SafeWork NSW v Silver Stone Hardware Pty Ltd

District Court of NSW|2021-10-06|Before: Mr P

Solicitors: Mr A El-Roubaei, Department of Customer Service (for the Prosecutor) Ms Amanda Harvey, Heathfield Grosvenor Lawyers (for the Defendant) File Number(s): 2020/32188

JUDGMENT

On 26 April 2021, Silver Stone Hardware Pty Ltd ('the defendant') entered a plea of guilty in respect of an offence under s 32 of the Work Health and Safety Act 2011 (NSW) ('the Act') that it failed to comply with its health and safety duty under s 19(1) of the Act and thereby exposed Haiqiang 'Johnny' Zeng ('Mr Zeng') to a risk of death or serious injury.
The maximum penalty for an offence under s 32 for a corporate entity is $1,500,000.00.
The prosecutor tendered a Prosecution Tender Bundle which became Exhibit A.
The defendant read an affidavit of Jie Li sworn 9 September 2021 which became Exhibit B, and a further affidavit of Jie Li sworn 22 September 2021 which became Exhibit C.

SYSTEMS OF WORK PRIOR TO THE INCIDENT

Mr Zeng was employed as a delivery driver and had commenced work with the defendant on or about 19 February 2018, being one month prior to the incident.
The defendant asserts that its approach to safety at the time of the incident was to: 1. provide on the job training with respect to the loading and unloading of glass panels from A-frame structures on its trucks; 2. oversee new workers using experienced workers; 3. require new workers to accompany experienced workers for a certain period of time upon commencing work; and 4. provide plant and equipment in the form of A-Frame delivery trucks with straps and clamps for glass sheets on the A-frame.
Prior to the incident, Mr Zeng was trained on the job for approximately one week before he worked alone.

SYSTEMS OF WORK AFTER THE INCIDENT

On 29 March and 19 April 2018, SafeWork NSW issued two Improvement Notices to the defendant.
Following the incident, the defendant: 1. displayed SafeWork NSW posters in relation to handling glass and trained their staff in these procedures. The defendant also purchased spirit levels and Irwin quick grip clamps for staff use; and 2. created a delivery guide and record for staff to record the angle of the glass each time they were making deliveries.

SENTENCING

The penalty to be imposed must be one which will give overall effect to the policy of the 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 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 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 duty of the defendant requires that it ensure the health and safety of workers as far as reasonably practicable. This duty is not delegable, and the defendant had control and influence over the workers at the site. The duty requires 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 holder's failure to ensure, so far as was reasonably practicable, that its 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 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 defendant's duty required it to identify risks at the site and to adopt measures to eliminate or minimise them: s 17 of the Act: Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at [34] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
The risk of a person being injured when standing in front of a number of heavy glass panels which are unsecured and which are standing at near vertical was both obvious and serious.
Paragraph 10(a) of the Amended Summons pleads the primary failure of the defendant was the lack of a risk assessment being performed, and the failure to document such a risk assessment relevant to the work that Mr Zeng was doing on the day in question.
It is plain and obvious that Mr Zeng received inadequate training, instruction and information.
As can be seen from paragraph 10(d) of the Amended Summons, there should have been a safe work procedure developed about which Mr Zeng could have been trained and instructed.
It is evident that whatever systems of work were in place at the time of the incident was an inadequate system. Mr Zeng had only had about one week's training before the incident.
There was no structure, no procedure and no testing of Mr Zeng before sending him out on his own, and it is clearly apparent that he was not up to the task.
The defendant accepts that the degree of foreseeability of the risk to safety was high. However, the defendant submits that its approach to safety was high. The defendant further submits that its approach to the risk prior to the incident, evinces an intention by the defendant to address the risk, albeit it accepts its pre-incident approach was inadequate. Nonetheless, the defendant submits that it is not the case that the defendant that was blind to the risk or aware of it but chose to do nothing.
Further, the defendant accepts that the likelihood of the risk eventuating, within the facts pleaded, was high, and accepts that the gravity of the potential risk to safety, as evidenced by the incident involving Mr Zeng, was high. Through its plea, the defendant accepts that those control measures as set out in paragraphs 10(a)-(f) of the Amended Summons were available control measures.
Employers must take steps to protect workers against risks created by inadvertent conduct of workers in the course of their work, if it is reasonably practicable to do so: SafeWork NSW v Poletti Corporation [2019] NSWDC 491 at [88].
The gravity of the risk is demonstrated by the seriousness of the injuries suffered by Mr Zeng. Mr Zeng sustained multiple injuries as a result of the incident, including a fractured spine, a fracture to his lower leg, ligament damage to his left arm and multiple lacerations to his left shoulder, feet and legs. Mr Zeng's treatment included surgery, with rods and screws being inserted to support his spine at his thoracic 12 vertebrae, and lumbar 1-4 vertebrae. He spent 13 weeks in hospital. He is unable to walk. The tragedy that has befallen Mr Zeng is enormous and his suffering must be immense.
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 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 Act is considered in the context of the graduation of offences contained in ss 31-32 of the 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 [53];
Whether those steps are complex, burdensome or mildly inconvenient if mitigating steps could easily have been taken, the offending will be more serious: Ibid [53];
Whether the risk was known or ought reasonably have been known to or identified by the offender;
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).

Having regard to the seriousness of the risk and the straightforward steps that could have been taken to overcome that risk, as detailed in the Amended Summons, I am of the view that this offence objectively falls within the middle range of seriousness.
In these circumstances, there was a substantial chance of the risk manifesting.

