Inspector Stephen Cooper v Kwik-Seal Pty Ltd and anor

Clean Waters Act 1970 Crimes (Sentencing Procedure) Act 1999 s 10 LEGISLATION CITED: Crimes Act 1900 s 556A Fines Act s 6 Occupational Health and Safety Act 1983 & 2000

Department of Mineral Resources v Berrima Coal Pty Ltd (2001) 105 IR 348 Environmental Protection Authority v Brazel (No 3) [2002] NSWLEC 120 Inspector Searle v Baptist Community Services - NSW and ACT (unreported, 19 December 2003: IRC 1520 of 2001) CASES CITED: R v Kay Piccin (2001) NSWCCA 323 Proudman v Dayman (1941) 67 CLR 536 Thorneloe v Filipowski (2001) 52 NSWLR 60 WorkCover Authority of New South Wales (Inspector Dall) v R & D Enterprises (Newcastle) Pty Ltd (2001) 110 IR 469 WorkCover Authority (NSW) (Inspector Maddaford) v Coleman [2004] 138 IR 21

PARTIES: Mr M Cahill of counsel SOLICITORS: Carroll & O'Dea LEGAL REPRESENTATIVES:

DEFENDANTS: Mr David Seal in person representing both defendants

• 38 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: HAYLEN J 21 February 2006

MATTER NO IRC 2418 OF 2005 INSPECTOR STEPHEN COOPER v KWIK-SEAL PTY LTD Prosecution under s 8(2) of the Occupational Health and Safety Act 2000

MATTER NO IRC 2419 OF 2005 INSPECTOR STEPHEN COOPER v DAVID JOHN SEAL Prosecution under s 8(2) of the Occupational Health and Safety Act 2000 by force of s 26 of the Occupational Health and Safety Act 2000 JUDGMENT [2006] NSWIRComm 48

1 In April 2003, Mr David Seal as director of Kwik-Seal Pty Ltd, submitted a quotation for the performance of waterproofing work in which his company specialised. He could hardly have contemplated that flowing directly from successfully tendering for this work, a workplace accident arising from its performance would so fundamentally alter his business and personal life. 2 On 17 June 2003, Mr Seal's son-in-law Michael Woodbridge, who had been engaged as a subcontractor for this work, was overcome by toxic fumes in the course of sealing a water tank. Mr Woodbridge was ultimately rescued following the attendance of ambulance and fire services at the site of the work and appears to have made a quick recovery without any indication that he suffered any ongoing adverse effects. Others around the site were also affected by the toxic fumes and required assistance. 3 This incident was investigated by the WorkCover Authority. In May 2005, Inspector Cooper commenced proceedings in this Court claiming that Kwik-Seal Pty Ltd had breached the provisions of s 8(2) of the Occupational Health and Safety Act 2000, and that David John Seal, as a director of the company, by operation of s 26 of the Act, had committed the same offence. By September 2005, both defendants had entered a plea of guilty. This judgment deals with the evidence and submissions relied upon by the prosecutor and the defendants in relation to the setting of an appropriate penalty in each matter.

4 The prosecution evidence comprised an Agreed Statement of Facts, a record of prior convictions indicating that neither defendant had offended against the provisions of occupational health and safety legislation, two factual incident reports, a number of coloured photographs and a number of "material safety data" sheets dealing with the products used by the defendants prior to the accident and on the day of the accident.

