Farrell v National Petroleum & Corrosion Services Pty Ltd

(A minor indictable offence against section 32 of the Work Health and Safety Act 2012).

• 1.1. The first defendant had a health and safety duty:
  • 1.1.1. At all material times, the first defendant was a body corporate conducting a business of providing petroleum and corrosion products and services.
• 1.1.2. At all material times, the first defendant was engaged to decommission the LPG tank at 82 Jubilee Highway West, Mount Gambier ('the service station').
• 1.1.3. At all material times, the first defendant engaged workers, including Robert Santilli ('Santilli') to assist with decommissioning the LPG tank at the service station.
• 1.1.4. The first defendant had a health and safety duty prescribed by section 19 of the Act to ensure, so far as reasonably practicable, the health and safety of workers it engaged while they were at work in its business; and to ensure, so far as reasonably practicable, that the health and safety of other persons was not put at risk from work carried out as part of the conduct of the business.
• 1.2. The first defendant failed to comply with that duty:
  • 1.2.1. Whilst at the service station, workers and other persons were exposed to a risk to their health and safety because:
    • 1.2.1.1. The workers were required to decommission the LPG tank ('the decommissioning work').
    • 1.2.1.2. The workers were aware that the LPG tank contained approximately 1,280L of LPG.
    • 1.2.1.3. LPG is extremely flammable and is a fire and/or explosion hazard.
    • 1.2.1.4. As part of the decommissioning work, the workers were required to ensure that the LPG tank was empty before it was depressurised. The LPG tank could be safely emptied by either pumping out the remaining LPG into a tanker or by decanting the remaining LPG into cylinders.
    • 1.2.1.5. It was possible for a worker to empty the LPG tank by intentionally venting the remaining LPG into the atmosphere.
    • 1.2.1.6. It was possible for such a worker to release the contents of the LPG tank over an approximate five (5) hour period during which time the service station continued to operate as normal.
    • 1.2.1.7. It was possible for such a worker to also operate battery powered tools (thereby creating a potential ignition source) in close proximity to the LPG tank as the LPG was released.
    • 1.2.1.8. It was possible for such an ignition source to cause the LPG to combust and/or explode.
    • 1.2.1.9. It was possible for workers and other persons located within the flammable range to be exposed to a risk of death or serious injury from the resultant LPG explosion.
    • 1.2.1.10. It was also possible for nearby structures to sustain loss of mechanical integrity and load bearing capacity from the resultant LPG explosion.
  • 1.2.2. The first defendant failed to provide and maintain, so far as was reasonably practicable, a safe work environment which protected the workers and other persons from the risk presented by the decommissioning work because:
    • 1.2.2.1. The first defendant did not carry out the decommissioning work in a safe and competent manner and in compliance with the relevant Unigas Scope of Works for Decommissioning of Unigas Sites and the associated Safe Work Method Statement in order to eliminate and/or minimise the exposure of the workers and other persons to a risk of an LPG explosion.
• 1.3. The first defendant's failure exposed an individual to a risk of death or serious injury:
  • 1.3.1. Being the risk of death or serious injury arising from the intentional venting of 1,280L of LPG into the atmosphere; and
  • 1.3.2. Which risk materialised on 30 April 2022 when the workers and other persons located within the flammable range were exposed to a risk of death or serious injury from the possibility of an LPG explosion.

1. The second defendant, Robert Santilli, on 30 April 2022, at Mount Gambier in the State of South Australia, committed a Category 2 offence.

(A minor indictable offence against section 32 of the Work Health and Safety Act 2012).

