Citation: SafeWork NSW v Paul Whitmarsh (No. 4) [2025] NSWDC 274
Court: District Court of NSW
Date: 23 July 2025
Judge: Russell SC DCJ
Background
On 27 January 2021, AWB Contractors Pty Ltd (AWB), a small marine salvage company operating in Rozelle, was lifting a submerged yacht named "Crazy Train" from the water on behalf of Transport for NSW. During the crane lift, the operation failed and the yacht's mast struck and killed a worker, Mr Max Haywood, who had worked with AWB for approximately 30 years.
SafeWork NSW prosecuted both AWB and its sole director and secretary for work health and safety offences. AWB pleaded guilty to failing, as a person conducting a business or undertaking (PCBU), to ensure the health and safety of its workers under s 19(1) of the Work Health and Safety Act 2011 (NSW) (WHS Act), contrary to s 32. AWB has since gone into liquidation.
The director was tried separately and, following a judge-alone trial, was found guilty in May 2025 (reported at [2025] NSWDC 150) of failing to exercise due diligence as an officer of AWB under s 27 of the WHS Act, thereby exposing Mr Haywood to a risk of death or serious injury. This decision, the fourth in the series, concerns the sentence to be imposed on the director.
Legal Issues
- What was the appropriate penalty for a Category 2 WHS Act offence by a director who failed to exercise due diligence, where the maximum fine is $353,430?
- What weight should be given to mitigating factors including the director's contrition, the financial collapse of the company, the director's personal health impact, and his long working relationship with the deceased?
- Was there evidence of extra-curial punishment (punishment outside the formal legal process, such as reputational or financial harm) that should reduce the penalty?
- How should prosecution costs be apportioned, including whether a 25% reduction was warranted because SafeWork failed to prove one particular element of the charge?
Decision
The court found that the director had failed in multiple concrete respects to exercise due diligence. He did not put appropriate processes in place for the salvage lift, provided no appropriate resources, and failed to verify that personal protective equipment (PPE) was being used. No Safe Work Method Statement (SWMS) existed for this type of salvage and lift operation at the time of the incident, and the safety management system in place was partly informal. All of the procedural safeguards that AWB introduced after the incident, including specific SWMSs for crane operations and hull removal, were absent on the day.
The court considered mitigating factors, including the director's cooperation with the SafeWork investigation, his contrition, his long personal friendship with Mr Haywood, and the financial and reputational harm his business suffered after the incident. However, the court noted that claims of emotional distress were unsupported by medical evidence, and that AWB's liquidation had multiple causes beyond the incident, including trading difficulties from COVID-19 and outstanding tax debt. The court treated the reputational and business harm as a form of extra-curial punishment and took it into account in moderating the penalty.
The court placed significant weight on general deterrence, noting that the harm to Mr Haywood's family was irreparable and that the legal obligation under the WHS Act is to eliminate or minimise risks. The court expressed that the director had created multiple risks and showed little or no regard for worker safety. A fine of $300,000 was imposed, representing approximately 85% of the maximum available penalty of $353,430.
On costs, the court declined to reduce the costs order by 25% on the basis that SafeWork failed to prove one particular element. The court found that the issue took up little time and any separate costs on that point were de minimis (too trivial to warrant separate treatment). The costs of two interlocutory hearings were ordered to be borne by each party, given that each side succeeded on one of the two applications argued.
Orders Made
- The director is convicted and ordered to pay a fine of $300,000.
- Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine is to be paid to the prosecutor (SafeWork NSW).
- Each party is to pay its own costs of the interlocutory hearings held on 13 March 2025 and 26 March 2025.
- Subject to the above, the director is ordered to pay the prosecutor's costs.
Key Takeaways
- A director's failure to exercise due diligence under s 27 of the WHS Act can attract a fine close to the statutory maximum where the failures are multiple and concrete, including the absence of any appropriate SWMS, failure to provide resources, and failure to verify PPE use.
- Extra-curial punishment, including documented reputational harm and business collapse following a workplace death, is a recognised factor in WHS sentencing that courts may weigh in moderating a penalty, but only to the extent the evidence supports it.
- Claimed personal impacts such as emotional distress carry less weight in sentencing where they are unsubported by medical evidence.
- Where a prosecutor fails on a discrete element of a charge that consumed little hearing time, that failure does not automatically justify a proportionate reduction in the costs order against the defendant.
- Under s 122(2) of the Fines Act 1996 (NSW), the court may direct that a portion of a WHS fine be paid to the prosecuting authority. Here, the District Court directed that half the $300,000 fine be paid to SafeWork NSW.
Legislation and Cases Referenced
Legislation
- Work Health and Safety Act 2011 (NSW), ss 3, 19, 27, 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22, 26, 27, 28, 30A, 30B, 30D, 30E
- Fines Act 1996 (NSW), ss 6, 122
- Corporations Act 2001 (Cth), s 588G
Cases
- SafeWork NSW v Paul Whitmarsh (No. 3) [2025] NSWDC 150
- Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338
- Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96
- Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
- Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610
- Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
- Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465
- Baumer v R [1988] HCA 67; (1988) 166 CLR 51
- R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566
- Mahdi Jahandideh v The Queen [2014] NSWCCA 178
- BW v R [2011] NSWCCA 176
- Silvano v R [2008] NSWCCA 118
- R v Wilhelm [2010] NSWSC 378
- R v Wilkinson (No. 5) [2009] NSWSC 432