SafeWork NSW v Stoneworx Marble & Granite Pty Ltd; SafeWork NSW v Doueihi

[2025] NSWDC 147

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Stoneworx Marble & Granite Pty Ltd; SafeWork NSW v Doueihi [2025] NSWDC 147

Hearing dates:

17 April 2025

Date of orders:

2 May 2025

Decision date:

02 May 2025

Jurisdiction:

Criminal

Before:

Russell SC DCJ

Decision:

In proceedings 2021/284139 (SafeWork NSW v Stoneworx Marble & Granite Pty Ltd):

(1)   Order the prosecutor to pay the costs of the defendant of the proceedings incurred up to 19 July 2023 and thereafter each party is to pay their own costs.

In proceedings 2021/284127 (SafeWork NSW v Joseph Doueihi):

(1)   Order the prosecutor to pay the costs of the defendant of the proceedings incurred up to 19 July 2023 and thereafter each party is to pay their own costs.

Catchwords:

COSTS — WHS criminal prosecution —When a prosecutor has withdrawn charges — Application of principles concerning costs in WHS prosecutions from Nash v Resource Pacific Pty Ltd (No 4) — Defendants filed and then abandoned Motions arguing that the proceedings were brought outside the limitation period — Defendants subsequently pleaded guilty — Prosecutor and defendants continued litigation on a common erroneous understanding of the law — Not just and reasonable for the prosecutor to pay all of the defendants’ costs

Legislation Cited:

Work Health and Safety Act 2011 (NSW)

Criminal Procedure Act 1986 (NSW)

Cases Cited:

Grant v R [2024] NSWCCA 78

Latoudisv Casey [1990] HCA 59; (1990) 170 CLR 534

Nash v Resource Pacific Pty Ltd (No 4) [2019] NSWSC 1253

Prime Marble & Granite Pty Ltd v SafeWork NSW [2024] NSWCCA 105

Category:

Costs

Parties:

SafeWork NSW (Prosecutor)
Stoneworx Marble & Granite Pty Ltd (Defendant)
Joseph Doueihi (Defendant)

Representation:

Counsel:
C Magee (Prosecutor)
P Barry (Defendants)

Solicitors:
Department of Customer Service (Prosecutor)
Kingston Reid (Defendants)

File Number(s):

2021/284127; 2021/284139

JUDGMENT

Introduction

1. This judgment concerns an application for costs when a prosecutor has withdrawn charges.

Background

2. On 19 March 2019 a SafeWork NSW (SafeWork) Inspector visited the premises of Stonework Marble and Granite Pty Ltd (Stoneworx). Following that visit SafeWork issued Improvement Notices to Stoneworx in relation to the risk posed by the inhalation of respirable crystalline silica (RCS). This inspection brought the commission of an offence to the attention of SafeWork.

3. The Work Health and Safety Act 2011 (NSW) (the WHS Act) requires proceedings for a breach of the legislation to be commenced within two years of the offence first coming to the notice of the regulator: s 232(1)(a) of the WHS Act.

4. Arguably, SafeWork had to commence proceedings before 19 March 2021.

5. On 6 October 2021 SafeWork filed a Summons against Stoneworx alleging that Stoneworx had breached its health and safety duty under s 19(1) of the WHS Act in that it exposed three workers to a risk of serious illness contrary to s 32 of the WHS Act. The allegation was that all three workers had been exposed to the inhalation of respirable crystalline silica (RCS) which put them at risk of developing silicosis.

6. In related proceedings SafeWork charged Mr Doueihi as an officer of Stoneworx with failing to exercise due diligence as required by s 27 of the WHS Act.

7. Both Summonses were filed more than two years after the visit of the Inspector and the service of the Improvement Notice.

8. On 9 December 2022 Stoneworx and Mr Doueihi filed Notices of Motion seeking to argue that the proceedings should be stayed as they had been brought out of time.

9. However, both motions were effectively abandoned in July 2023. Following negotiations, pleas of guilty were entered on 11 March 2024 to the charges in the Amended Summonses. Both matters were set down for a sentencing hearing on 31 May 2024. The sentencing judge became unavailable on that date and the sentence hearing was then set down for 27 June 2024.

