SafeWork NSW v TJN Construction Group Pty Ltd

Background

1. At all material times, the defendant was a company registered in New South Wales, with its registered address at Level 5, Suite 1, 410 Church Street, North Parramatta, and conducted its business or undertaking in residential and commercial construction and renovation.
2. The defendant was appointed the principal contractor of a construction project at the Site. The project involved construction and renovation work at a 4-storey residential property, and the value of the construction project was approximately $770,000.
3. Waterproofing works were to be performed at the Site to five balconies, three internal bathrooms and an internal laundry.
4. At all material times, the defendant engaged the following persons: 1. Hanna (John) Ibrahim, working director. 2. George Estephan, working director. 3. Charbel Sleiman, site supervisor. 4. Yohnan Yoo, apprentice carpenter. 5. Tony Estephan, George Estephan's son.
5. On or about 31 August 2020, the defendant engaged Carbon BMC Pty Ltd (Carbon) to undertake waterproofing works to five external balconies. The scope of the work was later extended to include three internal bathrooms and a laundry at the Site.
6. The directors of Carbon were Maurice Yap and Darcy Yap. Maurice Yap was a licenced builder who had undertaken training in internal and external waterproofing with Master Builders Australia in 2017 and 2018. Darcy Yap was a trade-qualified carpenter.
7. Carbon engaged Mr Conway, licensed waterproofing technician aged 22 years, and Mr Lloyd, second year apprentice aged 21 years. Mr Lloyd said that he reported to Mr Conway while on the Site, as Mr Conway was a qualified tradesperson.

The Waterproofing Works

1. Carbon commenced works at the Site on around 16 November 2020, having previously started waterproofing works on external balconies at the Site, and then ceasing works until other external areas were ready for the waterproofing works.
2. The products required for the works were delivered to the Site by Carbon, and as instructed by Carbon, stored in the garage for use when required.
3. Waterproofing works were generally performed by the defendant in the following way: 1. The substrate floor is cleaned and prepared using a grinder. 2. Adhesive is applied to the substrate floor and to the back of membrane sheets (which are left to partially dry). 3. Once the adhesive is dry, the membrane is bonded to the substrate floor. 4. A hot air welding tool is used to bond the laps of the adjoining membrane and to detail any areas.
4. The following products were used in the process described above: 1. Ardex APM 1000 membrane sheets (membrane sheets). The membrane sheets were designed to be used as an external waterproofing membrane. 2. Ardex WA 98 Butynol and WeldTec Adhesive 20L (adhesive). The adhesive is described on its product sheet as being a high-performance roofing contact adhesive developed for bonding butyl rubber sheeting to roofing substrates. 3. Ardex WA 98 Solvent (solvent).
5. The adhesive is a hazardous chemical for the purposes of the Work Health and Safety Regulation 2017 (NSW) (WHS Regulation). The label on the adhesive's container conveyed the following information: 1. The product must be kept well away from heat, sparks and open flames and be kept closed when not in use. 2. "Safety data: Wear protective gloves, clothing, eye and face protection. Keep away from heat/sparks/open flames/hot surfaces". … "Ensure adequate ventilation during mixing and application". 3. "Danger: gives off highly flammable vapour. Keep well away from heat, sparks and open flame. Keep closed when not in use".
6. The Safety Data Sheet (SDS) for the adhesive provided as follows: 1. The use of a quantity of material in an unventilated or confined space may result in increased exposure and an irritating atmosphere developing. Before starting, consider control of exposure by mechanical ventilation. 2. The "Hazard statements" included that the adhesive is highly flammable in liquid and vapour form. 3. The "Precautionary statements" included that the adhesive should be kept away from heat/sparks/open flames/hot surfaces and should be used only outdoors or in well-ventilated areas. 4. Under the heading "Firefighting measures", the SDS provided that the vapour may travel a considerable distance to a source of ignition. 5. Under the heading "Handling and storage" the SDS provided: "Do NOT cut, drill, grind, weld or perform other similar operations on or near open containers, wear protective clothing when a risk of exposure occurs; and use in a well-ventilated area". 6. Under the heading "Exposure controls/personal protection" the SDS contained symbols of gloves, protective clothing, foot protection and a half-faced respirator. 7. In respect of "Eye and face protection", the SDS recommended use of safety glasses with side shields or chemical goggles. 8. In respect of hand/feet, body and other protection the SDS recommended wearing chemical protective gloves, safety footwear or gumboots (eg rubber), overalls, PVC apron, PVC protective suit if exposure severe.