• 2.1. The second defendant had a health and safety duty under section 28 of the Act:
  • 2.1.1. At all material times, the first defendant was a body corporate conducting a business of providing petroleum and corrosion products and services.
  • 2.1.2. At all material times, the first defendant was engaged to decommission the LPG tank at 82 Jubilee Highway West, Mount Gambier ('the service station').
  • 2.1.3. At all material times, the second defendant was engaged by the first defendant in the role of Senior Corrosion Technician.
  • 2.1.4. At all material times, the second defendant was at work at the service station.
  • 2.1.5. As a worker at work, the second defendant held the duty prescribed by section 28 of the Act to take reasonable care for his own health and safety; and to take reasonable care that his acts or omissions did not adversely affect the health and safety of other persons.
• 2.2. The second defendant breached that duty.
  • 2.2.1. Whilst at the service station, workers and other persons were exposed to a risk to their health and safety because:
    • 2.2.1.1. The workers were required to decommission the LPG tank ('the decommissioning work').
    • 2.2.1.2. The workers were aware that the LPG tank contained approximately 1,280L of LPG.
    • 2.2.1.3. LPG is extremely flammable and is a fire and/or explosion hazard.
    • 2.2.1.4. As part of the decommissioning work, the workers were required to ensure that the LPG tank was empty before it was depressurised.
    • 2.2.1.5. The LPG tank could be safely emptied by either pumping out the remaining LPG into a tanker or by decanting the remaining LPG into cylinders.
    • 2.2.1.6. It was possible for a worker to empty the LPG tank by intentionally venting the remaining LPG into the atmosphere.
    • 2.2.1.7. It was possible for such a worker to release the contents of the LPG tank over an approximate five (5) hour period during which time the service station continued to operate as normal.
    • 2.2.1.8. It was possible for such a worker to also operate battery powered tools (thereby creating a potential ignition source) in close proximity to the LPG tank as the LPG was released.
    • 2.2.1.9. It was possible for such an ignition source to cause the LPG to combust and/or explode.
    • 2.2.1.10. It was possible for workers and other persons located within the flammable range to be exposed to a risk of death or serious injury from the resultant LPG explosion.
    • 2.2.1.11. It was also possible for nearby structures to sustain loss of mechanical integrity and load bearing capacity from the resultant LPG explosion.
  • 2.2.2. The second defendant failed to take reasonable care because he failed to:
    • 2.2.2.1. Carry out the decommissioning work in a safe and competent manner and in compliance with the relevant Unigas Scope of Works for Decommissioning of Unigas Sites and the associated Safe Work Method Statement in order to eliminate and/or minimise the exposure of the workers and other persons to a risk of an LPG explosion.
• 2.3. The second defendant's failure exposed an individual to a risk of death or serious injury:
  • 2.3.1. Being the risk of death or serious injury arising from the intentional venting of 1,280L of LPG into the atmosphere; and
  • 2.3.2. Which risk materialised on 30 April 2022 when the second defendant and other persons located within the flammable range were exposed to a risk of death or serious injury from the possibility of an LPG explosion.

1. It is not necessary to set out details of the charge against Ms Khomyleva as the informant has agreed to dismiss the charge against her upon receipt of confirmation from the informant and Mr Santilli that an amount of $20,000 has been paid to the Chief Recovery Officer. The amount of $20,000 has been placed in the trust account of the solicitor acting for all three defendants and will be transferred to the informant or its representative under the terms of an irrevocable authority that has been provided by the first and/or second defendant.

1. A Statement of Agreed Facts was tendered by the parties. It describes events leading up to the commission of the offences in this way:

10. On 11 April 2022, Unigas[1] contacted NPCS via email to supply a quote to decommission the LPG tank.

11. On 13 April 2022, NPCS (via Mr Santilli) provided a quote to Unigas to decommission the LPG tank for $8,100 plus GST.

12. On 13 April 2022, Unigas accepted the quote and advised NPCS that the LPG tank contained approximately 1,280L of LPG which could not be dispensed out from the pump.

13. On 13 April 2022, NPCS advised Unigas that they did not have the resources to 'pump out' (empty) the LPG tank and would require Unigas to supply a tanker for this purpose.

14. On 14 April 2022, Unigas advised NPCS that the other contractors they engaged did the 'pump outs' themselves and that this would be an issue with most LPG tank decommissioning work moving forward.

15. On 19 April 2022, NPCS advised Unigas that they did not require a tanker and would instead empty the LPG tank by dispensing the remaining contents into 'fat boys' and then blow the remaining vapour down as per normal procedure.

