Environment Protection Authority v Embridge Crest Pty Ltd

Land and Environment Court (NSW)|2002-02-03|Before: Cowdroy J, Bignold J

Introduction 1 By summons filed 19 April 2002 the Environment Protection Authority ("the EPA") charges Embridge Crest Pty Ltd ("the defendant") with an offence against s 37(1) of the Roads and Rail Transport (Dangerous Goods) Act 1997 ("the Act") in that it was involved in the unsafe transport of dangerous goods by road ("the offence"). Section 37 of the Act relevantly provides as follows:-

37(1) A person involved in the transport of dangerous goods by road or rail who fails to ensure, as far as is practicable, that the goods are transported in a safe manner is guilty of an offence. ….

(a) if the failure results in death or serious injury to a person - $100,000 or imprisonment for 4 years, or both, for an individual or $500,000 for a body corporate, or

(b) in any other case - $50,000 or imprisonment for 2 years, or both, for an individual or $250,000 for a body corporate.

2 The defendant has entered a plea of guilty to the charge and has agreed to pay the prosecutor's costs of the proceedings. Accordingly only the issue of penalty remains for determination by the Court. In separate proceedings before His Honour Justice Bignold which arises out of the same circumstances Moama Refinery Pty Ltd has been convicted of an offence against the Act: see Environment Protection Authority v Moama Refinery Pty Limited [2002] NSWLEC 244. In these proceedings the parties requested that the Court reserve its judgment until the publication of the judgment in those proceedings. These two proceedings comprise the first prosecutions in this Court under the Act. The offence

3 The defendant operates a transporting business with a small fleet of trucks and trailers and is based in Numurkah, Victoria. The offence occurred between 26 and 29 April 1999 when the defendant was transporting a highly flammable and dangerous liquid known as "Solvent B Premium" ("Solvent B") from the Moama Refinery at Hillside Road, Moama NSW to various places both within and outside New South Wales. The defendant was one of approximately 15 transporting companies used by Moama to transport Solvent B. Orders for chemicals were received by Moama, and the defendant accepted orders exclusively from Moama as the consignor of such chemicals. Most of the Solvent B orders Moama received at the time of the offence were from a company called Eadform Pty Ltd ("Eadform").

