SafeWork NSW v McInerney Enterprises Pty Ltd;; SafeWork NSW v Taylor McInerney

District Court of NSW|2023-03-09

Background

ME is a company engaged in the business of removal and installation of solar panels. At all material times, Mr McInerney was the sole director and company secretary of ME.
ME did not itself sell solar panels to individuals. It received work from solar panel retailers. Bell Solar Pty Ltd ('Bell') was one such retailer and had an ongoing contractual arrangement in place whereby Bell would regularly engage ME to install the solar panels it sold to clients.
On 30 July 2020, Bell was engaged to install solar panels at residential premises at 29 Croome Road, Albion Park Rail, New South Wales ('the site'). ME was engaged as the contractor to perform the installation work. The solar panels were to be installed on the roof of a detached garage at the premises.
At the time of the incident, Mr Mulholland was employed by ME on a full-time basis. Mr Mulholland had not received training or qualification to work at heights. Mr Ben Falconer ('Mr Falconer') was employed on a full-time basis by ME. Mr Falconer was a third-year apprentice who had obtained qualifications to work at heights.
Neither Bell or ME had inspected the site or conducted any risk assessment at the site prior to the attendance of workers on 12 August 2020.

The Incident

At about 7:20am on 12 August 2020, Mr Mulholland and Mr Falconer attended the premises to perform the installation. Mr McInerney was not present at the premises at the start of the day.

Injuries

Mr Mulholland sustained injuries including a fractured skull, two broken wrists, a cracked ear bone and two cracked ribs. He has residual mild hearing loss.

Systems of work before the incident

At the time of the incident, ME did not have in place any systems for conducting risk assessments, planning the installation activities or providing information, instruction and training to employees.
ME had a generic Safe Work Method Statement ('SWMS') relating to solar panel installation at the time of the incident, which was not site-specific.
The SWMS nor any other documented procedure or plan or process was used on the date of the incident.
The SWMS identified 'fall from heights' as a risk in connection with 'access and egress to roof' and stipulated the following control measures: '- Edge protection to be in place before commencement; - Ensure suitable fall restraints in place before commencing work; - Only workers trained in working at heights to complete task; - Safety footwear designed for use on a roof to be worn; and - PPE - gloves to be used.'
The SWMS also identified 'work on or near fragile, brittle surfaces…' as a risk in connection with working at heights. The SWMS did not identify skylights as a risk.
The safety controls for this hazard were identified as follows: 'Only competent workers to work at heights. Risk assessment to be conducted to identify all hazards and associated risks. Fall protection should be provided for al heights over 2m… … Work from certified scaffold, elevated work platforms, mobile scaffold or scissor lifts, ensure guard railing or other sufficient barriers are in place and providing fall protection.'
The only fall prevention available on the day were harnesses, which were not considered for this job as they were only used for steep roofs.
The SWMS made no provision for the use of skylight covers or crawl boards of any kind, and none of these were provided to Mr Mulholland and Mr Falconer. Further, ME did not provide any physical barriers to be placed around the edge of the roof.

Guidance material

The Guidance material is detailed in paragraphs [36]-[48] of the ASOF.

Systems of work following the incident

Following the incident, ME implemented several changes to its work systems including: 1. A requirement that a SWMS be site-specific, to be signed and dated each morning, which included the location of the nearest hospital and police station provided for each risk, identified each risk in writing, the risks were given a rating and written preventions; 2. Use of fall protection equipment, including harnesses, on every job and documented by photographs; and 3. Use of ladder clamps on every job.

SENTENCING

The penalty to be imposed must be one which will give overall effect to the policy of the WHS Act, in particular, ensuring the safety, health and welfare of workers and others on workplace premises. I have had regard to the principle contained within the WHS Act that workers should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work: s 3 of the WHS Act.
The Court is to be guided by the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act') which include: 1. Section 3A which sets out the purpose of sentencing; 2. Section 21A which sets out the aggravating, mitigating and other factors in sentencing; and 3. Section 22 which provides that a guilty plea is to be taken into account on sentence, as is the time when the plea was effectively indicated or entered.
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.
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

The duties of the defendants (ME and Mr McInerney) require that they ensure the health and safety of workers as far as reasonably practicable. These duties are not delegable, and the defendants had control and influence over the workers at the site. The duties require the identification of risks in the workplace and an assessment of measures to address such risks.
The primary factor to be assessed is the objective seriousness of the offence. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464, 474-5.
The gravity of the offence is determined by the extent of the duty holders' failure to ensure, so far as was reasonably practicable, that workers were not exposed to risks to their safety: Orbit Drilling v The Queen (2012) 35 VR 399 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No. 2) (1988) 164 CLR 465.
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 ('Capral Aluminium') at [81].
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.
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 at [31].
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 [2017] NSWCCA 96 ('Nash v Silver City'). Justice Basten at [34], under the heading 'Assessment of Risk' said: '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.'
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.'
I accept that s 3A of the Sentencing Act is generally regarded as a codification of the common law principles of sentencing: R v MA [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] NSWCCA 272.
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).

