SafeWork NSW v Williams Timber Pty Ltd; SafeWork NSW v Easy Fall Guttering Pty Ltd

1. [1]

   BEECH-JONES CJ AT CL: I agree with Wilson J.

2. [2]

   R A HULME J: I agree with Wilson J.

3. [3]

   WILSON J: This judgment concerns two appeals brought by the appellant, SafeWork New South Wales (“SafeWork”), pursuant to s 5AA(1)(b) of the Criminal Appeal Act 1912 (NSW). In each instance the respondent to the appeal is a company that was prosecuted in the District Court by SafeWork for an offence under the Work Health and Safety Act 2011 (NSW). The order against which SafeWork appeals in each case was an order of the District Court declining to award costs in favour of the prosecutor.

4. [4]

   Section 5AA(1)(b) of the Criminal Appeal Act provides:

5. [5]

   Section 5AA(7) provides for the application of the provision to proceedings heard in the District Court.

The Background to the Appeals

1. [6]

   Each of the respondent companies were separately charged by SafeWork with a charge or charges relating to a failure to comply with a health and safety duty under the Work Health and Safety Act such that an individual was exposed to a risk of death or serious injury. In each case the relevant failure led to an employee or contractor working for the particular respondent to suffer a serious workplace injury.

2. [7]

   On 13 October 2019 an employee of Williams Timber Pty Ltd (“Williams Timber”), the respondent to the first appeal, had part of a hand severed when working with a “running blade” used to mill timber. Williams Timber was later charged with an offence contrary to s 32 of the Work Health and Safety Act of exposing an individual to a risk of death or serious injury.

3. [8]

   On 16 May 2017 a contractor working for Easy Fall Guttering Pty Limited (“Easy Fall”), the respondent to the second appeal, suffered serious spinal injuries after falling from a roof onto a concrete surface below when attempting to install guttering. Easy Fall was later charged with an offence contrary to s 32, together with two other related Work Health and Safety Act offences.

4. [9]

   On 18 December 2020, following a plea of guilty, Williams Timber was sentenced in the District Court by her Honour Judge Strathdee for the s 32 offence. The prosecutor in those proceedings, SafeWork, sought an order for Williams Timber to pay its costs, but no costs order was made.

5. [10]

   On 5 March 2021 the same judge imposed sentence upon Easy Fall for the three offences to which it had pleaded guilty. SafeWork, as prosecutor, asked her Honour to make an order for the payment by Easy Fall of its costs, but no order was made.

6. [11]

   It is the failure in each instance to make a costs order in favour of the prosecutor, that is the subject of these two appeals, heard jointly since the issue is the same.

The Appeal Concerning Williams Timber

1. [12]

   In the course of the District Court prosecution the prosecutor sought an order for Williams Timber to pay its costs as agreed or assessed. That order was specifically requested in written submissions filed by SafeWork in the District Court, wherein the sentencing court was asked, in addition to the order imposing penalty upon Williams Timber, to make the following orders:

2. [13]

   In oral submissions made by Counsel for SafeWork during the proceedings on sentence before her Honour on 9 December 2020, the application for a costs order in favour of the prosecutor was repeated:

3. [14]

   Counsel for Williams Timber did not demur from that statement, despite being called upon by her Honour immediately after it was made. The focus of submissions for Williams Timber was on matters in mitigation of penalty, including its capacity to pay a fine; no submission was made as to any order different to that sought by SafeWork relating to payment of the prosecutor’s costs.

4. [15]

   Sentence was imposed on Williams Timber on 18 December 2020: SafeWork NSW v Williams Timber Pty Ltd [2020] NSWDC 777. In her judgment, Strathdee DCJ set out the circumstances and gravity of the offence and detailed the subjective case advanced by Williams Timber. On the question of costs, her Honour said this, at [103] – [106]:

5. [16]

   The sentencing judge concluded, at [108]:

6. [17]

   The following orders were made:

7. [18]

   SafeWork complains that Strathdee DCJ was in error in failing to make an order for costs. The appellant advances the following ground of appeal:

The Appeal Concerning Easy Fall Guttering

1. [19]

   During the hearing of the sentence proceedings against Easy Fall, SafeWork sought an order for a moiety of the fine imposed by way of sentence, and an order for payment of its costs. In its written submissions it noted that:

2. [20]

   That application was repeated in oral submissions before her Honour on 17 February 2021, when SafeWork submitted:

3. [21]

   Easy Fall took no issue with the prosecutor’s application for costs. In written submissions, Easy Fall said:

4. [22]

   Nothing further was said by Easy Fall on the subject of costs in oral submissions.

