Inspector Seneviratne v Kel Campbell Pty Ltd

Industrial Relations Commission (NSW)|2006-05-17|Before: Boland J, Mr P

CITATION: Inspector Seneviratne v Kel Campbell Pty Ltd [2006] NSWIRComm 166

PARTIES: PROSECUTOR Inspector Mahinda Seneviratne

CATCHWORDS: Occupational Health and Safety Act - Prosecution under section 8(2) of the Occupational Health and Safety Act 2000 - Road transport industry - Sub contractor suffered serious burns when an explosion occurred whilst transferring fuel to a fuel tanker - Plea of guilty - Offence proven - Penalty imposed.

Department of Mineral Resources of NSW (Chief Inspector Bruce Robert McKensey) v Kembla Coal & Coke Pty Limited (1999) 92 IR 8 Ferguson v Nelmac Pty Limited (1999) 92 IR 188 Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 CASES CITED: Inspector Seneviratne v Caltex Petroleum Distributors Pty Ltd [2005] NSWIRComm 192 Inspector Seneviratne v Qantas Airways Ltd [2006] NSWIRComm 69 Markarian v R (2005) 215 ALR 213 McColl v John Watson Building Services Pty Limited (2004) 137 IR 310 Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143

PROSECUTOR Mr P M Kite SC, with Mr D O'Neil of counsel

Solicitor: Mr G Phillips LEGAL REPRESENTATIVES: Carrol & O'Dea

DEFENDANT Solicitor: Mr M Quintiliani Kells the Lawyers

INSPECTOR MAHINDA SENEVIRATNE v KEL CAMPBELL PTY LIMITED

Prosecution under s 8(2) of the Occupational Health and Safety Act 2000

1 Kel Campbell Pty Limited ("the defendant") had been contracted by Caltex Petroleum Distributors Pty Ltd, trading as Metropolitan Fuel Distributors ("MFD") to provide road tankers and drivers to remove fuel from underground storage tanks at a site leased by Qantas Airways Limited ("Qantas") and located at Sydney International Airport, Mascot. 2 During the course of transferring diesel fuel from an underground tank to number four compartment of a road tanker vehicle on 11 August 2002, at about 11.28 am an explosion occurred and a flame came out of the compartment of the tanker barrel causing burn injuries to Lindsay Barry, an employee of MFD, who was on top of the tanker barrel checking the progress of the pumping.

