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

Catchwords: CRIMINAL LAW – prosecution – work health and safety- duty of persons undertaking business – risk of death or serious injury – maximum penalty
COSTS – prosecutor’s costs

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

Cases Cited: Bulga Underground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37
Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610; [2000] NSWIRComm 71
Environmental Protection Authority v Barnes [2006] NSWCCA 246
Ferguson v Nelmac Pty Ltd (1999) 92 IR 188
Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384
Haynes v CI & D Manufacturing Pty Limited (No 2); Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455
Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100
Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153
Inspector Sara Bestre v Jontari Pty Ltd; Inspector Sara Bestre v Tempo Services Pty Ltd; Inspector Jessica Doyle v Gignen Pty Ltd; Inspector Jessica Doyle v Tempo Services Pty Ltd [2007] NSWIRComm 190
Jahandideh v R [2014] NSWCCA 178
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464
Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25
McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310; [2004] NSWIRComm 353
Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117; [2005] NSWIRComm 61
Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39
Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
Orbit Drilling Pty Ltd v The Queen (2012) 35 VR 399; [2012] VSCA 82
R v Cage [2006] NSWCCA 304
R v MA (2004) 145 A Crim R 434; [2004] NSWCCA 92
R v Miria [2009] NSWCCA 68
R v MMK (2006) 164 A Crim R 481; [2006] NSWCCA 272
R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309
R v Youkhana [2004] NSWCCA 412
Rahme v R (1989) 43 A Crim R 81
SafeWork NSW v Harris Holdings NSW Pty Ltd; SafeWork NSW v Harry Zizikas [2017] NSWDC 299
SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632
SafeWork NSW v Cosentino Australia Pty Ltd (No 2) [2018] NSWDC 182
SafeWork NSW v Grandcity Constructions Pty Ltd; SafeWork NSW v Cai [2018] NSWDC 398
Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266
Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465
WorkCover Authority of NSW v Sarjame Storage Pty Ltd [2015] NSWDC 151
WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700; [2000] NSWIRComm 142

Category: Sentence

Parties: SafeWork NSW (Prosecutor)
Duralina Pty Ltd (Defendant)
Mill HR Pty Ltd (Defendant)

Representation: Counsel:
N Evans (Prosecutor)
R Reitano (Defendants)
Solicitors:
Department of Customer Service (Prosecutor)
Wotton & Kearney (Defendants)

File Number(s): 2023/267246 and 2023/268072

Publication restriction: Nil

JUDGMENT

1. Mill HR Pty Ltd (Mill HR) has pleaded guilty to the following offence:

“That as a person who had a health and safety duty under s 19(1) of the Work Health and Safety Act 2011 (the WHS Act), it failed to comply with that duty and thereby exposed workers, in particular Hanna Gerges (Mr Gerges), to a risk of serious injury contrary to s 32 of the WHS Act.”

2. Duralina Pty Ltd (Duralina) has pleaded guilty to the following offence:

“That as a person who had a health and safety duty under s 21(2) of the WHS Act, it failed to comply with that duty and thereby exposed workers, in particular Mr Gerges to a risk of serious injury contrary to s 32 of the WHS Act.”

3. The duty Mill HR breached concerned a general duty to ensure, so far as is reasonably practicable, the health and safety workers: s 19(1) of the Work Health and Safety Act 2011 (NSW) (WHS Act). The duty Duralina breached concerned a duty to ensure, so far as is reasonably practicable, the plant, namely the digital milling machine with two sets of double rollers (fine mill roller), was without risks to the health and safety of any person: s 21(2) WHS Act.

4. The maximum penalty for a s 32 WHS Act offence at the relevant time for a body corporate is $1,782,579 (rounded).

5. The plea of guilty entered by Duralina reflects an acknowledgement that at all material times the defendant’s business or undertaking involved the operation of a drum mill which produces semolina and flour.

6. The plea of guilty entered by Mill HR reflects an acknowledgement that at all material times the defendant’s business or undertaking involved providing labour to Duralina.

7. The pleas encompass an admission by both defendants that there was a risk that workers, including Hanna Gerges (Mr Gerges), would suffer a serious crush injury as a result of coming into contact with the moving components and/or parts of the fine mill roller at the durum mill.

8. The prosecutor tendered the Prosecution Sentence Tender Bundle (PSTB) which became exhibit A. The defendants tendered an affidavit of Hamish Shaw affirmed 11 April 2025 which became exhibit 1 and an affidavit of Rohan Dunsdon affirmed 27 March 2025 which became exhibit 2.

Background

9. At all material times, Mill HR was a registered corporation, with its registered address at Level 9, 123 Albert Street in Brisbane City, Queensland, from which it operated as a person conducting a business or undertaking (PCBU) involving the provision of labour only to Duralina.

