SafeWork NSW v Danrae Remedial Services Pty Ltd

[2025] NSWDC 190

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Danrae Remedial Services Pty Ltd [2025] NSWDC 190

Hearing dates:

23 May 2025

Date of orders:

27 May 2025

Decision date:

27 May 2025

Jurisdiction:

Criminal

Before:

Scotting DCJ

Decision:

1   Danrae Remedial Services Pty Ltd is convicted.

2   I impose a fine of $150,000.

3 I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

4   The offender is to pay 90% of the prosecutor’s costs of the proceedings, as agreed or assessed.

5   The prosecutor is to pay the offender’s costs thrown away by reason of the vacation of the trial date of 22 July 2024.

Catchwords:

CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – duty of employers – risk of death or serious injury – injury to worker

SENTENCING - objective seriousness - deterrence - aggravating factors - mitigating factors – capacity to pay a fine - appropriate penalty

SENTENCING PRINCIPLES - no record of previous convictions - good prospects of rehabilitation - remorse

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999

Criminal Procedure Act 1986

Fines Act 1996

Work Health and Safety Act 2011

Work Health and Safety Regulation 2017

Cases Cited:

Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37

Hili v The Queen (2010) 242 CLR 520

Jahandideh v R [2014] NSWCCA 178

Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96

R v Youkhana [2004] NSWCCA 412

SafeWork NSW v Remedial Services Pty Ltd [2025] NSWDC 70

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
Danrae Remedial Services Pty Ltd (Offender)

Representation:

Counsel:
M Scott (Prosecutor)
I Latham (Offender)

Solicitors:
Legal, Department of Customer Service (Prosecutor)
Wotton Kearney (Offender)

File Number(s):

2023/168134

Publication restriction:

None

Judgment

Introduction

1. Danrae Remedial Services Pty Ltd (the offender) appears for sentence after being convicted at trial of an offence under s 32 Work Health and Safety Act 2011 (the Act).

2. The Court’s reasons for the finding of guilt are set out in the decision: SafeWork NSW v Remedial Services Pty Ltd [2025] NSWDC 70 (the verdict judgment). This judgment assumes familiarity with the verdict judgment and adopts the defined terms used in the verdict judgment.

3. The maximum penalty for the offence is a fine of $1,782,579.

Facts

4. The factual findings are set out in the verdict judgment. I have taken all of those findings into account in coming to the appropriate sentence. What follows is a summary of the relevant factual findings in the verdict judgment to permit an understanding of the sentence imposed.

5. The offender operates a business providing waterproofing services.

6. On 12 November 2021 the offender was engaged to apply a waterproofing membrane to the third-floor balcony of a townhouse in Wilson Street, Botany (the site). The task involved applying Ardex WA98 Adhesive (the adhesive), a highly flammable substance, to membrane sheets and the floor of the balcony and then sticking the membrane sheets to the floor. Where the edges of the membrane sheets overlapped, it was intended to use a Leister Triac-ST Heat Gun (the heat gun) to heat weld them together. The heat gun could reach temperatures of up to 700^oC. It was raining at the time of the work and Mr Bunyan used the heat gun to dry areas of the floor so that the adhesive would stick. The heat gun was left switched on, close to where the work was being undertaken. At about 9.00am, Mr Reid was using a roller to apply the adhesive to membrane sheets and the floor. When he placed the roller back into a bucket containing the decanted adhesive, the vapour from the adhesive ignited and a flash fire engulfed Mr Reid causing burns to his lower legs.

7. Mr Reid was taken to hospital but released on the same day and referred for treatment as an outpatient. Mr Reid has recovered well from his injuries and has no ongoing disability. He has continued to work for the offender and was promoted shortly after his return to work.

8. I was satisfied beyond reasonable doubt for the reasons given in the verdict judgment that the vapour of the adhesive was ignited by the heat gun.

9. The work was high risk construction work as defined by cl 291 Work Health and Safety Regulation 2017 (the Regulations). As a result, the offender was required to have in force a Safe Work Method Statement relating to the work at the site, and to have trained the workers on it. In the alternative, I was satisfied that the nature of the work and the risks posed by the adhesive were such that the offender should have had a written safe work procedure (SWP) in force, to inform the workers of the risks and to specify the necessary control measures.

10. The offender did not conduct an adequate risk assessment for the adhesive prior to the incident, which was required by cls 34-38, 51, 52, 351 and 355 of the Regulations.

11. The offender had a SWMS in force at the time of the incident, but it was not referred to on the day of the incident. Mr Bunyan had not been trained on the content of the SWMS and Mr Reid was aware of its existence but not sufficiently familiar with its content. In any event, the SWMS was deficient because it did not:

1. identify the heat gun as a potential ignition source and instruct the workers that the heat gun was not to be used or turned on in the area where the adhesive was being used;

2. refer to the adhesive by name;

3. address the risk factors set out in the SDS for the adhesive, in particular that:

1. the adhesive in liquid and vapour form was highly flammable; and

2. the vapour could travel long distances to an ignition source;

4. direct the workers to wear the required PPE referred to in the SDS when using the adhesive.

