SafeWork NSW v South Coast Under Road Borers Pty Ltd

[2021] NSWDC 314

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v South Coast Under Road Borers Pty Ltd [2021] NSWDC 314

Hearing dates:

18 June 2021

Date of orders:

14 July 2021

Decision date:

14 July 2021

Jurisdiction:

Criminal

Before:

Scotting DCJ

Decision:

1   South Coast Under Road Borers Pty Ltd is convicted.

2   I impose a fine of $375,000.

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

Catchwords:

CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – duty of employers – risk of death or serious injury – death of 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 - plea of guilty - assistance to law enforcement authorities

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999

Work Health and Safety Act 2011

Work Health and Safety Regulation 2017

Cases Cited:

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

Jahandideh v R [2014] NSWCCA 178

R v Borkowski (2009) 195 A Crim R 1

R v Thomson & Houlton (2000) 49 NSWLR 383

R v Youkhana [2004] NSWCCA 412

Texts Cited:

How to Manage Work Health and Safety Risks, December 2011

Managing the Risks of Plant in the Workplace, July 2014

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
South Coast Under Road Borers Pty Ltd (Defendant)

Representation:

Counsel: M Cahill (Prosecutor)
A Davis (Defendant)

Solicitors: Legal, Department of Customer Service (Prosecutor)
Pryor, Tzannes and Wallis (Defendant)

File Number(s):

2020/329234

Publication restriction:

None

Judgment

1. South Coast Under Road Borers Pty Ltd (the offender) appears for sentence after it pleaded guilty to an offence pursuant to s 32 Work Health and Safety Act 2011 (the Act) in that it failed to comply with the health and safety duty it owed pursuant to s 19(1) of the Act and thereby exposed Reece Marchello, Christopher Higgins and Wesley Froud to a risk of death or serious injury.

2. The maximum penalty for the offence is a fine of $1.5 million.

Facts

3. The parties tendered an Agreed Statement of Facts that can be summarised as follows.

Background

4. At all material times the offender conducted a business or undertaking as a provider of specialist underground directional drilling, vacuum extraction, trenching and related services in the construction industry.

5. The offender maintained its registered office and principal place of business at 1810 Princes Highway, Termeil in the State of New South Wales (the premises).

6. Rebecca Cooney was the sole director, secretary and sole shareholder of the offender. Mrs Cooney was responsible for the office and administrative work related to the company, including site documentation, pre-start checklists and Safe Work Method Statements (SWMS).

7. Mrs Cooney was also responsible for implementing the company’s occupational health and safety (OHS) procedures by ensuring that all staff were adequately trained in OHS requirements and that the fleet of vehicles owned and operated by the company were maintained and serviced.

Workers

8. Damien Cooney oversaw the day-to-day operations of the company and was retained as the manager of the company’s specialist underground drilling and related services. Mr Cooney provided instructions to the employees of the company regarding the assignment of work and their daily activities. He was usually onsite at the premises on most days.

9. Mr Cooney was qualified as a directional driller and had 23 years’ experience in underground directional drilling and mechanical industries. He supervised the work performed by the offender’s workers at drilling sites and performed duties, as well as performing drilling work himself.

10. Christopher Higgins was employed by the offender as a machine/drill operator and was assigned as crew leader responsible for supervising the drilling crew. Mr Higgins would follow the instructions of Mr Cooney.

11. Wesley Froud was employed as a fitter/labourer/truck driver. He performed maintenance on trucks, welding work and truck driving duties.

12. Reece Marchello was employed by the offender as a mechanic. Mr Marchello was 27 years old. He started work for the offender on 3 October 2017, only three weeks prior to the incident. He was employed full time on a three month probationary basis.

13. Mr Marchello was a qualified light vehicle mechanic prior to being employed by the offender. He was employed because of his knowledge, skill and experience in servicing light vehicles. His role was to be an “in-house” mechanic, which was to include developing and maintaining all policies and procedures for the maintenance and servicing of the offender’s light and heavy vehicles.