10. At all material times, Duralina was a registered corporation, with its registered address at Level 9, 123 Albert Street in Brisbane City, Queensland, from which It operated as a PCBU involving the operation of a durum mill that manufactures semolina and flour. The durum mill is located at Lot 41, Bowler Lane, Westdale, New South Wales (the site).

11. At all material times, Duralina was the entity that operated the durum mill located at the site and carried out all sales, product invoicing, repairs and maintenance to plant and equipment.

12. At all material times, Michelle Shaw was the sole director of Mill HR and Duralina.

13. At all material times, Mill HR employed the following workers:

14. Mr Gerges, Electrical Engineer.

15. David Donaldson (Mr Donaldson), Technical Miller.

16. Geoffrey Butler, Maintenance Worker.

17. Hamish Shaw (Mr Shaw), General Manager.

18. Steve (Sutharsan) Packinathan (Mr Packinathan), Forklift Operator.

19. At all material times, Mill HR only supplied labour to Duralina, through the workers it engaged as noted above, to work at the site.

20. Mr Gerges was a qualified electrical engineer who had completed a bachelor’s degree in electrical engineering and he commenced employment with Mill HR on 16 June 2021 as a nightshift food milling electrical engineer/operator.

21. Mr Shaw was employed by Mill HR as a General Manager in January 2017 to oversee the general operations at the site, and he had responsibility over workers, including Mr Gerges and Mr Donaldson.

The Fine Mill Roller

17. At all material times Duralina operated eight milling machines, which contained one set of double rollers, for the production of flour and semolina. In addition, Duralina operated a single digital milling machine, Model – MML25, Serial Number – 068 (fine mill roller), manufactured in Zhanglakou, China, which contained two sets of double rollers.

The Incident

18. On 3 September 2021, there was an unplanned outage at the site while Mr Gerges was working at the site for his 3.00pm afternoon shift. This outage resulted in the milling machines, including the fine mill roller, being turned off.

19. Mr Gerges telephoned Mr Donaldson, who provided Mr Gerges with verbal instructions on how to restart the milling machines. Mr Gerges was able to restart the eight milling machines with double rollers, but experienced a technical difficulty with the fine mill roller as no raw material was passing through the machine.

20. Over the course of his instructions, Mr Donaldson said words to the effect of “go under the mill” to Mr Gerges, intended by Mr Donaldson to lead Mr Gerges to the ground floor underneath the fine mill roller. However, due to noise in the background of the mill, this instruction was misinterpreted by Mr Gerges as meaning placing his hands under the fine mill roller in front him.

21. At approximately 8.00pm, Mr Gerges proceeded to open a cover near the bottom of the fine mill roller, believing it to be similar to the other eight milling machines at the site. The cover removed by Mr Gerges was usually secured by metal cleats and can only be removed through a special tool. On this occasion, Mr Gerges was able to remove the cover using his hands.

22. Mr Gerges then placed his right hand into the fine mill roller, and after doing so his hand got caught between the set of rollers and was crushed.

23. Mr Gerges called out, alerting Mr Packinathan who activated the emergency stop. Mr Gerges’ hand was stuck between the rollers of the fine mill roller for approximately 60 to 90 minutes until emergency services were able to remove it.

24. As a result of the incident, Mr Gerges suffered serious crush injuries to his right hand resulting in complete or partial loss of all fingers on his right hand, excluding the thumb.

Relevant Guidance Materials and Statutory Obligations

25. The relevant guidance material is detailed at pars 31-41 of the Agreed Statement of Facts (ASOF) in PSTB.

Systems of Work Prior to the Incident

26. Mill HR did not have any safe work procedures or systems in place for the work undertaken by its employees at the site as it relied on the procedures and systems of work provided by Duralina.

27. Mr Shaw provided Mr Gerges with a documented written induction on 23 June 2021, and Mr Gerges answered yes to “do not remove safety guarding from any machine” and “isolate machinery electrically before working on it”.

28. Mr Shaw and Mr Donaldson had prepared a documented Safe Procedure Document for Mill Start Up (Start Up Procedure) dated 6 April 2021. It was not specific on whether it applied to the fine mill roller. The Start Up Procedure required the hopper door on each roll mill to be opened to check machine operation. The Start Up Procedure identified noise and dust, and not exposure to moving parts of the machinery, as a hazard. It also identified the safety controls of ear protection and eye protection.

29. Duralina had a documented Start Up Procedure which was undated. The document was not specific on whether it applied to the fine roll miller. It required that the relevant mill be assessed for start-up and that there are “no open hatches or removed guards”. The procedure also required a physical check to ensure that the “millrun lift is running”, which includes opening the hopper door on each roll mill according to the Start Up Procedure.

30. Duralina had another Start Up Procedure which was undated. This document was not specific on whether it applied to the fine mill roller. It included a requirement to ensure all lifts were running and rolls had started, which involves opening the hopper door on each roll mill according to the Start Up Procedure. This procedure also required the mill to be shut down, and to isolate and inspect roll mill hopper and lift for product chokes.

