The First Cat­e­go­ry 1 WHS Pros­e­cu­tion in New South Wales: The Mean­ing of Reck­less”

The recent deci­sion of the Dis­trict Court in Stephen James Orr v Cud­al Lime Prod­ucts Pty Ltd; Stephen James Orr v Simon Shan­non [2018] NSWDC 27 is the first to deal with a cat­e­go­ry 1 pros­e­cu­tion in New South Wales under the Work Health and Safe­ty Act 2011 (NSW) (Act).

Cat­e­gories of Offences

There are three cat­e­gories of offences for fail­ing to com­ply with a duty under the Act.

The most seri­ous is cat­e­go­ry 1. This is where a duty hold­er reck­less­ly expos­es a per­son to whom a duty is owed to the risk of death or seri­ous injury. The max­i­mum penal­ty for a cor­po­ra­tion for a cat­e­go­ry 1 offence is $3,000,000.

A cat­e­go­ry 2 offence is where a duty hold­er expos­es a per­son to whom a duty is owed to the risk of death or seri­ous injury. It is the same as cat­e­go­ry 1 except with­out the ele­ment of reck­less­ness. The max­i­mum penal­ty for a cor­po­ra­tion for a cat­e­go­ry 2 offence is $1,500,000.

A cat­e­go­ry 3 offence is a fail­ure to com­ply with a health and safe­ty duty. The max­i­mum penal­ty for a cor­po­ra­tion for a cat­e­go­ry 3 offence is $500,000.

The Cud­al decision

The Cud­al deci­sion is par­tic­u­lar­ly instruc­tive in that it exam­ines what con­sti­tutes reck­less” for the pur­pose of the penal­ty pro­vi­sions of the Act.

Cud­al Lime Prod­ucts Pty Ltd (CLP) oper­at­ed the Cud­al Lime Quar­ry which is an open cut lime­stone quar­ry locat­ed at Cud­al in New South Wales.

A work­er engaged by CLP lived in a cot­tage 200 metres from the mine with his de fac­to partner.

Elec­tric­i­ty was sup­plied to the mine and the near­by cot­tage through the same sys­tem. Trag­i­cal­ly, the work­er’s de fac­to part­ner was fatal­ly elec­tro­cut­ed when she came into con­tact with a metal­lic flex­i­ble show­er hose while stand­ing on a waste drain in the show­er recess of the cot­tage. The metal­lic fix­tures of the cot­tage (includ­ing met­al pipework and taps, the hot water ser­vice and exter­nal taps) were dan­ger­ous­ly elec­tri­fied. This was the result of a fault in the low volt­age sys­tem of the mine which trans­ferred to the cot­tage via the cable sup­ply between the mine and the elec­tri­cal sub-board of the cottage.

This inci­dent occurred after a series of elec­tri­cal faults at the mine over the course of many years.

Judge Scot­ting found that it was rea­son­ably prac­ti­ca­ble for CLP to take a num­ber of steps to elim­i­nate or min­imise the risk (the rel­e­vant test) of elec­tro­cu­tion to the work­er and his de fac­to part­ner aris­ing from an elec­tri­cal fault. One of these steps was to have the new switch­board (through which the cur­rent flowed from the mine to the cot­tage) installed by, or under the direct super­vi­sion of, a qual­i­fied elec­tri­cal trades­per­son or a qual­i­fied elec­tri­cal engi­neer. An unqual­i­fied per­son had, at the direc­tion of CLP, under­tak­en elec­tri­cal work on the switch­board as part of its instal­la­tion. (The per­son who under­took this work was also charged and plead­ed guilty under the Act.)

Some of the oth­er rea­son­ably prac­ti­ca­ble steps iden­ti­fied by Scot­ting DCJ that could have been tak­en by CLP were to ensure that the elec­tri­cal pro­tec­tion on the switch­board inter­rupt­ed the pow­er sup­ply in the event of an elec­tri­cal fault, to install an earth-neu­tral (MEN) link and ensure that cables were prop­er­ly insu­lat­ed and free of damage.

CLP plead­ed guilty to a cat­e­go­ry 1 offence. In doing so it accept­ed that it reck­less­ly dis­re­gard­ed the risk. While the plea of guilty obvi­at­ed the need for a detailed con­sid­er­a­tion of the mean­ing of reck­less” in this con­text, some inter­est­ing obser­va­tions were nev­er­the­less made by Scot­ting DCJ.

At para­graph 136 his Hon­our stated:

By its plea, CLP accepts that the risk was reck­less­ly dis­re­gard­ed. The direc­tion of an unqual­i­fied per­son to install the switch­board to save costs was an act devoid of social util­i­ty, so that the fore­sight of the pos­si­bil­i­ty of the risk of seri­ous injury or death aris­ing was suf­fi­cient to con­sti­tute reck­less­ness: Aubrey v R [2017] HCA 18 at [49]”

His Hon­our found that the reck­less­ness was aggra­vat­ed by the his­to­ry of elec­tri­cal issues at the mine which were iden­ti­fied as safe­ty risks by the Mine Safe­ty Offi­cer and not prop­er­ly rectified.


In con­sid­er­ing the penal­ty to be imposed Scot­ting DCJ had regard to the impor­tance of deter­rence (includ­ing the fact that CLP oper­ates in the min­ing indus­try which presents sig­nif­i­cant risks to the health and safe­ty of its employ­ees), aggra­vat­ing fac­tors (which in this case includ­ed the sig­nif­i­cant per­son­al impact of the fatal­i­ty), mit­i­gat­ing fac­tors (which in this case includ­ed no pre­vi­ous con­vic­tions, com­mu­ni­ty and char­i­ta­ble involve­ment and remorse and reha­bil­i­ta­tion) and the lim­it­ed capac­i­ty of CDL to pay a fine.

After weigh­ing up these fac­tors the appro­pri­ate fine was deter­mined to be $1,200,000 which was dis­count­ed by 25% to take into account the plea of guilty, result­ing in a final penal­ty of $900,000.

More to come

On 18 April 2018 it was report­ed that a series of charges have been laid in rela­tion to the 2016 death of a con­struc­tion work­er at the Uni­ver­si­ty of Can­ber­ra Pub­lic Hos­pi­tal worksite.

The prin­ci­pal con­trac­tor and a sub-con­trac­tor on the site were both charged with cat­e­go­ry 1 offences. Some work­ers (a dog­man”, the site super­vi­sor and safe­ty offi­cer) were also charged with cat­e­go­ry 1 offences. The Chief Exec­u­tive Offi­cer of the Prin­ci­pal Con­trac­tor and the Man­ag­ing Direc­tor of the sub-con­trac­tor were charged with cat­e­go­ry 2 offences along with the site man­ag­er on site on the day of the inci­dent (also employed by the Prin­ci­pal Contractor).

In addi­tion to these charges under the applic­a­ble equiv­a­lent of the Act, the crane dri­ver was charged with manslaughter.

Giv­en the num­ber and seri­ous­ness of these charges, which some observers note reflects a change in approach by the ACT reg­u­la­tor (Work Safe ACT), this will be a case to watch with inter­est. It may well be a por­tend that reg­u­la­tors, per­haps embold­ened by the out­come in the Cud­al case, will be more will­ing to lay cat­e­go­ry 1 charges in the future.