5 The Agreed Statement of Facts succinctly sets out the background to these matters and it is appropriate, omitting formal parts, to reproduce the terms of that document to assist in a proper understanding of the circumstances surrounding the accident involving Mr Woodbridge. The Agreed Statement of Facts dealt with the following matters: 1. ... 2. At all material times Kwik-Seal Pty Limited was a body corporate whose registered office was at SE 16A Karalta Plaza, 12 Karalta Road, Erina in the State of New South Wales. 3. At all material times, Mr David John Seal was a Director of Kwik-Seal Pty Limited and the Managing Director of Kwik-Seal Pty Limited 4. At all material times, Kwik-Seal Pty Limited was an employer. 5. At all material times, the place of work of Kwik-Seal Pty Limited was the Park Regis Building. 6. The Park Regis building is a 45-storey building at 27 Park Street, Sydney. On ground level commercial businesses operate and hotel and residential apartments operate on the upper levels. 7. The Park Regis Hotel occupies levels 6-15 and the residential units occupy levels 16-45. The building has a number of owners that form a body corporate group under Strata Plan No. 3397. 8. Strata Plan No. 3397 appointed BCS Strata Management Pty Ltd (BCS) to manage the building. BCS subsequently engaged Strata Engineering Solutions (SES) (a division of Costin Roe Consulting Pty Ltd) to arrange and organise a tender process for work to be carried out within the building. 9. SES carried out an investigation of the proposed work, which comprised the installation of a portable waterproof lining to three (3) internal water tanks of the building. SES submitted a proposed scope of work to BCS and obtained approval to commence the tender process. 10. On 15 April 2003 Mr David Seal prepared and submitted a tender document (Ref No. DJS/04/03/J2711) to SES for Kwik-Seal Pty Limited to carry out the work of sealing of concrete walls, floors and steel ladders to three (3) water storage tanks. The tender document outlined the proposed materials to be used, namely Kwik-Seal Ultracoat LP 85 Plural Component polyurethane membrane and method of work for the project. 11. The tender also clearly identified the work areas as confined spaces and provided that:- The works spaces are considered "Confined Space" areas. Full confined space recovery equipment will be required to be used during the whole of the works. Men down alarms are to be utilised and self-contained breathing equipment is to be on location during the whole of the works. Extraction blowers and deducted air in/outlets and air out of the tanks are to be in use at all times during the process. 12. The tender was successful and a Strata Works Agreement was issued on 28 May 2003 for the Defendant to commence the work. 13. Kwik-Seal Pty Limited engaged Michael Woodbridge ("Woodbridge") a subcontractor to carry out some of this work. Woodbridge commenced with Kwik-Seal Pty Limited as a subcontractor on 1 March 2001. 14. Angus O'Brien ("O'Brien"), a second subcontractor trading as Leakfix was also engaged by Kwik-Seal Pty Limited to assist with some of the work. O'Brien commenced with Kwik-Seal Pty Limited as a subcontractor on 19 May 2003. 15. The Operations Manager of Kwik-Seal Pty Limited, Tom Mislov ("Mislov") was in charge of this project. 16. Work commenced at the building some weeks before the date of the incident. Mr Ian Pearson (a subcontractor engaged by Kwik-Seal Pty Limited), Mr John Dore (an employee of Kwik-Seal Pty Limited), Mislov and Woodbridge, carried out the work on the first two (2) water tanks on the upper levels of the building. Woodbridge was the main contractor for the project. 17. Work on the water tank on level 19 was also to be carried out by Woodbridge. About two (2) days before the incident Mislov contacted O'Brien and asked him to attend the site to assist Woodbridge with the spraying of the water tank on level 19 of the building. Arrangements were then made between Woodbridge and O'Brien to meet at the site on Tuesday 17 June 2003 to carry out the work on the third tank. 18. Prior to attending at the site on Tuesday, 17 June 2003 Woodbridge collected an air tank for use as part of self-contained breathing apparatus. Woodbridge also attended at the Kwik-Seal office, where David Seal gave him verbal instructions regarding use of the breathing apparatus and the safety equipment. 19. Also, on Tuesday 17 June 2003 O'Brien made arrangements to meet Woodbridge at the Park Regis building around 11.00 am. O'Brien arrived at the building and waited until 11.30 am before contacting Woodbridge, who had not arrived. He asked Woodbridge where he was and what time he would get to the building. Woodbridge told him that he was still at the office in Gosford and would not be attending the site until some time that afternoon. He told him that he would call him with an estimated arrival time. 20. That afternoon O'Brien received a call from Woodbridge advising him when to meet him at the site. O'Brien drove to the building and met Woodbridge in the level three (3) carpark. Woodbridge was wearing a safety harness when he arrived at the building. They removed some tools and materials from the Kwik-Seal truck. Those items included electrical leads, electrical distribution box (GPO multiple outlet), a tin of Conipur 79 primer, a roller applicator, paint tray and some rope. They took the items up to the top of the tank at level 19 of the building. 21. The water tank at level 19 is located on an external balcony of the building between levels 17 and 19. Access to the tank is from the fire stairwell entry on the 19th floor. When they arrived some other equipment had already been placed on the balcony. Entry into the tank is through a 600 x 600 mm unsecured steel manhole cover on the top of the tank. 22. O'Brien dropped the equipment off at the balcony prior to the start of work and went up to the toilet on level 45 of the building. When he returned he found Woodbridge had already started work inside the tank. Some of the equipment, an industrial blower, a roller tray, an electrical lead and some rope was in the tank with Woodbridge. The only personal protective equipment being worn by Woodbridge was his safety harness. The harness was not attached to anything else. There was no external air feed into the tank or air extraction out of the tank. 23. When O'Brien returned to the balcony he noticed a strong solvent smell coming from inside the tank. Woodbridge was in the tank applying primer to the inner walls of the tank with a roller applicator. The substance being applied was Conipur 79, a fast drying surface primer. Conipur 79 is classified as a hazardous substance with a UN number of 1866. 24. Woodbridge was in the tank only a short time when he collapsed onto the floor. O'Brien shouted down to him but received only a limited response from him. O'Brien attempted to enter the tank using the fixed internal ladder but as he descended the ladder, O'Brien experienced difficulty in breathing and was unable to keep his eyes open. He was forced to climb back out of the tank. He contacted Mislov on his mobile phone and advised him of the situation. 25. Once O'Brien was outside the tank, he made contact with Mislov on his mobile phone and David Seal in the Kwik-Seal office and advised them of the situation, including the fact that there was no rescue equipment in place. 26. O'Brien was instructed to go to the Kwik-Seal truck and obtain a respirator. O'Brien was instructed not to re-enter the tank without a respirator. O'Brien then informed Mislov and Seal that the respirators and breathing apparatus were all locked inside the vehicle and that Woodbridge had the keys with him in the tank. O'Brien was instructed to break into the vehicle to get the respirators. Also, O'Brien was told that the SES would be contacted. 27. A few minutes later O'Brien received a call from State Emergency Services and after obtaining further details from him he was advised that they would be unable to assist in the type of rescue involved. O'Brien was advised to contact the NSW Ambulance Service and seek their assistance. O'Brien contacted the Ambulance Service before making his way down to the Kwik-Seal work truck at the level three (3) carpark. 28. Incident Report records supplied by the Ambulance Service of NSW indicate the time of notification of the incident to be 3.42 pm. The time of the arrival of the first Ambulance unit at the site is recorded as 3.49 pm. 29. When O'Brien arrived at the carpark he heard the sirens of the approaching ambulance. He went to the front of the building and directed the attending Ambulance Officer into the building. The initial response unit was motorcycle Ambulance Officer, Tony Bishenden ("Bishenden"). O'Brien took Bishenden up to the tank. When they arrived Woodbridge was still lying on the floor inside the tank. Bishenden shouted to him and Woodbridge responded by getting up and climbing up the tank ladder. At the top of the ladder Bishenden and O'Brien assisted Woodbridge out of the tank. Woodbridge was later transported by ambulance to St Vincent's Hospital. His clothes were taken off in front of the hospital and he was hosed down by the Fire Brigade. Woodbridge remained in hospital overnight. 30. A number of other emergency units, Ambulance, Fire Brigade and Police also attended the incident site. A Fire Officer wearing self-contained breathing apparatus went to level 19 balcony and secured the container of Conipur 79 in a large sealed hazmat (hazardous material) drum. The roller applicators and a quantity of the primer were placed in a separate drum. A quantity of wastewater material was sealed in a third black plastic container. All three containers were sealed with NSW Fire Brigade tape and identified as containing hazardous materials. 31. The Fire Brigade cordoned off the Park Regis building at street level. Residents and guests were refused entry for a period of time until the situation had been contained and the area ventilated. The building was re-opened to residents and the public around 7.00 pm. 32. Scott Burgess ("Burgess") a hotel porter, employed by the Park Regis Hotel was working in the building at the time of the incident. Burgess noticed a strong smell inside the building shortly before he went down to the hotel reception area. Burgess assisted emergency units to restrict entry into the building. Later Burgess was reported feeling unwell and was treated with oxygen by the Fire Brigade. He was later transported by ambulance to St Vincent's Hospital where he was examined. He was released from hospital a couple of hours later and returned to complete his rostered shift at the Hotel. 33. O'Brien and Marian Gale ("Gale") the Building Manager also received oxygen from the attending emergency services. Neither of them required additional treatment or medical attention. Mislov attended the building later that evening around 7.00 pm. 34. The materials placed into the three (3) Hazmat containers were removed from the balcony on Thursday, 26 June 2003 and taken to Testsafe Australia at 919 Londonderry Road, Londonderry. On Thursday, 31 July 2003 those containers were opened by Inspector Stephen Cooper and Technical Officer Andrew Hooke. A number of samples were removed from those drums. Those samples were taken to the Laboratory Services Unit where tests confirmed the presence of Diphenylmethane diisocyanate in two (2) of the samples. Diphenylmethane diisocyanate is a constituent of Conipur 79 according to the Material Safety Data Sheet. 35. Mr David Seal had prepared a Safe Work Method Statement dated 20 May 2003 for this project. This statement outlined the work processes to be used, the possible risks involved in those processes and the measures to be taken to address those risks. 36. The Safe Work Method Statement did not specifically address the use of Conipur 79 as the tender contemplated use of a different product, namely an Ultracoat LP 85 plural component polyurethane membrane. After the event, Woodbridge stated that he had been told by Mislov to use the Conipur 79 because of lost time. Woodbridge stated that Conipur 79 dried much faster than the Ultracoat primer. When interviewed, Mislov and Seal both denied that any such direction was given, although both Mislov and Seal conceded that time had been lost on the job. 37. The Work Method Statement was specific to the work being performed at the Park Regis building and outlines the use of air fed fume resistant masks and appropriate items of PPE. 38. Further, air fed fume resistant masks, together with all appropriate PPE and rescue equipment was located on the Kwik-Seal truck which Woodbridge drove to the site. 39. But, the Work Method Statement did not address the issues of the work being carried out in a confined space environment. There are no specific work processes, hazard identification or control measures in the Work Method Statement for confined space work or in any other of the Kwik-Seal Pty Limited documents. In particular, Kwik-Seal Pty Limited did not have in place any of the following:- (a) Any or any proper systems to ensure that workers did not enter the tanks without air supplied respiratory equipment and/or other equipment designed to maintain a safe level of oxygen and the reduction of atmospheric contaminants [Regulation 71 of the Occupational Health & Safety Regulation, 2001]. (b) Any system of written work permits designed to ensure that no person entered and/or worked in the tanks unless specifically authorised to do so without being informed of the work to be performed, the risks and the risk control measures to be taken; [Regulation 72]. (c) Emergency Procedures planned, established and rehearsed in relation to the presence of workers in the tanks. [Regulation 72(2)]; and (d) Training that complied with the requirements of Regulation 77 of the Occupational Health & Safety Regulation, 2001. 6 Although legally represented at the early stages of this matter, Mr Seal appeared in person in the sentence hearing giving evidence and making submissions on behalf of himself and the company. The evidence for the defendants comprised a written statement made by Mr Seal and adopted by him on oath. He was cross-examined by Counsel for the prosecutor especially as to the financial affairs of the defendants. Mr Seal also tendered, without objection, two references attesting to his good character and safety consciousness in operating in this hazardous industry.

7 Mr Seal referred to the day of the accident as being the day "that changed my life forever". He was working in his office on the Central Coast in the afternoon of 17 June 2003 when he received a call from Mr O'Brien who was very agitated and who informed him that Mr Woodbridge was unconscious in the tank at the Park Regis Hotel site, having been overcome by fumes. Mr Seal instructed him to use the self-contained breathing unit to go into the tank and to attach Mr Woodbridge to the lifting frame and retrieve him from the tank. Mr O'Brien said that the recovery equipment was in the truck downstairs and, when instructed to retrieve that material from the truck, he informed Mr Seal that the truck was locked and that Mr Woodbridge had the keys with him. Mr O'Brien's attempts to enter the tank to give assistance to Mr Woodbridge had failed because the intensity of the fumes had forced him back. Mr Seal was surprised by the reference to "fumes" because, in his view, the work was to be performed, and had been performed, using a non-fumic non-solvent primer.