3 Mr Barry was taken to hospital and later the Concord Hospital Burns Unit and treated for burns to his face and chest. Barry was off work for a number of weeks as a result of his injury. 4 The defendant was subsequently prosecuted by Inspector Mahinda Seneviratne of the WorkCover Authority of New South Wales for breach of s 8(2) of the Occupational Health and Safety Act 2000. 5 Section 8(2) provides: (2) Others at workplace An employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. 6 In an amended application for order it was alleged that the defendant failed to ensure that people other than its employees, in particular Lindsay Barry, were not exposed to risks to their health and safety arising from the conduct of the defendant's undertaking while they were at the defendant's place of work. In particular, it was alleged: [T]he defendant failed to ensure the provision and maintenance of a safe system of work in relation to the transfer of fuel from underground tanks into road tank trucks at the site such that non-employees were not exposed to the risk of fuel explosion during the transfer process, in particular: (i) by failing to ensure that a job safety analysis was devised for this task; (ii) by being involved in the making of ad hoc decisions on site without any, or any planned, assessment as to the effect any such decision affecting the conduct of the fuel transfer; (iii) by failing to ensure the transfer process was done safely. 7 The defendant pleaded guilty to the charge. Two other defendants were also charged in relation to the explosion at Mascot on 11 August 2002, they being MFD and Qantas. MFD pleaded guilty and was fined an amount of $240,000: Inspector Seneviratne v Caltex Petroleum Distributors Pty Ltd [2005] NSWIRComm 192. Qantas also pleaded guilty and was fined an amount of $150,000: Inspector Seneviratne v Qantas Airways Ltd [2006] NSWIRComm 69. 8 Mr P Kite SC with Mr D O'Neil of counsel for the prosecutor tendered an agreed statement of facts that relevantly stated: 7. On or about 2 August 2002, Qantas contracted with Caltex Petroleum Distributors Pty Ltd (MFD), trading as Metropolitan Fuel Distributors to remove approximately 110,000 litres of LRP and 40,000 litres of diesel ("the fuel") from underground tanks at the site, and to transfer the fuel to a site owned by Caltex Petroleum Distributors Pty Ltd in Banksmeadow. 8. MFD were at all material times an employer in the State of New South Wales whose undertaking was to remove the fuel from the underground tanks at the site, being MFD's place of work at the time the fuel was being removed. 9. MFD in turn contracted with Kel Campbell Pty Ltd ('Kel") for the provision of tankers and drivers required for the removal of the fuel. A standing contract existed between MFD and Kel dated 2 January 2002 ("the Contract") which provided that MFD could at any time issue a delivery advice to Kel for the collection and delivery of fuel product. As part of that contract, Kel agreed to ensure that deliveries were carried out in accordance with Australian Standard 1940 "Storage and Handling of Flammable and Combustible Liquids" and the "Ampol Driver Instruction Manual", as well as the AIP-CP8-1991 "Precautions Against Electrostatic Ignition During Tank Vehicle Loading", the Australian code for the transport of dangerous goods by road and rail ("ADG Code") and the AIP-CP14-1995 "The Transport of Petroleum Products by Road". 10. On or about 31 May 2002, Greg Clay ("Clay"), an employee of MFD, attended the site for a visual assessment of access for vehicles and equipment required to do the job. 11. On or about 14 June 2002, Clay submitted a quote to Qantas for the transfer of approximately 110,000 litres of petrol and 40,000 litres of diesel from the underground tanks and the site to the Caltex terminal. The quote stated that MFD would provide dangerous goods approved road tankers, dangerous goods licensed road tanker drivers and dangerous goods approved personnel to operate equipment and facilitate safe transfer procedures. 12. On 2 August 2002, Adam Machon ("Machon"), employed by Qantas as a Senior Fuel Technical Officer, sent a fax to Clay accepting the quote and confirming the transfer date of 11 August 2002 and nominated John Calfas, an employee of Qantas, as the Qantas representative who would be at the site while the transfer process occurred. 13. Between 2 August and 11 August 2002, Machon had four telephone conversations with Clay regarding site access, timing of work and an overview of Qantas requirements for the fuel transfer. At all material times, Qantas did not have a written procedure for fuel removal from underground tanks at the site. Machon did not request to see any procedures developed by MFD regarding fuel removal it intended to take place on 11 August 2002. 14. On 5 August 2002, Steve Fox ("Fox"), an Operations Manager employed by MFD, faxed a copy of Machon's fax dated 2 August 2002 to Bevan Burns ("Burns"). Burns, employed by Kel as its Operations Manager, made verbal arrangements with Clay in accordance with the Contract to provide tanker vehicles for the fuel transfer. 15. On 11 August 2002 ("the incident date"), the following people were present at the site being: (a) John Calfas ("Calfas"), employee of Qantas who was the Duty Operator of the site and had the role of escorting and liaising with the employees of Kel and MFD;

(b) Greg Clay ("Clay"), employee of MFD who was the Sale Representative of MFD;

(d) Sean Riordan ("Riordan"), employee of Kel who was a fuel tanker driver;

(e) Sean Gosper ("Gosper"), employee of MFD who was a fitter and whose role was earth and bond the vehicles;