31. The emergency stop for the fine mill roller was located approximately two metres away from the machine, which meant a worker was unable to activate it while directly operating the fine mill roller.

32. In 2016, metal cleats were retrofitted to all milling machines to secure the upper and middle covers in a manner that is to SafeWork NSW’s satisfaction. At the time of the incident the cleats were not secured and there was no interlock or other electronic limiting device to prevent contact with the rollers if the guarding was removed or open.

33. Duralina states that Mr Gerges had worked on the fine mill roller on four occasions prior to the incident. However, Mr Gerges stated to SafeWork NSW Inspectors that he had not operated the fine mill roller prior to the incident and was not adequately trained on how to operate the fine mill roller. Mr Gerges also stated he was unaware of the location of the second set of rollers on the fine mill roller where his right hand got caught.

34. An inspection conducted by Red Insight Pty Ltd into Duralina’s WHS systems after the incident discovered six hazards at the site related to the covers and guards on the mill, which carried the risk of fingers, hand or clothing being pulled into the rollers. At the time of the inspection, there were no devices fitted to prevent the mill from operating when covers were not in place over the moving parts. The inspection suggested various controls such as limiting switches, securing the covers and guards over the rollers and adding labels to the fine mill roller warning of moving parts that can cause crush or entanglement injuries

Systems of Work after the Incident

35. Mill HR implemented changes to its system of work in relation to verifying the systems of work implemented by Duralina, whilst providing care, support and significant resources to Mr Gerges for his return and recovery at work.

36. Following the incident, Duralina had:

37. Engaged Red Insight Pty Ltd as a third-party consultant to conduct a site inspection and WHS system review of the mill.

38. Installed limiting switches on all milling machines which stop the machine when activated to prevent access to moving parts if the machine is operating.

39. Installed an emergency stop control on the fine milling machine that is accessible to the worker(s) when operating the machine.

40. Reviewed and revised its induction process and documented safety procedures.

41. Provided care, support and significant resources to Mr Gerges for his return and recovery at work.

Multiple Offenders

37. Before turning to the objective seriousness of the offences and the other matters affecting penalty, it is appropriate to mention the unusual position of Mill HR and its consequences for the question of penalty.

38. The charges, in particular the omissions relevant to each charge, and the facts relevant to the offending are, with one exception, the same in both matters. That exception relates to what is in effect the formality involved identifying Mill HR as the employer.

39. The defendant asserts that prosecutor's reproduction of the facts in the ASOF fails to incorporate the fact that Mill HR only supplied labour to Duralina, through the workers it engaged to work at the site. I note in oral submissions the prosecutor agreed that Mill HR was a shell company that provided workers to Duralina, and that whilst both are still trading, Mill HR only supplies labour to Duralina, meaning they are effectively the same entity.

40. The evidence on behalf of the defendants would suggest that Duralina operated the mill at the site. All sales, product, invoicing, repairs and maintenance to plant and equipment were carried out by Duralina. Mill HR is the employing entity and did no more than provide employees to Duralina for the purpose of its business. Duralina paid Mill HR for providing employees. Mill HR has no assets and does not otherwise conduct a business.

41. Furthermore, outside of fees it collects from Duralina, Mill HR does not earn any income nor own any assets of its own. There were five employees employed on the date of the offence, all of whom were employed by Mill HR and all worked at Duralina. Duralina did not employ anyone directly.

42. I accept that the considerations in this case are much the same as those which applied in Inspector Sara Bestre v Jontari Pty Ltd (Jontari); Inspector Sara Bestre v Tempo Services Pty Ltd; Inspector Jessica Doyle v Gignen Pty Ltd (Gignen); Inspector Jessica Doyle v Tempo Services Pty Ltd (Tempo) [2007] NSWIRComm 190 (albeit perhaps more strongly in favour of Mill HR as Mill HR was (and is) not in any sense a “labour hire company”). In Jontari the corporate defendant Tempo stood in a similar position as Duralina and the labour hire entities, Jontari and Gignen*,* stood in a similar position to that of Mill HR. Haylen J observed:

“[48] Given the unusual nature of the relationship between these defendants, the question arises as to what sentencing options are properly open to the Court having accepted that, in terms, the principle of totality does not apply in relation to the subsidiary companies. It is appropriate in this particular exercise to return to some basic concepts. Section 3A of the Crimes (Sentencing Procedures) Act 1999 sets out the purposes for which a Court may impose a sentence on an offender. Those purposes include: ensuring that the offender is adequately punished for the offence; preventing crime by deterring the defendant and others from committing similar offences; protecting the community from the offender; promoting the rehabilitation of the offender; making the offender accountable for their actions; and, to denounce the conduct of the offender. It is the Court's duty to reconcile and rationalise these purposes in considering the sentence appropriate to the particular offence. In R v Engert (1995) 84 A Crim R 67, Gleeson CJ, at 68, after discussing the purposes of punishment as set out in Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465, stated:

‘A moments consideration will show that the interplay of the considerations relevant to sentencing may be complex and on occasion even intricate .... It is therefore erroneous in principle to approach the law of sentencing as though automatic consequences follow from the presence or absence of particular factual circumstances. In every case, what is called for is the making of a discretionary decision in the light of the circumstances of the individual case, and in the light of the purposes to be served by the sentencing exercise.’

