Citation: SafeWork NSW v TJN Construction Group Pty Ltd [2024] NSWDC 563
Court: District Court of New South Wales
Date: 28 November 2024
Judge: Strathdee DCJ
Background
TJN Construction Group Pty Ltd was the principal contractor for a renovation project at a four-storey residential property in Seaforth, valued at approximately $770,000. The company engaged a subcontractor, Carbon BMC Pty Ltd, to carry out waterproofing works across several balconies, bathrooms, and a laundry. Two Carbon workers, a licensed waterproofing technician aged 22 and a second-year apprentice aged 21, were undertaking those works on site.
On 2 December 2020, the two workers were applying a highly flammable contact adhesive inside an internal laundry that had no natural ventilation. The mechanical blower that was intended to provide ventilation had flat batteries and was charging at the time. A hot air tool, plugged in and set to maximum temperature outside the laundry door, was heating to approximately 700 degrees Celsius. Approximately ten minutes after the workers began applying adhesive, an explosion occurred, setting the laundry on fire and projecting burning adhesive onto the walls and onto both workers. Neither worker was wearing the personal protective equipment specified in the product's Safety Data Sheet.
SafeWork NSW prosecuted TJN Construction Group under s 32 of the Work Health and Safety Act 2011 (NSW) for failing to comply with its primary duty under s 19(1), in circumstances that exposed the two workers to a risk of serious injury. The defendant entered a guilty plea on 13 May 2024.
Legal Issues
- What was the appropriate assessment of objective seriousness for the offence under s 32 of the WHS Act?
- What weight should be given to mitigating factors, including the guilty plea, remorse, contrition, and the defendant's financial position?
- What discount should apply to reflect the utilty of the guilty plea?
- Whether the defendant's demonstrated financial difficulty warranted a reduction in the fine under s 6 of the Fines Act 1996 (NSW)?
- How should the court treat prosecutor's costs in light of the defendant's limited capacity to pay?
Decision
The court found the offence to be of moderate objective seriousness. The risks posed by using a highly flammable adhesive in an unventilated space, in proximity to a hot air tool capable of igniting vapours, were well-documented in the product's labelling and Safety Data Sheet. TJN, as principal contractor, had responsibility for ensuring safe systems of work on the site, and the failures were significant, even though the actual waterproofing work was performed by the subcontractor's employees.
The court accepted a number of mitigating factors, including that the defendant had no prior convictions, demonstrated genuine remorse and contrition, cooperated with the investigation, and had taken steps to improve its safety practices following the incident. The guilty plea, entered at a relatively early opportunity given the procedural history, attracted a 25% discount.
Having assessed the appropriate base fine at $400,000, the court reduced it by 25% for the guilty plea to $300,000. The court then exercised its discretion under s 6 of the Fines Act 1996 to reduce the fine by a further one third, to $200,000, in light of evidence from the defendant's accountant that the company was in a precarious financial position and lacked the capacity to source formal loans. The court noted that it had also taken into account the defendant's liability for prosecutor's costs when moderating the monetary penalty.
On costs, the court confirmed the established principle that costs orders in this context are compensatory rather than punitive, and that payment of costs to a successful prosecutor is the normal rule. The court acknowledged that it could have regard to both the prosecutor's costs and the defendant's own legal costs when calibrating the fine.
Orders Made
- The defendant is convicted.
- A base fine of $400,000 was reduced by 25% for the guilty plea to $300,000, then further reduced by one third under s 6 of the Fines Act 1996, resulting in a final fine of $200,000.
- Pursuant to s 122(2) of the Fines Act 1996, 50% of the fine is to be paid to the prosecutor.
- Pursuant to s 257B of the Criminal Procedure Act 1986, the defendant is to pay the prosecutor's costs, as agreed or assessed.
Key Takeaways
- A principal contractor's duty under s 19(1) of the WHS Act extends to ensuring safe systems of work for subcontractors' employees on site, even where the hands-on work is performed by others.
- Demonstrated financial incapacity, supported by expert accounting evidence, can enliven the court's discretion under s 6 of the Fines Act 1996 to reduce an otherwise appropriate fine, though the court will take a holistic view of all monetary burdens including costs.
- The District Court confirmed that a guilty plea discount and a Fines Act reduction can both apply sequentially: the 25% plea discount was applied first to the base fine, and the one-third Fines Act reduction was then applied to the discounted figure.
- Clear product labelling and Safety Data Sheets warning of explosion risk from flammable vapours are treated as placing a PCBU on notice of foreseeable hazards, which bears on the assessment of objective seriousness.
- Costs orders against a convicted defendant in WHS prosecutions remain compensatory in nature and are the normal consequence of an unsuccessful defence, though a sentencing court may factor anticipated costs liability into the calibration of any monetary penalty.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19(1), 31, 32, 242B
- Work Health and Safety Regulation 2017 (NSW), cll 44, 51, 52, 299, 312, 344, 355
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22
- Criminal Procedure Act 1986 (NSW), s 257B
- Fines Act 1996 (NSW), ss 6, 122
Cases
- Bulga Underground Operations Pty Ltd 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
- Latoudis v Casey (1990) 170 CLR 534
- Markarian v The Queen (2005) 228 CLR 357
- Muldrock v The Queen (2011) 244 CLR 120
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Jimmy v The Queen (2010) 77 NSWLR 540
- Kirk v Industrial Court (NSW) 234 CLR 531
- Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117