Citation: SafeWork NSW v Stoneworx Marble & Granite Pty Ltd; SafeWork NSW v Doueihi [2025] NSWDC 147
Court: District Court of New South Wales
Date: 2 May 2025
Judge(s): Russell SC DCJ
Background
SafeWork NSW inspected a stonemason's premises in March 2019, issuing Improvement Notices relating to worker exposure to respirable crystalline silica (RCS), a substance that can cause silicosis. SafeWork then commenced prosecutions against the corporate defendant (as the duty-holder under the Work Health and Safety Act 2011 (NSW)) and its officer, alleging breaches of health and safety duties. Both summonses were filed in October 2021, more than two years after the inspection.
The defendants filed Notices of Motion in December 2022 arguing the proceedings had been commenced outside the two-year limitation period in s 232(1)(a) of the WHS Act. Those motions were abandoned in July 2023. Both defendants then negotiated amended charges and entered guilty pleas in March 2024.
Shortly before the scheduled sentencing hearing, the Court of Criminal Appeal handed down its decision in Prime Marble & Granite Pty Ltd v SafeWork NSW [2024] NSWCCA 105. That decision, on closely analogous facts, held that SafeWork's knowledge of dangerous dust concentrations amounted to notice of the relevant offence, meaning proceedings commenced more than two years later were out of time and an abuse of process. SafeWork then withdrew the amended summonses in the present proceedings. The question of costs was left for the District Court to determine.
Legal Issues
- Whether the court should order SafeWork to pay the defendants' costs after the prosecution was withdrawn
- How the costs principles from Latoudis v Casey (1990) 170 CLR 534 and Nash v Resource Pacific Pty Ltd (No 4) [2019] NSWSC 1253 apply where a WHS prosecution is withdrawn
- Whether, and to what extent, the defendants' own conduct (including abandoning the limitation argument) affected the costs outcome
- Whether the shared erroneous understanding of the law by both parties was a relevant circumstance in the exercise of the costs discretion
Decision
Russell SC DCJ confirmed that the power to award costs in these circumstances is discretionary under s 257C of the Criminal Procedure Act 1986 (NSW). His Honour applied the principles set out by Walton J in Nash v Resource Pacific (No 4), which draw on the High Court's analysis in Latoudis v Casey. Under those principles, a successful defendant in summary proceedings ordinarily has a reasonable expectation of recovering costs, but that expectation is not absolute. There will be cases where, having regard to all the circumstances, it would not be just and reasonable to order the prosecutor to pay all of the defendant's costs.
The court noted that no formal finding was made in these proceedings that the prosecutions were commenced out of time. What could be inferred was that SafeWork formed the view, following Prime Marble, that the proceedings were out of time or that there was a real risk a court would so find. Critically, the court found that both sides had operated under a shared misunderstanding of the law: after the defendants abandoned their limitation motions in July 2023, both the prosecutor and the defendants proceeded on the common (but erroneous) assumption that the proceedings were validly within time.
His Honour held that it was this shared error, and the defendants' own decision to abandon the limitation argument, that caused the proceedings to continue well beyond the point they should have. Because both parties contributed to the prolonging of the litigation through a mutual misreading of the law, it was not just and reasonable to require SafeWork to bear all of the defendants' costs. The court drew on the Latoudis principle that a court may decline to order full costs where the defendant's own post-offence conduct contributed to the continuation of the prosecution.
The just and reasonable outcome, the court concluded, was that SafeWork should pay the defendants' costs up to 19 July 2023 (the date the limitation motions were abandoned), with each party to bear its own costs from that date onwards.
Orders Made
- SafeWork NSW to pay each defendant's costs of the proceedings incurred up to 19 July 2023
- From 19 July 2023 onwards, each party to pay their own costs
Key Takeaways
- A successful defendant in WHS summary proceedings has a reasonable expectation of recovering costs when a prosecution is withdrawn, but that expectation is not equivalent to an entitlement, and the discretion must be exercised with regard to all the circumstances.
- Where both the prosecutor and the defendants proceeded on a shared erroneous understanding of the law, causing proceedings to continue longer than they should have, the District Court found it was not just and reasonable to order the prosecutor to pay all of the defendants' costs.
- The defendants' decision to abandon their limitation period argument was treated as conduct contributing to the prolonged litigation, and was directly relevant to limiting the costs order in the prosecutor's favour.
- Under the Latoudis principles as applied in WHS prosecutions, a court may decline to award a defendant their full costs in circumstances arising from the defendant's own conduct of the proceedings, even where the prosecution ultimately fails or is withdrawn.
- The Prime Marble decision did not change the law on the two-year WHS limitation period; it declared what the correct law had always been, which the District Court treated as significant when assessing the parties' shared misunderstanding.
Legislation and Cases Referenced
Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(1), 27, 32, 232(1)(a)
- Criminal Procedure Act 1986 (NSW), ss 257C, 257D, 257G
Cases:
- Prime Marble & Granite Pty Ltd v SafeWork NSW [2024] NSWCCA 105
- Nash v Resource Pacific Pty Ltd (No 4) [2019] NSWSC 1253
- Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
- Grant v R [2024] NSWCCA 78