District Court New South Wales Medium Neutral Citation: SafeWork NSW v Denbrok Constructions Pty Limited [2023] NSWDC 407 Hearing dates: 27 September 2023 Date of orders: 4 October 2023 Decision date: 04 October 2023 Jurisdiction: Criminal Before: Strathdee DCJ Decision: (1) The defendant is convicted. (2) The appropriate fine for the offence is $400,000.00, and that will be reduced by 25% to reflect the plea of guilty, leaving a fine of $300,000.00. (3) In exercising my discretion under s 6 of the Fines Act 1996 (NSW), that fine will be reduced by 50%. (4) Accordingly, I order the defendant to pay a fine of $150,000.00. (5) Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. (6) Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor's costs, as agreed in the sum of $26,000.00. Catchwords: CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury – maximum penalty SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – appropriate discount for the utility of the plea – general deterrence – specific deterrence – remorse and contrition – maximum penalties COSTS – prosecutor's costs – capacity to pay Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW) Criminal Procedure Act 1986 (NSW) Fines Act 1996 (NSW) Work Health and Safety Act 2011 (NSW) Cases Cited: Bulga Underground Operations Pty Ltd v Nash (2016) NSWLR 338 Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610 Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 Haynes v CI & D Manufacturing (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 Jahandideh v R [2014] NSWCCA 178 Kirk v Industrial Commission of New South Wales [2010] HCA 1 Latoudis v Casey (1990) 170 CLR 534 Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 Markarian v The Queen (2005) 228 CLR 357 McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310 Muldrock v The Queen (2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 Orbit Drilling v The Queen (2012) 35 VR 399 R v Cage [2006] NSWCCA 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 (No 2) [2018] NSWDC 182 SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 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 Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 Texts Cited: Nil Category: Sentence Parties: SafeWork NSW (Prosecutor) Denbrok Constructions Pty Limited Ltd (Defendant) Representation: Counsel: Mr A Mykkeltvedt (for the Prosecutor) Mr C Magee (for the Defendant) Solicitors: Department of Customer Service (for the Prosecutor) Hicksons Lawyers (for the Defendant) File Number(s): 2022/352005 Publication restriction: Nil JUDGMENT 1. Denbrok Constructions Pty Limited ('the defendant'), being a person conducting a business or undertaking ('PCBU') who had a health and safety duty under section 19(1) of the Work Health and Safety Act 2011 (NSW) ('the WHS Act') in that on 3 December 2020, at 345 Harfleur Street, Deniliquin in New South Wales, failed to ensure so far as is reasonably practicable that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking, failed to comply with that duty and the failure to comply with that duty exposed workers, including Jake McManus ('Mr McManus') to a risk of death or serious injury contrary to s 32 of the WHS Act. 2. The offence is recorded in the Summons filed on 22 November 2022. 3. At the time of the offence the maximum penalty was $1,766,130.00. 4. The prosecutor tendered the Prosecutor's Sentence Tender Bundle ('PSTB') which became exhibit A. The defendant tendered an Affidavit of Troy Denbrok affirmed 1 September 2023 ('Denbrok Affidavit') which became exhibit 1. Troy Denbrok was not required for cross-examination. Background 1. The defendant's business or undertaking involved provision of housing construction and renovation services. 2. Mr Troy Denbrok ('Mr Denbrok') is the sole director of the defendant and has held a Builders Licence (Licence No. 12338OC) since March 2001 and has over 25 years building experience. 3. The defendant was the principal contractor for the renovation of residential property owned by Mr Denbrok at 345 Harfleur Street, Deniliquin, New South Wales ('the site'). The site was a 'workplace' for the purposes of s 8 of the WHS Act. 4. The defendant engaged or caused to be engaged 7 workers to undertake work at the site as at the time of the incident. The workers included Mr McManus (apprentice carpenter), Mr Denbrok (director, site supervisor and carpenter), Alaister McKern ('Mr McKern') (carpenter with supervisory responsibilities), Jack Blacklock ('Mr Blacklock') (apprentice carpenter), Zachary Godfrey ('Mr Godfrey') (apprentice carpenter), Ryan Hetherington ('Mr Hetherington') (carpenter), Christopher Jones ('Mr Jones') (carpenter) and Angus McCalman ('Mr McCalman') (carpenter). 5. Mr McManus was employed by the company as an apprentice, and his activities in carrying out the work were influenced or directed by the company in that he was carrying out work on their behalf. Mr McKern usually worked with Mr McManus and supervised him, but he was not present on the site at the time of the incident. Mr McManus was a worker within the meaning of s 7 of the WHS Act. 6. On 3 December 2020, Mr McManus was at work in the defendant's business and replacing a roof at the site, having been instructed by Mr Denbrok to secure roofing sheets on the existing residential dwelling above the garage and connecting to the extension. 7. Shortly before 7:00am, Mr McManus accessed the roof via an unsecured ladder at the front of the house facing the roadway. He was standing on a corrugated iron sheet near the ridge of the roof, marking screw lines, when he lost balance, slipped, and slid down the approximately 30-degree pitch and fell from the unprotected perimeter edge onto the ground surface. 8. At approximately 7.00 am, he fell approximately 4 metres from the roof of the residential property to the ground below. His fall was unwitnessed, as he was not being directly supervised at the time of the incident. 