8 At the time of this conversation, Mr Seal's wife was present in the office and near the telephone. When Mr Seal "forcefully instructed" Mr O'Brien that he was not to enter the tank but was to call the State Emergency Service, Mr Seal recalled that his wife became hysterical, screaming "Get him out - get him out". Mr Seal again instructed Mr O'Brien that, unless he could recover the breathing equipment, he was not to re-enter the tank for any reason. Mrs Seal continued to scream "Get him out - he'll die". Mr Seal tried to explain to his wife that he could not risk another death and that they would have to wait for the emergency service to attend. Mrs Seal then abused Mr Seal for not taking action to save their son-in-law, the father of their grandson, and accused Mr Seal of killing Mr Woodbridge whilst also screaming for Mr Woodbridge to be removed from the tank by Mr O'Brien. When Mr Seal again instructed Mr O'Brien to stay away from the tank and to call the State Emergency Service, he also tried to explain to his wife that to send Mr O'Brien into the tank would result in two possible deaths rather than one. Mrs Seal ran from the office, crying.

9 Mr Seal then graphically described the depths of his emotions at that point - that he sat slumped alone at his desk, crying, wondering how he was going to tell his grandson that his father was dead and that Mr Seal was responsible for killing him. Mr Seal stated that the anguish he felt at that moment could not be adequately expressed in words. He felt that he would have to live with that anguish for the rest of his life. 10 A short time later, Mr Seal was informed that Mr Woodbridge had been rescued and was "okay", and had been taken to hospital for a checkup and observation. Contact was then made with the hospital and he was informed that Mr Woodbridge was all right and had been discharged. For several weeks following this incident, however, Mr Woodbridge was not contactable. Some time later, Mr Woodbridge came to Mr Seal's office to see if there was any further work. The whole family had been worried about him and had not received any word from him when Mr Woodbridge suddenly turned up as though nothing had happened. Mr Seal asked him why he had changed the primer on the job and why he had not used the confined space recovery equipment. Mr Woodbridge said that he had simply "stuffed up". It appeared to Mr Seal that Mr Woodbridge, who was primarily responsible for this work, had fallen behind in the task and on the day in question had rushed in to try to complete the job by using a quicker drying product and ignoring the procedure that had been adopted in previous weeks in performing this waterproofing task at other parts of the site.

11 Despite these assessments of why this particular accident occurred, Mr Seal frankly accepted full responsibility for the lack of attention to detail on the day and accepted that, ultimately, it was his responsibility to ensure the safety of workers at the site. In oral submissions, Mr Seal stated that considerable money had been spent by the company in introducing a new system of membrane waterproofing and that he had become extremely busy, working up to 120 hours a week with little sleep or home life. Again, he frankly conceded these were the circumstances in which he had taken his "eye off the ball". Despite these deficiencies, he pointed out that a construction manager had been employed, Mr Mislov, at a salary of approximately $75,000 per annum, to manage the day-to-day site requirements including labour hire, control and safety issues. Mr Mislov was the supervisor in charge of this particular project and was in charge of all Kwik-Seal projects. The company owned $30,000 worth of confined space equipment, including: Man Down Alarms, Full Three to One Recovery Harnesses and the correct lifting equipment, two Direct Feed Air Breathing Apparatuses, Self-Contained Breather for Recovery of Man Down, and, in every vehicle (and supplied to all staff and contractors), Chemical Graded Air Filter Respirators. Indeed, on the day of the accident, Mr Woodbridge had come to the office in the morning to pick up the Self Contained Breathing Apparatus which had just been returned from service having been filled with compressed air to comply with industry requirements. Mr Woodbridge had asked if he could use the self-contained breathing apparatus instead of the air-fed breathers, "because the hose got in the way". Mr Seal told him that the self-contained breather was to be used outside the tank with the other confined space recovery equipment, and asked him if he understood that direction, to which Mr Woodbridge replied: "Yes". Mr Seal instructed him not to enter the tank unless it was set up in the correct manner. 12 Mr Seal said that Mr Mislov, Mr Woodbridge and the others working on the site had conducted the sealing of two tanks over previous weeks and he understood that they used the correct equipment during that time. Mr Woodbridge had been trained to use the confined space equipment in working on the other two tanks. During this work, correct primers were used without incident in those tanks.

13 Mr Seal's view in relation to this incident was that Mr Woodbridge had acted against instructions to suit himself. It was Mr Woodbridge who decided to change the specified primer from a non-toxic non-solvent primer to a fast-curing solvent based primer because he was running late. That was also the reason for Mr Woodbridge deciding to enter the tank alone instead of waiting for the assistant to be in attendance, and his decision not to set up or have present the recovery equipment whilst he was performing the work. Mr Woodbridge had left the safety equipment in the truck and had kept the truck keys with him. Mr Seal noted that there were simple chemical respirators in the safety box in the truck that did not require any feed or hoses, yet Mr Woodbridge chose not to use one of those which would have given him some protection. It was Mr Seal's belief that if Mr Woodbridge had been fully certified for confined space work he would nevertheless have made the decision to enter the tank alone and would have performed the work in the same way as he had on the day of the accident. 14 Mr Seal also spoke of his history in the construction industry, noting that he commenced work in large constructions at the age of 14 years as a reinforcing steelfixer working with his uncle. He had never been out of work, nor had never collected or requested assistance from anyone in his life. He married at 18 years of age, reared three children and had two grandchildren. He commenced self-employed work as a sub-contractor at the age of 22 years in 1972, now being 56 years of age. His current employment was the first time he has worked for an employer since 1972. Mr Seal listed a number of significant building on which he had performed work and indicated his pride in his achievements. 15 This accident involving Mr Woodbridge had severe consequences for both his business and personal life. After the accident, Mr Seal experienced heart palpitations, stress and anxiety panic attacks. He was unable to face the day-to-day world and could not work and he became angry and aggressive at home. Sleep was not possible, and while prescribed medication assisted some sleep, he over-medicated one night and fell asleep at the wheel of his car one morning on the F3 Freeway and apparently narrowly avoided an accident. He said he was not able to function as a director of the company and his wife refused to be part of the business and resigned as a director. His wife, however, carried the whole workload during his absences from the company, further straining their relationship. He described his health as deteriorating from being a very healthy individual who would see a doctor three times a year to a person who consulted a doctor at least monthly and was always sick. He described his relationship with his wife that was "the most intense love" but had now been strained to the point that they had lived together with minimal contact for the past three years. 16 Over the years he had built the business from very humble beginnings to the point where it had a yearly turnover of $2.5m but that business had ultimately gone. The business had been taken over by a large construction company, Austress Freyssinet Pty Ltd: that company had paid out some of the leases and purchased some of the tools of Kwik-Seal. Mr Seal said that everything had to be sold to cover the company's debts and that Kwik-Seal Pty Ltd had no assets. Mr Seal was now working as a consultant to Austress as part of the agreement to take over his business. The agreement under which he provided consultancy services provided that, if Kwik-Seal Pty Ltd was made insolvent or bankrupt, then the consultancy contract would be terminated.

17 In relation to the financial affairs of the defendants, Mr Seal said that his salary received as a consult was used to pay bank overdraft debts on the mortgage of $960,000 - 70 per cent of which were described as director's loans to Kwik-Seal Pty Ltd. Other assets and property that he and his wife owned for their retirement had been sold to pay some of Kwik-Seal's debts. They now had approximately $20,000 in their joint superannuation fund with "retirement nine years away". The debts of Kwik-Seal Pty Ltd were still being paid for by him and his wife. The situation had been reached where the home he had built with his wife was to be sold to satisfy the debts of Kwik-Seal Pty Ltd: his consultancy agreement had a year to run with an option of a further year but with no guarantee of work thereafter. He had calculated that he could not continue to service the debts, including the mortgage debts, without this job and therefore steps would have to be taken before that time to sell the family home and clear the company's debts.

18 Besides his own strained and difficult relations with his wife following the accident, his daughter and their grandchildren had separated from Mr Woodbridge and they had moved interstate making it difficult to keep in close contact.