The Incident

1. On 2 December 2020, Mr Conway and Mr Lloyd were on the Site carrying on the waterproofing works. George and Tony Estephan and Mr Yoo were at the Site.
2. Maurice and Darcy Yap instructed Mr Conway and Mr Lloyd that the internal laundry was ready for waterproofing.
3. George Estephan cleaned out the internal laundry and an adjacent bathroom. George Estephan told the waterproofers that the rooms were ready for waterproofing after they finished an external balcony.
4. There was no natural ventilation in the laundry and the batteries were flat on the Makita blower. Although it was intended that the Makita blower be used as mechanical ventilation, its batteries were charging at the time of the incident.
5. Prior to the incident, the hot air tool was plugged into a powerpack on the ground outside the laundry door. It was set to maximum and was heating up to produce hot air up to approximately 700° celsius.
6. It is an agreed fact that both Mr Conway and Mr Lloyd were wearing shorts, shirts, knee pads, face masks, socks and work boots. Neither worker was wearing appropriate personal protective equipment (PPE), in particular the PPE referred to in the SDS. Although the defendant had provided Mr Lloyd with a respirator, he was not wearing it at the time of the incident. The defendant relied on Mr Conway to supply his own PPE.
7. Mr Conway and Mr Lloyd decanted the adhesive into pails and then entered the laundry. They started by applying the adhesive to the floor and to the membrane sheet using paint rollers and brushes.
8. Mr Estephan and Mr Yoo said that they observed the workers using the heat gun, however this is not consistent with the evidence of the Carbon workers who said that the heat gun was heating outside the laundry room.
9. Approximately 10 minutes after Mr Conway and Mr Lloyd had started work, an explosion occurred and the laundry was set on fire. The adhesive that had been decanted in the pails was projected onto the walls of the laundry and onto Mr Conway and Mr Lloyd. The flames travelled outside the laundry, also igniting a container of solvent.
10. Mr Conway and Mr Lloyd were able to escape the laundry. They ran upstairs to a hose at the front of the house and applied water to their skin. Emergency services attended and treated Mr Conway and Mr Lloyd. They were both subsequently airlifted to the Burns Unit at the Royal North Shore Hospital.

Post-Incident Investigations

1. NSW Fire & Rescue determined that the probable cause of the fire was the ignition of flammable vapours from the adhesive by the use of the hot air tool in a poorly ventilated area.
2. A technical report by SafeWork NSW on the incident concluded: 1. The key risk was the release of large amounts of flammable vapour from the adhesive. 2. The vapour created an explosive atmosphere which could also have been ignited by other sources including static electricity discharge, hot surfaces and electrical arcs. 3. The "hazardous area" would have extended to the entire internal area of the laundry and approximately five metres from the laundry door. 4. The electrical equipment that was located on the ground outside the door was within the hazardous area. 5. The hot air tool, which was operating in the range of between 40° and 700° celsius, was capable of producing "auto-ignition" of the flammable vapours from temperatures above 540° celsius. The "auto-ignition" temperature is the lowest ambient temperature at which the chemical vapours will spontaneously combust without an ignition source.