(f) The injured person, Lindsay Barry ("Barry"), an employee of MFD who was a mechanic and whose role it was to operate the pump truck; There was no nominated supervisor. 16. On 11 August 2002, the work being undertaken by Kel at the site in transferring the fuel was the undertaking of Kel and the site was the place of work of that company. 17. On 11 August 2002, between 5.00 am and 6.00 am, Barry arrived at the site and met Gosper and Clay. At approximately 5.30 am, Riordan arrived, driving tanker vehicle TVK-400, with tanker barrel N16327 attached to it, and was later joined by Burns. 18. Barry, Clay, Gosper, Burns and Riordan met Calfas outside Gate 27 of the airport at around 6.00 am. 19. At around 7.00 am, Barry and Gosper began loading LRP from the first underground tank at the site to tanker vehicle VBB-276. Gosper installed the connections from the underground tank opening to the tanker, bottom filling the tanker by pumping through the MFD rigid truck, UVE-487. Discussion between Burns, Clay and Barry took place regarding the slow flow rate of the fuel pumping into the tanker. The second tanker, TVK-400, was positioned for pumping LRP into the first tanker. Following further discussions, it was decided to bring two other tanker vehicles in order to assist with the expedition of the fuel transfer process. 20. Gosper, Burns and Riordan returned to the site at around 8.30 am with two road tanker vehicles. At around 9.00 am, the loading of petrol on the first tanker was completed and a new tanker was moved into its place to continue the transfer of petrol. Once the first underground petrol tank was empty, Gosper reconnected the new tanker to the second underground petrol tank and continued loading petrol. 21. At this time a decision was made by Burns, Clay and Barry to pump diesel from the underground diesel tank into another tanker being tanker TVK-400, using the MFD rigid for pumping to top fill the tanker. This decision was made as the pumping process was perceived to be too slow. 22. The MFD rigid was moved alongside tanker TVK-400. Tanker TVK-400 was already being used itself to pump petrol, by way of bottom loading, into another nearby tanker. The pumping of petrol continued to occur while the MFD rigid pumped diesel into the compartments of Tanker TVK-400 by top loading. Gosper made the connections for diesel loading. 23. At around 11.00 am, Barry began top loading fuel from the underground tank containing diesel fuel to the tanker barrel attached to tanker TVK-400. He used the hose reel from the MFD rigid to transfer diesel through the open hatch on top of compartment five (5) in the barrel. 24. Barry climbed the tanker barrel while holding a hose, inserted the hose into the open hatch of number five (5) compartment and began filling it with diesel. Barry completed filling number five (5) compartment with diesel. He then inserted the hose reel into the open hatch of number four (4) compartment with a hose. Number four (4) compartment had contained petrol the previous day. 25. At approximately 11.28 am, while Barry was on top of the tanker barrel checking the progress of the pumping in number four (4) compartment, an explosion occurred and a flame came out of number four (4) compartment of the tanker barrel causing burn injuries to Barry. 26. At the time of the incident, Barry was wearing a nylon safety vest and had on his person a mobile phone. 27. It was found by the attending NSW Fire Brigade that one of the bonding straps between the tanker and the pumper truck in question, could have been pulled out of the clamp. 28. Barry was taken to hospital and later the Concord Hospital Burns Unit and treated for burns to his face and chest. Barry was off work for a number of weeks as a result of his injury. 