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District Court 11 July 2025

SafeWork NSW v Duralina Pty Ltd; SafeWork NSW v Mill HR Pty Ltd

[2025] NSWDC 253

Other
CRIMINAL LAW PROSECUTION WORK HEALTH AND SAFETY DUTY OF PERSONS UNDERTAKING BUSINESS RISK OF DEATH OR SERIOUS INJURY MAXIMUM PENALTY COSTS

Citation: SafeWork NSW v Duralina Pty Ltd; SafeWork NSW v Mill HR Pty Ltd [2025] NSWDC 253
Court: District Court of New South Wales
Date: 11 July 2025 (amended 20 August 2025)
Judge: Strathdee DCJ

Background

Two related companies, a durum mill operator and a labour-hire company that exclusively supplied workers to that operator, were prosecuted by SafeWork NSW following a serious workplace injury at a milling site in Westdale, New South Wales. Both companies shared the same sole director and the same registered address. The mill operator ran a facility producing semolina and flour; the labour-hire company employed all on-site workers and provided them to the mill operator.

On 3 September 2021, a worker employed by the labour-hire company suffered a severe crush injury while attempting to troubleshoot a milling machine fault during his afternoon shift. Following an unplanned outage, the worker received telephone instructions from a senior colleague to restart the machines. Due to background noise, the worker misunderstood a verbal instruction and placed his hand into the moving rollers of a digital milling machine rather than going to the ground floor beneath it. His hand became trapped between the rollers for approximately 60 to 90 minutes until emergency services freed it. He sustained complete or partial loss of all fingers on his right hand, excluding his thumb.

Both companies pleaded guilty to category 2 offences under the Work Health and Safety Act 2011 (NSW). The maximum penalty for a body corporate at the relevant time was approximately $1,782,579. The sentencing proceedings required the court to assess the appropriate penalty for each defendant, taking into account the objective seriousness of the offending, mitigating factors, capacity to pay, and costs.

  • What penalty was appropriate for the mill operator (Duralina Pty Ltd), which breached its duty under s 21(2) of the WHS Act to ensure the milling plant was without risks to health and safety?
  • What penalty was appropriate for the labour-hire company (Mill HR Pty Ltd), which breached its general duty under s 19(1) of the WHS Act to ensure the health and safety of its workers so far as reasonably practicable?
  • To what extent should mitigating factors, including early guilty pleas, limited financial capacity, and the defendants' own costs, reduce the penalties?
  • Whether the court should exercise its discretion under s 6 of the Fines Act 1996 (NSW) to further reduce the fine imposed on the mill operator.
  • Whether a conditional release order under s 10 of the Crimes (Sentencing Procedure) Act 1999 (NSW) was appropriate for the labour-hire company in lieu of a fine.

Decision

Strathdee DCJ convicted both companies. The sentencing analysis took into account the objective seriousness of the offending, including that the worker suffered significant permanent injury, that existing safety procedures were inadequate and did not specifically address the digital milling machine involved, and that no interlock or electronic device prevented access to the rollers when guarding was removed. The emergency stop was located approximately two metres from the machine, meaning a worker operating it directly could not activate it.

For the mill operator, the court identified $100,000 as the appropriate starting fine. That figure was then reduced by 25 per cent for the utility of the early guilty plea, bringing it to $75,000. The court then exercised its discretion under s 6 of the Fines Act to reduce the fine by a further 25 per cent, resulting in a final fine of $56,250. The court noted that it was entitled to take the defendants' liability for the prosecutor's costs into account when setting the monetary penalty, particularly given evidence of a limited capacity to pay, and that it could also have regard to the defendants' own costs flowing from the breach.

For the labour-hire company, the court determined that a conviction and conditional release order under s 10 of the Crimes (Sentencing Procedure) Act 1999 (NSW) for a period of 12 months was the appropriate outcome, rather than a fine. The court noted that Mill HR's role was limited to supplying labour and that it had relied entirely on the mill operator's procedures and systems rather than having its own. Both defendants were also ordered to pay the prosecutor's costs.

Orders Made

SafeWork NSW v Mill HR Pty Ltd (2023/268072):
- Mill HR is convicted.
- The court exercises its discretion to discharge Mill HR on condition that it enter into a conditional release order under s 10 of the Crimes (Sentencing Procedure) Act 1999 (NSW) for 12 months.

SafeWork NSW v Duralina Pty Ltd (2023/267246):
- Duralina is convicted.
- A fine of $56,250 is imposed (being $100,000, reduced by 25% for the early plea to $75,000, and further reduced by 25% under s 6 of the Fines Act 1996 (NSW)).
- Pursuant to s 122(2) of the Fines Act 1996 (NSW), a moiety of 50% of the fine is payable to the prosecutor.
- Both defendants are to pay the prosecutor's costs as agreed or assessed.

Key Takeaways

  • A labour-hire company that supplies workers exclusively to another entity remains a PCBU with its own duty under s 19(1) of the WHS Act, even where it relies entirely on the host entity's systems and procedures.

  • Under the WHS Act sentencing framework, the objective seriousness of the offending is a primary consideration, and a fine must satisfy all relevant sentencing purposes including general deterrence, even where financial capacity is limited.

  • A sentencing court may take into account a defendant's liability to pay the prosecutor's costs and its own consequential costs when calibrating any monetary penalty, particularly where capacity to pay is in evidence.

  • The District Court confirmed that costs orders against defendants in WHS prosecutions are compensatory in nature, not punitive, consistent with the High Court's statement in Latoudis v Casey (1990) 170 CLR 534.

  • Where two related entities are sentenced for the same incident, the court may impose materially different penalties reflecting the distinct nature and degree of each defendant's duty and its role in the circumstances giving rise to the offending.

Legislation and Cases Referenced

Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(1), 21(2), 31, 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 10, 21A, 22
- Fines Act 1996 (NSW), ss 6, 122

Cases:
- Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
- Bulga Underground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37
- Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25
- Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39
- Environmental Protection Authority v Barnes [2006] NSWCCA 246
- Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610; [2000] NSWIRComm 71
- Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117; [2005] NSWIRComm 61
- McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310; [2004] NSWIRComm 353
- Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464
- Inspector Bestre v Jontari Pty Ltd [2007] NSWIRComm 190
- Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100
- Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153
- Orbit Drilling Pty Ltd v The Queen (2012) 35 VR