District Court New South Wales Medium Neutral Citation: Safework NSW v K & R Fabrications (W'gong) Pty Limited (No. 2) [2019] NSWDC 457 Hearing dates: 29 August 2019 Date of orders: 03 September 2019 Decision date: 03 September 2019 Jurisdiction: Criminal Before: Russell SC DCJ Decision: (1) The offender is convicted. (2) Order the offender to pay a fine of $75,000. (3) Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. (4) Order the offender to pay the prosecutor's costs as agreed or assessed. (5) Order the return of Exhibits forthwith. Catchwords: CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence – appropriate penalty COSTS - prosecution costs OTHER – unrestrained bearing housing of gearbox fell on worker causing serious injury – need for bearing housing to be restrained when backing plates of housing were removed – need for SWMS or JSA for task being carried out Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW) Fines Act 1996 (NSW) Work Health and Safety Act 2011 (NSW) Cases Cited: Baumer v R [1988] HCA 67; (1988) 166 CLR 51 Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 BW v R [2011] NSWCCA 176 Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Mahdi Jahandideh v The Queen [2014] NSWCCA 178 Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96 R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 R v Wilkinson (No. 5) [2009] NSWSC 432 SafeWork NSW v K & R Fabrications (W'Gong) Pty Limited [2019] NSWDC 238 Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 Category: Sentence Parties: SafeWork NSW (Prosecutor) K & R Fabrications (W'gong) Pty Limited (Defendant) Representation: Counsel: M Cahill (Prosecutor) P Lowson (Defendant) Solicitors: SafeWork NSW (Prosecutor) Holman Webb (Defendant) File Number(s): 2018/22519 Judgment 1. K & R Fabrications (W'gong) Pty Limited (the offender) was found guilty on 7 June 2019 of an offence that as a person who had a work health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (the Act) it failed to comply with that duty and thereby exposed Graham Hogan, Dean Conkey and Joshua Garbutt to a risk of death or serious injury contrary to s 32 of the Act - SafeWork NSW v K & R Fabrications (W'Gong) Pty Limited [2019] NSWDC 238 (the Primary Judgment). 2. The maximum penalty for the offence is a fine of $1,500,000. Background 1. The parties presented an Agreed Statement of Facts at the trial and this material was recorded at paragraph 29 of the Primary Judgment. 2. Additional facts were found at paragraphs [30]-[86] and [96]-[122] of the Primary Judgment. The offender's evidence 1. Mark John Carberry swore an affidavit on 20 August 2019 (DX 3). He is the general manager and a co-director of the offender. 2. Mr Carberry started with the offender as an apprentice in 1980 and progressed through the ranks to become the general manager 11 years ago. The offender has been in business for just over 50 years as a fabricator, supplier and installer of structural steel work and a provider of diversified industrial maintenance services. The offender has 88 full-time employees, many of whom have served with the company for a long time. It supplies services to many of the major industrial undertakings on the south coast of New South Wales. 3. Mr Carberry acknowledges that the steel fabrication industry is heavy industry with a high risk of injury. Two full-time employees are employed as occupational health and safety officers, at a total cost of $250,000 per annum. The offender's Safety Management System includes Monday morning weekly safety meetings held on site, induction for all staff, monthly training on safety, daily toolbox talks, daily site checks and the daily update or development of JSAs for each particular task. Site inspections and audits by the work health and safety officers are carried out to ensure the system is being followed. External trainers are engaged to address the workers on safety issues. The offender receives an extra discount on its workers compensation premiums because of its excellent safety record and low rate of workers compensation claims. The offender has received numerous safety awards. In its 50 years of operation, the offender has never before been prosecuted, or been issued with any improvement notices. 4. Mr Carberry sets out the nature of the work being done by the offender which led to the injury. He acknowledges that none of the offender's employees identified the risk on the day of the accident in which Mr Garbutt was injured. Mr Carberry immediately went to the site after the accident, and then telephoned Mr Garbutt's employer, so that his family could be contacted. Mr Carberry sent Mr Doyle to hospital to offer any assistance to Mr Garbutt's mother. The offender offered to pay for accommodation for family members if that was required. Following the accident, it also offered lawn mowing services to Mr Garbutt. The offender arranged for counselling for all workers on site. 5. After the incident the offender: 1. conducted a workshop for all workers to debrief on the incident and re-train staff in identifying risks; 2. ensured that all employees working at Boral participated in a risk assessment for the remaining work to be done on the gear box; 3. required Boral supervisors to be present at the offender's daily toolbox meetings; 4. retrained all staff in relation to signing off on JSAs daily; and 5. re-visited JSAs during morning tea and lunch breaks. 1. Mr Carberry said: "On a personal level it was devastating to see Josh and to know that he had suffered leg injuries, and this incident has further cemented K & R's commitment to the safety of its employees, labour hire workers and the people K & R work with and for." 1. Mr Carberry gave evidence that the offender is a good corporate citizen, which regularly donates $50,000 per annum to charities and community organisations in the Illawarra region. 