12. The offender knew through the attendance of Mr Caruana and Mr Reid at the Ardex training course that the heat gun was a potential ignition source but failed to identify this in the SWMS or to provide for the necessary control measures.

13. By failing to provide an adequate SWMS, the offender failed to adequately train Mr Bunyan on the risks posed by the use of the heat gun in the vicinity of the adhesive.

14. Shortly after the incident, the offender:

1. developed the Hazards Associated with Ardex WA 98 Course on the Go1 training platform, providing training to workers on the nature of work, risks associated, and control measures to be implemented when using the adhesive and a plain English safety data sheet for the adhesive, highlighting that it is highly flammable in liquid and vapour form;

2. updated the pre-start checklist on the SimPRO app to ensure that employees could not skip screens and, made the information from the SDS, available in the app;

3. developed a SWMS for the activity of “Using Ardex WA98 in the Proximity of the Leister Welder” and trained its workers on it;

4. developed a Safe Operating Procedure for applying the adhesive; and

5. prohibited the use of the adhesive in confined areas.

The Offender’s Case on Sentence

15. The offender read and relied upon the affidavit of Daniel Caruana affirmed on 20 May 2025 and an affidavit of Sian Patricia Gilbert sworn 22 May 2025 (which was only relevant to costs and I will return to it when considering that issue).

16. The following is a summary of Mr Caruana’s evidence.

17. Mr Caruana is the sole Director, Secretary and Chief Executive Officer (CEO) of the offender. He held these positions at the time of the incident. As the offender’s sole Director and CEO, Mr Caruana has ultimate responsibility for the company’s performance and operations including company strategy, business development, people and culture, marketing, financial performance and compliance and business operations.

18. Mr Caruana stated in his affidavit that on behalf of the offender he sincerely and unreservedly apologises to the Court and to Mr Reid and accepts responsibility for the failures that resulted in the incident.

19. In response to the incident, Mr Caruana deposed that he sought to ensure that the offender took appropriate and on-going actions, including frequent reviews of the implemented procedures, so that a similar incident does not occur again.

20. Mr Caruana further expressed his relief that Mr Reid was able to make a full recovery and that he continues to be a valued employee of the offender.

21. The offender is committed to ensuring a safe workplace for its workers and is confident in the measures that have been taken following the incident, as its controls and safety systems have prevented any further incidents.

22. The offender employs approximately 25 workers, including apprentices, carpenters, builders, plumbers and project managers.

23. Mr Caruana stated that at the time of the incident he held ultimate responsibility for ensuring compliance with the offender's WHS obligations, with the assistance of the following persons:

1. Wayne Spiteri – Chief Operating Officer;

2. Ron Caruana - Construction Works Supervisor;

3. Darren Luce - Services Works Supervisor;

4. Jonathan Dupont - Remedial Works Supervisor; and

5. Danny Potocki - WHSE Coordinator and Injury Management Coordinator.

24. These individuals ensured compliance with the offender's WHS obligations including the following:

1. developing and maintaining SWMS in consultations with the offender's other managers and employees;

2. ensuring control measures are implemented to manage risks appropriately;

3. developing and implementing SMPs;

4. maintaining records such as training and incident reporting;

5. conducting regular inspections on workers; and

6. identifying and adopting legislative and training changes.

25. The offender had also engaged, and continues to engage, Michael Mazzaferro of Volt Consulting to assist in complying with its WHS obligations. Mr Mazzaferro was first engaged by the offender in or around November 2018 and assisted the offender immediately following the incident including in responding to SafeWork NSW notices.

26. Mr Caruana stated that, to his knowledge, there had been no incidents of waterproofing product ignition or explosion throughout the offender’s operational history.

27. Mr Caruana stated that, based on his recollection of the incident and further consideration of relevant company records, the assistance provided to Mr Reid in response to the incident was as follows:

1. Mr Reid was treated at the site immediately following the incident by Fire and Rescue NSW members, before being taken to Royal North Shore Hospital Burns Unit by Ambulance NSW members;

2. Mr Reid received treatment at the Burns Unit, before being discharged approximately two hours later with a WorkCover NSW Certificate of Capacity that stated he did not have capacity for any work until 30 November 2021;

3. The offender’s employees did not accompany Mr Reid in the ambulance as they were subject to interviews by SafeWork NSW inspectors at the site, and Mr Reid was discharged from Royal North Shore Hospital prior to those interviews at the site concluding;

4. in accordance with the offender's return to work policy, Mr Reid was supported by way of the workers' compensation scheme while he recovered; and

5. Mr Reid returned to work for the offender on 3 December 2021 where he participated in a testing and tagging training course, and he resumed office duties from 6 December 2021. Mr Reid returned to his ordinary duties from 10 January 2022 following the Christmas shutdown period.

