SafeWork NSW v Modco Homes Pty Ltd - [2024] NSWDC 565 - NSWDC 2024 case summary — Zoe

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SafeWork NSW v Modco Homes Pty Ltd

[2024] NSWDC 565

District Court of NSW|2024-07-30

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At a glance

Source facts

Court

District Court of NSW

Decision date

2024-07-30

Catchwords

[2016] NSWCCA 37 Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610
Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 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 Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117

Source

Original judgment source is linked above.

Catchwords

[2016] NSWCCA 37 Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 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 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 LtdAttorney 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 ThomsonR v Houlton (2000) 49 NSWLR 383SafeWork NSW v Cai [2018] NSWDC 398 Veen v R (No 2) [1988] HCA 14

Judgment (23 paragraphs)

[1]

[11]

Procedural History

On 20 June 2023, SafeWork NSW instituted proceedings alleging eight contraventions of the Work Health and Safety Act 2011 (NSW) (WHS Act) arising from the events of the First Incident, the Second Incident and the Third Incident.
On 6 May 2024, I dismissed the Summonses for two of the eight alleged contraventions with no order as to costs. On the same day, I granted leave to the prosecutor to file in court an Agreed Statement of Facts (ASOF) and Amended Summonses (AS) for the remaining six contraventions: 1. File number 2023/198178 relating to the First Incident, being the failure of the defendant with a duty under s 19(1) of the WHS Act to ensure, so far as reasonably practicable, the health and safety of workers, and this failure exposed workers to a risk of death or serious injury or illness contrary to s 32 of the WHS Act. 2. File number 2023/198186 relating to the Second Incident, being the failure of the defendant with a duty under s 19(1) of the WHS Act to ensure, so far as reasonably practicable, the health and safety of workers, and this failure exposed workers to a risk of death or serious injury or illness contrary to s 32 of the WHS Act. 3. File number 2023/198199 relating to the Third Incident, being the failure of the defendant with a duty under s 19(1) of the WHS Act to ensure, so far as reasonably practicable, the health and safety of workers, and this failure exposed workers to a risk of death or serious injury or illness contrary to s 32 of the WHS Act. 4. File number 2023/198229 relating to the Second Incident, being the failure of the defendant with a duty under s 38(1) of the WHS Act to ensure the Regulator was notified immediately after becoming aware that a notifiable incident arising out of the conduct of its business or undertaking had occurred. 5. File number 2023/198236 relating to the First Incident, being the failure of the defendant with a duty under s 39(1) of the WHS Act to ensure the site where a notifiable incident occurred was not disturbed until an inspector arrives at the site. 6. File number 2023/198240 relating to the Second Incident, being the failure of the defendant with a duty under s 39(1) of the WHS Act to ensure the site where a notifiable incident occurred was not disturbed until an inspector arrives at the site.
The defendant subsequently entered a plea of guilty pursuant to the six AS and the matter was set down for a sentence hearing on 30 July 2024.

[14]

Objective Seriousness of the Offence

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."
Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at pp 474-475.
The duties of the defendant require that they ensure the health and safety of workers as far as is 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.
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.
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].
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.
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].
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."
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) 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.
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).
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).
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: 1. 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 materialise: Nash v Silver City Drilling at [34]. 2. The availability of steps to eliminate or minimise the risk: Nash v Silver City Drilling at [34]. 3. 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 [53]. 4. Whether the risk was known or ought reasonably to have been known to or identified by the offender. 5. Whether the risk was an obvious or clear one. 6. 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).
However, I accept that it is the risk that I am assessing the seriousness of, and not its manifestation. 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."

[17]