4 On 27 April 1999 Moama received an order for 136 drums of Solvent B. Each drum contains 200 litres of liquid. At approximately 4 pm, drums were filled and loaded onto a white 1990 Lusty semi trailer registration 36747S ("the trailer") towed by a white 1989 Freightliner prime-mover truck registration W58DW ("the prime mover") which are together referred to as "the vehicle". 5 After the vehicle was loaded it was inspected by Mr Dean Rudeforth, a Moama employee. Mr Rudeforth made a quick check of the drums to ensure they were not leaking and also noted that no petrol odours were present. He then completed an internal sales order, noting the number of 200 litre drums on the trailer ("the load"), and a delivery docket. Each were given to the driver of the vehicle Mr Ronald Kelly. Mr Kelly was a truck driver employed by the defendant and one of two drivers who would carry the load. The vehicle then left the Moama Refinery. 6 By 11:30 pm the same day Mr Kelly had driven the load to the defendant's truck depot at Lot 1&2 Goulburn Valley Highway, Numurkah, Victoria. Mr Kelly left the vehicle at the depot for Mr Gary Matthews, the defendant's other driver who was to carry the load to New South Wales. At approximately midnight Mr Matthews arrived to collect the vehicle. He observed that the load was secured by ropes and gates. Using the overhead lights in the parking bay he was able to make a visual check of the load. He did not see any drums leaking but noticed that many of the drums were dented. 7 Mr Matthews left the depot at 12:30 am on 28 April 1999 having as his destination Lemon Tree near Gosford. He passed through Albury and then followed the Hume Highway to Sydney and the Pacific highway towards Lemon Tree. Mr Matthews stopped approximately every 3 hours to rest and check the load to ensure it was stable and properly secured. He also looked underneath the pallets upon which the drums rested to ensure no leakage was apparent, and checked the tops of the drums to see they were properly sealed. During the 12 hour trip he checked the load five times in this way and detected no leaks. 8 At midday on 28 April 1999 while approximately 70 kilometres from his ultimate destination Mr Matthews stopped at the Mt White Heavy Vehicle Checking Station ("the checking station"). Upon arrival at the weighbridge he could smell fuel or petrol. Mr Ray Jenkins, an inspector with the Roads & Traffic Authority ("the RTA"), took Mr Matthew's log book and proceeded to check the vehicle. Mr Jenkins discovered a white foamy substance and a clear liquid dripping between the pallet boards and elsewhere on the trailer. The substance had a strong chemical or fuel odour. Mr Jenkins took photographs of the leaking substance which were tendered in evidence during these proceedings. Thereafter the vehicle was parked some distance away from the main office of the checking station. 9 At the RTA's request, the NSW Fire Brigade and the local Rural Fire Service attended the checking station. Officers of Hazmat, being a branch of the NSW Fire Brigade, also attended the checking station. Mr Matthews co-operated fully and obeyed all instruction he received from the RTA and Fire Brigade officers. 10 Investigations establish that Solvent B was dripping from about six places underneath the trailer. The pallets beneath the drums were saturated with liquid as was the deck of the trailer. At least four of the drums were leaking. 11 Various precautionary measures were taken by the Hazmat unit which attended the site. Noting the drums were dented and generally in poor condition, Hazmat removed several drums from the truck by forklift and decanted them. Tests were continuously conducted to ascertain the level of flammable vapours around the vehicle and preventative measures where taken to avert any risk. 12 Detectives from the Gosford police and EPA officers Mr Ross Brylynsky and Mr Terry Muir also attended the site to assist in investigation of the incident. At 9.18 pm on 28 April 1999 the situation was declared to have been rendered safe by the Hazmat unit. The empty drums were reloaded on to the trailer and the Fire Brigade and Police escorted the vehicle to a holding yard in West Gosford. The EPA impounded the drums and the trailer at the holding yard. Breaches of Safety Standards 13 The vehicle was operating in breach of several standards. Such these breaches related to inadequacy of shipping documentation, inadequate placarding of the vehicle, lack of safety equipment, lack of an emergency procedure guide and inadequate training of personnel. Furthermore, the general condition of the vehicle was unsafe and in breach of several legislative requirements. 14 Most of the relevant obligations are contained in the Australian Code for the Transport of Dangerous Goods by Road and Rail ("the code"). Solvent B Premium is a petroleum product classified as a class 3 dangerous good in Appendix 2 of the code. The code is incorporated into New South Wales law by virtue of the Road and Rail Transport (Dangerous Goods) (Road) Regulation 1998 ("the NSW regulation") since clause 5 adopts the Road Transport Reform (Dangerous Goods) Regulations 1997 of the Commonwealth ("the Commonwealth regulation"). The Commonwealth regulation requires that particular standards set by the code be observed in a variety of circumstances. Accordingly, those provisions which are referenced by the Commonwealth regulation become legal standards New South Wales.

15 The internal sales order and the delivery docket given to Mr Matthews comprised the only documentation which accompanied the load. Clause 11.3 of the Commonwealth regulation requires the defendant as 'prime contractor' to ensure that shipping documentation complies with Chapter 11 of the code. Chapter 11 requires, inter alia, that the documentation provide certain basic details, including the consignor's name and contact details, the United Nations reference number and the class of the dangerous goods. 16 The drums containing Solvent B were labelled with Moama's address and contact details, but such information did not satisfy the requirements of cl 11.3 of the Commonwealth regulation.

Obligations relating to placarding 17 Clause 7.6(2) of the Commonwealth regulation requires vehicles involved with the transport of dangerous goods to display placards in accordance with Chapter 7 of the code. Clause 7.6.6 thereof requires specified "Dangerous Goods Class 3" signs to be placed at the front and rear of the vehicle. 18 Mr Kelly attached a placard with a piece of wire to the trailer before leaving the Moama Refinery. No placard was attached to the front of the vehicle and therefore the requirements of the code were not met. In addition such placard is badly faded with the original red colouring in some areas completely worn off. The prescribed form of the placard provided by the code is obviously intended to be easily visible and readily identifiable. The condition of the placard is such the objective of cl 7.6.6 would not have been effectively achieved even if a similar sign had been placed at the front of the vehicle.

Obligation in relation to the provision of safety equipment 19 Clause 12.2 of the code requires the driver of a vehicle transporting dangerous goods to be given personal protective equipment of a type, quality and quantity reasonably necessary for the safe transport of the goods and personal safety of the driver. The safety equipment provided must be sufficient for use in both normal operating conditions and dangerous situations. Further, in accordance with the code, the vehicle is required to be equipped with fire extinguishers, portable warning devices, an intrinsically safe torch complying with various safety standards and other relevant items. 20 In this instance the vehicle did not contain a fire extinguisher, goggles, gloves, first aid kit, protective clothing, eyewash kit, warning triangles, nor an intrinsically safe torch. An intrinsically safe torch is one designed such that it cannot act as an ignition source for flammable liquids. Mr Matthews had equipped himself with a torch which posed a risk to both himself and the public by being a possible source of ignition for the leaking Solvent B. 21 The evidence indicates that Mr Matthews had raised the lack of safety equipment with several of the defendant's employees and with its sole director Mr Douglas Trease. Mr Trease said words to the effect that he should "not worry".