2. Mr Carberry's affidavit could serve as a model for the kind of evidence which the court requires from an offender on a sentence hearing in a work health and safety prosecution. It contains sufficient detail concerning the incident and the steps taken to improve safety since the incident. It is concise and is expressed in admirably plain English. 3. The defendant also tendered the affidavit of its solicitor Ms Mataere sworn on 28 August 2019 (DX 4). It annexed an ICAM Incident Investigation Report of FLSmidth. The report records that it was not the role of Mr Kidawa, who was the specialist supplied by FLSmidth in relation to the gearbox job, to provide instruction on the installation process. The Report contains a number of recommendations. Included in those recommendations is that FLSmidth should conduct a review or re-wording of their instruction manual to set out the process involved in installation. 4. FLSmidth advised Ms Mataere that the review has occurred and that an updated manual will be reissued the next time a gearbox of this type is sold by FLSmidth. Such a sale has not occurred to date. That evidence ties into a submission (dealt with below) that the actions of FLSmidth in part contributed to the cause of the incident. Consideration 1. I have had regard to the objects in s 3 of the Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999. Objective seriousness of the offence 1. The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term "objective circumstances" was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 at [15]. 2. The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R [1988] HCA 67; (1988) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed, and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70]. 3. The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson (No. 5) [2009] NSWSC 432 at [61]. 4. The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively. 5. 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 judgment without any attempt to state precisely how any given factor has influenced the judgment. 6. The Court of Criminal Appeal has recently examined the sentencing process with regard to the Act in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96. His Honour Justice Basten at paragraph 34, under the heading 'Assessment of Risk' said: "The sentencing judge commenced his consideration with the proposition that 'greater 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 on assessment of all those factors." 1. Further at paragraph 42 his Honour continued: "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, were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs." 1. At paragraph 53 his Honour 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 the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting 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 materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken." 1. My findings about the offender's level of culpability are based upon the following: 1. The defendant through its employees on the night shift had actual knowledge of the risk of the housing falling off, if both rear cover plates were removed; 2. The defendant through its employees on the day shift ought to have known of that same risk; 3. There was on site means of eliminating the risk, which was simple to put in place and involved no cost. The overhead crane could and should have been used to support the weight of the bearing housing; 4. Given that the housing weighed 1.3 tonnes, the housing falling onto a worker carried the risk of death or serious injury; 5. The risk came home as manifested by the serious injuries to both legs of Mr Garbutt; 6. The submission of the defendant (MFI 7, para 9) that the likelihood of the risk arising was remote, and that this was not in the defendant's control, is rejected. With the bearing housing sitting supported only by gravity and its own weight on the spherical roller bearing, any lateral force applied to the housing could dislodge it. The defendant's workers were performing physical tasks, and applying force, to the housing in the course of the work undertaken by the day shift. It was the three workers of the defendant (two were direct employees of the defendant, and the third was a labour hire worker) who were doing the work on the bearing housing when it fell onto Mr Garbutt. The risk was not remote, and the control of the risk was, in the immediate circumstances of the accident, in the defendant's control; 7. Other parties had responsibility which led to the incident. I accept the submissions put by counsel for the defendant that failures by FLSmidth and Boral were also causative of the incident; 8. The offender had extensive safety systems in place, which were not only documentary, but included training, inductions, meetings, site audits and the development of JSAs for each particular task. The fact that the offender has a 50 year clean record, while conducting business in heavy industry, suggests that such systems were appropriate if followed; 9. There is no evidence to explain why the defendant's employees on the day shift did not pick up the risk. The simple fact is that they did not perform an appropriate risk assessment or create or revise an appropriate JSA; 10. The task being undertaken by the defendant when the incident occurred was a one-off task, which required no particular engineering expertise, but which did require the employees of the defendant to apply their considerable trade skills to looking at the job and assessing the risk before they started work. This is not a case where the risk was common or well-known, such as the risk of a fall from a height, or the risk of using a forklift. Nevertheless, the risk was there to be seen, and was seen, by other employees of the defendant earlier in the process. 