29. The circumstances applicable to this fuel transfer required the process to be by bottom loading only. 30. The circumstances for this fuel transfer were: a) There was diesel being loaded into a tanker compartment which previously contained petrol; b) There was petrol vapour remaining within the compartment; c) This situation constituted "switch loading", (cf. Handbook); d) The equipment necessary to top load safely was not available at the site on the day of the incident. 31. The dangers of static electricity and switch loading were described in the Caltex Driver's Handbook and the various codes and standards referred to in the Contract referred to at paragraph 9 herein. 32. Kel Campbell representatives were not aware and were not informed of the fact set out in 30(d) above. 33. After the incident SACL, MFD, Kel and Qantas revised their system regarding the process to be undertaken for the removal of the remaining fill in the underground tanks at the site. Meetings between SACL, Qantas, and MFD determined that the process to pump out the remaining fuel at the site would be undertaken on 11 and 12 December 2002. Qantas and SACL required inductions for all contractors, the induction to be led by Qantas at the offices of SACL starting at 10.00am on the day of the job. SACL required a Works Plan Application to be submitted to them by 27 November 2002 for their approval from Qantas. SACL agreed for an exclusion zone to operate and agreed to close bays 36 and 37 for the duration of the work. A requirement that there would be only one tanker on site at any one time was also agreed. Qantas was to ensure that the work site was kept clean and stationary vehicles are cleaned prior to commencing pump out. 34. A new procedure for product removal from underground tanks was prepared by MFD and reviewed by Qantas and provided to SACL for their review, a copy of which is hereto attached and marked annexure "A". 35. On or about 9 December 2002 a completed "Approved Air Side Works Plan" issued by SACL set out the conditions for the removal of fuel from the site on Wednesday 11 December 2002 and Thursday 12 December 2002, a copy of which is hereto attached and marked annexure "B". 36. On 11 December 2002, the transfer of fuel process was undertaken by employees of MFD being Stephen Fox, Greg Clay, Shane Gosper. John Turnbull, an employee of Kel attended as well as another Kel employee, Mr G. Markham. In addition, representatives from Qantas supervised the process, being Hans Schurch and John Calfas. Representatives from SACL also supervised the process, being Owen Jarvis and Mark Farrar (SACL Aviation Safety and OHS Manager). 37. On 11 December 2002, all persons present during the transfer process were instructed to wear cotton drill shirts and pants, static free safety vests, eye wear, chemical resistant gloves, safety lace up steel cap boots and ear plugs. Mobile phones were not permitted to be used at the site. 38. On the occasion of removal of the remaining fuel, the discharge hose of the pump was connected to the bottom valve of the compartment on the road tanker to be filled, and no filling took place from the top of the tanker by way of an open hatch. 39. After the incident, the Prosecutor obtained expert evidence to the effect that it was likely there was petrol vapour in the compartment which, when mixed with air, was ignited by a spark caused by a build up of static electricity. 9 Other material tendered by the prosecution included Australian Standard 1940 "Storage and Handling of Flammable and Combustible Liquids", the AIP Code of Practice, Caltex Drivers' Handbook, colour photographs of the incident scene, Procedure for product removal from underground tanks (post incident), Caltex Incident Investigation Report, Kel Campbell Cartage Contract, training records of Bevan Burns and Sean Riordan, a report of Stanley & Williamson, Chartered Accountants, dated 20 March 2006 and a record of the defendant's previous convictions showing no prior convictions. 10 For the defendant, the following material was tendered: (1) Letter from Duesburys Nexia regarding the defendant's financial accounts.