[49] The need to ensure that the offender is adequately punished for the offence is essentially linked to the concept that the sentence must ultimately reflect the objective seriousness of the offence. In the present case there is no doubt that each offence is a serious breach of the Act for reasons already set out. However, in a real sense the breaches are those brought about by the actions and omissions of Tempo and not of the conduit entities. It may be argued that Tempo has chosen its own corporate structure and if that left it open to charges in relation to the same incident in relation to itself and its wholly owned subsidiaries, then so be it. However, the circumstances of each case are to be scrutinised in the sentencing process: not every wholly owned subsidiary or closely related defendant charged in relation to the same offence will be a mere conduit exercising no control and playing no part in the day to day employment relationship. Further, while it may be for the prosecutor to lay charges that cannot limit the Court in the way in which it approaches the sentencing exercise. A related consideration is that while the wholly owned subsidiaries acted as mere conduits, in fact they had the power to exercise control over the employees and did not do so. In the circumstances of the present case that type of analysis has little potency because the directing minds of the corporate entireties were the same persons: they chose to have the labour hire entities act without control and as mere conduits and chose to use Tempo as the de facto employer and in a practical sense standing in the shoes of the employer. The seriousness of the offence of the labour hire entities has to be judged in that context.

[50] In relation to deterrence, it may be argued that the imposition of penalties on the labour hire entities would act as a general deterrent but that principle is not to be confused with a view that corporations should not structure themselves in this way. Having regard to the unusual nature of the relationships between these corporations, it is highly debatable whether separate penalties imposed on the labour hire entities would act as any more of a deterrent than the penalties to be imposed on Tempo, standing as it does at the corporate apex of these arrangements. In relation to specific deterrence, it is unlikely that a penalty imposed on the labour hire entities would act as a deterrent in their future activities, not only because for at least the present time they are not employing anybody but also because the controlling mind is that of Tempo and Tempo will be penalised having regard to this aspect of sentencing considerations.

[51] The same considerations apply to the purposes of protecting the community from the offender and promoting the rehabilitation of the offender. The community will best be protected against unsafe working systems in those cases by Tempo addressing the necessary elements of a system of work that will ensure that cleaners are protected from assaultive behaviour. In the same way, it is the actions of Tempo that will demonstrate its rehabilitation and its capacity to continue as a corporation abiding by the requirements of occupational health and safety legislation.

[52] To make the offender accountable for their actions and to denounce the conduct of the offender, similarly requires attention to be paid to the actions and omissions of Tempo. To recognise the harm done to the victim and to the community also directs attention to the acts and omissions of Tempo especially in circumstances where staff were treated as Tempo employees, wearing the Tempo uniform and being directed in the Tempo system of work by Tempo Area Managers and supervisors. In a very real sense, Mrs King and Mrs Rogers, as victims of the assault, are likely to look at Tempo as failing to adequately protect them rather than the labour hire entities that appear not to feature in their day-to-day work or at all, except as to payroll services.

[53] Having regard to all of the abovementioned matters if the approach is taken to assess the relative culpability of the offenders, again the focus is upon the acts and omissions of Tempo. The labour hire entities were never acting with any independence and they performed precisely as Tempo required them to perform - as mere conduits for activities for which Tempo was wholly responsible. There is an artificiality about any suggestion that the labour hire entities, as the legal employer, had the power to act independently and impose safe systems for the engagement of their employees by Tempo. This may be a valid expectation where there is in existence the usual labour hire relationship and where there is corporate independence. In the unusual circumstances of this case it is simply folly to proceed on the basis that the directors of Tempo, acting as directors of the wholly owned subsidiaries, would direct their relationships with Tempo so as to impose conditions that Tempo may not have addressed in order to seek changes to systems of work of Tempo which they regarded as being inadequate in ensuring the safety at work of the cleaners.

[54] The setting of an appropriate penalty for Jontari and Gignen has presented certain complexities and unusual factors that has made the decision a difficult one. I am, however, unable to see how the various purposes of sentencing are achieved or the system of promoting workplace safety is enhanced by imposing full penalties on each of the wholly owned labour hire companies in the circumstances shown to exist by the evidence. The notions of fairness equity and justice and the many considerations which inform the sentencing exercise do not appear to be well served by a penalty of substance that would treat these defendants as equally culpable as Tempo. . . (my emphasis).”