10. On 24 June 2024 the Court of Criminal Appeal delivered its decision in Prime Marble & Granite Pty Ltd v SafeWork NSW [2024] NSWCCA 105 (Prime Marble). It was this decision which led SafeWork to withdraw the Amended Summonses in the present proceedings.

11. On 13 February 2025 SafeWork was granted leave to withdraw both Amended Summonses, with the issue of costs to be later decided.

The Decision in Prime Marble

12. The background facts in Prime Marble were very similar to the present cases. A SafeWork inspector had attended the Prime Marble premises to measure exposure to RCS. This resulted in a report and the service of an Improvement Notice upon Prime Marble.

13. Several years later, SafeWork became aware that two workers at Prime Marble had died from exposure to RCS. Prosecutions were commenced against Prime Marble for a breach of its duty under s 19(1) of the WHS Act. Prime Marble applied to the District Court to dismiss the Summonses against it on the basis that they were not filed within the two-year limitation period prescribed by s 232 of the WHS Act.

14. That application was dismissed. The decision of the District Court was reversed on appeal to the Court of Criminal Appeal.

15. The Court of Criminal Appeal found as follows:

1. The relevant inquiry must be directed to the question of when the regulator first gets notice of the offence alleged in the summons commencing the proceedings – at [33].

2. The ordinary English meaning of the words in the section is that the offence is complete when the regulator has notice of the risk that is alleged to be associated with the exposure – at [33].

3. By determining that the proceedings were commenced within time having regard to when SafeWork became aware of the existence of the two deceased workers, the primary judge was in error. The charge pleaded in each summons was the same offence of which SafeWork had notice in 2017 – at [27].

4. The existence of knowledge on the part of SafeWork of dangerous dust concentrations necessarily equates to notice of exposure of Prime Marble’s workers to the relevant risk. Thus, each Summons was filed more than two years after such notice was received and the continuation of the proceedings was an abuse of process – at [48].

5. In the light of those findings the appeal was allowed and each summons was dismissed.

16. If SafeWork had persisted in pursuing the Amended Summonses against Stoneworx and Mr Doueihi, the decision of the Court of Appeal in Prime Marble could well have resulted in findings that the proceedings had been brought out of time and were an abuse of process. There has been no finding made in these proceedings that the prosecutions were brought out of time. All that can be inferred is that SafeWork came to the view that they were out of time, or that there was a real risk that if that issue was agitated, the court would find that the proceedings were out of time, in which case they would be dismissed.

Power to Award Costs

17. The power to award costs in the circumstances of these proceedings is discretionary. It is governed by Div 4 of Pt 5 of Ch 4 of the Criminal Procedure Act 1986 (NSW) (the CP Act). Section 257C of the CP Act provides:

257C   When professional costs may be awarded to accused person

(1)  A court may at the end of proceedings under this Part order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn.

(2)  The amount of professional costs is to be such professional costs as the court specifies or, if the order directs, as may be determined under section 257G.

(3)  Without limiting the operation of subsection (1), a court may order that the prosecutor in proceedings under this Part pay professional costs if—

(a)  the accused person is discharged as to the offence the subject of the proceedings, or

(b)  the matter is dismissed because the prosecutor fails to appear, or

(c)  the matter is withdrawn or the proceedings are for any reason invalid.

18. Section 257D of the CP Act imposes restrictions on when an accused person may recover costs, but that section does not apply to proceedings for an offence against the WHS Act.

19. In written submissions, both sides referred to the decision of Walton J in Nash v Resource Pacific Pty Ltd (No 4) [2019] NSWSC 1253. At [48] Walton J set out the relevant principles concerning costs in the context of a WHS prosecution. Those principles are as follows:

1. Subject to any contrary legislative indication, costs in summary proceedings do not follow the event and a successful defendant in such proceedings has no right to an order for costs: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 (Latoudis) at [6] per McHugh J.

2. A successful defendant in summary proceedings ordinarily has a reasonable expectation of obtaining an order for the payment of his or her costs on the basis that it is just and reasonable that the prosecutor reimburse him or her for liability for costs which have been incurred in defending the prosecution: Latoudis at [17] per Mason CJ; [13] per Toohey J; and [8] per McHugh J. Toohey J spoke of it being “unnecessary to speak in terms of a presumption” but rather that “ordinarily it would be just and reasonable that the defendant against whom a prosecution has failed should not be out of pocket”: Latoudis at [13] per Toohey J.