Hino Truck

14. At all material times, the offender owned and operated a fleet of vehicles, including heavy commercial and light vehicles, together with a range of specialist equipment used in the performance of directional drilling and related services. At the time of the incident, the offender operated approximately 10 trucks.

15. The offender was the registered owner and the operator of a blue Hino FR602B Rigid Truck, registration number CK05ZA (the truck). The truck had a Gross Vehicle Mass of 26 tonnes and was fitted with:

1. a manual gearbox;

2. a manually operated cable handbrake which was controlled by engaging a handbrake lever located in the cabin of the truck, which utilised a cable mechanism to engage a small drum brake mounted to the rear of the gearbox;

3. a tandem rear axle;

4. a large vacuum tank mounted on the rear flat bed of the truck; and

5. an industrial vacuum unit consisting of two mechanical vacuum pumps fitted in cradles attached underneath the flat bed of the truck.

16. The vacuum unit on the truck was powered by a power take-off (PTO) which also powered the hydraulic system, mounted on the rear of the truck. The hydraulics opened the rear of the vacuum tank and raised the tank for “tipping”. To operate the hydraulics, the PTO had to be engaged; and to enable the PTO to be engaged, the manual transmission had to be in neutral.

17. The truck was used by the offender to vacuum up dirt and mud from its drilling sites. After being used in the field at drilling sites, the truck would be driven back to the premises, where the mud and dirt would be tipped from the tank of the truck. This emptying process would occur each time the truck was used.

18. At the time of the incident, the vacuum unit on the truck was not functioning properly. Only one of the two vacuum pumps was running correctly due to a worn or damaged universal joint located between the two vacuum pumps underneath the truck.

19. Mr Marchello had enquired with suppliers about obtaining a replacement universal joint part for the truck several days before the incident. The part had not been sourced at the time of the incident.

Events Leading Up to the Incident

20. On the morning of 23 October 2017, Mr Marchello was assigned by Mr Cooney to work as a member of a work crew consisting of Mr Higgins, Mr Froud and Mr Marchello (the workers). Mr Higgins was the crew leader.

21. The workers were instructed by Mr Cooney to attend a work site at Dolphin Point. The workers were instructed to clean-up the site and then return the offender’s plant and equipment, including the truck, to the premises for cleaning and preparation, before being deployed to a new work site.

22. After finishing the clean-up of the Dolphin Point site, Mr Higgins instructed Mr Marchello to return to the premises with Mr Froud in another vehicle. Mr Higgins drove the truck back to the premises.

23. At approximately 11:30am, Mr Higgins arrived at the premises and reversed the truck into a position to the south of, and adjacent to, a man-made dam located at the premises. The area where Mr Higgins parked the truck was uneven, on soft dirt and had an incline that sloped towards the edge of the dam.

24. Mr Higgins parked the truck in this position because it was intended that the mud in the vacuum tank of the truck was to be dumped near the dam. The truck was routinely parked in this area to empty the mud from the tank and then to clean the inside of the tank.

25. After stopping the truck in this position, Mr Higgins placed the truck in neutral gear and engaged the handbrake so that he could operate the vacuum unit and the hydraulics to open and tip the tank.

26. Mr Higgins left the engine running, exited the cabin, and walked around the side of the truck. He witnessed hydraulic oil on the ground and realised that one of the hydraulic hoses on the truck had failed. This meant that the tank was unable to be lifted to be emptied.

27. Mr Higgins then returned to the cabin of the truck, turned the hydraulic system off and moved the truck slightly forward before stopping the engine. The truck was still parked near the dam on uneven, soft and sloping soil. The wheels were not chocked. Flat surfaces were available at other locations on the property.

28. At approximately 12:00pm, Mr Froud and Mr Marchello arrived back at the premises. The workers began repairing the failed hydraulics on the truck whilst it was still parked in the position that Mr Higgins had left it. The work that needed to be performed required the workers to be underneath the truck. The workers did not discuss moving the truck to a different location to perform the work.

29. Whilst Mr Froud and Mr Higgins were trying to weld the hydraulic hose, Mr Marchello removed the universal joint between the two vacuum pumps underneath the truck.

