DPP v Yarra Valley Water Ltd; DPP v Blaxland Pacific Pty Ltd [2006] VSCA 279

8 I have had the advantage of reading in draft the reasons of King, A.J.A. I agree that the appeal should be dismissed for the reasons which her Honour gives.

The Offence

9 On 30 May 2006 each of the respondents through their counsel pleaded guilty in the County Court to a single count that;

"at Bundoora on 9 March 2004, being employers they failed to provide and maintain, so far as was practicable for employees, a working environment that was safe and without risks to their health in that it did fail to provide safe plant and systems of work that were, so far as was practicable, safe and without risks to health."

10 The charge was laid pursuant to s. 21(1) and (2) of the Occupational Health and Safety Act 1985. Section 47 of the Act provides a maximum penalty of a fine of $250,000 for breach of this section.

11 A plea was then heard and his Honour imposed a penalty of $50,000 in respect of each respondent. A stay of three months on payment of the penalty was granted to Blaxland Pacific Pty Ltd and stay of one month was granted to Yarra Valley Water Ltd.

The Appeal Grounds

12 By notice of appeal dated 13 July 2006 the acting Director of Public Prosecutions appeals against the sentence imposed by the learned sentencing judge. The grounds of the appeal are:

In imposing a fine of $50,000 the learned sentencing judge -

(a) failed to adequately reflect the gravity of the offence generally and in this case in particular;

(b) failed to sufficiently take into account the aspect of specific deterrence;

(b) failed to take into account or sufficiently to take into account the aspect of general deterrence;

(c) gave too much weight to factors going to mitigation;

(d) gave insufficient weight to the applicable maximum penalty for this offence (2005 penalty units - $250,000);

(e) gave insufficient weight to the effect of this offence on the family members of the deceased person;

(f) gave insufficient weight to the danger of public safety posed by the consequences of the commission of the offence.

(2) The learned sentencing judge erred in characterising the circumstances of the offence as a "tragic miscalculation arising out of a failure by officers of the respective companies to appreciate the difference between lower pressure testing of sewers as compared to high pressure testing of water mains".

(3) Ground 3 was abandoned.

Circumstances of Offence

13 On the hearing of the plea, counsel for the appellant read to the Court and tendered Exhibit 1, a summary of the prosecution case.

14 In brief, the circumstances of the offence were that in February 2004 Blaxland Pty Ltd was engaged by Yarra Valley Water Pty Ltd to construct 193 metres of 300 mm diameter water mains pipeline in the Bundoora area. Blaxland Pty Ltd was the contractor to Yarra Valley Water. Michael Doherty and his wife were the two sole directors of Blaxland with Michael Doherty occupying a 'hands on role' in relation to the various projects.

15 At about 3.20 pm on 9 March 2004, Hemi Apanui was severely injured when he received head injuries from a 70 kilogram metal endplate which blew off the ends of the mains water pipe whilst it was being pressure tested for leaks. Mr. Apanui subsequently died from the injuries received on that day. The deceased was not in the trench where the pipe was laid. Although no one is totally clear exactly how far he was from the end of the pipe when he was struck by the metal endplate as it flew through the air, an indication of the force of the blast, was that a pair of red gum plates some 50 mm thick by 500 mm by 500 mm and rock from the rock face of the trench were blown up to 50 metres from the incident site. Pieces landed in nearby residential premises, roadway and the carpark of a school where people were in fact present as the school day was ending. Clearly there was potential for even more severe consequences to have flowed.

16 A sub-contracting plumber to Blaxland, Mr Colin Peters, received minor injuries from flying dirt and rocks but made a full recovery. He was working in the trench at the time and was blown out of the trench.

17 Pursuant to the specifications contained in the contract between Yarra Valley Water and Blaxland there was a specification at paragraph 4.2.2 which stated:

"The contractor shall hydrostatic pressure test all pipelines longer than three pipe lengths in accordance with Yarra Valley Water Supplementary Water Industry Specification at 95-093.2."

18 Hydrostatic pressure testing is testing by the use of water not by the use of high pressure air. It was frankly conceded by Mr. Priest for Blaxland that the pipe in question was longer than three pipe lengths. What caused the endplate and the other pieces of debris to be blasted from the end of the mains water pipe was the use of air pressure testing of up to 100 lb per square inch or as it is referred to 100 psi.

19 Several experts had provided statements for the brief and reference was made to those statements in the summary of the prosecution case. Their evidence was to the effect that high pressure testing of water mains using other fluids such as air is not permitted anywhere in Australia. Low pressure air testing is permitted for testing non-pressure pipelines, that is sewers, in which case the maximum air pressure used is generally 50 kPa.