19 In relation to the financial status of the defendants, Mr Seal was cross-examined by Counsel for the prosecutor. He indicated that he remained a director of Kwik-Seal Pty Ltd and that the company continued to function, although all of its assets and business had been sold to Austress. The only business now operated by Kwik-Seal Pty Ltd was as contracted to Austress and that was how Mr Seal's services were provided to Austress. The consultancy fees paid to Kwik-Seal Pty Ltd were primarily used to pay off the company's debts. The consultancy returned $160,000 a year, but that was the only income that was being received. From this amount, there were wages paid to Mr Seal and his wife - she was providing services as a sales and marketing manager. Although he had no documentation with him, Mr Seal stated that in the last financial year he and his wife had been paid $10,000 each as a result of the consultancy with no other payments (including directors' fees) being made to them by or through Kwik-Seal Pty Ltd. Mr Seal explained that the $10,000 figure was a nett figure after tax and that he and his wife were living frugally. He used his own car for his consultancy work and did not have a car provided to him, although Austress paid him an allowance to cover the use of his private vehicle. Mr Seal also explained how the mortgage on the family home had been increased in order to expand the operation of Kwik-Seal Pty Ltd and how these were treated as directors' loans in the books of the company. Preliminary advice received indicated that the home might be worth between $1.033m and $1.13m. If a price in this range was achieved, $960,000 would be required to be paid out by way of mortgage repayments being the money that had been used to expand the business. He and his wife had approximately $1,000 cash in a private account. Neither Mr and Mrs Seal nor the company had any other assets as they all had to be sold. A factory complex in West Gosford had been purchased to help fund retirement and had been used to house equipment used in the business, but the equipment that could be sold had been sold and, finally, the factory itself had been sold some two years ago to pay numerous tax and other debts. That property had been sold for $305,000.

20 The additional evidence relied on by the defendants were personal references provided by Mr Gardoni (Project Manager with Kwik-Seal Waterproofing Division of Austress Freyssinet) and Mr Edwards (Operations Manager of Kwik-Seal Waterproofing Division) Mr Gardoni stated that he had known Mr Seal in a professional capacity for at least ten years as the Manager of Kwik-Seal Waterproofing Pty Ltd and that his company was regarded as one of the leaders in waterproofing techniques in Australia. He had engaged Mr Seal for various contracts during Mr Gardoni's ten years with Westfields. In Mr Gardoni's opinion, Mr Seal had always displayed due diligence and vigilance towards occupational health and safety issues and compliance. Westfields had been rigid in regard to safety compliance and required work method statements and inductions prior to any work being carried out. He regarded Mr Seal as a professional person with integrity who would not take short cuts where safety and hazards were concerned: Mr Seal believed that he had a moral as well as a legal obligation towards people who worked for him and he was known to take all the necessary steps to ensure compliance with safety standards, codes of practice and regulations. Mr Gardoni had been employed by Austress Freyssinet since May 2005 and now worked with Mr Seal and attested to the fact that Mr Seal continued to apply occupational health and safety initiatives. 21 Mr Edwards had known Mr Seal in a professional capacity for the last twelve years while he was the Manager of Kwik-Seal Waterproofing Pty Ltd. He had used Mr Seal extensively on various contracts with Westfield Design & Construction Pty Ltd while employed as a Project Co-ordinator with that company for eleven years. In engaging Mr Seal during those years, Mr Edwards said that the major consideration was his rigid application and diligence towards occupational health and safety compliance. Westfield applied strict standards and required work method statements, induction and prescribed hazard guidelines to be available. Mr Edwards had been one of the senior safety and compliance officers for Westfield and, because of his diligence in the area of safety, had always been pleased to have Mr Seal on site. 22 In Mr Edwards' view, Mr Seal remained committed to occupational health and safety practices and this was demonstrated in his work with Austress Freyssinet, especially in specialist areas where Mr Seal was responsible for works involving confined spaces such as the two water tanks at a Milsons Point project. 23 The essence of the submissions for the prosecutor was that the failures that constituted the breach in each prosecution were serious and, indeed, so serious as to not warrant the Court exercising its discretion pursuant to s 10 of the Crimes (Sentencing Procedure) Act 1999 (the Sentencing Act). It was accepted that the defendants had addressed themselves to the issues of occupational health and safety prior to the accident. Kwik-Seal had an occupational health and safety policy, used work method statements and other procedures such as standard form registers for dangerous/hazardous goods, material safety data sheets, protective equipment, electrical equipment, site training and other matters relating to the maintenance of safety at its places of work. The company supplied and required its employees and sub-contractors to use appropriate personal protective equipment and the company provided safety equipment for use when its employees and sub-contractors were to undertake work in confined spaces.

What was of concern, however, was that the company did not have a written procedure governing entry into and the conduct of work in confined spaces such as written entry permits; it did not have emergency procedures for recovery of persons from within the confined space that had been planned, established and rehearsed; it had no procedures to ensure the presence of one or more appropriately trained "stand-by persons" when any person was located in a confined space; and it did not have atmospheric testing and monitoring to ensure that the atmosphere inside a tank was not and did not become contaminated: and, it failed to ensure that appropriate oxygen levels were maintained while workers were present in a confined space. The investigation confirmed that the company did not provide any confined space training and that Mr Mislov, Mr Woodbridge and Mr O'Brien had not otherwise been trained and certified to work in confined spaces. Against that it was noted that, after the accident and prior to the company ceasing to trade, the defendants took steps to have Mr Mislov and other employees from contractors externally trained and certified for confined space work. In those circumstances, general deterrence had a significant role in the setting of an appropriate penalty although, considering the present very limited operation of the company, specific deterrence may be of little relevance. In this respect, it was to be noted that Mr Seal continued to work in the construction industry, dealing with the specialty of waterproofing at a supervisory level.

24 The prosecutor accepted that there were substantial subjective factors to take into account. The penalty should reflect the defendants' contrition which was demonstrated in the defendants' early pleas of guilty, their co-operation with the WorkCover Authority and the frank admissions set out in Mr Seal's statement. The defendants were not adversely recorded and were entitled to the leniency normally extended to first offenders. Mr Seal's evidence regarding his long history of involvement in the construction industry resulted in it being open to the Court to have regard to that material as substantial evidence of the defendants' prior good industrial citizenship. It was also conceded that the impact of the incident upon Mr Seal, including the impact upon his health, his financial, marital and family circumstances, were matters to be properly taken into account in determining an appropriate penalty. It was further conceded that the pleas of guilty in each matter were entered at the earliest practicable opportunity and that a separate and identifiable discount may be given by the Court with respect to the utilitarian benefit of those pleas.

25 In relation to any application made under s 10 of the Sentencing Act, the prosecutor drew attention to authority in this Court that the exercise of such a discretion in occupational health and safety matters was regarded as extraordinary and exceptional. 26 It was relevant in deciding whether the discretion should be exercised to note that Mr Seal had prepared the tender for the works and had personally identified the water tanks as confined spaces; he had developed the generic safe work method statement on which the work method statement for the particular job was based; he was aware that the company did not have in place specific work systems/controls in relation to the conduct of work in confined spaces; Mr Mislov had not been trained in relation to working in confined spaces prior to commencing work with the company or while employed by the defendant company; neither Mr Woodbridge nor Mr O'Brien were trained and certified to work in confined spaces; and, such training was provided by the defendants to Mr Woodbridge in relation to the use of self-contained breathing apparatus or other safety equipment provided on the company's truck was, at best, cursory. In those circumstances, the role of both defendants in the incident could not be properly characterised as trivial. 27 In relation to the operation of s 6 of the Fines Act 1996, it was submitted that defendants wishing to obtain the benefit of that section must bring sufficient cogent evidence of their financial hardship to satisfy the Court on the balance of probabilities that the discretion should be exercised in their favour. In the absence of cogent evidence, such as proper accounting records, taxation returns and banking records, the Court should decline to exercise the discretion. If, however, the Court was satisfied on the material brought forward by the defendants that the s 6 discretion might be exercised, the Court had to be careful to recognise that the underlying principle remained that the penalty imposed must adequately reflect the objective seriousness of the offence.

28 In his oral submissions, Mr Seal said that he was not aware of the operation of s 10 of the Sentencing Act and had not been advised of its operation when the defendants were legally represented. Having had the operation of the provision briefly explained to him, Mr Seal sought the benefit of the discretion. In this regard, it should be noted that the Court was assisted by the submission of Counsel for the prosecutor as to the various sentencing options that were available to the Court even where some of those options were regarded as inappropriate by the prosecutor.