The Defendants' Duties

The defendants had a duty under s 19(1) of the WHS Act to 'ensure' the health and safety of its workers, so far as reasonably practicable. The duty requires the identification of risks in the workplace and the adoption of measures to eliminate or minimise them, so far as is reasonably practicable: s 17 of the WHS Act; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at [34] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
The duty is positive, non-delegable, and requires duty holders to search for, detect and eliminate, so far as is reasonably practicable, risks to safety: WorkCover Authority (NSW) Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80, 85 (Hill J).
Mr McInerney was the sole director and company secretary of ME. Prior to the incident, Mr McInerney did not ensure that ME had in place and used appropriate resources and systems designed to prevent the eventuation of risks associated with working at heights and falling through skylights.
Mr McInerney did not take any steps to conduct risk assessments relating to the removal and installation of solar panels and failed to prepare a site-specific SWMS. Mr McInerney failed to ensure that Mr Mulholland was adequately trained and qualified to work at heights and failed to adequately supervise Mr Mulholland and Mr Falconer. Further, he failed to ensure that adequate supervision was provided to Mr Mulholland and Mr Falconer to ensure compliance with the SWMS.
The reasonably practicable measures to control the risk are set out in paragraphs 11(a)-(f) of the Summons with regard to ME and at paragraph 12 of the Summons with regard to Mr McInerney.
It is an agreed fact that prior to and as at the date of the incident, the defendants were aware of the hazards: SOAF [15], [26], [28] and [30]. It is also an agreed fact that the defendants had not conducted a risk assessment which identified and/or addressed the subject hazard: SOAF [25]-[27].
The prosecutor acknowledges that there is evidence which, if accepted, indicates that the defendants have now taken the following steps: 1. Implemented site specific SWMS; 2. Adopted the use of Worx Inducts program to ensure compliance; 3. Installation of safety rails on all rooftop jobs; 4. Use of exclusion zones for skylights which are taped and boarded off; and 5. Implementation of regular toolbox meetings.
Whilst acknowledging steps have been taken by the defendants after the incident, the prosecutor submits that the observations made by Maidment J in Inspector Callaghan v Saunders Constructions (Queensland Industrial Relations Court, 26 November 1993) at [7] remain apposite: 'Commendable though it is to introduce appropriate occupational health and safety measures after the event it needs to be remembered that the legislation is not directed at ex post facto measures, it requires positive preventative steps being taken to ensure that workers are afforded safe working environments irrespective of their own laxities.'
See also: Schultz v Tamworth City Council (1994-95) 58 IR 221 at 227 per Fisher CJ.
In all of the circumstances the prosecutor submits that the steps taken by the defendants following the event should have little, if any, impact upon the Court's assessment of the penalty to be imposed on the defendants in relation its breach of the duty imposed by ss 19(1) and 27(1) of the WHS Act and, hence, the penalty to be imposed in relation to the defendants' contravention of s 32 of the WHS Act.
The defendants submit that they did not adopt a conscious disregard for safety, but rather that it was lack of experience and an adoption of existing work practices as experienced by the defendants. I accept that this is supported by the actions taken since the incident.
I note that Mr McInerney in exhibit 1 commenced his trade in 2010 and completed a Certificate 3 in Electrotecnology licenced electrician. He started sub-contracting solar installations in 2015 as a sole trader, in 2016 completed his CEC Accreditation, and the ME business was started in 2017. When the business first started, Mr McInerney did all the work himself and towards the end of 2017 he employed an apprentice. As at the date of the incident, ME employed Mr Falconer and Mr Mulholland, and Mr Mulholland had only commenced the job in the week that the incident occurred.
The following matters are relevant to determining the culpability of the defendants: 1. The defendants were not oblivious to the risk, but to some extent could be seen as 'babes in the woods' given the experience of Mr McInerney as at the date of the incident, and the size of ME; 2. However, the hazard was known and readily foreseeable; 3. The hazard carried with it a readily foreseeable risk of serious injury or death; 4. The defendants failed to undertake a risk assessment; 5. The defendants failed to take simple, straight forward steps in relation to addressing an obvious hazard, including both a failure to provide a safe system of work, adequate plant and/or equipment (such as covers and crawl boards: see Expert Report of Joshua Kent dated 28 September 2022 at 6.11,10.1 and 13.1), proper training and instruction and adequate supervision; 6. At [14] of exhibit 1, Mr McInerney states that at the time of the incident he was not aware that the SWMS needed to be job specific; 7. The potential consequences of the risk included a risk of death or serious injury. Mr Mulholland fell approximately 3.87m to concrete below; 8. The likelihood of the risk materialising was reasonably high in circumstances where there were no adequate control measures implemented; 9. The incident occurred during Mr Mulholland's first week of work with ME; 10. The supervision provided to the workers was inadequate; and 11. There were simple, straightforward steps which could have and should have been taken to avoid the risk.
However, I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of it. At [53] in Nash v Silver City, Basten JA dealt with the proper approach to considering the objective seriousness of offences under the WHS Act, saying: '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.'
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 (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ).
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 at [54]-[56]. The matters relevant to objective seriousness for a s 32 offence include:

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: Ibid [34];
The availability of steps to eliminate or minimise the risk: Ibid [34];
Whether those steps are complex, burdensome or mildly inconvenient. If mitigating steps could easily have been taken, the offending will be more serious: Ibid [34] and [53];
Whether the risk was known or ought reasonably have been known to or identified by the defendants;
Whether the risk was an obvious or clear one; and
The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 at [55] (Russell SC DCJ).

The general risk is not novel or unique. Falling is a risk of working at height, which is clearly obvious. The potential consequences were serious injury and/or death. Mr Mulholland was lucky to have survived despite sustaining serious injuries.
As a consequence of the matters set out above, I am of the view that this is an objectively serious offence and falls within the mid-range of offending. The seriousness of the foreseeable harm to a worker was extreme and the steps available to avoid the risk were known to the defendant and documented in its pre-incident SWMS, which were straight-forward, and readily available.

Deterrence

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.
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).
When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.
The Court of Criminal Appeal in Bulga Underground Operations v Nash (2016) 93 NSWLR 338 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 said: '[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.'
General deterrence must be a significant feature of the sentence imposed upon the defendants. 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 working at height. It seems that the message is not getting through to employers who require their workers to work at height - inherently dangerous work.
The frequency with which this Court deals with SafeWork prosecutions that involve workers falling from height is not decreasing, and the devastation and harm that can and is caused by this dereliction of the duties imposed by the WHS Act, is a matter which I find very concerning. The attention of employers in circumstances such as this needs to be focused and heightened, as the risk was so obvious.
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.
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.
In relation to specific deterrence, the attitude of the defendants 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 defendants to reoffend.
ME is a very small company, and its director has been in the industry for some 13 years. This is not a defendant that had no regard for the safety of its workers.
The incident has been a very strong 'wakeup call' for the defendants. Mr McInerney's affidavit (exhibit 1) demonstrates the significant effect that the incident has had on him. I accept that he was horrified, that Mr Mulholland was a family friend and that Mr McInerney provided assistance to Mr Mulholland after the incident.
I accept that the prospects of rehabilitation of the defendants are very good given the changes that Mr McInerney has made and the effect this has had on him and his wife, but the need for an element of specific deterrence is still necessary in these circumstances.

Aggravating Factors

For an aggravating factor to be established, I must be satisfied beyond a 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). It is not necessary that an injury occurred for the offence to be established, the creation of a risk is sufficient.
The injury and emotional harm caused by the offence was substantial: s 21A(2)(g) of the Sentencing Act. Mr Mulholland sustained serious injuries. Fortunately, he has returned to some employment.

Mitigating Factors

The defendant has no previous convictions: s 21A(3)(e) of the Sentencing Act.
I accept that the defendant has good prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act. The defendant has undertaken significant steps to review and amend its processes so as to ensure that incidents such as this cannot occur again.
Mr McInerney's affidavit (exhibit 1) demonstrates the acceptance of responsibility for the defendant's failures and has demonstrated significant remorse and contrition and was horrified at what had happened. The shock of what happened to a family friend has weighed heavily on Mr McInerney: s 21A(3)(i) of the Sentencing Act.
The defendants entered pleas of guilty early, which of itself demonstrates remorse, and the prosecutor submits it is open to me to find that the defendant is entitled to the maximum discount on that basis. Thus, I will allow the deduction of 25% for the utilitarian value of the pleas in accordance with the principles set out in R v Thomson & Houlton (2000) 49 NSWLR 383: s 21A(3)(k) of the Sentencing Act.
The defendant co-operated with the SafeWork investigation: s 21A(3)(m) of the Sentencing Act.