20 There were then a series of statements as to the knowledge of certain persons as to the type of testing that was being performed. In brief they indicate that Michael Doherty, the director of Blaxland, was aware of precisely what was going to be done in the way of testing. He had, instructed his sub-contractor how to set up the end cap on the pipe, discussed the dangers of air pressure testing, checked the packing and given directions that the air pressure testing be carried out on the particular day. As part of the general safety issues when testing in this manner he had stated that no workers should be standing in front of the end cap while testing was in progress. Mr Doherty equally had knowledge of the terms of the specifications of Blaxland's contract with Yarra Valley Water.

21 Robert Batley, Yarra Valley Water's site auditor, was informed by Mr Doherty on the day of the incident that he was going to expose the collars of the pipes to try and find any air leaks. He was advised that the testing would be done to a pressure of 100 kPa. He stated to investigators that to his knowledge there was no detailed procedure for testing with air or water for Yarra Valley Water. He said all testing was performed by contractors, most used hydrostatic testing, although air testing was not unusual. He passed on information to Laurie Harris, who was the project manager for Yarra Valley Water, that air pressure testing had been used by this contractor in testing the bridge.

22 Mr Batley took no steps to halt the testing nor did he refer Mr. Doherty to any of the requirements of the specifications within the contracts, the codes or the Australian Standards.

23 Laurie Harris was the project manager at Yarra Valley Water, she had not visited the site at the time of the incident. She was unaware that air pressure testing was only recommended for low pressure tests and, more particularly, for sewers. She was unaware of the type of pressure required to properly test the water mains as they were being laid.

24 Joanna Siles was Yarra Valley Water's team leader and superintendent of the project. She led a team of eight project managers and one field auditor in delivering the Yarra Valley Water capital works programme. She was aware that it was industry practice for testing of high pressure water mains to occur by hydrostatic testing. She knew that air pressure testing did occur but that was, in her understanding, at low pressure and she knew that the air pressure testing should not exceed 50 kPa.

25 The last paragraph of the summary produced by the appellant to the Court stated:

"It was practicable for Yarra Valley Water, Blaxland and Michael Doherty to have eliminated or substantially reduced the risk of injury to Apanui and Peters by ensuring that a comprehensive job safety analysis was completed by Blaxland and that the pressure testing of the water mains pipeline was hydrostatic."

There is no doubt that that is correct, it is apparent that if there had been compliance with the Australian standards in respect of this area of testing, this tragic incident would not have occurred.

26 In the summary of the offences there was no suggestion that Michael Doherty on behalf of Blaxland or Robert Batley or Laurie Harris on behalf of Yarra Valley Water, was aware that high pressure air testing was entirely inappropriate for a water mains and determined to persist with testing in this manner despite that knowledge. There is, as I have indicated, material that Michael Doherty knew that high pressure air testing had some dangerous aspects to it[5], but no evidence was contained in the summary that he was aware that such testing was not permitted anywhere in Australia.

Crown Appeals - the principles

27 The principles which govern appeals by the Director of Public Prosecutions are set out in the oft referred cases of R v Clarke[6] and R v Johnston.[7] As the Court explained in R v Clarke the reason that there should be Crown appeals only in exceptional cases is that such appeals:

"represent a departure from traditional standards of what is proper in the administration of criminal justice in that in a practical sense it is contrary to deep-rooted notions of fairness and decency which underlie the common law principle against double jeopardy.[8]"

28 It has been made clear in numerous cases[9] that this Court does not interfere with the sentencing discretion of sentencing judges merely because it disagrees with the sentence imposed or thinks it is a sentence less than the Court itself would have imposed. The inadequacy of the sentence must be clear and egregious. The sentence must be so disproportionate to the seriousness of the crime as to shock the public conscious and undermine public confidence in the ability of the courts to play their part in deterring the commission of crimes.

The Appeal

Ground 2

29 In relation to ground 2 of the appeal it was submitted that his Honour erred in characterising the circumstances of the offence as a tragic miscalculation arising out of a failure by officers of the respective companies to appreciate the difference between lower pressure testing of sewers as compared to high pressure testing of water mains.

30 The appellant submitted that several of the respondents officers, namely Sam Austin, Neil Rickard and Joanna Siles, were aware that high pressure air testing was inappropriate, and that hydrostatic pressure testing should have been used on the pipeline. Equally, however, they submitted that several of the respondent's officers, namely Robert Batley and Laurie Harris were not aware that high pressure air testing was not permitted. It should be noted that the two officers of the companies that were either informed of the situation or present and making decisions, if any, on the day were the two officers of the first respondent who were unaware that high pressure air testing was not permitted.