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 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 working in an industry that necessitates the transportation, loading and unloading of heavy sheets of glass.
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 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.
There was guidance material readily available to the defendant. This risk was known to the industry. The Australian Glass & Glazing Association Safety Fact Sheet contained within Exhibit A has as its introduction the following: 'Unloading of glass is one of the most dangerous tasks undertaken: several fatalities have occurred.'
Assistance such as that provided by the Association's Safety Fact Sheet and the glass safety posters referred to in paragraph 26 of the Agreed Statement of Facts, together with the more general Code of Practice referred to in paragraphs 23, 24 and 25 of the Agreed Statement of Facts have all been available to assist corporations in the glass industry.
General deterrence is necessary to heighten and focus the attention of companies engaged in the glass handling industry as having the potential for serious injury or death of workers tasked with the transportation and unloading of heavy sheets of glass.
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 perform the same work as it did when the incident occurred.
Following the receipt of Improvement Notices 7-326125 and 7-327970, the defendant took positive steps to firstly, change the racking system and secondly, put in place additional instruction for workers engaged in the transportation of glass. In that context specific deterrence is relevant to this matter so as to ensure that the defendant continues to focus upon the need to develop appropriate safety procedures and put in place systematic, documented and appropriate training of relevant workers.
I accept that Mr Li's affidavit (Exhibit B) demonstrates that in the period subsequent to the incident, the defendant undertook a number of steps to improve safety in response to the incident.
Since the incident, the defendant has undergone a significant change to its WHS obligations, which has entailed financial expenditure in retaining a safety consultant to develop and implement a new system of work. These are ongoing and pro-active systems, and given the varied nationalities of the employees, all safety instructions and documentation are provided in English and Mandarin. The documentation is comprehensive and detailed. In many places the exact risk that was present at the time of the incident on the job training has been extended to 4 weeks. New clamps are now used to keep the sheets of glass stable on the truck.
I accept that the prospects of rehabilitation of the defendant are good, but the need for an element of specific deterrence is still necessary in these circumstances.

AGGRAVATING FACTORS

The injuries sustained by Mr Zeng were serious as detailed above and will significantly affect his life on an ongoing basis: s 21A(2)(g) of the Sentencing Act.

MITIGATING FACTORS

The defendant has no previous convictions and the prosecutor fairly concedes that this is a matter that can be taken onto account as a mitigating factor. To my mind, noting the defendant has operated in an industry which is inherently dangerous, this is a significant mitigating factor: s 21A(3)(e) of the Sentencing Act.
The defendant co-operated with the SafeWork investigation: s 21A(3)(m) of the Sentencing Act.
I accept that the defendant has reasonable prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act.
Section 21A(3)(i) of the Sentencing Act provides that remorse may be taken into account as a mitigating factor in recognition of the remorse shown by the defendant, and this has been demonstrated by Mr Li's affidavit, Exhibit C [38]-[41].
The defendant entered a plea of guilty early, 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 plea in accordance with the principles set out in R v Thomson & Houlton (2000) 49 NSWLR 383: s 22 of the Sentencing Act.

CAPACITY TO PAY

Section 6 of the Fines Act 1996 (NSW) 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 tp 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).
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 (2002) 112 IR 284 at 309 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.''
Annexure JL1 to Exhibit B is a document headed 'Profit and Loss Statement July 2020 to June 2021'. I note it is neither authored nor signed. Attached also is a letter of Mr Aaron Yeung of 26 August 2021 written on behalf of the defendant to the NSW Government relevant to COVID-19 Job Saver Payment, which states: 'I have not conducted an audit or assurance engagement to verify the reliability, accuracy or completeness of the information the Applicant has provided to me to express and audit opinion or review conclusion on the Applicant's turnover.'
I accept that there is no evidence by way of tax return for either the corporation or Mr Li, as the sole director and majority shareholder of the defendant. Nor is there any evidence before the Court as to the assets held by the defendant, nor of debts owed or the capacity of the defendant to borrow funds.
However, I also accept that the Covid-19 pandemic is having an impact on the defendant as it is on so many other businesses and persons all over the world. The defendant's premises are located in Padstow which is part of one of the Local Government Areas that was subject to an effective 'lockdown' for some 15 weeks. In these difficult circumstances, I accept that the defendant remained connected to its entire workforce, and despite the difficulties all workers have been retained. The employees hours have been reduced, but they all remain employed. I accept that the effect of the pandemic could have had, and may continue to have, a negative effect on the capacity for a defendant to pay a fine, and I will afford some leniency on that basis.
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 reasonably 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. To reduce the fine significantly would not provide the level of general deterrence that is expected, nor specific deterrence, given the risk that Mr Zeng was exposed to.
The Court is entitled to take into account the fact that the defendant 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. The costs payable to the prosecutor are an important aspect of the punishment of the defendant. 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 Act, and I have done so: Environmental Protection Authority v Barnes [2006] NSWCCA 246 at [78]. I have also taken into account that the defendant will be liable for the prosecutor's costs as part of the overall penalty imposed.
The appropriate fine for the defendant is $300,000.00. The defendant is entitled to a discount of 25% for the early plea.

PENALTY

I make the following orders: 1. The defendant is convicted. 2. The appropriate fine is $300,000.00 and that will be reduced by 25% to reflect the early plea. 3. Accordingly, I order the defendant pay a fine of $225,000.00. 4. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. 5. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW) the defendant is to pay the prosecutor's costs agreed in the sum of $20,000.00.

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 October 2021

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