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Director banned for Chain of Responsibility breach

08 October 2019

#Transport, Shipping & Logistics

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Director banned for Chain of Responsibility breach

The case of R v Metropolitan Demolitions and Recycling Limited [2017] is a good example of what can happen to directors of companies that breach the Heavy Vehicle National Law (HVNL).

A routine inspection of Metropolitan Demolitions’ site by the NSW Environment Protection Authority (NSW EPA) uncovered discrepancies between records from their site’s weighbridge and other documents stating vehicle mass. NSW EPA passed on these concerns to Roads and Maritime Services (RMS), which conducted an investigation and found 138 mass offences, three instances of knowingly providing false information and 14 executive officer offences.

Due to the severity of the breaches and, no doubt, the fact that the business was aware of the misstatement of mass, the court used its extended penalty powers to not only slap Metropolitan Demolitions with a hefty fine, but also to issue a ‘prohibition order’ against its director.

Metropolitan Demolitions was fined $1.5 million and the company and its director were ordered to pay $50,000 in prosecution costs. In addition to this, the (now former) director was issued with the following prohibition order:

  • the court orders that [director] is prohibited from:
    • being a director, executive officer or manager of a company engaged in the operation and use of heavy vehicles
    • managing the loading and consignment of loads on heavy vehicles
    • managing the receipt of loads from heavy vehicles
  • this order applies for a period of 12 months.

So, not only can executives who fail their duty be hit with hefty fines and potential jail time, they can also be banned from being involved in the management of their business or performing certain safety-critical tasks within their business.

While it is often said that ‘all publicity is good publicity’, there is probably not enough spin in the world to create a positive out of a situation like this, in which a director has knowingly neglected their due diligence.

Author: Nathan Cecil 

* A version of this article was originally published in CoR Adviser. This article is © 2019 Portner Press Pty Ltd and has been reproduced with permission of Portner Press.

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