuted both the company and its director for failing to ensure the health and safety of other persons contrary to the Work Health and Safety Act 2011 (NSW).
Legal Issues
- Whether the construction company contravened its duty under s 19(2) of the Work Health and Safety Act 2011 (NSW) by failing to ensure the health and safety of other persons and thereby exposing them to a risk of death or serious injury, contrary to s 32 of the Act
- Whether the director, as an officer of the company, failed to exercise due diligence to ensure the company complied with its health and safety duty under s 27(1) of the Act, contrary to s 32
- What penalties were appropriate for each offender, having regard to objective seriousness, mitigating and aggravating factors, the pleas of guilty, and the financial capacity of the offenders
Decision
Both the company and its director pleaded guilty. The court proceeded to sentence each offender, taking into account an Agreed Statement of Facts and an affidavit from the director. The court identified a series of failures: no risk assessment, an inadequate Safe Work Method Statement, failure to engage a competent engineer when the excavation exposed the neighbouring footings, and failure to monitor or pump out the open trench.
A prior work health and safety matter dealt with in the Local Court in January 2021 was noted as an aggravating factor. The court accepted that the offenders were genuinely remorseful and that the director had a reasonable, if mistaken, belief that the architects would transmit the relevant reports to the structural engineers. No persons were physically injured.
The court took into account the financial position of both offenders. The director had committed his personal savings to the business, carried a mortgage, supported a family, and the company was operating at a substantial loss. The court considered these circumstances relevant to the quantum of the fine and to the appropriateness of alternatives to a larger financial penalty.
For the company, the court imposed a fine of $12,000 (reduced by 25 percent from $16,000 to reflect the guilty plea), with 50 percent payable to the prosecutor under s 122(2) of the Fines Act 1996. For the director, the court considered a monetary fine would risk financial ruin and instead made a Training Order and a Work Health and Safety Undertaking under s 239 of the Act.
Orders Made
Buildmark Developments Pty Ltd:
- Convicted
- Fined $12,000 (25% discount applied to reflect guilty plea)
- 50% of the fine to be paid to the prosecutor pursuant to s 122(2) of the Fines Act 1996
Mark John Khoury:
- Convicted
- Training Order requiring completion, by 15 August 2025, of:
- Certificate IV in Work Health and Safety (The Management Edge Pty Ltd / TME Training)
- WHS Due Diligence for CEOs, Directors and Managers course (Coastal OHS Services Pty Ltd / Leading Safety Training)
- SafeWork NSW Webinar for Construction Site Supervisors
- Work Health and Safety Undertaking entered into under s 239 of the Work Health and Safety Act 2011, on the following conditions:
- Matter adjourned to 22 September 2025; attendance required unless evidence of training completion is provided to SafeWork NSW by 4pm on 15 August 2025
- Not to commit any offence under the Work Health and Safety Act 2011 during the adjournment period
- To appear before the Court if called upon during the adjournment
- To provide evidence of training completion to the Court and SafeWork NSW by 5pm on 15 August 2025
- To notify the District Court Registrar (Downing Centre) of any change of address for service
Both offenders:
- To pay the prosecutor's costs of the proceedings, as agreed or assessed
Key Takeaways
- A company's prior work health and safety matters, even if dealt with by a lower court, can be treated as an aggravating factor when sentencing for a subsequent WHS offence.
- Under the Work Health and Safety Act 2011 (NSW), both a company and its officer can face separate charges arising from the same incident: the company under s 19(2) for failing to ensure the health and safety of others, and the officer under s 27(1) for failing to exercise due diligence to ensure compliance.
- The District Court accepted that a genuine but mistaken belief that a third-party professional had transmitted relevant safety reports was a mitigating circumstance, though it did not excuse the underlying failures.
- Where an offender's financial position is such that a substantial monetary penalty would cause severe personal hardship, the sentencing court may regard a Training Order and WHS Undertaking as the more appropriate response, particularly where rehabilitation prospects are good and no physical injury resulted.
- Leaving an open excavation trench adjacent to a neighbouring structure without monitoring, risk assessment, or engineering oversight was found to expose persons to a risk of death or serious injury, even though no one was physically harmed when the wall ultimately collapsed.
Legislation and Cases Referenced
Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(2), 27(1), 32, 239
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Fines Act 1996 (NSW), s 122(2)
Cases:
- Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37
- Jahandideh v R [2014] NSWCCA 178
- R v Borkowski (2009) 195 A Crim R 1
- R v Thomson & Houlton (2000) 49 NSWLR 383