24 Consistently with the Crimes (Sentencing Procedure) Act 1999, the determination of sentence in cases such as this, must be approached from a consideration of the nature and seriousness of the offences in question, together with aggravating and mitigating factors.
25 Relevant to a consideration of that question, is the submission that not all of the particulars of the charges were made out to the criminal standard. As Mr Hoy submitted, despite expert investigation and a coronial inquiry, the direct cause of the explosion at the Betapress was not established - it could potentially have been caused by either a mechanical or frictional impact, or by electrical or electrostatic discharge. Any matters of doubt, must of course, be resolved in favour of the defendants - see R v Olbrich (1999) 199 CLR 270 at [24] - [28]; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698-9. It follows that it must be concluded that certain of the particulars of the charges were not made out, a matter relevant to the assessment of the nature and quality of the offence.
26 Nevertheless, as the defendants accepted, the evidence must lead to the conclusion that the offences charged were both proven to the requisite degree, the necessary safe system of work not having been implemented and maintained at this workplace and a safe working environment not having been provided. The risks to which Mr Lovric and Mr Foti were here exposed as a result, were of the most serious kind - the risk of death. It was entirely a matter of good luck, not good management, that Mr Lovric and Mr Foti did not suffer even more than they in fact did. That this was a real risk, was quite apparent from the explosions and fires which occurred and the way in which a hopper feeding the Roman candle press and the building in which it was housed, were damaged as a result, as the photographs in evidence graphically showed.
27 This must all be taken into account in fixing penalty, as must the fact that the risk of explosion in a business which manufactures fireworks using dangerous explosives and flammable chemicals, is plainly foreseeable, if a safe system of work is not implemented and maintained.
28 The immediate cause of the first explosion in the Betapress operation which had been conducted since 1997 without difficulty, was not established. The explosion in the Roman candle room, where fireworks were being manufactured, which followed about four seconds later, was caused by the ignition of gunpowder in the hoppers. In the meantime, other products had exploded and caught fire. On the evidence, that an explosion and fire in the Betapress operation would have such consequences was entirely foreseeable, given the nature of this operation, the place at which it was conducted and the systems which were in operation. So, too, was the risk that employees working in the vicinity, not wearing suitable protective clothing, would be seriously injured or even killed, if such fires and explosions occurred in this workplace.
29 The red pellets produced by the Betapress were made of ingredients which will burn and possibly explode, when involved in a fire. Drums containing flammable liquids with flashpoints of less than 23 degrees celsius and an initial burning point greater than 35 degrees, were nearby; Mr Foti was also working nearby, producing other, blue pellets; the drying pellets were laid out nearby, as were other drums of various chemicals and thinners. Roman candle fireworks were being manufactured in the adjacent room, using gunpowder, of which there was approximately 2kg in the room.
30 The first part of the incident involved a flash and explosion at the Betapress, engulfing Mr Lovric in flames. The powder next to the press then exploded; the mixture being used by Mr Foti also ignited, flashing into the adjacent room, causing the gunpowder in the Roman candle press hoppers to explode.
31 That there were available methods of avoiding the risk which materialised from this entirely foreseeable sequence of events, given the various work being undertaken, must also be accepted. Indeed, after the explosion, having engaged expert advice in considering the safety of the manufacturing process being undertaken, the defendants came to the conclusion that even though the Betapress had been operated without prior difficulty since 1997, safety could not be assured in its operation. As a result, the defendants determined not to resume that manufacturing operation. The product in question is now sourced from overseas. A consultant was retained to review and improve the company's safety processes and procedures. Employees are now provided with flame retardant clothing and other personal protective gear, which they are required to wear.
32 The steps taken were commendable and relevant to be taken into account in mitigation of the offence. Sadly, however, as is so often the case in prosecutions such as this, the expert assistance obtained after an accident throws light on the complete inadequacy of the defendants' prior approach to its safety obligations.
33 Beforehand, amongst other problems already referred to, the plant risk management plan was inadequate and, in any event, not adhered to. Unsuitable containers were used to store chemicals and products, before and after the manufacturing process; equipment in use was not earthed; inadequate attention was paid to controlling the risk of electrostatic charge; and employees were not supplied with adequate safety equipment and were not even wearing all that had been provided.
34 All of these matters must be considered in determining appropriate penalties, for what were undoubtedly very serious offences, notwithstanding that they were these two defendants' first offences.
35 I accept that it is relevant, by way of mitigation, that the defendants were not in the position of some defendants, where no attention at all has been paid to safety obligations before an accident. Positive account must also be taken of the expert advice taken after the accident, which resulted in the discontinuation of the particular manufacturing process and a more diligent approach being taken generally to the obligations imposed upon the defendants by the Act. A new computer based safety system was designed by a consultant and a qualified employee has been given responsibility to review and keep the procedures up to date.