1. Mr Santilli arrived at the service station at about 10.23am on 30 April 2022 with Ms Khomyleva and their infant child. Mr Santilli entered the retail part of the service station and made entries in the communication book and visitor sign-in register. Mr Santilli commenced decommissioning the LPG tank at about 10.27am by releasing its contents into the atmosphere. It is agreed that 1,280 litres of LPG was released over a period of approximately 5 hours. The service station continued to trade during that time.
2. Mr Santilli manually manipulated the LPG release valve on the LPG tank, increasing the flow-rate when the area was unoccupied and reducing it or stopping it when people and/or vehicles were nearby. At around 4:31pm, Mr Santilli, Ms Khomyleva and their child departed the service station.
3. A member or members of the public became concerned about the release of what appeared to be a large quantity of LPG into the atmosphere at the service station whilst it was trading and contacted the Environment Protection Authority (EPA) to report it.

On 2 May 2022, SafeWork SA was notified of the way in which the LPG tank was emptied by an email from Dr Suresh Kumar, Senior Environment Protection Officer with the EPA. On 25 May 2022, an inspector advised NPCS that it was prohibited from conducting any LPG tank decommissioning work. The direction was complied with. On 26 May 2022, the inspector issued NPCS with two notices. NPCS provided evidence of compliance with the notices on 12 July 2022.

1. The agreed facts refer to a report of DK Inspection Services commissioned by SafeWork SA (SWSA). The report found that the float arm and float in the LPG tank were in working order. The LPG tank gauge was found to be operative through its range and to respond as designed. Flotation and leak tests showed that integrity of the float was intact. Based on the above findings, DK Inspection Services determined that the LPG tank gauge was operational at the time of the incident.

1. The informant tendered an affidavit of Nilofer Renish Satani, a senior process safety analyst employed by SWSA with a Bachelor of Engineering degree in chemical engineering and a Master of Technology degree. Mr Satani deposed that:[2]

LPG is a fuel gas which contains a flammable mixture of hydrocarbon gases specifically propane, n-butane and isobutane.

liquified petroleum gas means a liquid that is a mixture of hydrocarbons, basically consisting of butane or butenes, propane or propene, or any mixture of them, or 1 of them, and is a dangerous substance of Class 2, Dangerous Substances (General) Regulations 2017.

1. Based on the contents of Mr Satani's affidavit, the informant described LPG in the following way:[3]

53. LPG is extremely flammable and reacts violently with oxidising agents.

54. LPG at atmospheric pressure and temperature is a gas which is 1.5 to 2.0 times heavier than air. As such, it would normally settle at ground level / low lying places and accumulate in depressions and may also travel to remote sources of ignition (i.e. along drainage systems).

55. LPG is colourless both in liquid and vapour phase. During leakage, the vaporisation of liquid cools the atmosphere and condenses the surrounding water vapour to form a whitish fog which makes it possible to see an escape of LPG.

56. LPG has a very low flash point and any spillage or leak is a fire and/or explosion hazard.

57. In order to prevent accidental ignition, it is imperative to eliminate all potential ignition sources (i.e. flame, spark or heat) which could trigger combustion or explosion leading to severe consequences.

58. LPG (in high concentrations) may cause asphyxiation and direct contact may cause cold burns.

59. The primary risk associated with LPG is the possibility of explosion.

60. LPG explosion requires three main elements: the presence of LPG, mixing with air and an ignition source.

61. LPG needs to mix with air in the right proportion - this specific range is called the flammable range and is between the Lower Explosive Limit (LEL) and the Upper Explosive Limit (UEL).

62. When LPG mixes with air and ignites, it undergoes an exothermic reaction - meaning it releases heat energy as a byproduct, as well as additional gaseous products of combustion (i.e. carbon dioxide and water vapour).

63. If a person is standing near an LPG leak and an ignition source is present, there is a substantial risk of death or serious injury from the resultant LPG explosion.

After taking into account weather conditions on 30 April 2022, and other relevant circumstances, Mr Satani calculated the lower explosive limit (LEL) and upper explosive limit (UEL) of the LPG release. Mr Satani calculated that the flammable limit of the released LPG was between 19 metres and 36 metres from the LPG tank. If concentration patchiness is taken into account, Mr Satani deposed that a high risk of ignition could exist between 28 metres and 55 metres. If an ignition source was present in the flammable limit, Mr Satani deposed that the most likely result would be either a flash fire or a jet fire. He deposed that a flash fire causes the vapour to burn quickly without generating significant pressure while a jet fire results from the ignition of a high velocity jet of gas and/or liquid.

