Inspector Batty v Waste Equipment Pty Ltd & Anor

Capral Aluminium v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Genner Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Guillarte) (2001) 110 IR 57 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Markarian v R (2005) 215 ALR 213 Morrison v Powercoal Pty Limited (2003) 130 IR 364 R v Gallagher (1991) 23 NSWLR 220 CASES CITED: R v Thomson; R v Houlton (2000) 49 NSWLR 383 R v Way (2004) 60 NSWLR 168 Tyler v Sydney Electricity (1993) 47 IR 1 WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Limited (unreported, Schmidt J, 25 February 1994) WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited) (1998) 82 IR 80 WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 WorkCover Authority of New South Wales (Inspector Ching) v TRW Steering & Suspension Australia Ltd [2001] NSWIRComm 52

HEARING DATES: 27/04/09 EXTEMPORE JUDGMENT DATE: 28 April 2009

Prosecutor: Mr D.W.M. Chin of counsel Solicitors: Ms K. Longin LEGAL REPRESENTATIVES: WorkCover Authority of NSW

Defendants: Mr S.J. Rushton SC with Mr J.S. McLeod of counsel

Matter No IRC 650 of 2008 INSPECTOR IAN BATTY v WASTE EQUIPMENT PTY LTD Prosecution under s8(1) of the Occupational Health and Safety Act 2000 Matter No IRC 651 of 2008 INSPECTOR IAN BATTY v JOHN BERNARD CROSS Prosecution under s8(1) by virtue of s26(1) of the Occupational Health and Safety Act 2000

1 HER HONOUR: These prosecutions are brought by Inspector Ian Batty of the WorkCover Authority of New South Wales against Waste Equipment Pty Limited, the corporate defendant, under s8(1) and John Cross (the individual defendant) under s8(1) (by virtue of s26(1)) of the Occupational Health and Safety Act (the Act). It is alleged both defendants on 22 May 2006 contravened the Act in that they failed to: ensure the health, safety and welfare at work of all its employees and, in particular, Timothy Mark Hirst, contrary to s8(1) of the Occupational Health and Safety Act 2000. 2 The particulars relied upon are similar in both applications and relevantly read: (a) The defendants failed to ensure a system of work for painting (including preparation for painting) and fabrication of waste collection bins and equipment that was safe and without risks to the health and safety of its employees; (b) The defendants failed to ensure that painting (including preparation for painting) with the use of flammable substances did not occur adjacent or in close proximity to the performance of any hot work on any waste collection bins and equipment (including welding, thermal or oxygen cutting or heating, and other heat-producing or spark-producing operations); (c) The defendants failed to ensure that persons performing painting and painting preparation work adjacent or in close proximity to the performance of any hot work on any waste collection bins and equipment (including welding, thermal or oxygen cutting or heating and other heat-producing or spark-producing operations) wore any, or any adequate, personal protective equipment or clothing; (d) The defendants failed to conduct any, or any adequate, risk assessment as was necessary to ensure the health, safety and welfare of its employees whilst painting, preparing to paint and/or performing any hot work on any waste collection bins and equipment (including welding, thermal or oxygen cutting or heating and other heat-producing or spark- producing operations); (e) The defendants failed to provide any, or any adequate, information to its employees and in particular Mr Timothy Hirst and Mr Emile Pacevski as was necessary to ensure its employees' health and safety at work whilst painting and preparing to paint waste collection bins and equipment; (f) The defendants failed to provide any, or any adequate, instruction and training to its employees and in particular Mr Timothy Hirst and Mr Emile Pacevski as was necessary to ensure its employees' health and safety at work whilst painting and preparing to pain waste collection bins and equipment; (g) The defendants failed to provide any, or any adequate, supervision to its employees and in particular Mr Timothy Hirst and Mr Emile Pacevski as was necessary to ensure its employees' health and safety at work whilst painting and preparing to pain waste collection bins and equipment; (h) As a result of the said failures, Timothy Mark Hirst was placed at risk of injury and was seriously injured while employed at the premises.

