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  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  HCA 18 at ”
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.