1. Mr Santilli filed an affidavit dated 5 February 2025. He deposed that while Ms Khomyleva was the sole director and company secretary of NPCS at the relevant time, he operated the business but was not listed as a director as there is a restraint of trade clause in a contract between himself and his former employer. Mr Santilli deposed that no assets were transferred from NPCS to his family trust given the potential for a prosecution. He deposed that NPCS has spent $122,648.40 on safety, safety equipment and site clean-up since the offending.

1. In its written submissions, the informant noted that Unigas had advised the defendants that 1,280 litres of LPG had to be removed from the 7,500 kilolitre LPG tank without the use of a pump. It was said that no pre-start risk assessment or appropriate checking was undertaken in the 4 minutes between when Mr Santilli arrived at the service station and when he commenced releasing the LPG. It was submitted that Mr Santilli did not have appropriate personnel or tools to ensure that the that the decommissioning would be safely and competently completed.
2. The informant submitted that the video log which is in evidence shows that Mr Santilli performed other tasks and frequently moved away from the immediate vicinity of the tank as the LPG was being released. Those tasks included using battery powered tools under the canopy of the service station while LPG was being released.
3. The informant submitted that Mr Santilli gave the following false answers when interviewed by Inspector Watson of SWSA on 24 May 2022:[4]
   1. As per his standard procedure, excess LPG was transferred to cylinders prior to decommissioning.
   2. Only LPG and vapour remaining in lines was released on 30 April 2022.
   3. His car was used to block the driveway and stop vehicles from entering the area while LPG was released.
   4. A spotter was used on the day to keep any people out of the area.
   5. The area was clear for 10-15 metres from the tank and dispensers.
4. The informant submitted that Inspector Watson viewed the video evidence on 25 May 2022 and immediately telephoned Mr Santilli and issued a notice prohibiting NPCS from conducting any LPG tank decommissioning activities.
5. The informant submitted that the defendants failed to operate in accordance with the Unigas Scope of Works for Decommissioning of Unigas Site (Scope) or with the NPCS Safe Work Method Statement.
6. The Scope provides that NPCS had to "[p]ump out and remove any remaining LPG liquid from the tank, record the quantity removed and provide that information to Elgas promptly for arranging a credit to the customer. As directed by Elgas this product is to be returned to an Elgas supplied tanker for reuse."[5]
7. The SWSA investigation established that neither NPCS nor Mr Santilli complied with the Scope and, instead, intentionally vented 1,280 litres of LPG into the atmosphere over a period of about 5 hours.
8. The informant submitted that the offending by the defendants was objectively serious offending of its type. The informant said that there was a substantial risk of death or serious injury from a potentially catastrophic LPG explosion. General deterrence was said to be a significant sentencing factor here. Specific deterrence also featured, the informant submitted, as NPCS continues to provide services of the kind like those in issue and Mr Santilli is in charge of its operations.
9. The informant opposed the full 40% discount available under s 39(2)(a) of the Sentencing Act 2017 (SA). That was despite the first court appearance being on 25 July 2024 and guilty pleas being entered on 15 August 2024. Mr Santilli's lack of cooperation and candour when interviewed by SWSA was the basis of the submission. The informant submitted that convictions should be recorded. In terms of penalty, the informant submitted there was little by way of direct assistance with the penalty that should be imposed. Authorities were however cited to illustrate the principles that apply.