Obligations in relation to the provision of an emergency procedures guide 22 Clause 11.7 of the Commonwealth regulation requires that an emergency information holder and appropriate information be provided in accordance with Chapter 11 of the code. The defendant did not provide an emergency procedure guide which complied with the requirements of the code. Obligations in relation to training and instruction 23 Clause 20.1(2) of the Commonwealth legislation provides in relation to the instruction and training of those involved with the transport of dangerous goods as follows:- (2) A person who is responsible for management or control of the task must not employ, engage or permit someone else to perform the task unless the other person: (a) has received, or is receiving, appropriate instruction and training to ensure that he or she is able to perform the task safely and in accordance with these Regulations; and (b) is appropriately supervised in performing the task to ensure that he or she is able to perform the task safely and in accordance with these Regulations. Penalty: $ 3,000

24 The defendant had employed Mr Matthews for approximately seven months prior to the date of the offence. Mr Matthews had held a trucking licence since 1995 but had no special training in relation to the transport or handling of dangerous goods. Mr Matthews was not provided with any additional instruction or training by the defendant in relation to dangerous goods. During the interview for his employment with the defendant Mr Matthews was told by Liz Trease, an employee of the defendant: "Don't worry about the safety side of it, what you're carting is only solvent, it isn't dangerous". 25 The defendant had employed Mr Kelly for approximately two years at the time of the offence. As with Mr Matthews, Mr Kelly received no instruction or training in relation to dangerous goods while employed by the defendant. Neither Mr Matthews nor Mr Kelly was told that the substance they were carrying on 27 and 28 April 1999 was categorised as dangerous goods. 26 Although Mr Kelly had been given the dangerous goods placard to affix to the trailer he was not aware the sign indicated that the load consisted of dangerous goods. Mr Matthews noticed that the drums of Solvent B bore labels indicating that the contents were "highly inflammable". Neither driver has been informed of the precise nature of the subject goods.

General Condition of the Vehicle 27 Following the impounding of the trailer two further inspections were conducted by EPA and RTA officers. The first of these inspections was conducted on 7 May 1999. Mr Omar Elias of the RTA found the following defects in the trailer:-

a) Two brake drums were cracked. Based upon his experience he determined such defect would render the brakes of the trailer inadequate. Also as a result of a missing safety pin the brakes slack adjusters push rod was becoming detached from the left side third axle. This defect could also have caused three of the six brakes on the vehicle to become inoperative.

b) Several tyres on the trailer did not meet the required 1.5 mm tread depth under the Road Transport (Vehicle Registration) Act and Regulations. The worn condition of the tyres could have resulted in a loss of traction especially in wet conditions. In Mr Elias' opinion the worn tyres would also make the trailer more difficult to control.

c) Part of the suspension mechanism, known as springsaddles, on the left side first axle and the right side second axle were cracked. The chassis rails were cracked.

d) The vehicle identification number was not visible. 28 Vehicle defects may be classified into four categories being "formal warning", "minor", "major" and "major grounded". According to Mr Elias' assessment the defects in the trailer were classified as "major". As a result of Mr Elias' assessment the trailer was banned from use until the faults were rectified. 29 Mr Kevin Humphrey, an authorised RTA inspector and mechanical engineer conducted the second inspection on 8 May 1999. He discovered that there were cracks in the chassis rails which could have led to the collapse of the trailer. Mr Humphrey noted several other defects and noted that attempted repairs previously made to the trailer had not been undertaken competently. He concluded that the trailer was generally of poor condition and not roadworthy. Numerous faults in the trailer indicated that the trailer had not been inspected or serviced in recent times. 30 The Court notes that all the above investigations were made of the trailer, not the prime mover. The EPA acknowledges the condition of the prime mover, as distinct from the trailer, to have been reasonable. Nevertheless, the condition of the trailer was such that it was, by virtue of the defects, unfit for the safe carriage for dangerous goods.

31 Section 21(da) of the Land and Environment Court Act 1979 confers jurisdiction upon the Court to hear and dispose of matters bought under s 39(4) of such Act. Section 39(4) thereof allows proceedings for offences against that Act to be dealt with either by a magistrate in a Local Court or the Land and Environment Court. Section 39(5) of the said Act provides that the maximum penalty applicable to offences prosecuted in a Local Court is $10,000.