(2) Two affidavits of Bevan Burns, the defendant's operations manager.

(3) An affidavit of Sean Riordan, truck driver employed by the defendant.

(4) An affidavit of Marcus Di Pietro, the defendant's financial controller. 11 The letter from Duesburys Nexia reviewed the affidavit of Mr Di Pietro and the comments on that affidavit by Stanley & Williamson. All of this material related to the financial accounts of the defendant and examined profit, expenditure, assets, cash flow and liquidity/working capital ratio. 12 Mr Burns' affidavits went to the following matters: (1) His work experience and qualifications. In this respect, Mr Burns deposed: I hold a class licence 3 for the transfer of bulk dangerous goods and have an accreditation under the Australian Institute of Petroleum ("AIP") and hold a driver's passport. I have also have read and am aware of the Caltex driver's handbook receiving training regarding the practices prescribed within that handbook. In addition I have acquired an accreditation from Caltex to issue permits to individuals allowing those individuals to carry out hot and cold work on hazardous areas such as, depots, services stations, and customer supply locations which are controlled by Caltex. This accreditation allows me to assess the proposed workplace for any dangers and prescribe a procedure for work to be carried out in a safe manner on a Caltex hazardous site. This accreditation does not entitle me to provide any form of permit or assessment capabilities of any other site, excepting a Caltex site. It is not related to the loading or unloading of dangerous goods. (2) The defendant's business, which was predominantly a fuel distributor. (3) The contract between the defendant and MFD. (4) The events of 11 August 2002. In this respect, Mr Burns deposed: On 11 August 2002 I met Greg Clay who was the contact between Qantas, MFD, Lindsay Barry, Sean Riordan and myself. Greg directed us on the site as far as location of the tankers and was in charge of the MFD employees. Lindsay Barry was in control of the MFD pump truck which has been referred to in these proceedings as the rigid truck and Shane Gosper was responsible for fitting and connecting the static leads the tanks out to the hoses and the vehicles. At all stages during the course of the day Lindsay Barry performed all of the duties of the loader which entailed controlling the rigid pump truck and supervising and controlling the loading process without referring either me or to my recollection Sean. I considered that I was not permitted to interfere with the loading process or indeed to give any instructions or direction to any MFD employee nor did I do so. However by about approximately 8.00am it became apparent that the MFD rigid pump was not able to pump the fuel at a rate which was going to allow the transfer of the fuel from the airport to Banksmeadow before the Banksmeadow terminal closed for fire testing. At approximately 8.30 am I called the Banksmeadow terminal supervisor and advised him that we were not able to drive the fuel to the terminal prior to the terminal shutting down for the fire test. At this stage I had a conversation with Lindsay Barry were words to the following effect were spoken: Lindsay said: "I have only managed to fill about the first 2 compartments with petrol the pumping is going too slow". As a result I was involved in a conversation with Greg Clay, Sean Riordan, Lindsay Barry, and Shane Gosper, where it was agreed that at my suggestion that Kel could provide 2 additional appropriately rated vehicles so that MFD could load the additional tankers with the fuel and then transport the fuel to the Banksmeadow terminal when it re-opened after the first test. Apart from this change all the parties continued to perform their own various duties either as loader, fitter or driver. At no time did I give any direction to an MFD employee about the loading process or the means of pumping or connecting the vehicle. (5) The defendant's knowledge of safety laws and the defendant's safety history. In this latter respect Mr Burns deposed: Kel employs 86 employees who have various skills and obligations. From my knowledge of the company's history it has never been prosecuted or involved in any activity requiring intervention by WorkCover or other safety regulatory authority. From my review of the records which date back to 1991, and to date no Kel employee has been injured in a workplace incident. Kel is also dedicated to providing its staff with the best safety equipment available on the market. This equipment ranges from fire extinguishers and safety railing to-safety glasses and ear muffs and in the last financial year alone Kel has expended approximately $119,000 on the acquisition of safety equipment for its employees. (6) Changes in safety practice. In this respect Mr Burns deposed: As a result of the incident on 11 August 2002 I attached a further training section conducted by Caltex where Kel employees including myself received instructions on new procedures which are to be adopted for conducting underground tank pump out. This procedure has now been added to the Caltex Drivers Handbook. Further as a result of the incident on 11 August 2002 Kel is no longer prepared to simply provide appropriately rated vehicles and appropriately licensed drivers for the transfer of fuel from underground storage tanks. Kel's will now only accept contracts to transfer fuel from underground storage tanks if the principle will accept that Kel conducts the operation in its entirety using Kel's employees to perform the loading, bonding and driving duties. This includes utilising only Kel equipment. Kel has refused a number of requests by Caltex Australia Petroleum Pty Limited to perform pump outs of underground storage tanks as Caltex was not prepared to allow Kel to utilise its own employees and equipment for the purpose of the job. (7) The defendant's community involvement. 13 In his affidavit Mr Riordan described the events of 11 August 2002. He deposed as follows: On arriving at the Sydney International Airport we were met by Greg Clay who was co-ordinating the job between MFD employees, Qantas and Kel employees. A brief meeting was conducting for the purpose of gaining access to the Sydney Airport and Greg Clay then directed me and the other driver Bevan Burns as to where the location of the underground storage tanks. Greg Clay was also directing the other MFD employees Shane Gosper and Lindsay Barry who were present on the day to perform the loading duties.

I recall that Shane Gosper MFD fitter was responsible for carrying out and making the necessary connections with the hoses from tank to truck and making sure that all the bonding was in order to earth both the hoses and the trucks was done.

From my recollection Lindsay Barry was responsible for driving and operating the MFD pump truck.

On being advised by Greg Clay of the location of the underground tanks Bevan and I drove our respective tankers as close as possible to the underground tanks. I recall that this was a difficult process because of the location of the underground tanks and the fact that a number of handrails and other bollards were in close proximity to the tanks.

When our trucks were in the appropriate location Shane and Lindsay took control of the loading process and commenced loading petrol in the first of the Kel tankers with petrol.

This was done by Shane and Lindsay by utilising the MFD rigid pump truck.

Bevan advised me that the Caltex Banksmeadow terminal would be closed from about midday for the rest of 11 August 2002 and possible the remainder of the next day in order to conduct a fire drill.