30. Mr Higgins called Mr Cooney to discuss the broken hydraulic hose and the replacement universal joint. Mr Cooney instructed Mr Higgins to try and get the parts for the truck that afternoon as a matter of urgency because the job planned for the next day with the truck could not be started without the replacement parts.

31. Between 3:00pm and 3:30pm, Mr Higgins left the premises to go to Batemans Bay to attempt to purchase the replacement parts. Mr Higgins did not tell the other workers that he was leaving the site and he did not discuss undertaking any other repairs on the truck.

The Incident

32. Mr Marchello continued to carry out work alone on the truck whilst the truck was parked in the same position. Mr Marchello did not move the truck and he did not chock the wheels. Mr Higgins and Mr Cooney were unaware that Mr Marchello continued to work underneath the truck, and it is uncertain what work he was performing at that time.

33. At about 4:00pm, Mr Marchello obtained and transported a King Chrome 3000-kilogram trolley jack (the jack) for use underneath the truck. He also obtained tools and ply boards to take to the truck.

34. Mr Marchello raised the jack in an unknown position underneath the truck to carry out the work he wished to perform. It is unknown whether his intention was for the jack to support the whole truck, or a component located under the truck.

35. Mr Marchello was working alone with the jack underneath the truck. The truck was still parked on the soft, sloping ground adjacent to the dam.

36. At about 4:37pm, the truck began moving backwards. The jack was displaced, and moved down the slope towards the dam.

37. At the time of the incident, Mr Froud was working approximately 100 metres away. He heard a noise and turned around to see the truck slowly rolling backwards down the slope.

38. The truck came to a rest with its rear driver side tyre on the edge of the dam. It had rolled backwards approximately 3 to 4 metres from its original position.

39. Mr Froud ran up to the truck and jumped in the cabin. He found that the handbrake was fully engaged but the gearshift was in the neutral position. He placed the truck in gear before exiting the cabin.

40. Mr Froud then looked underneath the truck and saw Mr Marchello pinned between the jack, the undercarriage of the truck and the ground. Mr Froud rang emergency services.

41. Mr Froud remained on the phone for approximately 20 minutes until emergency responders arrived at the premises. During this time, Mr Froud dug rocks out of the ground nearby and placed them behind the wheels of the truck in an attempt to prevent it from moving any further towards the dam.

Injuries

42. NSW Fire and Rescue and Ambulance personnel attended the premises and began attempting to remove Mr Marchello from underneath the truck.

43. Mr Marchello sustained fatal injuries to his chest and abdomen.

Inspection

44. After the incident, Senior Constable Peter Mason, a trade qualified and licensed motor mechanic and vehicle examiner attached to the Engineering Investigation Section of the NSW Police Force, was unable to identify any mechanical fault or defect in the truck which may have caused or contributed to the incident.

45. Senior Constable Mason found that the cradle frame, where the vacuum pumps and universal joint were located underneath the truck, was buckled and broken.

46. Steve Best, a hydraulics fitter and engineer, concluded that the jack involved in the incident was in good and proper working order. The jack could lift or support items that weighed up to 3,000 kilograms. The jack was not capable of lifting the truck itself.

Available Guidance Material

47. The Work Health and Safety Regulation 2017 (the Regulations) provides that a person with management or control of plant at a workplace must manage risks to health and safety associated with the plant, by identifying foreseeable hazards, eliminating or minimising risks to health and safety (so far as is reasonably practicable), implementing control measures and reviewing and revising those control measures to maintain their efficacy.

48. Clause 213 of the Regulations provides that maintenance of plant must be undertaken by a competent person.

49. The SafeWork NSW Code of Practice, “Managing the Risks of Plant in the Workplace”, July 2014 (the Plant Code) was available to the offender prior to the incident. The Plant Code contains a warning that mobile plant, including vehicles, presents a risk of death in the workplace if measures are not taken to prevent them moving of their own accord, for example by rolling down a slope. The Plant Code provides guidance on the factors to be considered in complying with the requirements of the Regulations.

50. The SafeWork NSW Code of Practice, “How to Manage Work Health and Safety Risks”, December 2011, (the WHS Risks Code) was available to the offender before the incident. The WHS Risks Code provided further guidance on how to comply with the Regulations.