Each defendant pleaded guilty to the charge as laid. 3 An Agreed Statement of Facts, again relevant to both charges, reads: 1. ... 2. ... 3. ... 4. At all material times Waste Equipment was a wholly owned subsidiary of Clean Valley Pty Limited [ACN 003 238 882] ("Clean Valley") which operated a waste removal business (also from the premises) in the Newcastle and Hunter Valley area. 5. The Second Defendant, John Bernard Cross ("Cross") is and was at all material times the sole director and owner of Waste Equipment. Cross is and was at all material times also the sole director and owner of Clean Valley. 6. At all material times as at 22 May 2006: (a) Waste Equipment operated a business fabricating and selling waste collection bins and waste equipment in a workshop located at the premises ("the workshop"). (b) The workshop consisted of a building measuring 54.4 metres in length by 24 metres in width by 20 metres in height. Located at the southern end of the workshop were two large steel-plated waste collection bins. One of the bins was fully painted grey in colour (with the door at the rear of the bin painted white). (c) The other large bin was partially painted along its entire length within the internal walls of the bin. The partially painted bin was 70 cubic metres in volume and measured 10.86 metres in length at the base (with the top of the bin extending and sloping out a further 1.6 metres at the front of the bin), 2.25 metres in width and 3 metres in height ("the large waste bin"). At the rear of the large waste bin was a steel door measuring 2.25 metres in width by 3 metres in height. On the right-hand side of the door's outer edge were four locking catches running parallel with the side of the large waste bin. The catches were comprised of steel bars, measuring 25 mm in diameter, which were bent to a rectangular shape and tack-welded into the side of the door frame. The door of the large waste bin was locked in a closed position by a rotating lever that engages the catches on the door of the large waste bin. At the time of the incident on 22 May 2006, the door was held closed in an alignment by "g" clamps. (d) Waste Equipment employed approximately seven employees in the workshop, including: (i) Emile Pacevski - a third year apprentice boilermaker (employed by Waste Equipment for about two years); (ii) Michael Barry - a second-year apprentice boilermaker; (iii) Mick Ari - a second-year apprentice; (iv) Adam Chapman - a second-year apprentice: (v) Joel Mennie - a first-year apprentice boilermaker; (vi) Colin Sowerby - a labourer (employed by Waste Equipment for about three months); and (vii) Timothy Hirst - a painter and labourer (employed by Waste Equipment for 12 years), (e) Timothy Hirst ("Hirst") had a substantial degree of autonomy in the method of performing painting work in the workshop. (f) Cross had responsibility for the day-to-day management of the businesses operated at the premises by Waste Equipment and Clean Valley. (g) Mr Ian Harris ("Harris") was employed by Clean Valley as the foreman of the workshop who supervised the abovementioned employees of Waste Equipment. (h) For a period of one to two years prior to the incident on 22 May 2006, Harris' attendance at the workshop had been highly irregular owing to a back injury that he had previously suffered. THE PRIOR SYSTEM OF PAINTING WASTE COLLECTION BINS 7. Prior to the incident on 22 May 2006, the employees of Waste Equipment adopted the usual practice of painting waste collection bins in or in front of designated painting bays within the workshop. 8. Up until the incident on 22 May 2006, the hot work performed by Waste Equipment at the premises in connection with the construction of waste collection bins, including heat-producing and spark-producing welding, drop saw cutting, grinding, oxygen and acetylene cutting or other heating operations (the "hot work") usually took place at a distance of at least six metres away from any painting work that was conducted at the same time as the hot work. Smaller waste collection bins were painted within the painting bay area. However, the 70 cubic metre waste bins were painted outside the painting bay area because they did not totally fit within that area. At the time of the accident, the bin the subject of the accident was only the third or fourth bin of that size that Waste Equipment had manufactured. It has now manufactured about ten of that size. 9. Moreover, no partition of any kind separated the painting bay from the hot work being conducted with the workshop. 10. At all material times the acceptable Australian Standard required that a hot work permit be issued before performing any hot work (i.e. grinding, welding, thermal or oxygen cutting or heating and other related heat- producing or spark-producing operations) in an area in which flammable, combustible or explosive substances may be present, which included the identification and control of any such fire hazard within 15 metres from the hot work ("hot work permit"): section 3 of the Australian Standard - Safety in Welding and Allied Processes - Part 1: Fire Precautions (AS1674.1-1997). 