9. Mr Godfrey heard Mr McManus slide off the roof and hit the ground, and when he walked around he saw Mr McManus on the ground. Mr McManus was initially rendered unconscious and transported to Deniliquin Airport where he was airlifted to Royal Melbourne Hospital. Systems of work prior to the incident 1. Prior to the incident, the defendant prepared a Safe Work Method Statement dated 8 June 2020 ('SWMS'). The project description in the SWMS was given as "Relocation of Demountable Office Building". 2. Consistent with this, the SWMS was a generic statement and not specific to the work being undertaken at the site. The SWMS identified a risk of a person falling two metres or more. At Step 12, the controls for working at heights over two metres and the hazard of a fall or slide from a work platform had a handwritten "wear harnise (sic)" inserted. The words "provide fall protection over heights of 2m" and "provide roofguard rails for roof edges if working on roofs" were crossed out. 3. Workers were not provided with specific instructions in relation to access or egress from the roof. In practice, they accessed the roof via an unsecured ladder. 4. There is some evidence that harnesses were available on site, though not all workers were aware of the possible availability of harnesses; Mr McManus stated that there were not harnesses available for use. 5. In any event, workers were not instructed or required to wear harnesses, and none of the workers who accessed the roof on the day of the incident wore a harness. 6. As noted above, there were no guard-rails or edge protection in place at any time before the incident. 7. It is an agreed fact that Mr McManus advised SafeWork inspectors that he had not received training in working at heights or the use of harnesses. Following the incident 1. After the incident, the defendant developed and implemented a new SWMS specific to high risk construction work and the work environment at the site. Consistent with the risk controls identified in the new SWMS, Mr Denbrok purchased and installed roof barriers and hired and installed scaffolding. 2. The defendant took significant steps to ensure the safety of workers. There was extensive and ongoing risk-based re-examination of the management of hazards and risk associated with the nature of the work that the defendant was engaged in doing. 3. After the incident, training was provided to workers in working at heights, first aid, and scaffolding. 4. Mr Denbrok provides further details of the many steps taken after the incident the Denbrok Affidavit. The defendant's duty 1. The defendant 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, so far as is reasonably practicable and the adoption of measures to eliminate or minimise them, so far as is reasonably practicable: Kirk v Industrial Commission of New South Wales [2010] HCA 1 at [34]. The duty is positive, nondelegable and requires duty holders to search for, detect and eliminate, so far as is reasonably practicable, risks to safety. The risk 1. The risk relevant to this offence is described in Annexure "A" to the Summons in the following terms: "10 The risk was the risk of workers, including Mr McManus, suffering serious injury or death as a result of falling from height when working on the roof at the site". The defendant's failure to comply with the s 19(1) duty 1. The summons provides that the defendant breached its s 19(1) duty by failing to take the following reasonably practicable measures to reduce or eliminate the risk: 1. Developing, implementing and enforcing (including by appropriate supervision) an adequate safe system of work for accessing and working from the roof at the site which specified appropriate control measures including: 1. Prohibiting workers from accessing any parts of the roof that did not have edge protection such as scaffolding and/or guardrails installed, and/or 2. Using ladders to access and egress the roof that were securely tied down, and/or 3. Requiring workers to wear harnesses that were secured to suitable anchor points when working on the roof at the site, and/or 4. Prohibiting workers from accessing the roof without a supervisor being present at the site. 1. Installing edge protection such as scaffolding and/or guardrails prior to any work being undertaken on the roof; 2. Providing information to workers so that they knew where safety harnesses were kept at the site; 3. Requiring workers to wear safety harnesses that were secured to suitable anchor points when working on the roof at the site; 4. Providing adequate supervision to workers, including Mr McManus, so that: 1. workers did not access the roof areas where there was no edge protection and/or 2. harnesses were worn and secured whilst workers were working on the roof at the site. 1. Providing adequate information, instruction and training to workers in relation to safety issues associated with working at heights, including in relation to (a) - (e) above. Guidance Material 1. The relevant legislation and guidance material is detailed in [30] – [35] of the Agreed Statement of Facts ('ASOF') and I do not propose to repeat it here. Sentencing 1. 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. 2. 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. 1. 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. 2. 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 1. 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 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.' 1. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464, 474–5. 2. 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 duty requires the identification of risks in the workplace and an assessment of measures to address such risks. 3. 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. 4. 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]. 5. 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, here the use of edge protection, scaffolding and harnesses. 