Systems of Work at the Premises

51. The workers should not have performed work on the truck in the location that it was parked on the day of the incident.

52. Prior to the incident, the offender contracted various repair businesses located in and around the South Coast area for the performance of any major repair work on the offender’s fleet of vehicles.

53. The offender’s premises was used as a depot, both for storage and general servicing and maintenance of the offender’s vehicles, plant and equipment, including minor repair work. The facilities at the premises did not include a mechanical workshop suitable for such work.

54. Minor repairs that were performed at the premises included routine maintenance, welding and changing oil filters. Some of this work required workers to be underneath heavy vehicles. This work had been occurring at the premises for several years prior to the offender employing Mr Marchello.

55. There was no single designated area within the premises where minor repair work, general maintenance and servicing was to occur. These works were usually routinely performed on either a flat area of bitumen or a hard, flat gravel/earth area within the premises. The location of the incident had not been identified by the offender as an appropriate area for such activities and prior to the incident, such works had not been carried out at the location of the incident.

56. The offender was in the process of constructing a workshop which was to be fitted out and equipped to maintain and repair the offender’s fleet of vehicles. At the time of the incident, construction of the workshop building had been completed but it had not yet been fitted out. The workshop space had been used on at least one occasion prior to the incident as a location for minor motor vehicle servicing and repair work.

57. The offender did not provide purpose-designed wheel chocks for any of its vehicles. The offender neither instructed nor required its workers to chock the wheels of its vehicles when they were parked for the tanks to be lifted, emptied and cleaned. Instead, workers would use blocks of timber found around the premises to chock the wheels if they determined it was necessary to do so.

58. The offender had not undertaken or documented a formal risk assessment in relation to the performance by its workers of “on site” general servicing, maintenance and repair work on its fleet of vehicles. A SWMS had not been developed or implemented by the offender in relation to that work.

59. At the time of the incident, Mr Marchello was a probationary employee. Between his start date of 3 October 2017 and the date of the incident, Mr Marchello:

1. Attended a training course in order to obtain to a Construction Industry Safety Induction (White Card); and

2. Undertook an online induction in relation to the performance of Directional Drilling and related works, provided by a client of the offender.

60. Prior to commencing work with the offender, Mr Marchello had no specific formal training or experience as a motor mechanic or automotive engineer working on heavy vehicles and was not qualified to do so.

61. Both Mr and Mrs Cooney were aware that Mr Marchello was performing heavy vehicle, plant and equipment servicing, repairs and maintenance at the premises, including work that was completed on the truck.

62. The offender relied on its workers to select the locations within its premises where servicing and repair works were to be performed. Mr Marchello did not hold a heavy vehicle driver licence permitting him to drive heavy vehicles weighing over 4.5 tonnes and was not licensed to drive the truck.

63. Mrs Cooney considered Mr Marchello to be his own supervisor whilst performing work at the premises. Mr Cooney considered that Mr Higgins was Mr Marchello’s informal supervisor at the time of the incident. Mr Higgins believes that Mr Cooney was Mr Marchello’s supervisor. Neither Mr Higgins nor Mr Cooney were on site at the time of the incident.

Systems of Work Following the Incident

64. The defendant stopped performing the general servicing, maintenance and repair of its fleet of vehicles, plant and equipment in and around the premises pending:

1. the conduct of a formal, documented risk assessment;

2. the development and promulgation of a detailed, written safe work procedure and/or SWMS; and

3. the provision of information and training to its workers in relation to the hazards identified in the course of the abovementioned risk assessment and information and training in relation to the offender’s formal, documented safe work procedure or SWMS.

65. In addition, the offender equipped each of the vehicles in its fleet with purpose-designed “wheel chocks” to assist in preventing unexpected and unplanned movements of those vehicles, including during servicing, maintenance and repair works.

Offender’s Case on Sentence

66. The offender relied on two affidavits sworn by Mrs Cooney on 28 May 2021 and 11 June 2021. Both Mrs and Mr Cooney were in attendance at the proceedings and Mrs Cooney was cross-examined by the prosecutor. The content of Mrs Cooney’s affidavits can be summarised as follows. I will not repeat matters I have already referred to.