29 Mr Seal again described the devastating effect that this accident had on his business and family life and how the strong and prosperous business that had been built up over the years was now in ruins. He explained the safety equipment purchased by the company at considerable expense, the training provided in its use and its ready availability for all work performed by the company including work in confined spaces. He again frankly accepted his own responsibility for these breaches of the Act, but submitted that neither he nor the company had any capacity to pay a fine. A fine imposed on the company would render it insolvent and insolvency or bankruptcy would lead to the termination of the contract with Austress. Without income from that contract, the company's outstanding debts could not be paid and Mr Seal would have no capacity to meet those debts let alone meet the much reduced day-to-day expenditure of his household. His request was for the Court to take these matters into account, while accepting total responsibility for the breaches of the Act as particularised and to alleviate the potential burden of the fines in any way possible. DELIBERATION 30 The first matter to be considered is the objective seriousness of the offence. In this case, although Mr Woodbridge made a quick and apparently complete recovery, there was a risk of very serious injury by performing work with materials emitting toxic fumes when that work was to be undertaken in a confined space such as the water tank. The risk was increased because of the lack of formal training and the compilation of emergency procedures. The particulars of the charge to which both defendants have pleaded guilty is indicative of the seriousness the offence. 31 There are, nevertheless, a number of matters to be weighed in the balance in determining this matter. Mr Seal had approximately 34 years' experience in the building and construction industry and had been the person in overall charge of operations undertaken by Kwik-Seal Pty Ltd. I accept the evidence suggesting that Kwik-Seal was a leader in the field of waterproofing in Australia and had been involved in the introduction of modern techniques in this particular speciality. I also accept that Mr Seal had a reputation for being careful and conscientious in undertaking this work and as a director of Kwik-Seal. The evidence demonstrates that at the Park Regis site, the sub-contractors engaged were provided with a wide range of safety equipment and I accept the evidence of the financial investment made by the company in securing breathing and associated safety equipment for the performance of its work. Mr Seal's evidence was that apart from man-down alarms there was a full three to one recovery harnesses and the correct lifting equipment as well as respirators provided and available at this site. 32 The prosecutor readily accepted that this was not a case where no attention had been paid to a safe system of work but rather that the incident involving Mr Woodbridge brought to attention a gap in that system, especially in relation to work in confined space and the use of toxic substances. The defendants have accepted that training, as required, had not been undertaken in the performance of such work and that there was an absence of formal plans in relation to standby assistance and emergency procedures but the thrust of Mr Seal's evidence was that he had engaged experienced sub-contractors in this area and a very experienced foreman to oversee the work. These were people who were well aware, by experience, as to what was required for the safe working in this specialist industry and knew how to operate the safety equipment that had been provided including the respirators, the harness and the lifting equipment. 33 The circumstances of this particular incident also have to be considered. The work had been carried on at this site for a considerable period without incident using the defendant's system of work and the safety equipment provided. Mr Seal's tender document specified the materials to be used and identified the work as being work in confined spaces - to that extent full confined space recovery equipment would be required to be used during the whole of the works with men down alarms and self contained breathing equipment to be on location during the entirety of the works. There were to be extraction blowers and ducted air in/outlets and air out of the tanks to be used at all times during the process. While the operations manager Mr Mislov was in direct charge of the project, Mr Woodbridge was the main contractor at the site and when work was being performed on this particular tank both Mr Mislov and Mr Woodbridge contacted Mr O'Brien to assist in that work. The work was meant to commence at 11 am but it was well into the afternoon before Mr Woodbridge was able to attend the site. Having regard to the defendant's unblemished history of work in this area and the steps proposed for the performance of this work, on balance, I accept the defendants' submission that it appears that on this day because he was running late, Mr Woodbridge performed the work in a way that had not been authorised by the defendants and was quite contrary to its tender and specific instructions given by Mr Seal that very day. In almost every respect Mr Woodbridge departed from the normal safe system of work adopted by the defendants in his rush to perform the work. He elected to use a product that was not proposed in the tender apparently because of its quick drying properties and went straight into the tank without arranging for the presence of all of the safety equipment and while Mr O'Brien was absent. The haste with which this work was performed is indicated by the fact that Mr Woodbridge did not even attach his safety harness. There is no evidence to suggest that he had informed the defendants of his intention to use this highly toxic product and it is highly unlikely that he would have discussed with the defendants or their operation's manager Mr Mislov his intention to perform the work without the presence of the safety equipment they had provided. There is substance in Mr Seal's submission that even if formal training in confined spaces work and the production of formal emergency procedures had been made available to Mr Woodbridge prior to this incident, that he would have done anything different on the day in question. This situation highlights the oft stated importance of focusing upon the charge rather than the incident itself. 34 Balancing all of these considerations, I conclude that this was a serious breach of the Act although it is not one that could be ranked in the high range of culpability or regarded as being in the worst category of breach. 35 General deterrence is an important consideration in any offence, especially offences under the Occupational Health and Safety Act 2000. The building and construction industry, encompassing a variety of specialist undertakings, is notorious for the dangerous nature of the work performed and every penalty imposed for a breach of the Act serves to alert those participating in the industry of the need to be diligent in matters of safety. Specific deterrence in this case, having regard to the limited operation of the company and the work now performed by Mr Seal at a supervisory level, has, realistically, a very limited role. 36 There are a number of subjective factors to be considered. It says something about the capacity of Mr Seal, as a person not trained in the law, to put forward all matters that might be relevant to his case, when it was counsel for the prosecutor who disclosed in written submissions that after the accident the defendant took steps prior to the company ceasing to trade to have the operations manager Mr Mislov and other employees and contractors externally trained and certified for confined space work. There is no suggestion in the evidence that any other safety equipment was required for the type of work to be performed. The defendants fully co-operated with the WorkCover Authority and made frank admissions in relation to their guilt. In his evidence and submissions Mr Seal, without equivocation, accepted total responsibility for this accident and spoke with conviction about the obligations of participants in industry to accept responsibility for their acts and omissions. His contrition was publicly expressed, heartfelt and genuine. Each defendant is a first offender and Mr Seal appears to have considerable standing as a good citizen in this specialised area of industry. Having regard to the dangerous nature of the industry, the hitherto unblemished record of the defendants speaks well of their previous attention to occupational health and safety. In addition, the pleas of guilty were entered at an early stage and would entitle the defendants to a substantial discount usually made available for the utilitarian value of the plea. 37 Counsel for the prosecutor conceded that, given the unusual circumstances of this case, the impact of the incident upon Mr Seal including the impact upon his health, his financial, marital and familial circumstances, were matters to be properly taken into account by the Court in determining the appropriate penalty to be imposed upon him. 38 In the course of submissions, counsel for the prosecutor raised the prospect that the defendants may seek the exercise of the Court's discretion under s 10 of the Sentencing Procedure Act . In essence, the prosecutor submitted that in view of the Court's well established jurisprudence requiring special and exceptional circumstances to be established, the objective seriousness of this offence made it inappropriate for the defendants to be the beneficiary of the exercise of that discretion. As earlier indicated, in the course of his submissions, while raising matters relevant to the operation of s 10, Mr Seal confessed to not knowing of or being informed by his previous legal advisors of the operation of s 10 but nevertheless asked the Court to deal with the matter with leniency including any consideration that may be available to the defendants under s 10 of the Sentencing Act. In light of this development both the prosecutor and the Court proceeded on the basis that the defendants had made an application under s 10 of the Sentencing Act. 39 There are numerous statements by Full Benches of this Court stating that s 10 of the Sentencing Act, like its predecessor, s 556A of the Crimes Act, will be available only in rare and limited circumstances in relation to proceedings brought under the Occupational Health and Safety Act: indeed, I have been a member of Full Benches that have reiterated and adopted that approach. Many of those statements can be found in the more recent case of WorkCover Authority (NSW) (Inspector Maddaford) v Coleman [2004] 138 IR 21. In that case it was noted that in the Department of Mineral Resources v Berrima Coal Pty Ltd (2001) 105 IR 348 reference was made to earlier cases establishing the proposition that the discretion available under s 556A would be "rarely available in significant offences against the legislation". Some cases had noted the prior good record of the defendant but had concluded that the record was due to good fortune rather than good conduct. Cases where the risk of injury from an accident was not difficult to foresee, where the breach could be and did result in serious consequences for the health of the injured person, where the risk of injury was preventable and where a step was taken without difficulty to address that risk, provided circumstances in which it would be seldom appropriate to exercise the discretion under s 10. 40 Significantly, in Berrima Coal, the Vice-President, Walton J, stated: [174] In applying the foregoing authorities for an application for the exercise of the Court's discretion under s 10 of the Crimes (Sentencing Procedure) Act, it is important, however, to bear in mind that each matter requiring consideration under s 10 of that Act needs to be considered in the light of its own particular circumstances: WorkCover Authority (NSW) (Inspector Robins v Ecolab Pty Ltd (1999) 90 IR 413 at 430. 