1. NPCS commenced to operate in March 2022 with two workers and now employs eight persons. NPCS is based in Tullamarine, Victoria.
2. The defendants submitted that the primary duty of care under the WHS Act is set out in s 19, which is underpinned by s 18, and the notion of "what is reasonably practicable in ensuring health and safety" as per the heading to s 18. Section 17 of the WHS Act requires a person to eliminate risks to health and safety, so far as is reasonably practicable.
3. The defendants submitted that the following sentencing principles apply:
   1. The purposes of the legislation should be given effect - Markarian v R (2005) 228 CLR 357 at [27];
   2. The objective seriousness of an offence is to be assessed having regard to the nature and quality of the offence - Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales [1999] NSWIRComm 343; (1999) 90 IR 464 at [474];
   3. The sentencing court should seek to reflect legitimate community expectations - Markarian v R at [82];
   4. The sentencing court should generally lean towards mercy - Webb v O'Sullivan [1952] SASR 65 per Napier CJ at [66], cited with approval by the New South Wales Court of Criminal Appeal in Kelly [2007] NSWCCA 357 at [30];
   5. Guidance from sentencing guideposts must be accounted for - It should be noted however that Rothman J in Murry [2013] NSWCCA 12, at [48]-[49] cautioned against the approach of starting with a guideline decision and adding or subtracting from that decision on the basis of differences in the considered case. Such a course would not be appropriate as that would go beyond using the guideline decision as a guide;
   6. Factors to the determination of sentence must be taken into account in an instinctive synthesis seeking individualized justice; and
   7. A sentencing court should undertake a final review before imposing sentence - Way [2004] NSWCCA 131; 60 NSWLR 168 at [124]; Mill [1988] HCA 70; (1988) 166 CLR 59 at [63].
4. The defendants submitted that the objective seriousness of the breach of the duty owed by them is measured by two factors; the seriousness of the breach, or the extent to which the duty holder has departed from its duty, and the extent of the risk of death or serious injury which might result from the breach.
5. The defendants accept that the potential risk to safety in issue was serious. The defendants also accept that the control measures cited in paragraphs 1.2.2.1 and 2.2.2.1 of the summons as set out above were available to use.
6. The defendants have no prior record of offending under the WHS Act, its predecessor or any like legislation in an Australian jurisdiction. It was submitted that the defendants are unlikely to reoffend and have not been the subject of any further incident, report, site-audit or compliance notice since the immediate aftermath of the offending.
7. It was submitted that the defendants assisted SWSA in its investigation and that they have expressed profound contrition and remorse in relation to the incident.
8. The defendants accept that general deterrence plays an important role in relation to health and safety in the workplace. It was submitted that the need for specific deterrence here is low given the nature of the offending and the defendants' decision to restrict the gas decommissioning work that they do.
9. The defendant's submitted that sentencing should not take into account the absence of a pre-start risk assessment or appropriate checking as breaches of that kind did not form part of the charges.

1. I accept the views expressed in the DK Inspection Services report and in Mr Satani's affidavit. I also accept the description of the properties of LPG provided by the informant, a description that is based upon Mr Satani's affidavit. The defendants did not challenge those views and descriptions.
2. Given the nature of the offences it is appropriate to record a conviction and to impose a fine in relation to the first and second defendants.
3. The offending is objectively serious. The first and second defendants disregarded the procedures stipulated in the Scope for emptying the tank and failed to provide any vessels into which to decant the LPG despite agreeing to do so contractually. The estimates of the flammable limits of the LPG provided by Mr Satani range from a minimum of 19 metres to a maximum of 55 metres. Had an ignition source been present within the flammable limits, an explosion could have resulted and could have had dire consequences. The defendants submitted that it is not clear what the actual flammable limit is. Given that, I proceed based upon the minimum flammable limit of 19 metres described by Mr Satani. The Statement of Agreed Facts does not specify how far the service station bowsers are from the LPG tank. The informant has not suggested that an explosion may have ignited another fuel source at the service station.
4. Based on the assumptions made by Mr Satani,[6] and his use of the Area Locations of Hazardous Atmospheres (ALOHA) software, I am satisfied that if the LPG had been ignited, there would have been a risk of serious injury or death to anyone who was within 19 metres of the ignition point and/or that burns, injuries from flying debris and trauma from the force of the blast could have resulted.[7]
5. I accept the submission that the absence of a pre-start risk assessment and appropriate checking should not be relied upon in sentencing the first and second defendants as those breaches have not been alleged against them.
6. In Campbell v Infuse Bottling Company Pty Ltd,[8] Cole DPM observed that in cases where the objective nature of the offending is very serious, the result of the offending is relevant to sentencing.[9] It does not follow that because no harm results from a breach of s 32 that an offence has not been committed. In Diemould Tooling Services Pty Ltd v Oaten; Santos Limited v Markos,[10] Doyle CJ said:[11]