43. The defendant's written submissions state the following:

“[13] The reasoning in Jontari is compelling and should be applied here.8 The artificiality to which Haylen referred to in Jontari is underscored by the particulars of the omissions which the prosecutor relies on each of the Amended Summons. All the particulars, except for one which is identical, in each Amended Summons reproduce the exact same omission but in the case of Mill the word ‘confirming’ appears at the beginning of each sentence. That ‘confirmation’ could only have been undertaken by the same controlling minds, Mr and Mrs Shaw, who directed Duralina's actions by reason of their respective position as director and production manager. It is no matter of coincidence that the Amended Summons, the ASF, the prosecutors outline of submissions and the remainder of these written submissions are identical to both defendants.

[14] In the circumstances the Court should adopt a similar approach to determining the penalty to imposed on Mill to that adopted by Haylen J in Jontari, namely:

‘[54] ... Each defendant had no prior convictions and there was no adverse evidence as to their general corporate conduct, although the nature of each offence is to be considered a serious breach and cannot be appropriately described as an offence trivial in nature. The evidence suggests that they will no longer engage employees and there is room to conclude that they have good prospects of not offending again. For the reasons canvassed above, I conclude that there are extenuating circumstances and a variety of factors that make the application of s 10 appropriate in relation to these defendants. In view of the fact, however, that there was no evidence as to whether, in the future, Jontari and Gignen would again act as labour hire companies and engage employees, the preferable course, pursuant to s 10(1)(b) of the Crimes (Sentencing Procedure) Act I 999, is to make an order discharging the defendants on condition that they enter into a good behaviour bond for a term of two years. That course, at least, appears to be expedient having regard to all the circumstances and permits the activities of the subsidiaries to be monitored over the period of the bond.’

[15] The position in this case is not materially different from that that existed in Jontari and reflects much of the same unusual, extenuating, circumstances found in Jontari. The Court should exercise its discretion to discharge Mill on condition that it enter into a conditional release order (the equivalent of a good behaviour bond) under s.10 of the Crimes Sentencing Procedure Act 1999 or, alternatively by convicting Mill HR but not proceedings to conviction under s.10 of that Act.”

44. The prosecutor accepts that Mill HR is a shell company providing workers to Duralina, and the site is operated by two entities, and that Mill HR is effectively the paymaster and Duralina performs all the work at the durum mill.

Sentencing

45. The court is to approach a sentencing exercise on the basis of it being one of “instinctive synthesis”: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25.

46. The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 at [109] in this way:

“The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the “instinctive synthesis” approach, involves the making of a global judgement without any attempt to state precisely how any given factor has influenced the judgement.”

Objective Seriousness of the Offence

47. The primary consideration requires a determination of the objective seriousness of the offence. The High Court made this clear in Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [27]:

“…The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of offending.”

48. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474-475.

49. The duties of the defendant require that they ensure the health and safety of workers as far as reasonably practicable. This duty is not delegable, and the duty requires the identification of risks in the workplace and an assessment of measures to address such risks.

50. The gravity of the offence is determined by the extent of the duty holder’s failure to ensure, so far as was reasonably practicable, that its workers were not exposed to risks to their safety: Orbit Drilling Pty Ltd v The Queen (2012) 35 VR 399; [2012] VSCA 82 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465.

51. The objective degree of foreseeability is a matter for the court to have regard to when considering the gravity of the offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610; [2000] NSWIRComm 71 (Capral Aluminium) at [81].

52. An offence will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Ltd (No 3*)* (2005) 147 IR 117; [2005] NSWIRComm 61.

53. Subjective factors should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700; [2000] NSWIRComm 142 at [31].

54. The Court of Criminal Appeal examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 (Nash v Silver City Drilling). His Honour Justice Basten, under the heading “Assessment of Risk” said at [34]:

“The sentencing judge commenced his consideration with the proposition that ‘[g]reater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely.’ However, the truth of that proposition depends upon other considerations, including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends upon an assessment of all those factors.”

55. His Honour further observed at [42]:

“The culpability of the respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and a little, if any, cost. That assessment will involve both objective considerations and a consideration of what the respondent’s responsible officers knew or ought to have known.”

56. I accept that s 3A of the Crimes (Sentencing Procedure Act) 1999 (NSW) (Sentencing Act) is generally regarded as a codification of the common law principles of sentencing: R v MA (2004) 145 A Crim R 434; [2004] NSWCCA 92. The purposes of punishment in the section are constrained by the sentencing principles that exist under the common law such as the principles of proportionality and totality: R v MMK (2006) 164 A Crim R 481; [2006] NSWCCA 272.

57. The court is obliged to make an assessment of where on the scale of criminality the offence lies referable to the maximum penalty prescribed by the legislature: R v Cage [2006] NSWCCA 304 at [17]-[18] (Latham J).

58. Where there was an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible, it will be a serious offence: WorkCover Authority of NSW v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ).