41 It is appropriate in this discussion to set out the relevant provisions of s 10 of the Sentencing Act : 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years, (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. (2) An order referred to in subsection (1)(b) may be made if the court is satisfied: (a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or (b) that it is expedient to release the person on a good behaviour bond. . . . (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (e) any other matter that the court think roper to consider. 42 In the context of dealing with an appeal against a conviction for malicious wounding, the Court of Criminal Appeal (Giles, JA, James and Hulme JJ) gave consideration to the operation of s 10 of the Sentencing Act in R v Kay Piccin (2001) NSWCCA 323. In that case, the appellant, following a relationship breakdown, arranged a meeting with the victim having predetermined to injury him with a knife and did in fact inflict knife wound injuries on the victim. James J was of the view that having regard to the nature of the offence and his conclusion that the offence was not trivial in nature, it was not a proper case for the Court to dismiss the charge or to discharge the applicant without proceeding to conviction in accordance with the provisions of s 10 of the Sentencing Act. 43 Although agreeing with the reasons and orders proposed by James J, Hulme J recorded the following observations: [25] Although the matter has not been argued, I wish to record my view that it is not a precondition of the exercise of power under s 10 of the Crimes (Sentencing Procedure) Act, 1999 that the offence involved be trivial. That conclusion was more obvious in the case of s 556A of the Crimes Act, 1990 (as amended) which, s 10 replaced ... . [26] However, there is nothing in the explanatory memorandum to the later Act or in the Minister's Second Reading Speech or in the Law Reform Discussion Paper 33 or Report 79 which preceded the legislative changes reflected in the Crimes (Sentencing Procedure) Act to suggest that any change of significance so far as s 556A is concerned was intended. And clearly, a limitation such that the section could be invoked in trivial cases would be a change of significance. [27] That some power should exist to ameliorate the rigours of the criminal law in cases calling out for such an approach has been recognised in a number of cases. It is sufficient for present purposes to refer to one. In R v Ingrassia (1997) 41 NSWLR 447 at 449, Gleeson CJ with the concurrence of the other members of this Court said:- The essence of s 556A is that it empowers a Court which considers that a charge has been proved, in certain circumstances, to take steps 'without proceeding to a conviction'. The legal and social consequence of being convicted of an offence often extend beyond any penalty imposed by a Court. As Windeyer J said in Cobiac v Liddy (1969) 119 CLR 257 at 269, 'a capacity in special circumstances to avoid the rigidity of inexorable law is of the very essence of justice'. [28] I am unaware of any other statutory provision or other power applying to offences or offenders generally which enables a Court to avoid recording a conviction when the facts proved establish the commission of an offence. Against this judicially recognised purpose and function of s 556A, one cannot conclude from what is obviously a 'plain English' rewriting of the section that a change to only trivial offences was intended. Indeed, were one to regard the reference to 'the trivial nature of the offence' as limiting the section's application to only such offences, one would have to take the same approach to the terms of para (c) and conclude that the section was not merely limited to trivial offences but trivial offences where there was also 'extenuating circumstances'. [29] Such an emasculation of an important provision, designed to mitigate 'the rigidity of inexorable law', is not to be inferred in the absence of legislative intent far more clearly demonstrated that in the charge change in terminology from s 556A to s 10. 44 The circumstances in which the s 10 discretion may be available in strict or absolute liability offences were discussed by the Court of Criminal Appeal in Thorneloe v Filipowski (2001) 52 NSWLR 60. In that case, a small amount of oil was discharged into the waters of Botany Bay during loading operations and the master of the vessel responsible was convicted on a plea of guilty and fined and his application to have the charge dismissed under s 10 of the Sentencing Act was refused. Although only a small amount of oil was discharged there was a potential for a much larger discharge. In discussion, Spigelman CJ stated that in the present matter little turned on the difference between absolute and strict offences but noted at [143] that in s 15 of the Occupational Health and Safety Act, 1983 the potential for harm was a material consideration because the offence was not a result offence and the focus was on the state or condition rather than on the result or consequence of an act. 45 In the course of his judgment, the Chief Justice compared offences under the Clean Waters Act, 1970 and offences under the Occupational Health and Safety Act, 1983. The nature of these offences was a matter of statutory construction but it appeared that certain Clean Waters Act offences were to be treated as "result" offences such that the effect of pollution identified a particular result or consequence which was an essential ingredient of the offence. This was to be compared with, for instance, an offence under s 15 of the Occupational Health and Safety Act, 1983: s 15 was not to be regarded as a result offence as its focus was on a state or condition rather than a result or consequences and the potentiality for harm arose by reason of the existence of the state or condition. The issue then arose as to whether in Thorneloe the sentencing Judge had taken into account an irrelevant consideration and whether the potential harm was a proper matter to be considered by the sentencing Judge when exercising the discretion to order that the relevant charge be dismissed. In dealing with this issue, Spigelman CJ stated: [151] The discretion conferred by s 10 is wide-ranging. There is no warrant for treating the scope and range of matters which is 'proper' for a sentencing judge to take into account in a narrow way. Nevertheless, it is a discretion which must be exercised judicially. The identification of relevant considerations turns on the scope of purpose of s 10. [152] As Windeyer J said in Cobiac v Liddy (1969) 119 CLR 257 at 269 in the context of concluding that the then equivalent on s 10 in South Australia applies to the offence thereunder consideration: ... the whole history of criminal justice has shewn the severity of punishment begets the need of a capacity for mercy. The more strict a rule is made, the more serious become the consequences of breaking it, the less likely it may be that Parliament would intend to close all avenues of exception. Especially when penalties are made rigid, not to be reduced or mitigated, it might seem improbable that Parliament would not retain a means of escaping the imposition of a penalty which must follow upon conviction, that it would abolish it, not directly but by a side wind. This is not because mercy, in Portia's sense, should season justice. It is that a capacity in special circumstances to avoid the rigidity of inexorable law is of the very essence of justice. 46 Although not finding it easy to determine whether a factor is not relevant on sentencing for the charge, it can nevertheless be a "proper" matter to be considered when exercising the discretion under s 10, Spigelman CJ found, on balance, that s 10 did have a scope and purpose extending beyond the elements of the offence of the relevant charge. Therefore the risk to which society was subject was a relevant and accordingly a proper consideration to be taken into account in deciding whether to dismiss proceedings without proceeding to a conviction and this was so even in the context of a strict liability result offence such as under s 27 of the Marine Pollution Act. 47 The Chief Justice then noted a line of authority for the proposition that it would be a rare case when a dismissal under s 556A was seen as appropriate in relation to an environmental offence, especially a breach of the Clean Waters Act. A similar formulation had been applied by the Land and Environment Court in a number of cases and also in relation to s 15 of the Occupational Health and Safety Act by the previous Industrial Court and its predecessor. There was no error in such an approach. 48 The Chief Justice then gave consideration to a submission whether the sentencing Judge had given adequate consideration to the fact that no reasonable action on the part of the master of the ship could have averted the incident. Of this proposition the Chief Justice stated: [171] Even in the case of an offence of strict liability, no public purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done anything to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur. [172] Lord Scarman expressed the purpose of imposing strict liability in Gammon (Hong Kong) Ltd v Attorney-General of Hong Kong [1985] AC 1 at 14: ... The creation of strict liability will be effective to promote the objects of the statute by encouraging greater vigilance to prevent the commission of the prohibited act. ... [178] It is, in my opinion, relevant to the exercise of the discretion under s 10 of the Sentencing Act, in the context of a strict liability offence, to consider what the applicant for the benefit of s 10 could have done to avert the event that has occurred. While questions of weight are always for the sentencing Judge, it is unlikely that this consideration will be give determinative weight in the case of a serious offence or a repeat offender. Where, as here, there was a comparatively minor pollution by a first offender, this consideration is entitled to weight. 49 While agreeing with the reasons for judgment of the Chief Justice, Hulme J added further comment: [201] ... One may accept the numerous statements to which the Chief Justice has referred to the effect that, in the case of environmental offences, it is rare for s 556A of the Crimes Act 1900 (the precursor to s 10) to be applied. However, when one comes to consider a particular case, it seems to me preferable to look primarily at the considerations which arise in that case. These will, of course, include the nature of the offence as defined in the statute creating it and the penalty provided together with the perceived object of the relevant statutory provisions. But, subject to such matters, there is no reason to give s 10 any more restrictive operation in the case of environmental offences than in the case of the general run of offences to which it applies. 50 In dealing with the relevance of what, if anything, the Master could have done to prevent the lapses, Hulme J stated: [205] That such a matter is relevant to the exercise of discretion under s 10 is amply demonstrated by the reasons of the Chief Justice. To them I would add only this. Of the five principal general considerations in sentencing - general deterrence, personal deterrence, retribution, rehabilitation and protection of the community: see Veen v The Queen (No 2) (1988) 164 CLR 465 at 476, the last two are normally of little additional consequence where, as in this case, the penalty takes the form of a fine. Retribution may well have a part to play but save insofar as considerations of deterrence may cause actual or prospective offenders to cease activities which have associated with them risks of the commission of strict liability offences, there is little point in punishing someone for an event which he could have done nothing to avert. 51 Although I have referred extensively to the judgments in Piccin and Thorneloe, for present purposes their relevance may be shortly stated. Firstly, s 10 of the Sentencing Act is not confined to "trivial" offences but is available in all circumstances where an offence has been proved. Secondly, even in the case of absolute or strict offences the discretion available under s 10 of the Sentencing Act is not excluded. Thirdly, in relation to strict offences it will be a relevant consideration as to what the defendant could have done to avert the breach although that consideration does not exclude consideration of other relevant matters: nor is it the only consideration when applying s 10.