28. Following the incident, in his capacity as CEO and with the assistance of Mr Mazzaferro, Mr Caruana deposed that he ensured the offender made changes to its safety systems, including the following:

1. amended the prestart checklist accessed by the offender’s employees using the SimPRO app to include a requirement to read the MSDS and confirm correct use of PPE;

2. updated and implemented a SWMS specific to the installation of membranes and waterproofing rooftops, balconies and wet areas for future waterproofing work;

3. migrated test and tag records of machinery and appliances to the SimPRO app for ease of access by the offender’s employees;

4. terminated the use of Ardex WA98 in any internal or confined areas, and introduced a water based alternative product;

5. retrained the offender’s employees about the hazards associated with the use of Ardex WA98 following the creation of an accessible online course;

6. reviewed the offender's PPE and created a register to have it signed by employees to confirm receipt of appropriate PPE;

7. prepared a Safe Operating Procedure for applying Ardex WA98 which was circulated to and signed by relevant employees of the offender, including Mr Reid; and

8. conducted monthly safety inspections at the offender’s operational sites by Mr Mazzaferro to ensure compliance with the offender's safety systems and procedures.

29. Mr Caruana stated that under his direction and with the assistance of Mr Mazzaferro, the offender cooperated with SafeWork NSW’s investigation into the incident.

30. Details of the offender's compliance with SafeWork NSW's various notices resulting from the investigation are as follows:

1. Section 171 Notice No: 7-407822 dated 12 November 2021 was complied with in accordance with its deadline of 19 November 2021;

2. Improvement Notice No: 7-407825 dated 12 November 2021 was complied with in accordance with its deadline of 17 December 2021;

3. Improvement Notice No: 7-407828 dated 12 November 2021 was complied with in accordance with its deadline of 27 November 2021;

4. Improvement Notice No: 7-409249 dated 3 December 2021 was complied with in accordance with its deadline of 22 December 2021;

5. SIRA Employer Improvement Notice Reference No: 7-409282 (issued by SafeWork NSW Inspector Selena Scott) dated 3 December 2021 was complied with in accordance with its deadline of 15 January 2022;

6. Improvement Notice No: 7-409284 dated 17 November 2021 was complied with in accordance with its deadline of 15 December 2021;

7. Improvement Notice No: 7-409286 dated 17 November 2021 was complied with in accordance with its deadline of 15 December 2021;

8. Section 155 Notice No: 7-412807 dated 22 February 2022 was complied with in accordance with its deadline of 15 March 2022;

9. Section 155 Notice No: 7-417053 dated 6 May 2022 was complied with in accordance with its deadline of 27 May 2022; and

10. Section 155 Notice No: 7-417192 dated 10 May 2022 was complied with in accordance with its deadline of 31 May 2022.

31. The offender has been committed to making on-going and meaningful contributions to the community. Recent examples of these contributions by Mr Caruana and the offender include:

1. participating in the Vinnies CEO Sleepout;

2. sponsoring the Cancer Council with monthly $50 donations;

3. sponsoring Glenhaven Public School with a $500 donation to raise money for an upgrade to the playground area;

4. donating $105.95 to Koorana Child & Family Services on 15 August 2024; and

5. on-going sponsorship and participation in the Sydney MS Walk Run + Roll event, with its most recent involvement with the 2025 event raising funds in the amount of $6,989.

32. In addition to these contributions Mr Caruana stated that he assisted the offender in enacting the offender's Aboriginal Participation Plan. He is committed to ensuring the offender follow through with this program and an example of this is the offender's joint venture with Watertight Right, an Aboriginal owned and managed waterproofing business that has access to the offender's systems including quality procedures and technical training.

33. The offender does not have any prior convictions under WHS laws or any other laws.

Consideration

34. I have had regard to the objects of the Act set out in s 3 and the purposes of sentencing set out in section 3A Crimes (Sentencing Procedure) Act 1999.

Objective Seriousness

35. The offence involves some objective gravity.

36. The risk was obvious and well known, both to the offender and in the industry. The offender knew that the heat gun was a potential ignition source and had been trained by Ardex on the dangerous properties of the adhesive. It failed to incorporate that information into its SWMS and to train its workers on the content of an adequate safe work procedure. The offender placed too much reliance on Mr Reid’s knowledge and experience as a waterproofer and failed to ensure that the work was being performed safely by taking the reasonably practical steps referred to in the verdict judgment.