59. The objective seriousness of an offence under s 32 of the WHS Act is considered in the context of the gradation of offences contained in ss 31-32 of the WHS Act: Nash v Silver City Drilling at [54]-[56]. The matters relevant to objective seriousness for a s 32 offence include:

60. The potential consequences of the risk. Consequences may range from mild to catastrophic. Offending will be more serious where the potential injuries are severe, regardless of whether they are likely to materialize: Nash v Silver City Drilling at [34].

61. The availability of steps to eliminate or minimise the risk: Nash v Silver City Drilling at [34].

62. Whether those steps are complex, burdensome or mildly inconvenient. If mitigating steps could easily have been taken, the offending will be more serious: Nash v Silver City Drilling at [34] and at [53].

63. Whether the risk was known or ought reasonably to have been known to or identified by the offender.

64. Whether the risk was an obvious or clear one.

65. The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd*; SafeWork NSW v Cai* [2018] NSWDC 398 at [55] (Russell SC DCJ).

66. However, I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of. In Nash v Silver City Drilling, his Honour Justice Basten dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying at [53]:

“It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of the injury occurring is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialise. The objective seriousness of the conduct will also be affected by the ease with which mitigation steps could have been taken.”

Matters Relevant to Determining the Culpability of the Defendant

61. The nature of the risk was plain. The risk of a worker suffering a serious crush injury as a result of coming into contact with moving components and/or parts of the fine mill roller was obvious.

62. The risk was one that was widely published, and one that each defendant ought to have foreseen.

63. I accept that the creation of the risk could have been anticipated by Duralina due primarily to the fact that it:

64. Did not take an adequate risk assessment of the fine mill roller, with specific regard to the two sets of moving double rollers.

65. Did not install adequate guarding to the fine mill roller.

66. Failed to ensure that an emergency stop on the fine mill roller was within reaching distance of the fine mill roller such that it could be pressed by the operator when performing work with or on the fine mill roller.

67. The creation of the risk could have been anticipated by Mill HR due primarily to its failure to confirm or verify the above matters with Duralina. I accept that, in the circumstances, the risk and its potential consequences were plainly foreseeable and should and could have been anticipated by Duralina and Mill HR. I further accept that the risk could have been eliminated or minimised.

68. A factor relevant to an assessment of objective seriousness is the existence of simple and straightforward remedial steps that could have been taken by the defendant to eliminate the risk to safety.

69. These measures are accepted by the defendants, and acknowledged by the plea, were simple and straightforward steps that could have been taken to eliminate the risk to safety.

70. I note the prosecutor submits that the likelihood of the risk occurring could not be classed as ‘moderate’ or ‘low’ due to the extent of the failures on the part of each defendant to guard against it. The fine mill roller was being operated on the site in circumstances where proper safety measures were not in place.

71. The prosecutor submits that while each defendant had in place work, health and safety policies and procedures, they were not specifically targeted to the risks presented by the fine mill roller.

72. Moreover, the prosecutor submits that the guarding on the fine mill roller was easily removed without the need for any tools and an emergency stop button was not within reaching distance from the fine mill should (as was the case here) something untoward occur with the fine mill roller.

73. Whilst I accept that there existed a serious risk of workers coming into contact with moving parts of the fine mill roller, I note that the risk only existed on one machine. The risk was limited to an area under the machine, and only existed because, for a reason unexplained, the cover which usually was secured by metal cleats, and could only be removed by using a special tool that was kept by Mr Donaldson, had been removed. Further, the risk manifested itself in circumstances where the machine had lost power due to a power outage and could not be restarted. This was not something that was usual in the defendants’ operations.

74. I further note that the risk existed at a time when the most senior employee at the site, who was responsible for the entire operation, was unable to access the site due to the Queensland government’s regulations during the COVID-19 pandemic.

75. Further I accept that the charge applies to one day only, one machine only, and one employee only. The production manager was not on site that day due to the restrictions of the COVID-19 pandemic.

76. However, whether the production manager could have been present or not, the absence of the guard on the machine, which was supposed to only be able to be removed by a special screwdriver, is unexplained

77. The defendants do, however, very openly concede that the steps that the prosecutor suggests that were things that could eliminate or mitigate the risk, would have been relatively simple (such as covering the nip point with a secure guard that could not be removed).

Deterrence

75. In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act.

76. General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J).

77. When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.

78. The Court of Criminal Appeal in Bulga Underground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37 (Bulga) at [177]-[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]-[75] which says:

“[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.

…

[75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.”

79. General deterrence must be a significant feature of the sentence imposed upon the defendant. It can be appropriately used to direct the industry’s attention to the consequences of inattention and the need for greater concentration on the potential risks of death or serious injury associated with the operation of a mill which involves the operation of plant and workers.