It does not appear to have been necessary to determine authoratively whether provisions under the Occupational Health and Safety Act 1983 or under the 2000 Act create absolute liability offences or strict liability offences. The classic definition of an absolute liability offence is one which does not require proof of any mens rea so that the offence is made out so long as the act of the accused is voluntary. It is usually said that such offences are generally found in relation to regulatory offences concerned with public health or safety. A strict liability offence is classically defined as an offence which does not require any proof of mens rea but to which the common law defence of honest and reasonable mistake of fact applies such as in culpable or dangerous driving. (see the approach in Proudman v Dayman (1941) 67 CLR 536). It might be said that because of the defences available under s 53 of the 1983 Act and s 28 of the 2000 Act, the penalty provisions do not fit neatly into either classic definition but operate as a statutory hybrid focusing attention upon whether or not it was reasonably practicable to comply with the provisions of the Act or Regulations or establishing that the commission of the offence was due to causes over which the person did not have control or for which it was impracticable to make provisions. 52 On occasions, in dealing with offences under Occupational Health and Safety legislation, this Court has taken the approach of imposing a fine of substance on the corporate offender but giving the director the benefit of the discretion available under s 10 of the Sentencing Act or its equivalent. For example, in WorkCover Authority of New South Wales (Inspector Dall) v R & D Enterprises (Newcastle) Pty Ltd (2001) 110 IR 469, Hungerford J fined the corporate defendant $30,000 but dismissed without conviction the charge against the personal defendant. In that case his Honour accepted the evidence that the corporate defendant had modest financial means and that any penalty imposed against the corporate defendant would in fact be paid directly from the resources of the personal defendant and where the corporate defendant itself was only a small company. The company was also clearly in financial difficulties. 53 In dealing with the application under s 10, Hungerford J said: [19] As to the position of the personal defendant, I propose to apply the provisions of s 10 of the Crimes (Sentencing Procedure) Act by dismissing the charge against Mr Green. I have to say I have reached that conclusion with some hesitation but, on balance, and consistent with the terms of the section, I consider in the circumstances it would be inexpedient to convict him and to impose a fine. I regard the fine against the corporate defendant as sufficient to meet the ends of justice for the identified risks to safety in the incident here ... . In R v Rushby [1977] 1 NSWLR 594 at 598, the balancing process involved in sentencing was dealt with by Street CJ by reference to what the Court of Appeal in New Zealand said in R v Radich [1954] NZLR 86 at 87 as follows: On the other hand, justice and humanity both require that the previous character and conduct, and probable future life and conduct of the individual offender, and the effect of a sentence on these should also be given the most careful consideration, although this factor is necessarily subsidiary to the main considerations that determine that appropriate amount of punishment. [20] Mr Green had no prior convictions of any nature and during evidence he presented as a sincere, hard-working tradesman who was endeavouring to build and maintain a small business in difficult commercial circumstances. In a sense, his brief departure from the scene of the incident at the time it occurred to attend a pressing problem elsewhere on the site was no excuse for the safety detriment which thereby arose but, I am prepared to accept, it was a casual omission which should not result in a criminal record being created against Mr Green. I think to do so, in the circumstances where the corporate defendant is to be convicted and fined accordingly would be neither suitable or judicious. 54 Hungerford J then referred to the fact that in relation to offences under the Occupational Health and Safety Act the exercise of the discretion under s 10 was rarely allowed but noted that in Berrima, the Vice-President, Walton J had taken into account the fact that the personal defendant had no prior convictions and had entered a plea at an early time and had actively co-operated with the prosecutor. Furthermore, the defendant in that case was to be given credit for the efforts to improve safety after the incident and for the overall good industrial citizenship of the corporate defendant. The defendant had an impeccable record as a manger in the mining industry but his continued career in that industry was threatened by any conviction under the Act. At 60 years of age it was likely that he would soon look to retirement and that was a factor to be considered. The defendant had also been observed in the course of giving evidence allowing his Honour to conclude he was genuinely contrite, that he suffered remorse, shock and distress over the incident and had ultimately suffered a heart attack. It was in all of those circumstances that Walton J considered that extraordinary and highly exceptional circumstances existed in the case warranting the exercise of the Court's discretion under s10 of the Sentencing Act. That approach informed and guided the approach adopted by Hungerford J. 55 The seriousness of the offence and the importance of general deterrence in the context of considering an application under s 10 of the Sentencing Act was considered by the President, Wright J in Inspector Searle v Baptist Community Services - NSW and ACT (unreported, 19 December 2003: IRC 1520 of 2001). In this case, the defendant was the corporate entity alone. His Honour the President referred to the passage in Rushby cited above and then stated: [64] The passage cited from R v Rusby shows the difficulty in a case as complex as the present one in balancing the competing factors. I consider that the very particular circumstances, on fine balance, should result in the granting of the defendant's application. The seriousness of the offence, including the actual and potential consequences of it, has to be balanced with the highly exceptional set of circumstances which came together and resulted in the breach. The conclusions that the situation was uncharacteristic of the defendant and it found itself 'out of its depth' are readily available on the detailed evidence provided by the defendant. On that evidence there seems little prospect of a re-occurrence of such an offence. The issue of general deterrence has led to great hesitation in deciding to grant the application. However, I have concluded that, in light of the exceptional character of the defendant, the fact that in other cases in the welfare field heavy penalties have been imposed in cases where it was appropriate to do so, the exceptional circumstances of the offence seen in the perspective of the defendant's overall work (both in hindsight and in the perspective of the benevolent motives that appeared to lead it to enter a field it became clear it was not equipped for) the application should be granted. 56 Before addressing the relevant factors in the present case, it is appropriate to refer to the remarks of Chief Justice Spigelman made to mark the 181st anniversary of the founding of the Supreme Court of New South Wales, namely: The recent debate about sentencing will know no rest because the ineluctable core of the sentencing task is a process of balancing overlapping, contradictory and incommensurable objectives. Requirements of deterrence, rehabilitation, denunciation and punishment do not point in the same direction. Specifically, the requirements of justice, in the sense of just deserts, and of mercy, often conflict. Yet we live in a society which values both justice and mercy. 57 In the present case, the particulars of the offence are the failure to provide and maintain a safe system of work in relation to the application by sub-contractors of sealant on the inside of water tanks at the site; the failure to ensure that persons engaged to carryout and supervise the work held appropriate training, accreditation and/or entry permits in relation to working in confined spaces at the site; and a failure to supervise the work to ensure that the established system of work was complied with when its subcontractors were carrying out the work and in particular the defendants' failure to ensure that fresh air and breathing equipment, respirators or masks were utilised by such persons undertaking the work. I have already indicated that this a serious offence and one that cannot be properly described as "trivial" for the purposes of the application of s 10 of the Sentencing Act. Having regard to all of the factors I would, nevertheless, regard this offence as falling within the low range of penalties available under the Act, namely a maximum penalty of $500,000 in relation to the corporate defendant and a maximum of $55,000 in relation to the director Mr Seal. That assessment derives from the fact that despite the absence of formal training and accreditation, there was training and training in the use of the respirator equipment and specific directions had been given about using an assistant and respirator equipment on this particular day which were not followed, a system of work that had been safely in operation for weeks prior to this incident and from which a sub-contractor departed on this particular day and the availability of safety harnesses, emergency rescue equipment and breathing apparatus. 