32 The substantial maximum penalty applicable to the offence is $250,000 which is an indication of the seriousness of the offence. In Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683, Kirby P (as he then was) observed at 698:- While it is the function of the Court itself to assess the seriousness of the offence in question, the maximum penalty available for an offence reflects the 'public expression' by parliament of the seriousness of the offence: R v H (1980) 3 Crim R 53 at 65. 33 The Act provides for a separate penalty (see s 37(2)(a)) if the failure to ensure safe transport results in death or serious injury to a person. This prosecution does not concern death or personal injury. Nevertheless the severe penalties prescribed by s 37(2)(b) of the Act reflect the gravity of the offences and of the need to protect the public and the environment. Such objective is apparent from s 3 of the Act which provides:- The purpose of this Act is to regulate the transport of dangerous goods by road and rail in order to promote public safety and protect property and the environment. 34 Accordingly the fact that the defendant's various breaches were discovered before they had manifested in actual harm to property, person or the environment does not absolve the defendant from culpability for the offence as charged. The purpose of the Act is to protect the public and the environment from dangerous practices in order to avoid actual harm. The defendant has committed the offence in flagrant disregard of the applicable statutory requirements.

35 The defendant entered a plea of guilty at an early stage in the proceedings and has thereby assisted the EPA. The defendant has also expressed contrition and remorse for its actions. The utilitarian value of a plea of guilty will generally entitle a defendant to a discount in penalty: see s 22 of the Crimes (Sentencing Procedure) Act 1999; see also R v Thomson; R v Houlton (2000) 49 NSWLR 383 (especially at 416-417); Cameron v R (2002) 187 ALR 65; R v Sharma (2002) 54 NSWLR 301. However the facts indicate that the defendant did not fully co-operate with the EPA's investigations. The defendant refused to answer certain questions put to it by the prosecutor during its investigations and this fact is noted by the Court in assessment of penalty. 36 The Court has also been requested to take into consideration certain charitable activities of the defendant and the fact that the defendant provides employment for a significant number of persons. The total population of Numurkah Victoria, where the defendant bases its operations, is 2,900 and the defendant employs more than 100 persons from within this district.

Findings 37 The failures of the defendant to meet the basic requirement of the regulations, and the misinformation deliberately provided by the defendant to its drivers, exposed the public to a potential environmental disaster. The liquid carried in the vehicle was as explosive as petrol, but the drivers were unaware of this fact. If an accident had occurred the drivers would have been quite unable to provide an emergency service with knowledge of the contents of the load. The trailer used by the defendant was in a dangerous condition and should not have been used on any road. Its use for the transportation of dangerous goods demonstrates that the defendant had insufficient regard for public safety of the environment. It was only as a result of the checking of the vehicle by the RTA that a possible catastrophe was averted. In the assessment of penalty the absence of any evidence of harm to the public and to the environment, and the early plea of guilty warrants a reduction of the penalty. But for the plea of guilty the Court would have imposed a fine of $40,000 Orders 38 The Court orders that:-

The defendant is convicted of the offence as charged.
The defendant is fined the sum of $30,000 such fine to be paid within 28 days of this order.
The defendant pay the prosecutor's costs.
The exhibits be returned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Environment Protection Authority v Embridge Crest Pty Ltd [2002] NSWLEC 238 PROSECUTOR Environment Protection Authority PARTIES : DEFENDANT Embridge Crest Pty Ltd FILE NUMBER(S) : 50040 of 2002 CORAM: Cowdroy J KEY ISSUES: Prosecution :- failure of carrier of dangerous goods to ensure that as far as practicable goods were transported in a safe manner. Crimes (Sentencing Procedure) Act 1999, s 22 Land and Environment Court Act 1979, s 21(da), s 39 Roads and Rail Transport (Dangerous Goods) Act 1997, s 3, s 37 LEGISLATION CITED: Road Transport (Vehicle Registration) Act 1997 Road and Rail Transport (Dangerous Goods) (Road) Regulation 1998 Road Transport Reform (Dangerous Goods) Regulations 1997 Road Transport (Vehicle Registration) Regulations 1998 Cameron v R (2002) 187 ALR 65; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; CASES CITED: Environment Protection Authority v Moama Refinery Pty Limited [2002] NSWLEC 244; R v Sharma (2002) 54 NSWLR 301; R v Thomson; R v Houlton (2000) 49 NSWLR 383 DATES OF HEARING: 26/11/2002 DATE OF JUDGMENT: 02/03/2003

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