36 Employees undertake a daily grounding test and clothing check; they are instructed in machine operation and checks of machinery operation is ongoing. On the job training is given, because there are no available, technical or tertiary courses for this industry. Training logs are maintained and safety training and monitoring is ongoing.
37 Also of relevance is Mr Foti's active involvement in the business and the fact that he himself attended to Mr Lovric and extinguished the fires. The defendants' real contrition for what occurred, particularly to Mr Lovric, who was described by Mr Foti as an experienced and valued employee, must be accepted. The defendants' acknowledged co-operation with the investigating authority and the entry of the plea at the earliest opportunity, must also be taken into account. I have also had regard to the defendants' record and accept that it is relevant that these were not defendants who had paid no attention to their safety obligations. Indeed, the expert's reports referred to aspects of the operation which demonstrated that attention had been paid to safety matters, as well as aspects of the operation where improvements were required. I accept that it is proper to take these matters into account in fixing penalty but in doing so, note that the evidence as to the deficiencies in the system in operation at the time of the accident, shows that it cannot be thought that the prior trouble free period of operation of the Betapress, was as the result of a safe system of work being in operation in that time.
38 Consideration must also be given to the element of deterrence. On the evidence, this business has been conducted by the corporate defendant since its incorporation in 1969, when it acquired the business of Vulcan fireworks, where Mr Foti's grandfather had been employed as head pyrotechnician. Up to 1984 it made and sold millions of fireworks to the public. Since 1984 the sale of such fireworks was banned and the company has manufactured large fireworks used in public displays at New Years Eve, Easter and during events such as the Sydney Olympics. The business has its foundations in a business run by the Foti family for generations and since 1793, in Italy. Other members of that family, apart from Mr Foti, remain involved in the business - indeed the other injured employee, Mr Angelo Foti, is Mr Foti's cousin. Family members are active in industry associations in Australia and internationally, where safety issues are considered.
39 It is a relatively small business, engaging about 11 permanent employees, supplemented by additional casual staff, when particular projects are being undertaken, when numbers swell up to 35. Such staff are engaged away from the manufacturing premises, in other activities.
40 I am satisfied on that evidence, that both specific and general deterrence have a role to play in the penalty to be imposed, although I take the view that it is appropriate, in this connection, to have regard to the evidence of the steps taken after the explosion to address safety concerns. Given both Mr Foti's evidence and that of Mr Gray, I am satisfied that specific deterrence has a lesser role to play in penalty than would have been the case, in the absence of those steps having been taken.
41 The industry is a small one in New South Wales and the defendants continue to operate in it. As I have noted, while it can be accepted that the defendants' records were good ones, prior to these serious offences, the fact that there is no Australian Standard regulating the manufacture of fireworks, confirms the necessity for attention to be paid to deterrence, in the imposition of penalty. This was also confirmed by the reference made in the agreed statement of facts to WorkCover Authority of NSW (Inspector Sequeira) v Foti's International Fireworks (Displays) Pty Limited [2003] NSWIRComm 471, where Staunton J imposed a notional penalty of $250,000, discounted to $162,500, in a case where an employee of that company, of which Mr Fortunato Foti was also a director, had been killed, while preparing a number of 75mm aerial shells for use in a fireworks display, at the same site at Leppington.
42 As to the submissions made in relation to the respective culpability of the two defendants for what occurred, I am unable to accept the submission that the corporate defendant should be held more culpable for what here transpired, than Mr Fortunato Foti. On the evidence, he was the sole working director of the corporate defendant and it follows, its managerial mind. On that evidence, I am unable to see any basis upon which it could properly be concluded that the two defendants' culpability was any different.
43 I have had regard to the evidence as to Mr Foti's means. There was no evidence led as to the financial position of the company, although I have noted the submissions made as to the size of its operation.
44 Having weighed all of the matters I have mentioned, I have concluded that the appropriate penalty to be imposed in these very serious first offences is $210,000 for the corporate defendant and $21,000 for Mr Foti. In coming to those figures, I note that I adopted the approach discussed in Inspector Brett Martin v Encore Tissue Pty Limited [2005] NSWIRComm 271 at [29] - [31] and Inspector David Waterhouse v Innovative Property Developments Pty Ltd and Others [2006] NSWIRComm 97 at [64] to [67]. I here concluded that a discount of 25% for utilitarian savings achieved by the acknowledged entry of early pleas, was an appropriate discount on the penalties which I had otherwise determined were appropriate in all the circumstances of each case.
Orders