58 Mr Seal presented his own case and was cross-examined by counsel for the prosecutor. The Court was placed in a position, over a period of time, to observe Mr Seal and to make some assessment of him as a person. He had worked for many years in a difficult industry where risks abound and had done so for some 34 years without coming to notice speaks highly of his methods of work and attention to safety. He had engaged an appropriately qualified person to be operations manager on site and at some considerable expense had provided all manner of safety equipment: there was no suggestion that there was anything lacking in this regard. The defendants had a safe system of work (partly acknowledged by the particulars of charge) although there were omissions in relation to formal training but it appears to me that the essence of a safe system was in operation. What happened on this day was quite contrary to that safe system and appears to have been the result of a conscious decision taken by the sub-contractor, Mr Woodbridge. It is difficult, in the circumstances detailed in the evidence, to conclude what else Mr Seal could have done to avoid the situation in which Mr Woodbridge placed himself. He had engaged a person to be the supervisor of the operations on site, Mr Mislov, and he had arranged for there to be a second person to assist in this job. Mr Woodbridge had been given verbal instructions only that morning by Mr Seal relating to the use of breathing and safety equipment for that day's work. Mr Seal had instructed him not to enter the tank unless it was set up in the correct manner. Mr Woodbridge had been trained in the use of the company's confined space equipment as used at the site. The work method has been in use in previous weeks without incident but using the approved primer. Mr O'Brien was present at the site as arranged by Mr Mislov and was aware shortly after the work commenced that Mr Woodbridge was not using breathing equipment, his harness was not attached, no safety equipment usually available was present at the site, and, the inference is open that he was aware that the type of primer had been changed. There is no evidence of Mr O'Brien rasing these issues with Mr Woodbridge or Mr Mislov. Adherence to a safe system of work would not require Mr Seal to be personally present at each site to ensure that the safety rules were adhered to. In my view, what occurred in this day was uncharacteristic of the operation of Mr Seal's business and something of an aberration. There were, nevertheless, formal and important provisions that were not complied with and they are matters that add to the difficulty of this delicate balancing exercise. 59 Mr Seal addressed the Court with emotion but also with quiet dignity and conviction and did not hesitate to take full responsibility for these breaches of the Act. From his own evidence and the references he relied upon it is apparent that the concept of responsibility informs his daily work activities and his relationship with those with whom he works. Mr Seal was clearly devastated at having to make the judgment call of leaving his son-in-law on the floor of the tank rather than risking another life in directing Mr O'Brien to attempt another rescue in circumstances where the fumes had already forced him back three or four times. I accept the evidence that this judgment call crippled relationships within his family and particularly with his wife. He became debilitating ill where he had previously been a healthy man and this led directly to his once prosperous company (of which he was justifiably proud) crumbling financially. All that he had sought to achieve in life had disintegrated, his relationship with his wife, his relationship with his family, the work in which he was a renowned specialist and the company which he had built up to be such a success. 60 Given the lack of assets of the company and the dire financial situation of Mr Seal, any fine now imposed would be crushing in its effect. The only reason for the existence of the company appears to be Mr Seal's determination to pay its debts and to service the mortgage (now nearly $1m) over his home - to achieve that the company is the conduit through which Mr Seal acts as a consultant. The terms of his consultancy are such that if the company cannot meet any fine imposed by the Court it will be insolvent: if the company becomes insolvent or bankrupt then the terms of the arrangement are such that Mr Seal's consultancy will be terminated. I accept the evidence that both defendants are in a position where they are unable to meet any fine: even if Mr Seal sold the family home it appears that the proceeds would be almost entirely consumed by the mortgage obligations. 61 In addition, the following matters need to be considered: (a) in the cases where s 10 has been applied in occupational health and safety prosecutions, the discretion has been exercised notwithstanding the presence of fault in the defendant's activities and having regard to the whole of the circumstances; (b) the finding that an offence is "serious" does not automatically remove it from consideration under s 10. For example, the involvement of highly toxic chemicals in a pollution offence did not prevent the application of s 10 (see Environmental Protection Authority v Brazel (No 3) [2002] NSWLEC 120); (c) Section 6 of the Fines Act provides that in the exercise of the discretion to fix the amount of a fine the Court is required to consider: (i) such information regarding the means of the accused as is reasonably and practicably available to the Court, and (ii) such other matters as, in the opinion of the Court, are relevant to the fixing of that amount. Having regard to the fact that the defendants were not legally represented, it would be wrong to expect a sophisticated level of financial evidence to be put before the Court. Mr Seal was cross-examined under oath and counsel for the prosecutor did not suggest that the evidence given was less reliable because of its want of form. I accept the truthfulness and force of that evidence. 62 The question then has to be asked in terms of sentencing objectives, what would be achieved by imposing a penalty? The resultant fragility of a business that relies heavily on the expertise of its founder (and is in effect a family business) when subjected to scrutiny for alleged breaches of occupational health and safety legislation, is as surely a deterrent as the imposition of a fine that appropriately reflects the seriousness of the offence. To the extent that retribution is a consideration it must be concluded that, overall, Mr Seal has lost more than could ever have been properly imposed on him and his company by way of a penalty. Indeed, it is difficult to see what else he could lose. In relation to rehabilitation and protection of the community, there is much to be said for the approach of Hulme J that these are of little consequence when the penalty is a fine. Nevertheless, it may be stated that Mr Seal addressed the gaps in his system by having those who worked for him independently trained in confined space working. The evidence supports a finding that his past safety consciousness has been heightened and is constantly in his thoughts in the role he now performs as a consultant. In this sense the issue of rehabilitation and protection of the community are addressed. 63 Having regard to the operation of the Sentencing Act generally, where applicable to offences of this nature, there do not appear to be aggravating aspects of the offence but there are a number of mitigating factors. Although the context of an offence under the Occupational Health and Safety Act has to be considered, nevertheless the injury sustained by Mr Woodbridge was not substantial, the defendants did not have any record and were persons of good character. Having regard to all of the evidence and having closely observed Mr Seal during the course of the proceedings, I am satisfied he is unlikely to re-offend in this particular way or indeed, at all. Having considered these matters, including Mr Seal's age, there are good prospects of rehabilitation in the sense that I have referred to earlier. There is not the slightest doubt that Mr Seal has shown remorse and I accept his evidence and submission that his life will never be the same again. There has, in addition, been an early plea of guilty and assistance provided by Mr Seal to the WorkCover Authority. These matters together with my conclusion that the offences, properly understood in their context, were uncharacteristic and represent something of an aberrant departure from the usual standards of the defendants, lead me ultimately to conclude that there were extenuating circumstances surrounding this offence and that on balance, these circumstances are sufficiently exceptional that both defendants should be given the benefit of the discretion under s 10 of the Act. ORDERS 64 Accordingly, the Court makes the following orders: In Matter No IRC No 2418 of 2005 relating to Kwik-Seal Pty Ltd: (a) the defendant is found guilty of the offence charged; (b) without proceeding to conviction, the Court dismisses the charge pursuant to s 10 of the Crimes (Sentencing Procedure) Act 1999; (c) the defendant shall pay the prosecutor's costs of the proceedings in a sum as agreed, or in the absence of agreement, as ordered by the Court. In Matter No IRC 2419 of 2005 in relation to David John Seal: (a) the defendant is found guilty of the offence charged; (b) without proceeding to a conviction, the Court dismisses the charge pursuant to s 10 of the Crimes (Sentencing Procedure) Act 1999; (c) each party is to pay its own costs.

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