Relevant Legislation and Guidance Material

1. Clause 51(1) of the WHS Regulation provides that a PCBU must manage risks to health and safety associated with a hazardous atmosphere at the workplace in accordance with Part 3.1. An atmosphere is flammable if the concentration of flammable gas, vapour, mist or fumes exceeds 5% of the Lower Explosive Limit (LEL) for the gas, vapour, mist or fumes: cl 51(2)(c) of the WHS Regulation.
2. The LEL of the adhesive is 1% which means that only small concentrations of the vapour are required to create an explosive atmosphere.
3. Clause 52 of the WHS Regulation provides that a PCBU at a workplace must manage risks to health and safety associated with an ignition source in a hazardous atmosphere at the workplace, in accordance with Part 3.1 of the WHS Regulation.
4. Clause 355 of the WHS Regulation provides that a PCBU at a workplace must, if there is a possibility of fire or explosion in a hazardous area being caused by an ignition source being introduced into the area, ensure that the ignition source is not introduced into the area from outside or within the space.
5. Prior to the incident, the SafeWork NSW Code of Practice Managing Risks of Hazardous Chemicals in the Workplace, July 2014 (Hazardous Chemicals Code) was published and was available to the defendant. The Hazardous Chemicals Code relevantly provided: 1. A PCBU must obtain the SDS for a hazardous chemical from the manufacturer, importer or supplier no later than when the chemical is first supplied at the workplace or as soon as practicable after it is first supplied but before it is used at the workplace: cl 344 of the WHS Regulation. 2. Important hazard information to note from SDSs includes physicochemical properties such as flashpoint, fire point and explosive limits. 3. In many circumstances, a risk assessment will be the best way to determine the measures that should be implemented to control risks. It will help to identify which workers are at risk of exposure, determine what sources and processes are causing the risk, identify what type of control measures should be implemented and check the effectiveness of existing controls. 4. A basic risk assessment consists of reviewing the label and the SDS of the hazardous chemicals and assessing the risks involved in their use; deciding whether the hazardous chemicals in the workplace are already controlled with existing controls, as recommended in the SDS or other reliable sources, or whether further control measures are needed. 5. Physiochemical risks arise mainly from hazardous chemicals where they come into contact with other things such as ignition sources. 6. Fire and explosion can result in catastrophic consequences, causing serious injuries or death or workers, as well as significant damage to property. They occur when the following three primary elements come together (commonly referred to as the fire triangle): 1. a source of fuel (a flammable or combustible substance); 2. a source of oxygen (usually in the air); and 3. an ignition source (a source of energy sufficient to cause ignition). 1. When identifying hazards, PCBUs should have identified the sources of fuel in your workplace that could contribute to fire and explosion risks. Fuels that present the highest risk are those hazardous chemicals that are flammable (for example, flammable solids, liquids or gases, including their vapours and fumes). 2. Ignition sources can be any energy source that has the potential to ignite fuel and can be categorised into three broad types: flames, sparks and heat. 3. PCBUs must identify any ignition source in the workplace that has the potential to ignite a flammable material. 4. Depending on vapour density, some gases can flow across surfaces in a similar way to liquids, rather than dissipating quickly. For example, vapours which have a density greater than air can move along the floor and spread to adjacent work areas where ignition sources may be present, thereby creating a significant risk in those areas. 5. The effects of an explosion can be exacerbated where the fuel and air mixture is contained, for example in a tank, duct or pipework, as well as in larger structures like silos, rooms or buildings. 6. PCBUs must always aim to eliminate the hazard and associated risk at first. If this is not reasonably practicable, the risk must be minimised by using one or more of the following approaches: substitution, isolation and implementation of engineering controls. If a risk remains, it must be minimised by implementing administrative controls, so far as is reasonably practicable. Any remaining risk must be minimised with suitable PPE. 7. Substitution is the replacement of a hazardous chemical with a chemical that is less hazardous and presents lower risks, for example substituting a highly flammable liquid with one that is less flammable. 8. Engineering controls include mechanical devices that eliminate or minimise the generation of chemicals, suppress or contain chemicals, or limit the area of contamination. Examples of engineering controls include use of exhaust ventilation. 9. Administrative controls include written policies and work procedures (for example, safe work method statements). 10. If PPE is to be used at a workplace, the PCBU must ensure that the equipment is: 1. selected to minimise risk to health and safety; 2. suitable for the nature of the work and any hazard associated with the work; and 3. used or worn by the worker, so far as reasonably practicable: cl 44 of the WHS Regulation. 1. PPE includes overalls, aprons, footwear, gloves, chemical resistant glasses, face shields and respirators. 2. Key control measures for managing risks of fire and explosion include: 1. using intrinsically safe equipment; 2. using ventilation to avoid the creation of a hazardous atmosphere; 3. substituting flammable materials for ones that are less flammable or combustible; 4. eliminating ignition sources from hazardous areas (this may include establishing a hot work permit system). 1. The auto-ignition temperature of the hazardous chemical should be considered as some hazardous chemicals may ignite spontaneously above certain temperatures. 2. A hazardous area is a three-dimensional space in which a hazardous atmosphere exists. In relation to hazardous chemicals, a hazardous atmosphere is one in which a flammable substance, such as fuel, is present in combination with air or other sources of oxygen and which would ignite to cause a fire or explosion if an ignition source was introduced. Hazardous areas generally exist around flammable materials, for example those present in tanks, drums or containers. 3. Accumulation of vapours creates the potential for a hazardous area to exist. Vapour emissions can be minimised by providing extraction ventilation for all sources of vapour. 4. Maintenance of control measures may involve regular inspections of control measures and supervision to ensure workers are using the control measure properly. 5. Information, training, instruction, and supervision must be provided not only to workers but to other persons at the workplace such as visitors. Information, training and instruction should include the following: 1. the nature of the hazardous chemicals involved and the risks to the worker; 2. the control measures implemented, how to use and maintain them correctly; 3. the arrangements in place to deal with an emergency; 4. the selection, use, maintenance and storage of any PPE required to control the risks; 5. the labelling of containers of hazardous chemicals, the information that each part of the label provides and why the information is being provided; 6. the availability of SDS for all hazardous chemicals; 7. how to access the SDS and information that each part of the SDS provides; 8. the work practices and procedures to be followed in the use and handling of hazardous chemicals; 9. The extent of emergency procedures required will depend on the size and complexity of the workplace, types and quantities of hazardous chemicals and processes involved when the goods are in use; 10. Emergency equipment and safety equipment must be located so it is readily accessible for all workers if an emergency arises. Examples of emergency equipment that may be required include fire extinguishers and a reliable water supply.