11. The Occupational Health and Safety Regulation 2001 ("the Regulation"), cl 178, regulates spray painting outside the spray booth. Where it is impractical for the painting to be undertaken in the open air, cl 178 requires that the area be adequately ventilated and away from any ignition source. 12. The Regulation defines a confined space at cl 66. The large waste bin may be considered to be a confined space when the back door is closed, requiring the employer to ensure the concentration of any flammable contaminants in the atmosphere is below five per cent of its lower explosive limit and that a standby person is present outside. 13. Painting work on fabricated waste collection bins involved preparing the bins for the application of paint by initially brushing any debris and sometimes wiping down surfaces with enamel thinner to remove grease in order to promote the adhesion of the paint on the surfaces of the waste collection bins. For this purpose Waste Equipment used an industrial paint thinner known as "Ameron 445 Enamel Thinner". Waste Equipment also used a paint known as "Ameron Rustfighter 215 Lead Free". The Material Safety Data Sheets (the "MSDS") specify that vapours from the paint thinner and paint form an explosive mixture with air and should be kept away from ignition sources such as heat, naked flames and sparks. 14. The Regulation at cl 178(5) requires that personal protective equipment ("PPE") is worn while spray painting. The WorkCover Spray Painting Guide 2001 and the MSDS require that persons working with the aforesaid paint and enamel thinner wear chemical safety goggles or face shield, half face respirator with organic vapour cartridge, PVC or nitrate chemical handling gloves and PVC cover overalls. At the time of the incident on 22 May 2006 Hirst was wearing jeans, a long-sleeve shirt, as well as gloves, work boots, a respirator, glasses and a beanie. Although Hirst was wearing prescription glasses, Waste Equipment did provide access to safety glasses. 15. Waste Equipment had not provided its employees with the MSDS in respect of the paint and enamel thinner used in the workshop and had not informed, instructed or trained its employees in respect of safe distances between painting and hot work. 16. There was a fan extraction system in place to remove paint fumes from the spray booth situated on the back wall of the workshop. The manufacturer of it warrants it as being effective to a radius of six metres room the start of the pain bay area. However, it was not effective in extracting fumes from the large waste bin situated outside the spray booth. 17. Prior to 22 May 2006, Hirst had observed hot work involving the cut-off machine being performed close to the painting area resulting in sparks igniting paint or paint fumes on or around a waste collection bin. However, Cross had not seen and had not been alerted to such activity. THE INCIDENT ON 22 MAY 2006 18. On 22 May 2006, the large waste bin was located outside the painting bay (27 metres from the front of the building and 5.8 metres from the western wall of the building at the premises) as it was too large to fit within that bay. 19. Before he left the workshop early on the morning of the incident (to replace a truck driver who had called in sick), Cross had conveyed to Harris that progressing the large waste bin towards completion was a high priority. Cross conveyed the importance of progressing work on the large waste bin because it was due for collection on 24 May 2006, two days after the day of the incident. 20. Prior to Harris leaving on the day of the incident, Hirst had instructions to sand and then paint the front half of the large waste bin and Pacevski had instructions to finish his fabrication work on the back door of the large waste bin (which involved fixing the latches to the back of the door). Pacevski began his work with the back door of the large waste bin open. 21. Cross was absent from the workshop on 22 May 2006 from no later than 7.30 am because he had to take over a truck-driving role in the absence of the usual driver who had called in sick on that day. Harris left the premises at about 1.15 pm due to his aforementioned back injury. When Harris left the workshop on the day of the incident, Harris did not contact Cross to notify him that he had left work on the day and Cross was not otherwise informed that Harris had left work on that day. The workshop employees continued their work in relation to the large waste bin in the absence of Cross and Harris. 