67. The offender was first established in late January 2013. Mrs Cooney deposed that since its inception, it was a family business employing Mr and Mrs Cooney and three of their children. The offender’s remaining workers were local residents.

66. In or about September 2018 another company, Southern Infrastructure and Hire Pty Ltd (Southern Infrastructure), was incorporated to take over the operational side of the business previously conducted by the offender. The offender retained the ownership of the plant and equipment which is now hired out to Southern Infrastructure to conduct the same type of work for the offender’s clients that was previously undertaken by the offender. The re-structure of the offender’s business in this way was devised by the offender’s accountant in or about June 2017. Mrs Cooney is the sole director of Southern Infrastructure.

67. The offender operates out of a small town on the South Coast of New South Wales and most of their supplies are purchased from other local businesses.

68. In or around late 2016, Mr and Mrs Cooney decided to set up a large concrete work area at the premises enclosed by a shed (the shed). The shed was to be fitted out with plant, such as lifts and hoists, to be used to service the offender’s vehicles. The intention was to eventually carry out all minor mechanical and maintenance work in the shed.

69. In or around October 2017, Mr Marchello was employed as a mechanic to try and reduce the downtime when vehicles were unavailable and free up the offender’s other employees to work solely on their core tasks. Mr Marchello was to be an integral part of finalising the set-up of the shed, as well as formulating and implementing appropriate safety measures for the mechanical and maintenance works he would be undertaking.

70. Mrs Cooney, on behalf of the offender, accepts the shortcomings of the process of Mr Marchello’s recruitment. At the time of hiring, Mrs Cooney was provided with Mr Marchello’s qualifications including his mechanic licence, air-conditioning certificate and tradesperson’s certificate. She deposed that she was not aware of the limit to the category of vehicle that Mr Marchello could work on.

71. Mrs Cooney also accepts that there was a lack of specific training, procedures and direction given to Mr Marchello as a new employee. She acknowledged that it was not sufficient for the offender to place reliance upon Mr Marchello’s skills as a mechanic, particularly in circumstances where he did not have the required level of prior experience and adequate qualifications required to safely work on the heavy vehicles maintained by the offender. As a consequence, Mr Marchello was working alone on the truck that was parked on sloping ground, unsecured without wheel chocks, and using a trolley jack that was not appropriate for servicing the truck.

72. Mrs Cooney, on behalf of the offender, deeply regrets the incident and expressed a sincere apology. Mrs Cooney and her family live at the business premises, and she describes the incident involving Mr Marchello as having a significant impact on herself, her family, the offender’s employees and the local community.

73. At the time of the incident, Mr and Mrs Cooney were notified via telephone by Mr Higgins and they immediately drove to the premises. Mrs Cooney was with Mr Marchello until paramedics arrived.

74. Following the incident, the offender’s employees were provided with paid leave for as long as they required. Mrs Cooney encouraged workers to seek counselling and the offender offered to pay for any services needed in response to the incident.

75. Mrs Cooney deposed that the offender is committed to improving its safety systems to avoid such an incident occurring again.

Safety Improvements

78. In addition to the implemented safety measures that have been described above, the offender purchased a significant amount of safety equipment for use at the premises, including various jacks for different purposes.

79. New areas of concrete were laid around the premises in order to create more stable and flat surfaces for its employees to carry out maintenance work. The offender completed the full fit-out of the shed and directed its employees that any and all mechanical works and maintenance, however minor, were to be carried out in the shed. All major mechanical and maintenance works continue to be carried out by an external mechanic and not the offender’s employees.

80. The offender changed the way in which it conducted Toolbox Talks. They are more formal and require employees to sign a document confirming their attendance and that they understood what was discussed.

81. All employees are provided with start cards which are to be filled in and signed prior to any work being carried out.

82. In or around July 2019, Southern Infrastructure retained a safety consultant to conduct a full risk assessment of the company, provide compulsory training for all workers and implement a new safety policy and procedure where required.