Systems of Work After the Incident

1. After the incident, the defendant made the following changes to its systems of work: 1. Implemented a documented work health and safety management system, including a SWMS template and a toolbox talk form. 2. Developed a SWMS, specifying the following control measures: 1. There were to be no sources of ignition within three metres of a work area; 2. The hot air tool was to be turned off when not in use and hot welding was not to take place for at least 20 minutes following the application of adhesive; 3. For internal works, ducted extraction fans were to be used; 4. Workers were required to use appropriate PPE. 1. Furnished its company vehicles with first aid kits. 2. Arranged for its workforce to be trained and certified in first aid. 3. Implemented a practise of considering SDSs for all new products it used. 4. Purchased new mechanical ventilation equipment. 5. Purchased new PPE.

The Defendant's Duty

1. The defendant had a duty under s 19(1) of the WHS Act to ensure the health and safety of its workers, so far as reasonably practicable. In particular, this included Mr Lloyd and Mr Conway while they were at work in the business or undertaking.
2. The duty requires the identification of risks in the workplace and the adoption of measures to eliminate or minimise them, so far as is reasonably practicable: Kirk v Industrial Court (NSW) 234 CLR 531; [2010] HCA 1 at [34]. The duty is positive, non-delegable and requires duty holders to search for, detect and eliminate, so far as is reasonably practicable, risks to safety.
3. The defendant failed to ensure, that one or more of the following reasonably practicable measures to control the risk presented by the waterproofing works as set out at par 11(a)-(e) of the AS and are as follows: 1. Undertaking a risk assessment. 2. Prohibiting waterproofing work from taking place in internal rooms with hazardous flammable chemicals unless: 1. Mechanical ventilation was used, such as intrinsically safe portable fans; 2. Any possible sources of ignition were removed from the working area, or in close proximity to the working area; and 3. Workers were wearing appropriate PPE, such as the PPE recommended to be used in the SDS for the hazardous chemicals. 1. Prior to the waterproofing work commencing, ensuring that a SWMS was prepared that identified the risks associated with use of the hazardous chemicals and described the measures to be implemented to manage the risks, so far as reasonably practicable: 1. Providing adequate monitoring/supervision of the waterproofing works to ensure workers were complying with a safe system of work and implementing control measures in a SWMS and/or the SDS for the hazards chemicals; and 2. Providing readily accessible first aid and emergency resources on the Site, such as first aid kits, fire extinguishers an access to running water.
4. As a result of the defendant's failure, workers, in particular Mr Lloyd and Mr Conway, were exposed to a risk of death or serious injury. The serious injuries sustained by Mr Lloyd and Mr Conway, which were significant total body area burns requiring debridement and skin grafting operations, were a manifestation of the risk.

Sentencing

1. The penalty to be imposed must be one which will give overall effect to the policy of the WHS Act, in particular, ensuring the safety, health and welfare of workers and others on workplace premises. I have had regard to the principle contained within the WHS Act that workers should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work: s 3 of the WHS Act.
2. The court is to be guided by the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) (Sentencing Act) which include: 1. Section 3A which sets out the purpose of sentencing. 2. Section 21A which sets out the aggravating, mitigating and other factors in sentencing. 3. Section 22 which provides that a guilty plea is to be taken into account on sentence, as is the time when the plea was effectively indicated or entered.
3. The court is to approach a sentencing exercise on the basis of it being one of "instinctive synthesis": Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25.
4. The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 at [109] in this way: "The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgement without any attempt to state precisely how any given factor has influenced the judgement."