31 It was submitted in argument in this court that the true failure on the part of Yarra Valley Water was the failure to ensure that the knowledge and information relating to testing was communicated effectively and efficiently to those working in the field. That appears to me to be a correct characterisation of the problem that occurred within Yarra Valley Water. But unfortunately that submission was not put before the learned sentencing Judge.

32 Equally, in respect of the other respondent Blaxland, the appellant submitted that Michael Doherty was aware that air pressure testing was dangerous, knew that there were risks associated with the method of testing adopted, and knew that in using the form of testing he was exposing the employees to a grave risk. The appellant submitted in oral argument that Blaxland, through its employee Michael Doherty, was aware that high pressure air testing was not permitted to be used in pipes of this type and thereby knew that he was exposing the employees to grave risk. In support of this argument the appellant relied upon what is contained in the summary ,which reads in the relevant part;

"Prior to the testing of the McLeans Road pipeline for leaks, Michael Doherty instructed Peters how to set up the end cap on the pipe and how to set up the bracing ready for testing. He had discussed with Peters the dangers of air pressure testing. He knew workers should not stand in front of the end cap while testing was in progress. Michael Doherty checked the packing and gave the direction that air pressure testing be carried out on the day of the incident."

33 Nowhere in that summary is there a statement that the Michael Doherty knew that high pressure air testing was not permitted in respect of pipes of this nature, nor that he was exposing employees to a grave risk.

34 It was submitted during the plea by counsel for the respondent, Blaxland, at page 46-47 that;

"when asked about why it was that pneumatic testing was used in relation to the PVC pipe, which your Honour can see in Exhibit B12, is sleeved in through a rubber seal at the end of the two end bend pieces, the regrettable, but quite frank, explanation is simple, the equipment was there; I wanted to make sure there was going to be no leak and, with the greatest regret in the worked, Mr. Doherty would say to your Honour, he simply didn't think about it.

He simply didn't think about it. He set it all up appropriately for high pressure testing, but didn't consider the issue of the inappropriateness for PVC water pipe."

35 In reply counsel appearing for the crown submitted [10]

"The final comment I make your Honour, is this: that it should have been realised by the auditor employed by Yarra Valley Water, Mr. Battley and also Mr. Doherty of the grave dangers associated with this procedure."

36 That is in my view quite different to the submission made by counsel for the appellant in this court, that the respondent's officer knew that in using that form of testing, the respondent was exposing it's employees to a grave risk. There was no evidence brought to the attention of the learned sentencing Judge to enable him to make such an adverse finding to the necessary standard. His Honour during his sentencing remarks made the following comment;

"It is clear that there was clearly confusion, if not lack of knowledge, by some of the employees of Yarra Valley Water who were in charge of the project, although not necessarily continuously on site. It is not clear from the material placed before the court as to the state of knowledge of Michael Doherty, the court was told he simply did not think of the inappropriateness of the pressure air testing in PVC pipes."[11]

37 In this court, counsel for the appellant referred the court to various aspects of the materials contained in the depositions, which included the Australian standards, the contract specifications, the statements of the expert witnesses and the statement of the respondent's employee Michael Doherty. Nowhere within that material is there anything that discloses his knowledge, and ergo that of the respondent, of the dangers of testing these particular pipes in this manner. There is within those documents material that demonstrates his knowledge that air pressure testing is generally potentially dangerous, and evidence that the respondent's employee took steps to deal with what Michael Doherty perceived to be the dangerous aspects of that type of testing. There is certainly evidence that the respondent was in breach of his contractual obligations to perform hydrostatic testing. But in my view there is no evidence that he was aware that high pressure air testing of PVC water mains pipes was absolutely not permitted, nor that he was aware that he was placing employees in a grave position of danger by performing testing in this manner.

38 In relation to the findings His Honour made it is clear that the learned sentencing Judge was not determining that all officers of the respondents were unaware of the differences of the testing procedures, but stating, in my view correctly, that what caused the actual blast was a failure by the relevant, immediately present officers of the two respondent companies to appreciate the difference between the two forms of testing on the different types of pipes that had been tested previously and were tested on that day.

39 I am of the view that it was clearly open to the learned sentencing judge to characterise the circumstances of the offence in the manner that he did, and no identifiable error has been demonstrated in relation to ground 2.

Ground 1

40 Ground 1 is that the sentence was manifestly inadequate. This ground does not permit of a great deal of argument and counsel for the appellant has enumerated a number of factors upon which he relies being the particulars marked (a) through (f) noting that there are two particulars marked (b).