3. The purpose of a costs order is not to punish the unsuccessful party but to compensate the successful party: Latoudis at [3] per McHugh J.

4. A court ought not to exercise its discretion against a successful defendant on grounds unconnected with the charge or the conduct of the litigation: Latoudis at [8] per McHugh J; [12] (per Toohey J).

5. The fact that a prosecutor has acted in good faith in the public interest is not a ground for depriving a successful defendant of costs: Latoudis at [8] per McHugh.

6. There will be cases in which, when regard is had to the particular circumstances, it would not be just and reasonable to order costs against the prosecutor or to order payment of all the defendant’s costs: Latoudis at [17] per Mason CJ; and [14] per Toohey J.

7. Circumstances in which it may not be just and reasonable to order costs against a prosecutor or to order payment of all the defendant’s costs include, but are not limited to, the following:

1. Where the defendant has by his or her conduct after the events constituting the commission of the alleged offence, brought the prosecution upon himself or herself: Latoudis at [17] per Mason CJ.

2. Where the defendant has declined to take up an opportunity of explaining his or her version of events before a charge is laid: Latoudis at [18] per Mason CJ; and [14] per Toohey J.

3. Where the defendant fails to disclose evidence later successfully used in cross-examination of the prosecutor’s witnesses: Latoudis at [8] per McHugh J.

4. Where the defendant conducts his or her defence in such a way as to prolong the proceedings unreasonably, for instance by unnecessary cross-examination: Latoudis at [18] per Mason CJ; and [14] per Toohey J.

Submissions for Stoneworx and Mr Doueihi

20. The defendants submitted as follows:

1. Where proceedings against the defendants had been withdrawn the defendants have a reasonable expectation of obtaining an order for the payment of their costs, on the basis that it is just and reasonable for SafeWork to reimburse them for the costs they have sustained in the proceedings.

2. SafeWork should have been aware that the proceedings were brought outside the two-year limitation period and in any event, were put on notice of this defect by the stay application filed by the defendants (but never pursued).

3. An order for costs is compensatory and not punitive.

4. The fact that SafeWork acted in good faith and in the public interest in commencing and continuing the proceedings is immaterial to the costs application.

5. The fact the defendants made stay applications and then withdrew them is irrelevant, given that they were withdrawn in connection with negotiated guilty pleas. The guilty pleas were invalid because they were entered to charges which were incapable of being brought from the outset.

6. In any event, SafeWork withdrew the Amended Summonses, even though guilty pleas had been entered prior to the decision in Prime Marble.

21. The defendants submitted that the appropriate costs order would be for SafeWork to pay the costs of each defendant for the entirety of the proceedings. An alternative, put in written submissions, was that SafeWork should be ordered to pay the costs of each defendant up to 11 March 2024, when the defendants entered a plea of guilty. This alternative submission was abandoned at the hearing.

Submissions for SafeWork

22. SafeWork submitted as follows:

1. Costs in summary proceedings do not necessarily follow the event and a successful defendant has no right to an order for costs.

2. The investigation into each alleged offence was conducted in a reasonable and proper manner.

3. The proceedings were initiated with reasonable cause.

4. There was no demonstrated factual deficiency in the prosecution case.

5. When the proceedings were instituted, there was no first instance or appellate decision which should have warned SafeWork that the proceedings could not be brought, because notice of the offence came to the attention of the regulator earlier than the two years prior to the filing of each Summons.

6. This is not a case where the proceedings were dismissed after a defended hearing and thus the prosecutor failed to prove the charge.

7. By their pleas of guilty each defendant admitted all of the essential legal and factual elements of the offences.

8. But for the fact that the judge before whom the sentence hearings were listed became unavailable, it is likely that each of the defendants would have been convicted and sentenced in relation to the offences on or shortly after 31 May 2024. I regard that event, fortuitous as it was for Stoneworx, as irrelevant. If a defendant has pleaded guilty and it is later discovered that the prosecution was fundamentally flawed, a conviction recorded can be quashed by the Court of Criminal Appeal: Grant v R [2024] NSWCCA 78.

9. While the defendants raised the limitation period argument by their stay applications, they did not pursue that argument and instead negotiated pleas of guilty.