5. [23]

   Judgment in the matter was handed down on 5 March 2021 and sentence imposed: SafeWork NSW v Easy Fall Guttering Pty Limited [2021] NSWDC 44. As might be expected, her Honour’s reasons principally dealt with the circumstances of the offences, the gravity of the respondent’s omissions, and the subjective case advanced on sentence by Easy Fall. Her Honour’s conclusions as they relate to any costs order can be found at [119], [122] - [123], and [127] – [128] of the judgment, under a heading “Capacity to Pay”, where she observed:

6. [24]

   The sentencing judge made orders as follows:

7. [25]

   By its appeal, SafeWork raises the following ground:

Determination

1. [26]

   Although the grounds of appeal filed by SafeWork in each appeal are perhaps rather prolix, at the heart of the complaint is the contention that the sentencing judge denied the prosecutor procedural fairness on the question of any costs order in each case, and misapprehended the function and purpose of such an order by treating it as part of the punishment imposed upon the convicted defendant.

2. [27]

   At the outset, SafeWork’s overarching complaint must, in each instance, be accepted. In failing to make a costs order against the defendant company the sentencing judge both denied the prosecutor procedural fairness and treated the payment of costs as part of the punishment for the offence or offences, rather than as compensation for legal expenses. To that extent there was clear error; it is not necessary to go beyond those aspects of the ground of appeal filed in each case by SafeWork.

3. [28]

   The respondent companies were, in each case, represented by a Director of the company at the hearing of the matters before this Court. In the absence of legal representation, the submissions of each focused, as can readily be understood, on the capacity of the respective company to pay any further monies following the appeal proceedings. That is a feature of the matter to which I shall return.

4. [29]

   It is axiomatic that litigants before a court are entitled to procedural fairness; what that entitlement may mean will differ from case to case depending upon the particular circumstances. As a general statement the requirement to afford procedural fairness dictates that a court give a party to litigation before it an opportunity to be heard before an order adverse to the party’s interests is made. The question will always be what is necessary to ensure that proceedings are fairly conducted. In Re Minister for Immigration & Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6, Gleeson CJ observed of the requirement for fairness, at [37]:

5. [30]

   In the proceedings against Williams Timber, SafeWork sought a costs order in the specific amount of $22,000 and Williams Timber, by its silence on the subject, accepted that a costs order in the particularised sum was appropriate. No question about that course was raised by her Honour, and SafeWork was not put on notice that the sentencing court might depart from the agreed position of the parties. In those circumstances it was reasonable for SafeWork (and the respondent) to conclude that a costs order would be made in the terms sought.

6. [31]

   In thereafter declining to make the anticipated order in those circumstances, SafeWork was denied procedural fairness, specifically, the opportunity to adduce evidence as to the nature and extent of its costs and to put submissions to the court in support of its application for an order in its favour. As Garling J noted (with the concurrence of Macfarlan JA and Johnson J) in Weir v R [2011] NSWCCA 123, at [66]:

7. [32]

   Similarly, in proceedings against Easy Fall, SafeWork was given the reasonable expectation that an order for costs would be made in its favour. It had sought the order; Easy Fall had conceded it was entitled to such an order [1] , and the sentencing judge had said nothing that might have raised as uncertain the question of whether an order would in fact be made. In circumstances where the sentencing judge may have been contemplating making no award of costs, fairness required that her Honour warn the parties that she might take that course, and invite them to tender any evidence relevant to the question, and make any submissions in support of or against such an order being made.

8. [33]

   If one considers the consequences of the departure from proper procedure, it was that the parties and, in particular SafeWork, did not make submissions to the sentencing court on the question of a costs order, in the reasonable belief that an order would be made.

9. [34]

   Had SafeWork been afforded the opportunity to make submissions, it may be that the second error complained of in these appeals would not have been made.

10. [35]

    In declining to make an order for costs in favour of SafeWork against each of the respondents the sentencing judge made the second of the two material errors complained of by the appellant, that is, her Honour proceeded on the basis that an order for costs was a species of criminal penalty.

11. [36]

    The power to make an order for costs in matters such as those under consideration is derived from s 257B of the Criminal Procedure Act 1986 (NSW), which provides:

12. [37]

    Both Williams Timber and Easy Fall were convicted of an offence and the power to order costs against each for payment to the prosecutor was enlivened. Although it no doubt feels like an additional punishment to the offender ordered to pay the prosecutor’s costs, a costs order of that nature is not made to penalise the offender; it is made to compensate the prosecuting authority for its legal expenses.

13. [38]

    In Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 the High Court considered the purpose of a costs order in a summary prosecution, although in the context of a refusal to make an order in favour of a defendant against whom criminal charges had been dismissed. Mason CJ observed, at 543:

14. [39]

    To similar effect, McHugh J said, at 567:

15. [40]

    The principle was discussed and applied in Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd (2017) 93 NSWLR 338; [2017] NSWCCA 96 in relation to an appeal against a refusal to order costs in favour of the prosecutor in a Work Health and Safety Act prosecution.