6. 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]. 7. 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'). 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.' 1. 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.' 1. 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. 2. 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). 3. 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). 4. The risk in these proceedings was obvious, glaringly so. The risk of falls from height in workplaces is notorious, and particularly so in the context of constructions projects, and especially roofing work. It is difficult to understand how PCBUs can overlook such foreseeable risks, despite the Court trying to get the message out into the community. I note that this was in fact Mr Denbrok's home that was being worked upon when the incident occurred, and this perhaps led to some complacency, however safety issues must be at the forefront of the mind of all persons involved in working at height, given the inherently dangerous nature of such work. 5. 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: 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 materialize: Nash v Silver City [34]; 2. The availability of steps to eliminate or minimise the risk: Nash v Silver City [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 [34] and [53]; 4. Whether the risk was known or ought reasonably have been known to or identified by the offender; 5. Whether the risk was an obvious or clear one; and 6. The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 at [55] (Russell SC DCJ). 1. 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.' 1. The following matters are relevant to determining the culpability of the defendant: 1. Mr McManus was an inexperienced apprentice working on a roof with a steep pitch. 2. Mr McManus had been instructed by Mr Denbrok to secure roofing sheets on the existing residential dwelling above the garage. Mr Denbrok and two other workers were working on another section of the roof and were away from Mr McManus, he was not being directly supervised at the time of the accident (ASOF [7] – [8], [15]). 3. Mr McManus had accessed the roof via an unsecured ladder at the front of the house (ASOF [22]). 4. Mr McManus was not wearing a harness, and there was no edge protection, scaffold or guard rails to prevent his fall (ASOF [25]). 5. Workers were not provided with specific instructions in relation to access or egress from the roof, and in practice they accessed the roof via an unsecured ladder (ASOF [22]). 6. Although there is evidence that there were harnesses available on site, not all workers were aware of the possible availability of harnesses. Mr McManus stated that there were not harnesses available for use (ASOF [23]). 7. In any event, workers were not instructed or required to wear harnesses, and none of the workers who accessed the roof on the day wore a harness (ASOF [24]). 8. There were no guardrails or edge protection in place at any time before the accident (ASOF [25]). 9. It is agreed that Mr McManus was not provided training in working from heights or the use of harnesses (ASOF [27]). 10. This was an entirely obvious risk and could have been eliminated or at least minimised by the implementation of entirely simple measures. 11. Whilst I accept that there were some safety measures in place, they were not utilised, or enforced. 1. As a consequence of the matters set out above, I am of the view that this is an objectively serious offence. The abject failure of the defendant with regard to its WHS duty suggests that this matter is at the top end of the mid-range. The seriousness of the foreseeable harm to a worker was significant, and the steps available to avoid the risk were straightforward and available to the defendant. Deterrence 1. 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. 2. 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). 3. When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68. 4. The Court of Criminal Appeal in Bulga Underground Operations v Nash (2016) 93 NSWLR 338 ('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 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.' 1. General deterrence must be a significant feature of the sentence imposed upon this 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 the building industry and in particular work performed at height. 2. 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. 3. 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. 4. 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. 5. The defendant took extensive steps after the incident to address the failures of and complying with the defendant's WHS duty. I accept that this incident has come as a wake up call for the defendant and Mr Denbrok, and that it has led to an extensive and detailed review and re-evaluation of all the systems of work, and I accept that Mr Denbrok is committed to enforcing such system. 6. Furthermore, I note that whilst the defendant continues to work in the industry, it no longer does roofing work, and outsources that work to specialist roofers. 7. I accept that the prospects of rehabilitation of the defendant are very good, however, the need for an element of specific deterrence is still necessary in these circumstances. Aggravating factors 1. 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). 2. The serious injuries sustained by Mr McManus, including pulmonary contusions throughout his right lung, right midshaft clavicle fracture, right third and fourth rib fractures and left knee laceration, were a manifestation of the risk. 3. The defendant's offending conduct exposed a person or persons to a grave risk of death: s 21A(2)(ib) of the Sentencing Act. Mitigating factors 1. In Haynes v CI & D Manufacturing (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.' 