80. The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the WHS Act very seriously.

81. However, whilst general deterrence is a matter that I must consider in the sentencing process, it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all other factors. These were dangerous machines which were operated in such a fashion that the injured worker could not access the emergency stop button. There was no one there to assist him, and there is no explanation as to how the guard had been removed, by whom or when. The PCBUs who are engaged in the use of rolling machines must be vigilant to ensure that appropriate inspections are careful in their assessments so the events like this cannot occur.

82. In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve the safety of its worksites following a breach of a duty are relevant, as is the propensity for the defendant to reoffend. I note that the defendant continues to operate in the business, and the prosecutor accepts that both defendants have demonstrated good prospects of rehabilitation due to the steps that have been taken after the incident. I also accept that to be correct, and I have taken that into account in coming to my sentence.

Aggravating Factors

83. The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) of the Sentencing Act. In order for this aggravating factor to be established, I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26] (Hidden J, McColl JA and Levine J agreeing).

84. I am satisfied beyond reasonable doubt that this harm is more deleterious than may ordinarily be expected, and as such is an aggravating factor pursuant to s 21A(2)(ib) of the Sentencing Act.

Mitigating Factors

85. In Haynes v CI & D Manufacturing Pty Limited (No 2); Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 at 456-457 the Full Bench held the following:

“We think that having regard to the specific nature of the legislation, the past record upon which the both the prosecution and the defendants should rely must be intimately bound to the nature of the offences which the Court is considering, namely industrial safety, health and welfare. We add one comment on the question of the previous record, and that is that the Court should attempt to ensure the accuracy of the record and have objective regard to it in relation to the industrial enterprise and the extent of its operations. We consider that the extent of the operations of the defendant enterprises is to be taken into consideration when coming to conclusions having regard to the past record.

Human experience indicates that the larger the number of industrial transactions a company is involved in the larger the number of industrial accidents which occur as a matter of statistical expectation. The safety record of very large company with some prior convictions may, on analysis, be better than that of a small company with fewer such convictions. However, we again emphasise that in the context of the OHS Act the record is only one of the factors to be taken into account in assessing penalty and the essential inquiry must remain the circumstances of the breach in question.”

86. The defendants have not been subject to a prior conviction under work health and safety law: s 21A(3)(e) of the Sentencing Act, and as such are entitled to some leniency.

87. I have had regard to the affidavits of the defendant’s construction manager, Mr Shaw - exhibit 1 in coming to these views.

88. I accept that the defendants are corporate citizens of good character and has made significant charitable donations and contribute to the community: s 21A(3)(f) of the Sentencing Act. Furthermore, the defendants have supported the injured worker significantly, including his return to work. The defendants have also paid the injured worker all of his salary despite some periods of recouperation.

89. I accept that the defendants are unlikely to reoffend as it has undertaken significant and prompt changes and is even more focused than before on the health and safety of its workers: s 21A(3)(g) of the Sentencing Act. This is not a defendant that had no regard to safety at all – it had systems in place to protect its workers, but there was no enforcement of such policies when the workers went to perform the installation tasks.

90. I accept that the defendants have demonstrated a very strong commitment to workplace safety and therefore have very good prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act*.*

91. I accept that the defendants have demonstrated its remorse and accepted responsibility for the offence, which is expressed in exhibit 1: s 21A(3)(i) of the Sentencing Act.

92. The defendants co-operated with SafeWork NSW during its investigations: s 21A(3)(m) of the Sentencing Act.

93. The defendants entered a plea of guilty to the Amended Summons at an early stage of the proceedings. Such a plea of guilty demonstrates remorse, and I will allow a deduction of 25% for the utilitarian value of the plea in accordance with the principles set out in R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 and s 21A(3)(k) and s 22 of the Sentencing Act.

94. In the exercise of my discretion, I propose to discharge Mill HR on condition that it enter into a conditional release order under s 10 of the Sentencing Act.

Capacity to Pay

95. Section 6 of the Fines Act 1996 (NSW) provides as follows:

“6 Consideration of an accused's means to pay

In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider:

(a) Such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and

(b) Such other matters as, in the opinion of the court, are relevant to the fixing of that amount.”

96. The onus is on the offender to satisfy the court on the balance of probabilities as to the truth of such evidence and its relevance to the fixing of penalty: McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310; [2004] NSWIRComm 353 at [24].

97. The offender’s capacity to pay is relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16] (Rothman J, Hoeben CJ at CL agreeing).

98. In Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100, Staff J said at [57]-[58]:

“The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 are as follows:

‘[83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50):

“It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201.”

[84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82):

“... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76).”

However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed:

“... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty …

When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence ...”

[85] I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476:

“Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86”.”

99. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said:

“First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to 'the means' of the defendant, pursuant to s 6 of the Fines Act 1996.”

100. I accept this authority is relevant to these proceedings. The defendants are a tight-knit family operation, and suffered as a consequence of the COVID-19 pandemic. Nonetheless they paid the injured worker his full salary during his period of healing.