16. [41]

    Whilst ss 4 and 6 of the Fines Act 1996 (NSW) require a court in imposing a fine and in imposing costs to have regard to a defendant’s means, that does not have the effect of converting costs to a species of punishment. Where capacity to pay is an issue, the correct approach is to reduce the fine to be paid by the offender, rather than to reduce the amount awarded as costs in favour of the prosecutor.

17. [42]

    In the case of Williams Timber, the sentencing judge was conscious of the financial position of the company, which was likely to become parlous due to various external factors, such as the impact of the 2019 – 2020 bushfires. Describing a costs order as “an important aspect of the punishment of the defendants”, she determined that the appropriate way to ameliorate the impact of penalty upon Williams Timber was by declining to order costs.

18. [43]

    Similarly, when sentencing Easy Fall her Honour accepted that the company might have difficulty in paying a fine because of its straitened means, but was concerned that any reduction in the penalty to reflect the company’s incapacity to pay would lead to a fine that was incapable of reflecting the seriousness of the offences. She thus determined to leave the penalty undisturbed, but made no costs order in favour of the prosecutor.

19. [44]

    In the ordinary course, it is open to sentencing judges to act on the basis of an agreement between the prosecutor and the defendant concerning costs, and then consider what impact the award of costs may have on the means of a defendant to pay a fine under s 6 of the Fines Act. It is noted that a sentencing court is required to consider information regarding the means of a defendant when exercising the discretion to fix the amount of a fine; it is not necessary for a defendant to make an application to the court to consider means when assessing the amount of a monetary penalty.

20. [45]

    In sentencing Williams Timber, and in sentencing Easy Fall, her Honour was in error in treating a costs order as a form of punishment, and using the refusal to make an order as a means of ameliorating penalty. Such amelioration as was held to be necessary after considering the means of each defendant should have been delivered by mitigation of the fine.

The Discretion Not to Intervene

1. [46]

   Error having been established, consideration must be given as to whether this Court should intervene and order each respondent to pay the costs of the respective prosecution at first instance, or exercise the discretion to decline to intervene.

2. [47]

   There are a number of pertinent considerations.

3. [48]

   The first of those considerations is delay. In the case of Williams Timber sentence was imposed on 18 December 2020; SafeWork’s appeal was not filed until 29 March 2021, about three and a half months later. In the case of Easy Fall, sentence was handed down on 5 March 2021; the appeal was filed on 27 July 2021.

4. [49]

   Whilst not an extensive delay in either instance, neither appeal was filed promptly, a relevant feature to the exercise of the discretion.

5. [50]

   The means of each respondent is another consideration.

6. [51]

   Williams Timber sought to read the affidavit of a director, Andrew Williams, sworn on 23 August 2021, which dealt in part with the company’s difficult financial position. Although SafeWork objected to Mr Williams’ affidavit, I would admit it into evidence, at least insofar as it informs the Court of the means of Williams Timber, a matter relevant when determining the order the Court is to make. Section 5AA(4) of the Criminal Appeal Act gives the Court the power to make any order that could have been made at first instance, and a court considering the imposition of a costs order is required pursuant to s 6 of the Fines Act to consider a defendant’s means.

7. [52]

   On the basis of both the evidence that was before the sentencing court, and the contents of Mr Williams’ affidavit, I am satisfied that Williams Timber would struggle to pay a costs order in the amount of $22,000, particularly in circumstances where the fine imposed upon it would not be reduced.

8. [53]

   Easy Fall would also find it difficult to pay a costs order, in its case of $42,000. The company relied upon its financial difficulties before the sentencing court and those difficulties may be accepted. As with Williams Timber, the fine Easy Fall was ordered to pay remains unchanged.

9. [54]

   That points to the final feature of relevance to the exercise of the discretion, a feature which is in my view determinative of the issue. No appeal was filed against the fines imposed upon each of the respondents at first instance; only the refusal to make a costs order is subject to challenge. Were this Court simply to order the respondents to pay SafeWork’s costs, there would be no corresponding amelioration of the fines. Such an outcome would be productive of unfairness to each respondent in circumstances where it is clear that the sentencing judge sought to ameliorate the overall sum of monies payable by the defendants in recognition of their respective limited means.

10. [55]

    As Williams Timber said in its submissions to this Court:

11. [56]

    There is considerable force in that submission.

12. [57]

    For those reasons, I would exercise the Court’s residual discretion not to intervene, despite the error at first instance.

Conclusion

1. [58]

   The orders I propose are as follows:

   1. (1)

      In SafeWork v Williams Timber Pty Ltd: Appeal dismissed.

   2. (2)

      In SafeWork v Easy Fall Guttering Pty Ltd: Appeal dismissed.