1. The defendant has not been subject to any prior convictions under work health and safety law: s 21A(3)(e) of the Sentencing Act. 2. I accept that the defendant is a corporate citizen of good character and has made significant charitable donations as an active contributor to and sponsor of its community: s 21A(3)(f) of the Sentencing Act. 3. I accept the defendant is unlikely to reoffend: s 21A(3)(g) of the Sentencing Act. 4. I accept that the defendant has good prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act. 5. I accept that the defendant has demonstrated its remorse by providing evidence that it has accepted responsibility for the offence and has acknowledged the injury, loss and damage caused by the offence: s 21A(3)(i) of the Sentencing Act. 6. I accept that the defendant has done this in part by implementing many measures to minimise the risk since the incident, at a significant cost. 7. I accept that the remorse is genuine and that Mr Denbrok himself has suffered psychological issues as a consequence of the incident. 8. The defendant co-operated with SafeWork NSW during its investigations: s 21A(3)(m) of the Sentencing Act. 9. The defendant entered a plea of guilty early, which of itself demonstrates remorse and acceptance of responsibility for the incident, and the prosecutor accepts that it is open to me to find that the defendant is entitled to the maximum discount on that basis. Thus, 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 & Houlton (2000) 49 NSWLR 383 and ss 21A(3)(k) and 22 of the Sentencing Act. Capacity to pay 1. Section 6 of the Fines Act 1996 (NSW) ('Fines Act') 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.' 1. 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]. 2. 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). 3. 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.'' 1. 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.' 1. 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.' 1. 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). 2. 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: 1. the financial position and means of a defendant should be taken into account when determining the fine to be imposed; 2. 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; 3. it is for the defendant to place detailed financial information that fully discloses its financial circumstances to the Court so that a proper assessment of his capacity to pay can be undertaken; 4. 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 5. 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 Pty Ltd (2004) 137 IR 310 at [24]–[25]; 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]. 1. I accept that the defendant does not have a capacity to pay a large fine. Most of any profits generated by the business are retained by the company and reinvested into the business to allow it to continue to operate. 2. The limited financial capacity of the company is demonstrated by its financial records which are summarised at paragraphs [64] – [78] of the Denbrok Affidavit. 3. I accept that the company does not have much in the way of assets. Generally, the assets of the company are its trade receivables and work in progress, and any cash in the bank used for operational purposes. The company owns only a limited amount of plant and equipment which is essential for the ongoing conduct of the business. Indeed, the three utility vehicles and one excavator used by the business are the subject of chattel mortgages. 4. The Defendant's business is primarily concerned with providing carpentry services in respect to the building and renovation of residential dwelling in a regional area (Deniliquin) of New South Wales. It is a small company and currently employs 4 full-time qualified carpenters and 3 apprentices, and a bookkeeper/office manager. It also engages subcontractors on a job-to-job basis. 5. It is evident that Covid-19 had a significant negative impact on the defendant's business. In an attempt to rebuild the business, the defendant has taken out commercial loans for office and shed space, and to exhibit in a display home village in the hope of obtaining more work. 6. The company made a trading loss in the Financial Year ending June 2022, and used much of its cash reserved to continue to trade. This can be seen by the Balance Sheet as at 30 June 2022 showing cash and cash equivalents of $73,842.00, as compared to $215,571.00 for the Financial Year ending June 2021. 7. While there has been an improvement in trading conditions in the Financial Year ending June 2023, there has been a significant increase in the costs of running the business. In particular the company has had to pay subcontractors considerable amounts to undertake roofing and other works on behalf of the business. As a result the company only made a small nett profit after tax of $40,050 in the Financial Year. 8. On the basis of the totality of the documents before me, I will allow the defendants some leniency. To impose a fine that might be crushing, could put the viability of the defendant in jeopardy. 9. 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). 10. 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, 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. 11. 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 1. I make the following orders: 1. The defendant is convicted. 2. The appropriate fine for the offence is $400,000.00, and that will be reduced by 25% to reflect the plea of guilty, leaving a fine of $300,000.00 3. In exercising my discretion under s 6 of the Fines Act 1996 (NSW), that fine will be reduced by 50%. 4. Accordingly, I order the defendant to pay a fine of $150,000.00 5. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. 6. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor's costs, as agreed in the sum of $26,000.00. ********** 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: 04 October 2023