Capacity to Pay

Section 6 of the Fines Act 1996 (NSW) ('Fines Act') provides as follows: '6 CONSIDERATION OF 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.'
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 at [24]. 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).
The defendants have provided Tax Returns which are annexed to exhibits 1 and 2. It is apparent that the defendants, particularly Mr McInerney who will be responsible for paying any fines, are receiving a very modest profit and the net assets of ME are minimal. Similarly, the assets of Mr McInerney and his wife are also modest.
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.''
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. 110.'
The Full Bench 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.'
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).
Discussion as to the application of the Fines Act was in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476 as follows: '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.'.
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:

the financial position and means of a defendant should be taken into account when determining the fine to be imposed;
the defendant bears both the evidentiary onus and the onus of proof, on the civil standard, in relation to satisfying the Court that he does not have the capacity to meet a fine;
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;
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; and
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 v John Watson Building Services and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353 at [24]-[25]; see also: SafeWork NSW v Harris Holdings NSW Pty Ltd [2017] NSWDC 299; SafeWork NSW v Harry Zizikas [2017] NSWDC 299 at [134]-[141]; SafeWork NSW v Cosentino Australia Pty Ltd [2018] NSWDC 182 at [23]-[24].

On the basis of the totality of the documents before me, I am satisfied that there is sufficient evidence before me to assess the financial circumstances of the defendants. I propose to allow the defendants significant leniency. To impose a fine that is crippling may well cause ME to collapse and Mr McInerney to lose his business and home. In my view, these circumstances are such that it is appropriate that I exercise my discretion under the Fines Act.
Having said that, the objective seriousness of the offence is such that it must be reflected in a significant fine. I accept that the defendant is highly unlikely to reoffend, but the seriousness of the offence is such that a fine must be imposed to send a message to employers that they must take their obligations to protect their workers from a risk of injury very seriously.
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) 170 CLR 534 at 543 (Mason CJ).
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 the defendants, 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 Underground Operations Pty Ltd v Nash (2016) NSWLR 338.
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].
It is clear that as the payment of the prosecution's costs is not punitive, I must consider the defendants' obligation to pay such costs by these orders, as well as their own costs in the context of allowing any leniency to be applied to the fines imposed, which I have done.
In Nash v Silver City Drilling, the Court addressed the capacity of a defendant to absorb a fine at [59]-[60]: '[59] Two factors would indicate that, objectively speaking, the fine should not be at or above the half-way point of the range available. The factors are related. First, the fine will apply to corporate employers of wide-ranging size and ability to absorb a fine. That which would hardly be noticed in the balance sheet of a large corporation may push a smaller corporation to the verge of insolvency, or over. Secondly, it is possible to be satisfied in the case of a small corporation that changes in management practice may diminish significantly the need for individual deterrence. That may not be so powerful a factor with a large corporation which will rely upon general systems and the quality and diligence of its supervisory officers. [60] The size of the operation of the respondent may perhaps be best indicated, on the evidence available in this Court, by the size of the respondent's wages bill in the year to June 2015, which was in excess of $10 million. The evidence also revealed that the company operated in a number of different regions within Australia.'

Penalty

I make the following orders: 1. (1) The defendants are convicted. 2. (2) The appropriate fine for the offence by McInerney Enterprises Pty Ltd, the corporate defendant, is $400,000.00 and that will be reduced by 25% to reflect the plea of guilty. 3. (3) Accordingly, the fine for the corporate defendant should be $300,000.00. 4. (4) In exercising my discretion under s 6 of the Fines Act 1996 (NSW), I order that the corporate defendant pay a fine of $150,000.00. 5. (5) The appropriate fine for the offence by Mr McInerney, the individual defendant, is $1,000.00 and that will be reduced by 25% to reflect the guilty plea. 6. (6) Accordingly, the fine for the individual defendant should be $750.00. 7. (7) In exercising my discretion under s 6 of the Fines Act 1996 (NSW), I order the individual defendant pay a fine of $375.00. 8. (8) Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fines imposed are to be paid to the prosecutor. 9. (9) Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendants are to pay the prosecutor's costs, agreed in the sum of $30,000.00 exclusive of GST.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 March 2023

Work Health and Safety Regulation 2017(NSW)

WCCA 304 R v MA [2004] NSWCCA 92 R v Miria [2009] NSWCCA 68 R v MMK [2006] NSWCCA 272 R v Thomson & Houlton (2000) 49 NSWLR 383 R v Youkhana [2004] NSWCCA 412 Rahme v R (1989) 43 A Crim R 81 SafeWork NSW v Cosentino Australia Pty Ltd [2018] NSWDC 182 SafeWork NSW v Harris Holdings NSW Pty Ltd [2017] NSWDC 299 SafeWork NSW v Harry Zizikas [2017] NSWDC 299 SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 Schultz v Tamworth City Council (1994-95) 58 IR 221 Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 Veen v R (No. 2) (1988) 164 CLR 465 WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 WorkCover Authority (NSW) (Inspector Egan) v Atco Controls Pty Ltd (1998) 82 IR 80 WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 Category: Principal judgment Parties: SafeWork NSW (Prosecutor) McInerney Enterprises Pty Ltd and Taylor McInerney(Defendants) Representation: Counsel: Ms R Rodger (for the Prosecutor) Mr B McManamey (for the Defendants)

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Judgment (15 paragraphs)

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