83. The offender continues to assess and improve its safety measures where possible. When updated safety risk assessments are provided by machinery manufacturers, these are incorporated into the offender’s SWMS where necessary.

84. Mrs Cooney deposed that from about mid 2017 the offender had been working on a significant project for a large client. The offender suspended its operations for two to three weeks after the incident. The truck was seized for examination for about six months and this impacted the offender’s capacity to undertake its work. The offender engaged external mechanics to undertake maintenance work after the incident, increasing its costs. The incident caused a 12 month disruption to the business. However, the business expanded significantly during that period to go from five employees to 25 employees and from having one large truck and one drill to having six trucks and three drills.

85. In about November 2019, Southern Infrastructure’s business was significantly impacted by the bushfires. Operations were ceased for about four weeks because roads were inaccessible. Between about November 2019 and February 2020 about 50% of Southern Infrastructure’s work needed to be put on hold. During this period, Southern Infrastructure continued to pay the wages of its 25 employees.

86. By about mid-March 2020, Southern Infrastructure managed to return to its pre-bushfire capacity for about three to four weeks. In or about late March 2020 the NSW Government put a number of NBN projects on hold as a result of the COVID-19 pandemic. Southern Infrastructure ceased operations until May 2020 and laid off six of its employees. On resumption of its operations, Southern Infrastructure was only able to complete a number of smaller jobs with the majority of its larger jobs still unable to proceed.

87. In the period of April 2020 to February 2021, Southern Infrastructure lost a further nine employees. In about late 2020 the offender sold a truck and two utility vehicles to obtain funds to pay wages. The offender and Southern Infrastructure operate at about 50% of their pre-COVID-19 capacity.

88. Mrs Cooney deposed that on the advice of the offender’s accountant that a fine of greater than $100,000 would put it in jeopardy of being wound up. Mrs Cooney deposed that the impact of winding up on the offender would be that Mr and Mrs Cooney would lose their home and that their sons would lose their livelihood. The mortgage over the premises currently stands at approximately $430,000.

89. The financial accounts of the offender for the past four financial years can be summarised as follows:

Financial Year ending	Turnover	Profit/(Loss) after tax
2018	$3,686,041	$30,252
2019	$2,811,150	$377,009
2020	$439,903	($163,333)
2021 [1]	$301,356	($72,999)

1. To 31 March 2021

90. The available financial accounts for Southern Infrastructure can be summarised as follows:

Financial Year ending	Turnover	Profit/(Loss) after tax
2019	$3,775,136	$229,255
2020	$3,417,901	($295,791)
2021 [2]	$1,419,809	($457,985)

2. To 31 March 2021

Cross Examination of Mrs Cooney

91. Mr and Mrs Cooney draw wages of $100,000pa and $80,000pa respectively, from the business. They live in a house on the premises that is owned by the offender. Mr and Mrs Cooney do not pay rent to the offender. They have lived in the house since about 2014. The house has not been recently valued.

92. When the operational side of the business was transferred to Southern Infrastructure it did not make any payment to the offender for the transfer of goodwill and no valuation of the goodwill was undertaken at the time of the re-structure.

93. The offender owns a number of campervans which it hires out for profit. The offender also purchased a 36’ Riviera fishing boat for $200,000 in 2018 which it uses to conduct fishing charters.

94. Southern Infrastructure pays a fixed rate for the hire of the plant and equipment owned by the offender of $400,000pa. The offender’s accountant calculated that price and it was not the subject of a valuation.

Consideration

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

Objective Seriousness

96. The offence is one of significant objective gravity.

97. The risk of a worker being struck or crushed by the unplanned movement of a vehicle during servicing or maintenance was obvious and well documented in the available guidance material.

98. The likelihood of the risk occurring was moderate.

99. The potential consequences of the risk included a risk of death.

100. The steps that could have been taken to eliminate the risk were simple, inexpensive and well known. This is a case where the offender had no system in place for the servicing of its heavy vehicles on the premises. It did have substantial systems in place for the directional drilling work that was mainly conducted elsewhere. Mr Marchello was not qualified to work on heavy vehicles. No risk assessment was undertaken for the work that he was performing at the time of the incident. It was anticipated that formal procedures would be adopted when the servicing facility at the premises was completed. This reflects that the offender knew that those procedures were required for the maintenance work to be performed on site but that it did not develop or implement them. The offender could have continued to have its vehicles serviced by competent third parties until adequate procedures were put in place for the maintenance work to be performed on site. Purpose-designed wheel chocks were available at minimal cost.