At approximately mid morning on the 11 August 2002 I had a conversation with Bevan Burns, Lindsay Barry and Sean Gosper. I cannot now remember who said what however I do recall that the parties discussed way of resolving the problems which was being caused by the fact that the MFD rigid pump truck was a slow pumping capacity. This meant that it was likely we would not be in a position of transporting all of the fuel stored in the under ground tanks to the Banksmeadow terminal before it shut down for fire testing at about midday.

It was concluded that the pumping rate was too slow and was likely that by midday both the Kel tankers may have been fully loaded but we would have no place to unload the fuel. And the underground tanks would still be about half full.

It was decided that we would attempt to minimise the down time between loading at the International Airport and unloading the fuel at the Banksmeadow terminal by Kel obtaining another 2 tanker trucks to assist loading the remainder of the fuel. My recollection is that the reasoning for this was that this would at least insure (sic) that the fuel stored in the underground tanks would have been removed.

On the day my function was simply to provide driving services and an appropriately rated tanker truck to MFD. As such I did not consider it my job to perform any of the loading duties which I believe to be the responsibility of MFD and its employees. I was not familiar with and had not been inducted in the operation or use of the MFD rigid pump truck and believe that I was not entitled to operate that truck for loading purposes.

In accordance with my understanding and belief I did not supervise or direct any of the MFD employees nor did I undertake any of the loading functions. Consideration

14 What the defendant in this case failed to do was to ensure the provision and maintenance of a safe system of work in relation to the transfer of fuel from underground tanks into road tank trucks such that non-employees were not exposed to the risk of fuel explosion during the transfer process. This failure was particularised as having occurred: (i) by failing to ensure that a job safety analysis was devised for this task; (ii) by being involved in the making of ad hoc decisions on site without any, or any planned, assessment as to the effect any such decision affecting the conduct of the fuel transfer; (iii) by failing to ensure the transfer process was done safely. 15 The prosecutor submitted the following factual matters may be seen as relevant in the context of the charge as particularised: (a) The defendant was contracted to provide tankers and drivers required for the removal of the fuel. (b) The defendant agreed to ensure that deliveries were carried out in accordance with: (i) Australian Standard 1940, Storage and handling of Combustible Liquids (ii) Ampol Driver Instruction Manual (iii) AIP-CP8-1991 (iv) Australia Code for the Transport of Dangerous Goods by Road and Rail (v) AIP-CP14-1995. (c) There was no job safety analysis for the transfer of fuel. (d) Bevan Burns, the operations manager for the defendant, partook in discussions at the site which changed the manner in which the fuel transfer was being done. (e) The workers involved in the fuel transfer exercise had expertise and were trained in the proper methods to undertake such transfer. (f) There was no nominated supervisor for the fuel transfer. (g) The discussion Burns was involved in led to the methodology changing from bottom loading (only) to both bottom loading and top loading. (h) The change to the method of top loading undertaken by Barry was a departure from the training, instruction and proper procedures known to the workers and was facilitated by the absence of supervision. 16 I agree with the prosecutor. The foregoing matters are relevant in assessing the objective seriousness of the offence. Whilst the defendant contended it was not in charge of the fuel transfer operation on 11 August 2002 and did not consider it was permitted to interfere with the loading process or to give any instructions or direction to any MFD employee, the facts are that: (1) It was implicit in the defendant undertaking the work that it would do so in accordance with certain strict safety standards; (2) It had the men and equipment to carry out the work safely; (3) It undertook no job safety analysis for the transfer of the fuel; (4) It was present in the form of its operations manager when discussions were held about changing the fuel transfer method; (5) Those discussions did not have proper regard to how the changed method of fuel transfer would affect the safety of workers. 17 The proposition that the defendant did not consider it was permitted to interfere in the loading process in circumstances where there was a risk of explosion/fire during the fuel transfer process and a risk of serious injury, carries very little weight. Does it mean that if the defendant observed a system of work being employed that rendered the fuel transfer unsafe, or observed someone placing himself or herself at risk, it felt constrained not to object? 18 Although Mr Barry did foolishly place himself at risk by standing on top of one of the defendant's trucks, the defendant would have known this was an unsafe act and should have acted to prevent it. Its failure to do so reflects on the degree of culpability of the employer for the purposes of sentencing: Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143 at [15].

