Lessons for the construction, demolition, and other heavy vehicle transportation industries

From 2022 to 2023, Guantao & CS Lawyers acted for its client who was under prosecution by the National Heavy Vehicle Regulator in the Blacktown NSW Local Court for overloading their truck on two separate occasions. By working closely with consultants and government regulators, the parties successfully negotiated an Enforceable Undertaking in lieu of the client having to pay more than $267,000 in maximum fines.

Background

• Our client Top One Demolition & Excavation Pty Ltd specialises in house demolition, excavation and the transportation of heavy loads. They employ a fleet of heavy vehicles to carry on their work.
• On 20 July 2022, one of our client’s employees drove a vehicle carrying building rubble saturated with water from the recent rainfall. A Transport for NSW compliance officer inspected the vehicle, and found that the vehicle weighed 3.8 tonnes over the permitted mass and had 15 defects.
• The following month, the same vehicle being driven by a company employee was intercepted by National Heavy Vehicle Regulator officers while carrying aggregate soil. After inspection, the officers issued two defect notices and one penalty notice for driving a vehicle weighing more than 7 tonnes over the limit.
• Both breaches were committed unwittingly by the truck drivers.
• Nevertheless, our client was charged with offences carrying a total maximum fine of over $267,000 for failure to comply with the Heavy Vehicle National Law 2013 (NSW).

The Heavy Vehicle National Law

• The Heavy Vehicle National Law, which applies to most states including NSW, regulates the usage of heavy vehicles (those with a gross mass above 4.5 tonnes). It sets out amongst other things a number of rules relating to vehicle standards, cargo weights and driver fatigue.
• The law firmly states that the duty of ensuring safe vehicle operations is shared along the entire chain of responsibility, extending from management to the drivers. Failure to observe this duty is an offence and carries a maximum penalty ranging from $50,000 to $3,000,000, depending on the nature of the breach, the degree of intention and whether the offender is an individual or a corporation.
• But a crippling fine is not the only possible outcome. Pursuant to Part 10.1A of the Heavy Vehicle National Law, the prosecutor may accept as an alternative to prosecution an Enforceable Undertaking from the offender which pledges to rectify shortfalls in their compliance.
• However, the Regulator will only accept an Enforceable Undertaking in lieu of prosecution if the offender “demonstrates an ability to effect profound reform of their activities to improve safety and benefit the community”. The Undertaking may be rejected if it doesn’t meet the Regulators’ strict evaluation criteria.
• In other words, our client must substantially rectify their safety procedures in a way that outweighs the potential fines.

The Enforceable Undertaking

• After our client approached us in September 2022, we immediately got to work.
• Our client underwent consultation with a specialised consultant, and conducted an extensive internal audit to identify gaps in compliance in their operations.
• The result of our combined efforts was a comprehensive suite of strategies to not only overhaul the client’s internal safety framework, but to also benefit the transportation industry and the broader community:
      a) Restructuring the vehicle fleet to dispose of defective vehicles and purchasing new ones;
      b) Installing scales, on-the-ground weighing systems and containers on vehicles;
      c) Reviewing and updating company procedures to comply with legislative requirements, starting immediately with a Daily Truck Checklist to be filled out by all drivers prior to commencement of work every day;
      d) Educating staff members along the chain of responsibility. Employees were directed to confirm weight loads, and the Director personally undertook training courses to advance his knowledge of the correct procedures; and
      e) Publishing a bilingual narrative sharing what our client has learned through this experience to raise public awareness of road safety for the construction and transportation industries.
• After careful evaluation, the Regulator was satisfied that the Enforceable Undertaking contained sufficient rectifications and community benefit to be accepted as an alternative to the fines. Accordingly, they withdrew the charges against our client.

Conclusion and Lessons Learned

• Offences like overloading can happen even if your organisation has functioning transport safety management systems in place. Non-compliance can spell significant consequences, even if done unintentionally.
• It is always better to avoid breaching the Heavy Vehicle National Law in the first place. Periodically review your internal procedures to identify shortfalls, and ensure that staff members along the entire chain of responsibility understand their duties under the law.
• If your organisation is being prosecuted by the National Heavy Vehicle Regulators, we recommend you seek legal advice as soon as possible.

Prepared by: Shun Cheng and Charles Cui, paralegal