41 Particular reliance was placed on the decision of DPP v Amcor Packaging Australia Pty. Ltd.[12] by counsel for the appellant. In that case an employee operating a paper manufacturing machine with large unguarded rollers was caught and drawn into the rollers of the machine and died. The use of the machine required employees to sometimes work in extremely close proximity to the open rollers. Two risk assessments had been undertaken regarding this particular part of the machine, both in 1998, which identified risks of entanglement, crushing, shearing and others. In July 2002 an incident occurred which was of a similar nature to the incident that caused the death of the employee in 2004, in that, he was sucked towards and into the rollers of the machine whilst performing his duties of guiding the paper. The company had assessed the risk of a serious incident as low, but there was certainly an awareness of the potential dangers of the machine in question.

42 In the joint judgment of Vincent, Eames and Nettle JJA, it was submitted, the Court indicated the approach that ought to be considered in the assessment of the appropriate penalty for offences of this nature when it referred with approval to the decision of Workcover Authority of New South Wales v Profab Industries Pty Ltd[13] which stated:

"[T]he primary factor to look at in relation to the penalty to be imposed is the objective seriousness of the offence. Particularly in cases involving a serious breach of the OH&S Act, subjective factors, such as a plea of guilty, co operation with the investigation and subsequent measures taken to improve safety, must play a subsidiary role in the determination of the penalty to the gravity of the offence itself. While the court must keep in mind not only facts which establish the seriousness of the offence, but also those which tend to mitigate that seriousness or exculpate the offender (see Camilleri's Stock Fees Pty.Ltd. v Environment Protection Authority...) the presence of the subjective factors referred to should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence."

43 However, when referring to this decision the court prefaced its approval with the following remarks:[14]

"When determining the appropriate penalty in a case of the breach of a statutory duty imposed for the purpose of protecting the lives and well being of those who may be affected by the breach, the foreseeable potential consequences must be taken into account as it is the avoidance of those consequences which, when considering the objective seriousness of the offence, constitute the raison d'être for the establishment of the legislated regime in the first place. To a substantial extent the seriousness of a breach must be assessed by reference to those potential consequences and the measure of evidenced disregard concerning the safety of employees in the circumstances.[15] We would adopt, with respect, the views expressed by the Industrial Relations Commission of New South Wales (in court sessions) in Workcover Authority of New South Wales v Profab Industries Pty Ltd.

44 It is obvious that the foreseeable and the objective consequences must be taken into account, as that is a factor that assists in determining the potential seriousness of the case. It is equally obvious, in my view, that if there is a blatant disregard of known dangers, the level of seriousness of the offence may escalate quite significantly.

45 His Honour the learned sentencing Judge, during his detailed sentencing remarks dealt with the other issues raised by counsel for the appellant. The circumstances of the offending, the impact upon the victims and families of the victims[16], the issues of general and specific deterrence[17] and the history of the respondent companies including the lack of any previous offending[18], the steps taken to rectify and ensure such a situation never recurs[19] were all specifically addressed by the Judge in those remarks. The findings made by his Honour in respect to those matters were in my view clearly open upon the evidence placed before him on the plea.

46 His Honour also took into account, correctly, the co operation of the respondents with the investigating authorities, the pleas of guilty together with the early stage at which such pleas were entered, and indications of remorse. His Honour further found for the purposes of the plea that this was not an accident involving wilful non-compliance with safety standards by either company but as referred to earlier, more a tragic miscalculation arising out of a failure by officers of the respective companies.

47 In my view the sentences imposed by Honour were within the range of sentence that should have been imposed in the circumstances of these cases. and I would dismiss the appeal.

Conclusion

48 I would dismiss the appeal.

[1] DPP v Amcor Packaging Pty Ltd [2005] VSCA 219; (2005) 11 VR 557.

[2] Ibid at 566[39]-[41].

[3] _Capital Aluminium Ltd v Workcover Authority of New South Wa_les (2000) 49 NSWLR 610 at 646[82].

[4] Ibid at 644[77].

[5] See para 14.

[6] [1996] VICSC 30; [1996] 2 VR 520.

[7] (2004) 1 VR 84.

[8] R v Clarke, page 522.

[9] DPP v Phillip Josefski [2005] VSCA 265; Everitt v R [1994] HCA 49; (1994) 181 CLR 295, [306] per McHugh J; DPP v Whiteside and Dieber [2000] VSCA 142; (2000) 1 VR 331.

[10] Page 67 plea transcript.

[11] Sentencing remarks Para 15 page 74.

[12] [2005] VSCA 219; (2005) 11 VR 557.

[13] [2000] NSWIRComm 142; (2000) 49 NSWLR 700 at 714, [31].

[14] DPP v Amcor Packaging Australia Pty. Ltd, para 35.

[15] Ibid.

[16] Sentencing remarks paras 18-20.

[17] Sentencing remarks paras 31-38.

[18] Sentencing remarks paras 21, 22.

[19] Sentencing remarks paras 23-28, 31, 33, 34, 36, 37.