22. At the time of the incident on 22 May 2006, Pacevski was the most senior employee working in the workshop. However, no one was formally in charge of the workshop at that time. 23. At approximately 2.20 pm on 22 May 2006: (a) Pacevski was heating, cutting and tack-welding the catches on the door at the rear of the large waste bin using an oxyacetylene cutting device and an electric welder. The door of the large waste bin was shut with "g" clamps in order to maintain the correct alignment during the fitting process. (b) Hirst was spray painting the internal walls at the rear of the large waste bin near the closed door on which Pacevski was working. (c) No hot work permit had been issued prior to the commencement of Pacevski's work. (d) There was a build-up of paint spray and fumes within the large bin. (e) Pacevski could not see Hirst behind the door of the large waste bin. (f) As Pacevski was oxy-acetylene cutting the top catch on the door, he noticed flames emerging about two feet over the top rim of the large waste bin. Pacevski could small paint fumes. He then ran up the ladder to the platform next to the door and saw Hirst standing at the door of the bin engulfed in flames that extended to about one foot from his body. Pacevski jumped into the bin and began patting down Hirst with his welding gloves on. Mr Barry arrived and turn a fire hose on Hirst while Hirst was screaming. (g) Adjacent to the right rear corner of the large waste bin was an open-top 20-litre drum with the label "Ameron Coating Rustfighter 215" with the flammable liquid 3 red diamond sign containing about three or four litres of paint thinner, which was also on fire. The drum was hosed down and kicked outside the open door. (h) Hirst was subsequently taken to hospital by ambulance. 24. As a result of the incident, Hirst suffered severe third degree burns to 90% plus of his body. He was taken initially to John Hunter Hospital and transferred by air ambulance to the Royal North Shore Hospital where he was admitted into intensive care. Hirst underwent a surgical operation to cut burnt skin on the front of his chest and abdomen to relieve pressure on the chest and organs and allow him to breathe. He was in an induced coma for 3.5 months. He was placed in intensive care at Royal North Shore Hospital for seven months and underwent multiple skin graft procedures, operations and extensive physiotherapy. He was subsequently hospitalised at Ryde Hospital Rehabilitation Centre from December 2006 to May 2007, and returned to Hunter Valley Private Hospital for a further 1.5 months. Hirst has extensive scarring covering the whole of his body from the top of his head to the dorsum of his feet and burn amputations of the thumbs and fingers of his left and right hands. His impairment has been assessed as 95%. Hirst has been unable to work since the incident. CHANGES TO THE SYSTEM OF WORK AFTER THE INCIDENT 25. On 23 May 2006, Inspector Garry Sandall issued a Prohibition Notice to Waste Equipment to eliminate the risk of injury from carrying out spray painting in close proximity to welding, heating and oxy-acetylene cutting (No 150275). On 24 May 2006, Inspector Sandall issued three Improvement Notices to Waste Equipment. 26. After the incident on 22 May 2006, Waste Equipment instituted a system at the workshop whereby spray painting and hot work are performed during separate shifts, rather than in conjunction with each other. PRIOR CONVICTIONS 27. Neither of the defendants have any prior convictions under the Occupational Health and Safety Act 2000. CO-OPERATION WITH WORKCOVER 28. The prosecution acknowledges the co-operation of the defendants at all stage of this matter. 29. The following supporting documentation is annexed: (a) Factual Inspection Report of Inspector Garry Sandall dated 13 July 2007. (b) 1-23 colour photographs taken by Inspector Garry Sandall on 22 May 2006. (c) Australian Standard - Safety in Welding and Allied Processes - Part 1: Fire Precautions (AS1674.1-1997). (d) Material Safety Data Sheet for Ameron 445 Enamel Thinner. (e) Material Safety Data Sheet for Rustfighter 215 Lead Free. (f) WorkCover Spray Painting Guide 2001. (g) Prior Conviction Certificates for Waste Equipment and John Bernard Cross. 4 The prosecution was represented by Mr D.W.M. Chin of counsel. The prosecution tendered a bundle of documents, including an agreed statement of facts, factual inspection report, photographs, Australian Standard No 1674.1-1997- Safety in Welding and Allied Processes, a safety data sheet for 445 Enamel Thinner, Information regarding Rustfighter 215, a spray painting guide and the Prior Convictions Records for both defendants. 5 The defendants were represented by Mr S.J. Rushton SC and Mr J.S. McLeod of counsel. Reliance was placed upon an affidavit of Mr John Cross sworn 24 April 2009, the net profit figures for Clean Valley Group (comprising Waste Equipment Pty Limited and Veetol Helicopters Pty Limited) and profit and loss statement for Veetol Helicopters Pty Limited and a bundle of statements and references in support of Mr Cross.