10. In the light of the decision of the Court of Criminal Appeal in Prime Marble, and the later refusal by the High Court to grant special leave, it was appropriate for SafeWork as the prosecutor to withdraw both proceedings. SafeWork acted properly and expeditiously after the Prime Marble decision.

23. SafeWork submitted that the appropriate order was for each party to pay its or his own costs of the proceedings. In the alternative, it was submitted that if the defendants were to have a costs order in their favour, it should be limited to their costs up to 19 July 2023, when they abandoned their applications arguing that the proceedings were out of time.

Consideration

24. In par 19 above I have referred to the principles concerning costs in the context of a WHS prosecution. Adopting that same numbering I find as follows:

1. The defendants, although successful in that the proceedings have been withdrawn, have no right to an order for costs.

2. The defendants have a reasonable expectation of obtaining an order for the payment of their costs on the basis that it is just and reasonable that SafeWork reimburse them for a liability for costs which have been incurred in defending the prosecution.

3. An order for costs will be compensatory, and is not an order made to punish the unsuccessful prosecutor.

4. There are no grounds unconnected with the charge or the conduct of the litigation which might otherwise deny the defendants an order for costs.

5. While SafeWork acted in good faith and in the public interest, this is not a ground for depriving the defendants of a costs order.

6. SafeWork submitted that the fact that the defendants abandoned their challenge to whether the proceedings had been brought within the limitation period, and then pleaded guilty, is a circumstance which should result in the court declining to grant a costs order to the defendants. This matter is discussed more fully below.

7. The defendants did not bring the prosecution upon themselves. There was no evidence that the defendants declined to take up an opportunity of explaining their version of events before a charge was laid. Indeed, when a plea of guilty was negotiated on amended facts, that was an indication that the defendants accepted the facts, and the particulars of each charge, then put forward by SafeWork. The defendants did not fail to disclose evidence later successfully used in cross-examination of prosecution witnesses. Indeed, there was never a trial which involved witnesses.

8. I have come to the view, expressed below, that by abandoning the limitation point and pleading guilty, the defendants conducted their defence in such a way as to prolong the proceedings unreasonably.

Limitation Motion Abandoned

25. Further consideration needs to be given to the prosecutor’s submission that the defendants should be denied a costs order because they initially argued that the proceedings were out of time, but then abandoned that argument, following which the defendants pleaded guilty to the charges.

26. SafeWork was obviously of the view from the start that the proceedings were brought within the two-year limitation period. The defendants filed Motions to raise the argument that the proceedings had been commenced out of time and should thus be dismissed. However the defendants abandoned the argument, their Motions were dismissed, and after negotiations about Amended Summonses and amended agreed facts, pleas of guilty were entered.

27. When the Motions were abandoned on 19 July 2023, both sides obviously thought that the better view of the law was that the proceedings had been brought within the limitation period. The decision of the Court of Criminal Appeal in Prime Marble shows that both sides held an erroneous view of the law (as did the trial judge in Prime Marble). The proceedings thus continued after 19 July 2023 because not only SafeWork, but both defendants, continued to pursue the litigation, on a shared erroneous understanding of the law. It cannot be said that the decision of the Court of Criminal Appeal changed the law. It simply declared what the correct law was and had always been.

28. In my view the abandonment by the defendants of the argument concerning the limitation period, together with the view of SafeWork that it had commenced within time, has resulted in the proceedings continuing far longer than they should have. After 19 July 2023 both sides have incurred costs based upon their common erroneous view of the law.

29. In these circumstances, which arise from the conduct of the case by the defendants, it would not be just and reasonable to order the prosecutor to pay of all the defendants’ costs: Latoudis at [17] per Mason CJ; and [14] per Toohey J.

30. This is not a case where a costs order should flow because a defendant has successfully defended a prosecution, when the plea has been “not guilty” and the matter has gone to a defended hearing. In such cases, when the prosecution fails to prove its case, the proceedings are dismissed and a costs order is commonly made.

31. The just and reasonable order in the circumstances is for SafeWork to pay each defendant’s costs up to the date when the limitation argument was abandoned.

Orders

32. In each matter, the order of the court is:

1. Order the prosecutor to pay the costs of the defendant of the proceedings incurred up to 19 July 2023 and thereafter each party is to pay their own costs.

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Decision last updated: 02 May 2025