1. I find that the offender's level of culpability is in the low end of the mid-range. Deterrence 1. The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180]. 2. The penalty must reflect the need for specific deterrence. The offender is still conducting a business. Its operations involve the continuing provision of services to heavy industry and the continuing engagement of workers in a high risk environment. Aggravating factors 1. The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. 2. The court received the Victim Impact Statement of Mr Garbutt dated 21 August 2019 (PX 25). He is presently 33 years of age. He enjoyed the work of being a tradesman in the industry. Prior to the accident he was an active young man who was living with his future wife Erin. 3. After discharge from hospital Mr Garbutt was wheelchair-bound. He and Erin had to move back in with her parents, due to his lack of mobility. He had to be cared for by Erin, including showering and toileting. She gave up full-time work to care for him. The couple moved out in June 2016. By that time Mr Garbutt was getting about on crutches, and later he started using a walking stick. He still does so. He could only resume driving in about mid-2017. He received workers compensation benefits including weekly payments, however these have not matched his potential earnings if uninjured. He will never return to his pre-injury occupation as a fitter/machinist. He has no other skills. He is not academically suited to many of the jobs which would be available to a person with his physical problems. 4. Mr Garbutt becomes anxious when near construction sites or heavy machinery. He cannot walk any significant distance without a walking stick. He can only lift light objects. He can no longer do the maintenance on his car. He has very poor balance and worries about falling and hurting himself. He has poor circulation in his legs. He now sits in a shower chair to take a shower, because of his balance problems. He gets more pain in his legs in cold weather. He has made job applications but has been unsuccessful. He and his wife Erin have not been able to buy a home of their own, because of financial loss caused by the accident. He has trouble sleeping. He still has bad memories and flashbacks of the accident. His injuries have placed a significant strain on his marriage. The couple now have a baby, but he cannot provide the assistance to his wife that he would like to, because of his physical disabilities. He feels that he will miss out on a lot of special events in life with his son, because he cannot fully participate in the care of him, or in future activities with him. Mitigating factors 1. The offender has no previous convictions: s 21A(3)(e) of the Crimes (Sentencing Procedure) Act 1999. The offender has operated for over 50 years. It will receive a significant discount on the sentence which would otherwise be imposed. 2. The offender is otherwise of good character: s 21A(3)(f) of the Crimes (Sentencing Procedure) Act 1999. The steps which the offender took after the incident demonstrate this. The offender has been in business for over 50 years. 3. The offender is unlikely to re-offend: s 21A(3)(g) of the Crimes (Sentencing Procedure) Act 1999. 4. The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has taken positive steps to guard against the risk of an incident such as this ever happening again. The offender has improved its documentation and its procedures even further since this accident. 5. The offender does not rely on remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. However, the offender has provided evidence that it regrets the injury to Mr Garbutt, and that it took positive steps to improve safety after the accident. 6. The offender gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. The offender co-operated at all times with the prosecutor and provided all documents requested in a prompt fashion. Capacity to pay a fine 1. I am required to have regard to s 6 of the Fines Act 1996 before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the court that it should exercise its discretion to limit the amount of the fine. The offender's capacity to pay is relevant but not decisive: Mahdi Jahandideh v The Queen [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence. 2. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 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. There was no submission about capacity to pay, so this issue does not arise. Costs 1. Save for one matter, the parties have agreed to an order that the offender is to pay the prosecutor's costs. 2. Counsel for the defendant submitted that the costs should not include any costs associated with the reports prepared by Dr Robert Casey. It was submitted that: incorrect assumptions were provided to Dr Casey; parts of the report were successfully objected to; limited reliance was placed on the report by the prosecutor in its submissions; and the judgment did not rely on any part of the Casey report. 3. Most of the three reports of Dr Casey were not objected to and contain useful background engineering analysis in relation to the components of the gear box. The fact that the reports were not referred to in the judgment does not mean that the reports were not considered as part of the overall evidence in the case. I see no reason to disallow the costs of the Casey reports. Penalty 1. My orders are: 1. The offender is convicted. 2. Order the offender to pay a fine of $75,000. 3. Order pursuant to Section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor. 4. Order the offender to pay the prosecutor's costs as agreed or assessed. 5. Order the return of Exhibits forthwith. ********** 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: 03 September 2019