19 That a fire/explosion could occur during the transfer process was reasonably foreseeable. Indeed, the very purpose of the documented procedures on the handling of fuel was to avoid a fire/explosion and its consequences. That the risk was foreseeable is a factor to be taken into account when assessing the level of culpability of the defendant. 20 The existence of simple and straightforward remedial steps that could have been taken by the defendant to avoid the risk to safety are relevant in assessing the seriousness of the offence: Department of Mineral Resources of NSW (Chief Inspector Bruce Robert McKensey) v Kembla Coal & Coke Pty Limited (1999) 92 IR 8 at 27.

21 As the prosecutor submitted, the process undertaken on 11 December 2002 when the fuel was safely transferred was a process that was capable of being taken prior to the incident. 22 In relation to general deterrence, I have taken the same approach as that adopted in Inspector Seneviratne v Qantas Airways Ltd at [42]-[43]. In relation to specific deterrence, the defendant continues to employ 86 people in what I would describe as a dangerous industry and, as the prosecutor submitted, there needs to be a component for specific deterrence to reinforce to the defendant the responsibility to maintain constant vigilance and take all practicable precautions to ensure safety: Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388. 23 The defendant has no prior convictions under the Act. Accordingly, the maximum penalty in this case is $550,000. Careful attention should be given to the maximum penalties because, as the majority observed in Markarian v R (2005) 215 ALR 213 at [31]: [F]irst because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick. 24 In respect of the guilty plea, I propose to provide for a discount of 17.5 per cent for its utilitarian value. Other subjective factors I have considered in determining an appropriate penalty include the defendant's contrition, its status as a good industrial citizen and its cooperation in the investigation with the WorkCover Authority. 25 As I noted earlier, there were three prosecutions in respect of the events of 11 August 2002: MFD, Qantas and the present defendant. The question of parity, therefore, arises. It also arose in Inspector Seneviratne v Qantas Airways Ltd where the Court found as follows at [52]-[55]: The question of what penalty should be applied to the defendant has to be considered in light of the penalty imposed on MFD by Kavanagh J in Inspector Seneviratne v Caltex Petroleum Distributors Pty Ltd [2005] NSWIRComm 192. In that case MFD was prosecuted in relation to the same incident that gave rise to the charge against Qantas in these proceedings. MFD was charged with a breach of s 8(1) of the Act. Whilst MFD and Qantas have been found guilty of different offences, nevertheless the factual circumstances giving rise to the charges justify an approach to sentencing which shows consistency and not disparity in punishment: Warman International Limited v WorkCover Authority (1998) 80 IR 326 at 341. 53 In the matter involving MFD before Kavanagh J, the defendant pleaded guilty and was provided with a discount of 25 per cent in that regard. MFD, a first offender, was fined the sum of $240,000. Her Honour found the offence to have been most serious. At [26] her Honour observed: This court is however, considering penalty given the obligations carried by the defendant. The defendant played a major role under the contract to assist in the fuel transfer. It had two workmen on site and brought onto the site a number of its tankers. There was a complete failure by the defendant to risk assess the task and, to devise a suitable work method for the performance of the task. A risk assessment would have recognised the risk of top loading, the need for the purging of tanks, and the work methods would have ensured proper procedures, and compliance with the appropriate regulations for the removal of the fuel which task is identified in the Road and Rail Transport ( Dangerous Goods) Act 1997 (NSW). 54 The principles governing parity and consistency in sentencing do not require equal sentences where there exists differences between offenders that warrant a different approach. Where there are relevant differences between the defendants' culpability or circumstances, due allowance should be made for them: Lowe v The Queen (1984) 154 CLR 606 at 610-611 per Mason J and at 617-618 per Brennan J; Postiglione v The Queen (1997) 189 CLR 295 at 301-302 per Dawson and Gaudron JJ; 309 per McHugh J, 325 per Gummow J, 338-340 per Kirby J. 55 In my assessment the culpability of MFD was considerably greater than that of Qantas. MFD held itself out to be a capable and competent contractor that had direct control of the operation. That was not the case with Qantas who whilst it failed to provide and maintain a safe system of work, was not in the position of directly supervising and controlling the fuel transfer operation. 26 In assessing the present defendant's culpability, I accept the prosecutor's submission that the defendant's level of culpability was at least the equal of and not less than the culpability of Qantas. That is to say, it is arguable that the defendant's culpability is higher than that of Qantas (but lower than MFD) because the defendant was more directly involved in the fuel transfer process than Qantas. Whilst MFD had direct control of the overall operation, the defendant's employees were directly involved in the transfer of the fuel and thereby directly involved in changing a safe work process to an unsafe process. However, having regard to all of the relevant sentencing factors it may be appropriately concluded that the penalty to apply to the defendant should be the same as that applied to Qantas, subject to the question of the defendant's means to pay the fine.