101. It is also evident that the family members of the defendants have endured some financial hardship, and their businesses could not be described as a “large corporation”.

102. The Full Bench of the Industrial Relations Commission of NSW observed in Inspector Fraser v Karabelas (No 2) [2011] NSWIRComm 153, citing Rahme v R (1989) 43 A Crim R 81 that:

“It is well established that a court should first arrive at a penalty and then review it on the basis of any case properly made out by a defendant of a lack of capacity to pay a substantial penalty or any penalty.”

103. It follows that the question of capacity to pay and, hence, the exercise of the discretion under s 6 of the Fines Act should be considered after the court has determined the appropriate fine(s).

104. I accept that the principles which are then applicable to the exercise of the discretion conferred by s 6 of the Fines Act are as follows:

105. The financial position and means of a defendant should be taken into account when determining the fine to be imposed.

106. The defendant bears both the evidentiary onus and the onus of proof, on the civil standard, in relation to satisfying the court that it does not have the capacity to meet a fine.

107. It is for the defendant to place detailed financial information that fully discloses his financial circumstances to the court so that a proper assessment of his capacity to pay can be undertaken.

108. It is for the prosecutor to check the information provided by the defendant and to assist the court in relation to the assessment of the defendant's capacity to pay.

109. In any event, notwithstanding the capacity of a defendant to pay a fine, the penalty to be imposed must reflect the objective seriousness of the offence: Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at [209]-[210]; McColl at [24]-[25]; SafeWork NSW v Harris Holdings NSW Pty Ltd; SafeWork NSW v Harry Zizikas [2017] NSWDC 299 at [134]-[141]; SafeWork NSW v Cosentino Australia Pty Ltd (No 2) [2018] NSWDC 182 at [23]-[24].

110. I have had regard to the affidavit of Mr Dunsdon the accountant for the defendant (exhibit 2) and I accept that the reality of the position is that this is a small family business that employs half a dozen or so employees. Mill HR does not trade and is simply the conduit through which people are employed by Mill HR and provided as workers to the Duralina business. I also accept that Mill HR earns no income apart from the service fees paid to it by Duralina in respect of employees, and as such has no capacity to pay a fine. I accept that the defendants have a limited capacity to pay a fine.

111. I propose to enter a s 10 order of the Crimes (Sentencing Procedure) Act 1999 (NSW) with regard to Mill HR, and they will not be subject to a fine.

112. Little evidence was provided to the court as to the capacity of Duralina to pay a fine, and I accept that the defendant bears the onus of establishing their inability to pay a fine. As outlined by the prosecutor, the submission that the court should take a guarded view when assessing Duralina’s capacity to pay should be accepted. However given the current circumstances of Duralina, I will exercise my discretion, and make a small deduction.

113. The issuing of costs against a defendant in both criminal and civil proceedings is not punitive, but rather compensatory to the prosecution: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543 (Mason CJ).

114. However, given the objective seriousness of the offending and the requirement for general deterrence, the fine must be such that it satisfies all of the relevant sentencing considerations.

115. On the basis of the totality of the documents before me, I propose to exercise my discretion under s 6 of the Fines Act and afford the Duralina some leniency.

116. The court is entitled to take into account the fact that the defendants will be liable to pay the prosecutor’s costs when considering any monetary penalty to be imposed on Duralina, particularly in circumstances where there is evidence of a limited capacity to pay a fine, and I have done so. Costs payable to the prosecutor are the “normal” rule as the prosecutor has been successful, although there can be exceptions: see for example, Bulga.

117. The court can also have regard to the defendant’s own costs that it will have to bear as a consequence of a breach of the WHS Act, and I have done so: Environmental Protection Authority v Barnes [2006] NSWCCA 246 at [78].

Penalty

113. I make the following orders:

In relation to 2023/268072 SafeWork NSW v Mill HR Pty Ltd:

1. Mill HR is convicted.
2. I exercise my 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.

In relation to 2023/267246 SafeWork NSW v Duralina Pty Ltd:

3. Duralina is convicted.
4. The appropriate fine is $ 100,000 but that will be reduced by 25% for the utility of the early plea.
5. Accordingly, that results in a fine of $75,000.
6. Pursuant to s 6 of the Fines Act 1996 (NSW), I exercise my discretion and reduce that fine by 25%.
7. Accordingly, Duralina is to pay a fine of $56,250.
8. Pursuant to s 122(2) of the Fines Act 1996 (NSW) a moiety of 50% of the fine is payable to the Prosecutor.
9. The defendants are to pay the prosecutors costs as agreed or assessed.

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Amendments

11 July 2025

In relation to 2023/268072 SafeWork NSW v Mill HR Pty Ltd: Order 2 amended to include the words "for 12 months".

11 July 2025

Typographical error

20 August 2025

Orders amended under Slip Rule