I should add that the allegation of a fatal injury to the named employee is unnecessary but legally harmless. The consequence of a contravention of s 19(1) is relevant to the question of penalty, but is not an element of the offence.[12]

1. The first and second defendants disregarded their contractual obligations under the Scope in relation to how to decommission the LPG tank. I accept their submission that the offending was also occasioned by ignorance of the potential consequences of releasing LPG into the atmosphere. That is demonstrated by the second defendant allowing his wife and infant child to remain in the vicinity of the LPG tank while LPG was being released. That consideration does not however qualify the objective seriousness of the offence. If the LPG had ignited, the result may have been calamitous. The learned Deputy President Magistrate in Campbell said it was fortunate that no one was injured in that case. That comment applies to this case.
2. As the parties submitted, there is no reported case in this jurisdiction with facts similar to the facts of this case. Campbell is probably the most analogous case as it involved a very real risk of very serious injury by electrocution following an obvious disregard of safety by a defendant who continued to use a bottling line despite having written advice from an electrical contractor that doing so was unsafe because the line was not electrically compliant.
3. I accept the expressions of contrition made by the first and second defendants. I accept that they have no relevant prior convictions. I accept that they have invested in safety since the offending, but as they acknowledged, not to the extent of all of the $122,648.40 referred to in the second defendant's affidavit.
4. Whilst it was submitted that the first defendant employs eight people including the second and third defendants and will be adversely impacted by a fine, I am not persuaded that I should ameliorate the amount of the fine under s 120(1) of the Sentencing Act 2017. That submission was not advanced in any event.
5. The informant agreed to withdraw the charge against the third defendant on the terms described above as the third defendant's residency status in Australia may have been at risk had she been convicted of a criminal offence.
6. In relation to any discount under s 39(2)(a) of the Sentencing Act 2017, the parties agree that the maximum discount available is 40%. I accept the informant's submission that it is not appropriate to apply the maximum discount given that the second defendant gave deliberately false responses to SWSA after the offence was detected. The informant also submitted that the delay in finalising the pleas of guilty should be taken into account. As s 39(2) (a) is satisfied, and as there was a good reason to delay finalising the matter to allow the third defendant to not be proceeded against, I do not accept that submission. I do not accept the defendants' submission that they should be given credit for not transferring assets from the first defendant to a family trust in order to place the first defendant in a bad financial position. If the financial position of the first defendant had been altered in that way and the informant had learned of it, it would have aggravated the offending and placed the defendants in a worse position.
7. In all the circumstances I consider a reduction of 30% to be appropriate.
8. I make the following orders.
   1. In relation to the first defendant, a conviction is recorded on count 1 and a fine of $140,000 is imposed before a 30% discount. After the discount the fine is $98,000. The first defendant is to pay the informant's costs fixed at $1,210, disbursements fixed at $715 and a victims of crime levy of $424.
   2. In relation to the second defendant, a conviction is recorded on count 2 and a fine of $40,000 is imposed before a 30% discount. After the discount the fine is $28,000. The second defendant is to pay the informant's costs fixed at $1,210 and a victims of crime levy of $424.
   3. Upon receipt of confirmation from the informant and second defendant that an amount of $20,000 has been paid to the Chief Recovery Officer towards the penalty imposed by this Court on the second defendant, or in the alternative on the first defendant, count 3 against the third defendant is dismissed with no order as to costs.

[1] The LPG tank was owned and maintained by Elgas Autogas Pty Ltd & Unigas Transport Fuels Pty Ltd t/a Unigas Partnership (Unigas). Unigas contracted NPCS to decommission the LPG tank.

[3] Informant's written submissions [53]-[63].

[4] Informant's written submissions [39].

[6] Affidavit affirmed on 24 March 2024, BoD 23 - 53 at 28, [25].

[8] [2022] SAET 63.

[10] [2008] SASC 197.

[12] Sections 19, 22 and 58 of the Occupational Health Safety and Welfare Act 1986 concern duties owed by employers and breaches thereof and are similar to, and have been replaced by, ss 30 to 34 of the WHS Act.