Principles 6 In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R (2005) 215 ALR 213 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s8(1) of the Occupational Health and Safety Act 2000 with ss21A, 22, 23 and 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 7 Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 8 Spigelman CJ in R v Thomson; R v Houlton (2000) 49 NSWLR 383, correctly, given the consideration in Markarian, recognised this "instinctive synthesis" approach to sentencing saying at [57]: [57] The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole.

Proper regard is to be had to express legislative provisions and to the relevant statutory regime ( Markarian at [27]). The object of the Act is to protect employees from risk to safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the workplace. Of relevance particularly is the effect of s21A of the Crimes (Sentencing Procedure) Act 1999.

Consideration 9 In consideration as to penalty, the court assesses the objective seriousness of the offences charged (Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474)): In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence"...

and in Morrison v Powercoal Pty Limited (2003) 130 IR 364 at [32]: [32] In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ... 10 In a reading of the Agreed Statement of Facts, I am satisfied the following occurred: flammable paints and thinners were concurrently applied in close proximity to an ignition source, namely, heat-producing and spark-producing welding, drop saw cutting, grinding, oxygen and acetylene cutting. The latter work was known as "hot work". The conduct of these two tasks concurrently and in the same geographic area was contrary to the applicable Australian Standard (AS1674.1-1997) which required that any hot work could not be conducted within 15 metres of the presence of flammable substances and further, where flammable substance work had to be performed, it had to be isolated, there had to be atmospheric testing and minimisation of flammable gas vapour within a 15 metre area. 11 The large 70-cubic metre waste bin was being painted outside the designated painting area within a workshop and was, therefore, outside the effective range of the fan system in an enclosed area that was intended to prevent the build-up of paint and thinner fumes within the workshop. Employees, furthermore, did not have the Material Safety Data Sheets on the flammable substances which they were using which included information as to the nature of such substances. There was no proper information, instruction or training to the employees concerning the necessary safe working distances required between painting and hot work. 12 As to supervision, Mr Ian Harris, the workshop foreman whose attendance at that time had been irregular, had left the site on the relevant date prior to this work being commenced by the two employees. I am satisfied both employees were given a substantial degree of autonomy in the method of performing work in the workshop. I am further satisfied they were highly skilled employees. Mr Hirst had worked there for 12 years and the other employee, Mr Pacevski, had worked there for over two years. The latter employee was a third-year apprentice boilermaker. Because each employee was so skilled there was autonomy given to them in the performance of the work but that fact led the foreman foregoing his responsibility to ensure the employees were supervised. They therefore performed their tasks in a dangerous environment. 13 Waste Equipment was under an obligation to be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety and to the health and welfare of the employees (WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited) (1998) 82 IR 80 (at 85). The defendant also owed a duty not only to the careful and observant person but also to the inadvertent, inattentive and perhaps even foolish or disobedient servant (WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 (at 257) and WorkCover Authority of New South Wales (Inspector Ching) v TRW Steering & Suspension Australia Ltd [2001] NSWIRComm 52 at [13]. Waste Equipment's duty was not merely to establish safe procedures but also to sufficiently enforce and promulgate such procedures (Genner Constructions Pty Limited v WorkCover Authority of New South Wales (Inspector Guillarte) (2001) 110 IR 57 at [75]. Unfortunately, there was no current documentation at the relevant time endorsing there had been any risk assessment of the two tasks nor any planned work methods designed for the performance of each task. 14 In an assessment of the objective seriousness of the offence, the defendant asked for consideration of the events surrounding the incident, namely: the unforeseen departure of the foreman who would have recognised the danger in the concurrent performance of the tasks and that there be consideration as to the skill of the two relevant employees who, it is inferred, should have been more cautious. 15 However, I am persuaded this was a most serious offence where there was no evidence placed before me as to any rigorous instruction to either employee in the relevant Australian Standards for the type of work they were required to perform. While allowing for the fact the large bin would not have fitted into the fan control room where smaller bins were placed so fumes could be extracted, there was no risk assessment of an alternative system for safe performance of the specific task of painting which would have identified the risk. There was separately, no risk assessment of the hot work. The risk of the ignition of flammable products being used was clear once the tasks were concurrently performed. 16 The principle of foreseeability is a factor in determining the objective seriousness of the offence. This was considered and affirmed in the decision of Capral Aluminium v WorkCover Authority of New South Wales (2000) 49 NSWLR 610. On the issue of foreseeability, the Full Bench stated at [82]: [82] The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209-210) in these terms: "… reliance on 'hindsight' must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy.