37. The likelihood of the risk coming home was low. Mr Reid was an experienced waterproofer and he had been given appropriate external training. The internal training documents and processes were inadequate and this culminated in a situation where Mr Bunyan, who was unaware of the risk, left the heat gun turned on in the work area where the adhesive was being used.

38. The consequences of the risk included a risk of death.

39. The steps that the offender could have taken to further minimise the risk were known to it, simple and inexpensive.

40. The injuries suffered by Mr Reid were not significant. He has made a good recovery, continued in his employment with the offender and advanced his career.

41. I have had regard to the maximum penalty for the offence.

Deterrence

42. The penalty imposed in relation to the offences must provide for general deterrence. PCBUs must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large businesses will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180].

43. There is some need for specific deterrence in this case because the offender still operates in a dangerous industry where its workers are potentially exposed to risks posed by the use of dangerous substances. The offender did have a significant safety system in place at the time of the incident. The offender quickly took the necessary steps to address the failings in its safety system that were demonstrated in the incident.

Aggravating factors

44. Mr Reid suffered an injury which is not an element of the offence. In order for the aggravating factor provided for by s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999 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]. The offence does not require an injury to be sustained but only the creation of a risk. Whilst I am satisfied beyond reasonable doubt that the aggravating factor has been established, I will not afford it much weight.

Mitigating factors

45. The offender does not have a record of prior convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender’s business has been operating since 1996. The offender was incorporated and took over the business in 2013 and Mr Caruana was appointed to his present roles in 2014.

46. The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has demonstrated, by the steps it has taken after the incident, that it has good prospects for rehabilitation.

47. The offender, through Mr Caruana, has accepted responsibility for the offence and expressed remorse: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. The offender has accepted the Court’s findings in the verdict judgment. I am satisfied that the mitigating factor is established, but it must be afforded less weight than if it had been made in connection with a plea of guilty.

48. The offender was a good corporate citizen. I am satisfied that the offender contributed to the community through its financial support of charitable and equal opportunity employment causes.

Comparable sentences

49. I have had regard to the comparable cases referred to me by the parties and I have taken into account the limitations of that exercise: Hili v The Queen (2010) 242 CLR 520.

Capacity to pay a fine

50. The Court is required to have regard to s 6 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: Jahandideh v R [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.

50. The offender did not contend that it had a limited capacity to pay a fine.

Costs

52. The offender contends that I should reduce the costs payable by it by reference to:

1. the vacation of the hearing date of 22 July 2024; and

2. the prosecutor’s failure to establish the breach of duty alleging that the offender should have used mechanical ventilation.

53. The Summons in this matter was filed on 25 May 2023. The prosecutor initially indicated that it would not be relying on expert evidence. On 22 April 2024 the prosecutor served the expert report of Mr Hunt. For the reasons expressed in the verdict judgement, the evidence of Mr Hunt was essential to the proof of the charge. At the time of service of Mr Hunt’s first report, the matter was listed for trial commencing on 22 July 2024.

54. On 12 June 2024 the offender brought an application to vacate the trial so that it could respond to the report of Mr Hunt. At that time, the offender had retained Ms Jones as its expert and received her first report. However, her second report that responded to Mr Hunt’s report was not obtained until 15 August 2024, being a date after the listed trial date.

55. The trial date was vacated and costs of the application were reserved.

56. In Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 the Court of Criminal Appeal reviewed the principles relevant to awarding costs to a prosecutor pursuant to section 257B Criminal Procedure Act 1986 relating to a prosecution under the Act. At [70] the Court stated that it may be appropriate in the circumstances of a case to award costs by reference to success or failure on discrete issues.

57. Mr Hunt’s reports made it clear that the use of mechanical ventilation on the day of the incident was not reasonably practicable because the ventilation equipment would have been another ignition source. The offending particulars could have and should have been withdrawn well before the hearing. They were not withdrawn even at the time of final submissions when, on the only evidence in the trial, they could not be maintained. Having said that, the issue did not take up much Court time in the evidence, but I am satisfied that it would have taken up some preparation time.

58. Taking into account all of these matters and noting the success of the prosecutor, I am satisfied that it is appropriate to order that:

1. the offender is to pay 90% of the prosecutor’s costs of the proceedings, as agreed or assessed; and

2. the prosecutor is to pay the offender’s costs thrown away by reason of the vacation of the trial date of 22 July 2024.

Penalty

59. Danrae Remedial Services Pty Ltd is convicted.

60. I impose a fine of $150,000.

61. I order pursuant to section 122(2) Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.

62. The offender is to pay 90% of the prosecutor’s costs of the proceedings, as agreed or assessed.

63. The prosecutor is to pay the offender’s costs thrown away by reason of the vacation of the trial date of 22 July 2024.

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Decision last updated: 27 May 2025