The Second Incident

The Second Incident occurred on the same day as the First Incident at approximately 3.00pm when Mr Wiri was instructed by Mr Charlie Seghabi to use the Tower Crane to lift two skip bins from the ground level to Level 8 (ASOF par 23).
Whilst the skip bins were being lifted across the Site, the crane hoist rope failed, which caused the hook block and the skip bins to fall approximately five storeys. The skip bins and hook landed on the edge of a garden bed located on Level 2 of the Site. Fortunately, no one was beneath the Tower Crane and no persons were injured in the Second Incident.
Whilst it is apparent that the defendant had trained the workers in the procedure of lifting sheets, as the Tower Crane had suffered damage at approximately 1.42pm, it should not have been used until someone with the appropriate level of competency, and training in excess of Mr Wiri's training, had the opportunity to inspect it. The intended effect of the defendant's safety procedures included that after an uncontrolled event, machinery was to be inspected by a competent person before it was used again, and this procedure applied to the use of the Tower Crane.
It was only after the events of the Second Incident (described at ASOF par 24) that TCI was contacted.
Thus, the culpability of the defendant continued during the use of the Tower Crane after the First Incident, creating an obvious risk. The fact that it happened one and a half hours after the First Incident is indicative of the risk. Clearly having a crane drop its load creates a significant risk of injuring of any workers who were in the vicinity of sustaining injury.
The pleas of guilty represent an acknowledgment of the defendant's failures which are detailed in the respective Amended Summonses.
I accept that the defendant was cognisant of the risks of working at height and with the use of cranes - it had in place a system to protect its workers. However, it did not ensure that such systems were enforced on the Site. I further accept that this is not a defendant who knew of the risks and ignored them, but a defendant that failed to ensure that its systems were followed and enforced at any time that its workers were working on the Site.
I accept that the measures to which the plea has been entered were measures that were suitable, available, and were able to be implemented by the defendant during the relevant period and, had they been so, the risk would have been eliminated or minimised.
The gravity of the potential risk to safety flowing from the breach is relevant to the assessment of the gravity of the breach and the culpability of the defendant.
Although the damage or injury caused by the breach does not if itself dictate the seriousness of the offence or penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis from a breach unlikely to have such consequences.
The risks existed over a period of two days, despite the defendant's knowledge of the risks and the availability of the measures available to address the risks which were neither expensive nor difficult to implement.
There can be no suggestion that the situation that existed was not a dangerous incident as defined in s 35(c) of the WHS Act, and that a failure or malfunction of any plant is a dangerous incident pursuant to s 37 of the WHS Act.
The obligation imposed by s 38(1) of the WHS Act is that the PCBU must notify the Regulator immediately, and by the fastest possible means - WHS Act s 38(2). The obligation in s 39 of the WHS Act is that the person with management and control of the site must not disturb the site until representatives of the Regulator have attended for an inspection.
This did not occur on each occasion, and the notification to the Regulator was made by anonymous persons, not anyone from the defendant.
Whilst I accept that no harm occurred, and thankfully the outcome was not as bad as it could have been, had the Regulator been notified after the First Incident, then the Tower Crane would have been stood down, and the Second Incident would not have occurred.
I do accept however that the defendant did have quite comprehensive work health and safety policies in place in which the workers had been trained. On that basis this matter can be distinguished from circumstances where there are no systems in place at all with regard to the tasks at hand to ensure the safety of the workers.
I further accept that the specific failures are administrative errors as there was no appropriate nor adequate enforcement and inspection of the work that was being performed. Mr Wiri was a qualified and experienced worker and had, up until these three incidents, been a safe worker, and I think it is not unreasonable to assume that he was aware of the prohibition against leaving the Tower Crane unattended. However, on this occasion the Crane Operator SWMS and safety policies were not followed.
I also accept that for the Third Incident to occur, Mr Wiri had to make a positive decision to do what he did, thus placing himself at risk, despite the WHS policies that he had been inducted in.
For the above reasons I find that the offending was objectively serious.

[18]

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 is 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 Pty Ltd v Nash (2016) 93 NSWLR 338 (Bulga); [2016] NSWCCA 37 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."
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 the use of crane and working at heights.
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 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.

[20]

Mitigating Factors

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."
The defendant has not been subject to any prior convictions under work health and safety law: s 21A(3)(e) of the Sentencing Act.
I accept that the defendant is a corporate citizen of good character and has made significant charitable donations and contributions to the community: s 21A(3)(f) of the Sentencing Act (see George Seghabi affidavit sworn 25 July 2024 at [58] of exhibit 1).
I accept that the defendant is unlikely to reoffend as it has undertaken significant 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 at the relevant times. I further note that the defendant does not currently have any employees and that it does not intend to continue in the business.
I accept that the defendant has demonstrated its remorse and accepted responsibility for the offence: s 21A(3)(i) of the Sentencing Act. This is borne out in the affidavit of George Seghabi (exhibit 1), and in his oral evidence before me.
I accept the defendant co-operated with SafeWork NSW during its investigations: s 21A(3)(m) of the Sentencing Act.
The defendant entered guilty pleas at an early point in time. 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.

[22]

Penalty

I make the following orders: 1. In each proceedings, Modco Homes Pty Ltd is convicted. 2. The appropriate fine for the offence under s 19(1) in file 2023/198178 which relates to the first incident is $80,000 and that will be reduced by 25% to reflect the plea of guilty. 3. Accordingly, in that matter, I order the defendant to pay a fine of $60,000. 4. The appropriate fine for the offence under s 19 (1) in file 2023/198186 which relates to the second incident, the appropriate fine is $80,000 and that will be reduced by 25% to reflect the plea of guilty. 5. Accordingly, in that matter, I order the defendant to pay a fine of $60,000. 6. The appropriate fine for the offence under s 19 (1) in file 2023/198199 which relates to the third incident, the appropriate fine is $80,000 and that will be reduced by 25% to reflect the plea of guilty. 7. Accordingly, in that matter, I order the defendant to pay a fine of $60,000. 8. The appropriate fine for the offence under s 38 (1) in file 2023/198229 which relates to the second incident, is $20,000 and that will be reduced by 25% to reflect the plea of guilty. 9. Accordingly, in that matter, I order the defendant to pay a fine of $15,000. 10. The appropriate fine for the offence under s 39(1) in file 2023/198236 which relates to the first incident is $20,000 and that will be reduced by 25% to reflect the plea of guilty. 11. Accordingly, in that matter, I order the defendant to pay a fine of $15,000. 12. The appropriate fine for the offence under s 39(1) in file 2023/198240 which relates to the second incident is $20,000 and that will be reduced by 25% to reflect the plea of guilty. 13. Accordingly, in that matter, I order the defendant to pay a fine of $15,000. 14. In each matter, pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor's costs, as agreed or assessed. 15. In each matter, pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor.

SafeWork NSW v Modco Homes Pty Ltd

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