I accept there was a foreseeable element to these offences in the circumstances where flammable substances were exposed to welding work causing ignition. 17 The availability of simple and straight-forward steps to remedy the defects in the system is also relevant to the consideration of the objective seriousness of the offence (WorkCover Authority of New South Wales (Inspector Ch'ng) v ACI Operations Pty Limited (unreported decision of Schmidt J, 25 February 1994)). There were obvious steps that could have been taken which I think singly or in combination would have eliminated or reduced the risk. Those steps have now been implemented. Such activity, after the incident, is indicative of the fact there was a safe system of work for both tasks that was available and practical. It was practical to ensure the following: hot work and painting work were not conducted concurrently and compliance with the hot work permit or, alternatively, ensuring no hot work was performed within 15 metres of the painting work. Further, it would have been easily available to the employer to ensure adequate instruction and training had been provided to the employees, Mr Hirst and Mr Pacevski. 18 The gravity of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and the culpability of the defendant (Lawrenson Diecasting at 476). Major burns to 90 percent of Mr Hirst's body was not just a remote possibility. There was a high risk to his safety when he, an employee, was required to manually paint, which painting work was being performed in an enclosed area without fan extraction in the vicinity of welding work. The risk was not Mr Hirst suffering from burns, however, but from the ignition of the flammable substances without a safe system. The seriousness and the gravity of the risk is reflected in the injuries suffered by Mr Hirst (Tyler v Sydney Electricity (1993) 47 IR 1 (at 5)). 19 The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral at [71]-[77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: [74] ...both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. 20 In particular, the circumstances reveal the need for the company and its managers and directors to ensure excessive reliance is not placed upon the discretion of employees in undertaking inherently dangerous tasks. Ensuring safety measures are adequate was the responsibility of both the employer, Waste Equipment, and Mr Cross, its director/manager, given the foreseeability of the particular risk. This was such a basic risk to safety that even commonsense would have told one not to conduct these two concurrent ventures together. One can only assume that Mr Pacevski did not see the other employee inside the large waste bin and/or was not aware of the task of painting Mr Hirst was performing. Nonetheless, Mr Cross was the sole director and owner of Waste Equipment. The company is still in operation and Mr Cross is still Director/Manager. He is responsible for the day-to-day management of the waste equipment business and, as such, an element of both specific and general deterrence are relevant in consideration of penalty against both defendants. 21 It is also necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A (1) of the Crimes (Sentencing Procedure) Act 1999 relevant to the defendants. As was said in R v Way (2004) 60 NSWLR 168 at [56]: 56 ... it is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c)

