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District Court 22 March 2024

SafeWork NSW v Metsquare Pty Ltd

[2024] NSWDC 84

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 Metsquare Pty Ltd [2024] NSWDC 84
Court: District Court of New South Wales
Date: 22 March 2024
Judge: Strathdee DCJ

Background

Metsquare Pty Ltd was a formwork contractor engaged to supply and install formwork at a 21-storey residential building construction site in Wollongong. The company was a person conducting a business or undertaking (PCBU) under the Work Health and Safety Act 2011 (NSW) and owed a statutory duty to ensure, so far as reasonably practicable, the health and safety of its workers.

On 28 August 2019, an apprentice carpenter employed by Metsquare was instructed to clean up the level 16 deck. He noticed an open penetration that needed covering and walked toward a sheet of plywood to use as a cover. He believed it was a spare sheet nailed down against wind. He did not know it was covering a column penetration. When he lifted it, he fell 2.7 metres through the opening to level 15 below, landing on protruding steel reinforcing bars. One bar penetrated through his upper leg.

The worker suffered serious injuries including wounds to the groin area, a transected urethra, and a penetrating laceration. He required surgery, used a catheter for approximately three months, and sustained ongoing impaired sexual function and psychological injury. The cause of the incident was clear: the plywood penetration cover was not marked as required by the company's own Safe Work Method Statement (SWMS) and Standard Operating Procedure (SOP). Workers had developed a practice of not marking covers despite knowing they were required to do so.

  • Whether Metsquare, as a PCBU, failed to comply with its duty under s 19(1) of the WHS Act to ensure the health and safety of workers, thereby exposing them to a risk of serious injury contrary to s 32 of the WHS Act.
  • What fine was appropriate having regard to the objective seriousness of the offence, relevant aggravating and mitigating factors, the utilitarian value of a guilty plea, and the principles of general and specific deterrence.
  • Whether the prosecutor was entitled to costs.

Decision

Metsquare pleaded guilty to an amended summons. The maximum penalty for the offence under s 32 of the WHS Act is $1,500,000. The court assessed the objective seriousness of the offending by reference to the nature of the risk, the foreseeability and likelihood of harm, the gravity of the actual injury, and the extent to which the risk could have been controlled. The company had its own SWMS and SOP that expressly required penetration covers to be marked and screwed down, yet workers had adopted a practice of not following those requirements. The Safework Australia Guide to Formwork and two approved Codes of Practice under the WHS Act were available to the company and reinforced the need for clearly marked penetration covers.

The court identified several aggravating features: the risk of falling through an unmarked penetration cover was foreseeable, the control measures were straightforward and inexpensive, and the company's own documented systems had not been enforced or followed. No daily prestart inspection was conducted on the day of the incident. The court also noted that the injuries were serious and had lasting consequences.

In mitigation, the court accepted that Metsquare had no prior convictions under work health and safety law, the offending was not part of any planned or organised criminal activity, and the company took remedial steps after the incident including issuing a Hazard Alert and preparing an amended SWMS. The defendant was absent from the sentencing hearing after its solicitor ceased acting, but the court was satisfied the defendant was aware of the proceeding given the prior representation and entry of the plea.

A 25% discount was applied to the fine for the utilitarian value of the guilty plea, entered at a reasonably early stage, in accordance with R v Thomson & Houlton (2000) 49 NSWLR 383 and ss 21A(3)(k) and 22 of the Crimes (Sentencing Procedure) Act 1999 (NSW). The court also took into account the prosecutor's costs that the defendant would be ordered to pay, and the defendant's own costs arising from the breach, when setting the monetary penalty.

Orders Made

  • Metsquare Pty Ltd is convicted.
  • A fine of $600,000 was assessed as appropriate, reduced by 25% for the guilty plea to a fine of $450,000.
  • Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine is to be paid to the prosecutor (SafeWork NSW).
  • The defendant is to pay the prosecutor's costs, as agreed or assessed, pursuant to s 257B of the Criminal Procedure Act 1986 (NSW).

Key Takeaways

  • A PCBU's failure to enforce its own documented safety procedures, including requirements for clearly marking penetration covers, can constitute a serious breach of the duty under s 19(1) of the WHS Act even where written systems exist on paper.
  • Where workers develop a practice of departing from safety requirements and supervisors allow that practice to persist, the company bears responsibility for the resulting risk to workers.
  • A 25% discount for a guilty plea entered at a reasonably early stage remains consistent with the principles in R v Thomson & Houlton and the Crimes (Sentencing Procedure) Act 1999 (NSW).
  • The District Court confirmed that costs orders against a defendant in WHS prosecutions are compensatory rather than punitive, following Latoudis v Casey (1990) 170 CLR 534, and that both the prosecutor's costs and the defendant's own costs from the breach are relevant considerations when setting a monetary penalty.
  • The availability of industry guidance, such as the Safework Australia Guide to Formwork and approved Codes of Practice, is relevant to the assessment of what a PCBU knew or ought to have known about appropriate risk controls.

Legislation and Cases Referenced

Legislation:
- Work Health and Safety Act 2011 (NSW), ss 3, 19(1), 32, 274
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22
- 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
- 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
- R v Thomson & Houlton (2000) 49 NSWLR 383
- SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398
- SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632