27 The Court is required to have regard to the defendant's means to pay any fine imposed: s 6 of the Fines Act 1996. In this respect in McColl v John Watson Building Services Pty Limited (2004) 137 IR 310 the Full Bench referred to the following principles: 24. We agree with and adopt the following principles which may be distilled for present purposes from the discussion of the authorities contained within the judgment in Inspector Mansell v Eleven Lighting Pty Ltd [2002] NSWIRComm 339 : 1. This court is obliged to take into account the means of a defendant to pay any penalty by virtue of s 6 of the Fines Act . 2. The imposition of a fine on a corporation may have different ramifications to the imposition of a fine on an individual where imprisonment or some other penalty may be available as an alternative sanction. That alternative is not available in the case of a corporation. 3. A defendant who wishes to rely on the provisions of s 6 to temper the amount of any monetary penalty bears the onus of putting such evidence in support as is appropriate before the court and bears the onus on the basis of the balance of probabilities of satisfying the court as to the truth of such evidence and its relevance to the fixing of penalty. 4. Whilst it is for a corporate defendant to fully disclose its financial state, it is for the prosecutor to check that information in order to assist the court in determining the propriety of taking that evidence into account in imposing a monetary penalty. It is inappropriate for the court to exercise an inquisitorial role in this regard. 25. In addition, we note the following principles which have been settled for the consideration of the financial situation of the defendant: 1. In the context of determining penalties in prosecutions for a breach of occupational health and safety legislation by a corporation, it may be appropriate, in some limited circumstances, for the Court to have regard to whether the defendant's corporate structure is little more than a means of distributing earnings arising from personal exertion or where the burden imposed by a fine will fall on one person or family, compared with a corporation which is functioning as "a company with assets of a substantial kind": see Haynes v CI & D Manufacturing Pty Ltd (No 2) (1995) 60 IR 455 at 457. However, it is now also clear that the fact that a corporation may represent the alter ego of a person or family and that any penalty imposed on the corporation will consequently have a financial impact on that person or family does not, of itself, warrant a reduction in penalty: WorkCover Authority (NSW) v Chen (2004) 137 IR 33; Inspector Maddaford v Coleman [2004] NSWIRComm 317. 2. The financial position and the means of a defendant should be taken into account when determining penalty. It is well established that, notwithstanding such considerations, the penalty must ultimately reflect the objective seriousness of the offence: Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209; WorkCover Authority (NSW) v Schrader (2002) 112 IR 284 at 308-309; Manpac Industries Pty Ltd (formerly t/a Pacific Concrete & Quarries Pty Ltd) v WorkCover Authority (NSW) (2001) 106 IR 435. 28 I also note what Wright J, President said in Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209-210: Whilst I accept that the imposition of heavy fines would be a burden on the Defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in a Court not imposing a heavy penalty… When viewed in the context of the statutory mandate in Section 15 the offences were very serious and provided proper weight if given to the subjective considerations and in so far as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence… 29 I have considered the material relating to the defendant's financial accounts and I can see nothing in that material that would lead me to temper the amount of monetary penalty that I otherwise consider appropriate. 30 Having regard to all of the relevant factors and circumstances I have decided that an appropriate penalty in this case is $150, 000. Orders

31 The Court makes the following orders: (1) The offence is proven and a verdict of guilty is entered.

(2) The defendant is convicted of the offence as charged. (3) The defendant is fined an amount of $150,000 with a moiety thereof to the prosecutor.

(4) The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs.

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Dangerous Goods) Act 1997(NSW)

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