Ultimately, all of the above factors must be considered as part of "a complex of inter-related considerations" ( R v Gallagher (1991) 23 NSWLR 220 (at 228)). 22 As plea of guilty was entered at the early stage in both proceedings (R v Thomson; R v Houlton (2000) 49 NSWLR 383), both defendants, therefore, are entitled to a discount of 25 per cent of the utilitarian value of their plea. The defendants fully co-operated with the WorkCover Authority throughout the investigation of the incident. 23 A further number of significant features were placed before the court for consideration as to the subjective elements of the offence. 24 As Mr Cross revealed in his affidavit, Waste Equipment is a wholly owned subsidiary of Clean Valley Pty Limited, of which he was the owner and sole director. Clean Valley is a commercial skip company operating in the Hunter Valley and the Central Coast. Clean Valley offers a service whereby it delivers waste bins to various enterprises, replaces them to be filled with waste and then collects them and disposes of the waste for its clients. The defendant company is involved in the fabrication and sale of the large steel waste bins. It trades out of Tomago. The Clean Valley group employs 15 employees and Waste Equipment nine of the 15 employees. 25 I am satisfied since the incident of 22 May 2006, Waste Equipment has progressively improved its systems of work. Independent advice was sought for a safety system design. It has been implemented with a number of significant changes. Waste Equipment now has a fully documented occupational health and safety system and an occupational health and safety consultation system between the owner, the staff and its foremen. The new system has been drawn up on the advice of an occupational health and safety expert. I am satisfied hazardous substance storage has been addressed. I am further advised that the appropriate training certificates have been sought for the foreman, Mr Harris, and I am particularly and happily persuaded that Mr Cross himself has attended and completed an intensive training course aimed at improving his education and knowledge in respect of occupational health and safety matters. This is important in the context there was really no pre-existing occupational health and safety system rigorously in place at the time of the incident. 26 I have also evidence before me of the industrial record of the company. Neither the company nor Mr Cross has any prior convictions so the maximum penalty for the corporate defendant will be $550,000 and the maximum penalty for the individual defendant is $55,000. I am persuaded that in the 21 years Mr Cross has been the sole owner and director of Clean Valley (since 1987) and Waste Equipment (since 1993) this is the first serious incident which has occurred at any of his enterprises. 27 Evidence has been placed before me as to the corporate citizenship of the company and of the individual. Large financial contributions have been made to organisations with a community base. Mr Cross contributes significantly to employment in the Newcastle area, a regional district of New South Wales, where the support of an employer providing significant and safe employment is to be admired. 28 To the extent that each defendant relies upon s6 of the Fines Act 1996, it is appropriate for the court to consider the defendant's means in exercising its discretion to fix an amount of any fine. The financial records of both Waste Equipment and the holding company, Clean Valley, have been placed before the court. While there was some difference in opinion about the assets of the companies, I accept there is approximately $500,000 in assets held. The financial circumstance of Mr Cross was also relied upon. He opined the net profit from the Clean Valley group is the only source of his income and he has no personal assets. He reveals this in the context that up until five years ago he was living in the family home, married with four children. However, he and his wife separated. She was, by way of agreement, given the family home, which has been sold but he did not receive any proceeds of the sale. 29 Both defendants have expressed contrition for the offences indicated and consideration has been provided to the injured employee. Evidence reveals through the company Mr Cross has continued to pay the injured employee full salary, including the annual overtime rate and this is to be commended. Nonetheless, I find this a serious offence. 30 I take into account all the subjective elements placed before me. I find each defendant guilty. 31 I therefore give the following orders: 1. In matter No. IRC 650 of 2008, I find the corporate defendant guilty of the offence charged.

2. The defendant is fined in the sum of $120,000 with a moiety to the WorkCover Authority of New South Wales.

3. In matter No. IRC 651 of 2008, I find the individual defendant guilty of the offence as charged.

4. The defendant is fined in the sum of $20,000 with a moiety to the WorkCover Authority of New South Wales.

7. The defendants shall pay, in equal share, the costs of the prosecution as agreed or to be assessed. 32 I publish my reasons.

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