101. The extent of the harm caused was substantial. The death of Mr Marchello is a significant aggravating feature of the offence.

102. I have taken into account the maximum penalty for the offence.

Deterrence

103. 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 Ltd v Nash [2016] NSWCCA 37 at [180].

104. The penalty imposed must also provide for specific deterrence. The offender continues to operate a business that poses a significant risk to the health and safety of its workers. I note that the offender has taken various steps to improve its safety systems since the incident.

Aggravating Factors

105. The injury, harm and loss caused by the s 32 offences was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999. In order for the 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]. The offence does not require an injury to be sustained but only the creation of a risk. In this case, the death of Mr Marchello is sufficient to establish the aggravating factor. I have also had regard to the devastating impact that the offence has had on Mr Marchello’s family.

Mitigating Factors

106. The offender does not have any record of previous convictions s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The company was established in January 2013.

107. The offender has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has demonstrated by its commitment to improving its safety systems since the incident, that it has good prospects of rehabilitation.

108. The offender has demonstrated remorse: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. Mrs Cooney, on behalf the offender, has accepted responsibility for the failings that led to the incident and has expressed genuine contrition and remorse.

109. The offender entered a plea of guilty: s 21A(3)(k) and s 22 Crimes (Sentencing Procedure) Act 1999. It is entitled to a discount on penalty that reflects the utilitarian value of that plea: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The appropriate discount is 25%.

110. The offender co-operated with the SafeWork investigation: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.

Capacity to Pay a Fine

111. 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.

112. I accept that the re-structure of the offender’s business was first contemplated prior to the incident, but only implemented in the following financial year. However, the re-structure has significantly complicated the comparison of the performance of the business before and after the impacts of the bushfires and the COVID-19 pandemic.

113. In each of the financial accounts for the offender there are recorded significant sums for depreciation, viz: $175,598 in 2017, $251,628 in 2018, $366,001 in 2019 and $388,984 in 2020. The accounts to 31 March 2021 did not include any amount for depreciation but that is not unusual because I would expect it to be calculated once at the end of the financial year. As I understand the evidence, the sums claimed for depreciation reflect depreciation of existing plant in 2017 and 2018 as well as the instant write-off of new plant acquired during the applicable tax concessions in 2019 and 2020. Those sums have not been actually required to be paid by the offender and if added back into the accounts have the offender trading at a profit of approximately $220,000 in 2020. Further, taking into account the current tax concessions for the new acquisitions of plant, the book value of the plant recorded in the accounts is unlikely to be an accurate reflection of its value.

114. The offender did not present any current valuation of the premises, including the family home on the premises, or the offender’s plant and equipment, including the campervans and the fishing boat.

115. Taking into account all of the evidence, I am not satisfied that the offender has demonstrated that it has a reduced capacity to pay a fine.

Penalty

116. South Coast Under Road Borers Pty Ltd is convicted.

117. I have taken into account the Victim Impact Statements (VIS) prepared by Ryan Marchello (brother), Terry Marchello (father), Heidi Rawson (sister), Shannan Hoy (sister), Tracey Wakeford-Brook (mother) and Katherine Brooker (partner). Each of the VIS reflected the love for Mr Marchello and the esteem in which he was held by his family and the community. Clearly the impact of the death of Mr Marchello on his close-knit family has been severe and life-changing. The Court appreciates the time and effort put into the VIS. The experience of the VIS being read aloud in Court was a moving tribute to a kind, talented and much loved young man. I have taken into account the impact of Mr Marchello’s death on his family as harm done to the community.

118. The appropriate fine is one of $500,000 that will be reduced by 25% to give effect to the plea of guilty.

119. I impose a fine of $375,000.

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

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

**********

Endnotes

Decision last updated: 14 July 2021