Objective Seriousness of the Offence

1. The primary consideration requires a determination of the objective seriousness of the offence. The High Court made this clear in Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [27]: "…The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of offending."
2. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474-475.
3. The duties of the defendant require that they ensure the health and safety of workers as far as reasonably practicable. This duty is not delegable, and the duty requires the identification of risks in the workplace and an assessment of measures to address such risks.
4. The gravity of the offence is determined by the extent of the duty holder's failure to ensure, so far as was reasonably practicable, that its workers were not exposed to risks to their safety: Orbit Drilling Pty Ltd v The Queen (2012) 35 VR 399; [2012] VSCA 82 at [62] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465.
5. The objective degree of foreseeability is a matter for the court to have regard to when considering the gravity of the offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610; [2000] NSWIRComm 71 ("Capral Aluminium") at [81].
6. An offence will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Ltd (No 3) (2005) 147 IR 117; [2005] NSWIRComm 61.
7. Subjective factors should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700; [2000] NSWIRComm 142 at [31].
8. The Court of Criminal Appeal examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 ("Nash v Silver City Drilling"). His Honour Justice Basten, under the heading "Assessment of Risk" said at [34]: "The sentencing judge commenced his consideration with the proposition that '[g]reater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely.' However, the truth of that proposition depends upon other considerations, including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends upon an assessment of all those factors."

Matters are Relevant to Determining the Culpability of the Defendant

1. The following matters are relevant to determining the culpability of the defendant: 1. The risk was obvious and ought to have been known to the defendant. The risks associated with the use of the adhesives were set out on the product label and the SDS. 2. The gravity of the risk was significant. The potential consequences of the risk were serious injury or death. 3. The products used by Carbon included Ardex WA98 Butynol and Weldtech Adhesive (the adhesive). The adhesive is highly flammable in both liquid and vapour form. The key risk associated with the adhesive is the release of large amounts of flammable vapour. Unless the formation of an explosive atmosphere was prevented, ignition sources such as static electrical discharge, hot surfaces and electrical arcs would result in fire and possible explosion (ASOF 47). 4. The product information and the SDS for the adhesive warned that the adhesive must be kept away from heat, sparks, open flames and hot surfaces and that it should only be used outdoors in well-ventilated areas. The SDS also stated that prior to using the product in an unventilated or confined space use of mechanical ventilation should be considered (ASOF 14-15). 5. The SDS further recommended using PPE, including safety glasses with side shields or chemical goggles, protective gloves, protective clothing (including overalls and PVC apron) and safety footwear (ASOF 14). 6. Prior to the incident, the defendant did not conduct a risk assessment, or require Carbon to conduct a risk assessment which identified the risks associated with the waterproofing works, specifically the risks associated with the use of hazardous chemicals to undertake work in internal areas of the Site (ASOF 46-50). 7. The defendant did not obtain from Carbon any risk assessment or SWMS, contrary to its obligations under cl 299 and cl 312 of the WHS Regulation 2017 (ASOF 43). 8. The defendant's pre-incident systems of work were wholly inadequate. The defendant did not comply with its statutory responsibilities as a principal contractor to manage risks on the Site. It entirely relied upon Carbon to manage the risks associated with the waterproofing work in the circumstances where it had taken no steps to verify Carbon had a safe system of work. There was no documented Work Health and Safety Management Plan (WHS Management Plan) setting out how risks were to be managed or an emergency plan. There was no hazardous chemicals register. The defendant did not obtain a copy of Carbon's SWMS before the high-risk construction work commenced. Carbon commenced the waterproofing work at the Site over three months prior to the incident (ASOF 9). The work at the Site was monitored by Mr Sleiman without reference to any SWMSs (ASOF 42-45). 9. There were simple, straightforward, and available steps which could have been taken to avoid the risk. Even a basic risk assessment could have been undertaken which consisted of a review of the product label and SDS, and identifying the control measures required to manage the risk (ASF 49). Had a basic risk assessment been undertaken, or the defendant required Carbon to undertake one, it would have been readily apparent what was required to manage the risk in terms of appropriate work procedures, adequate PPE and having readily accessible emergency equipment. 10. There was a significant inadequacy in the way for first aid to be provided to workers. Mr Conway and Mr Lloyd had to run upstairs after the explosion where other workers gave them bottles of water to pour on themselves. The simple step of having a fire extinguisher available would have minimised the risk. 11. The injuries sustained by Mr Conway and Mr Lloyd were significant and permanent. Both workers suffered extensive burn injuries; Mr Conway 58% TBSA and Mr Lloyd between 30% and 39% TBSA. Both workers spent considerable stints in hospital post-incident. The burns required debridement, which would have been dreadfully painful, and skin grafting operations. As at 5 March 2021, Mr Conway had not returned to work, and as at 2 February 2021 Mr Lloyd was certified as having no capacity to work due to his severe burn injuries. 12. I find that Mr Lloyd was vulnerable by reason of his youth and inexperience, coupled with the inadequate nature of the information and training provided to him by the defendant. 13. Incidents involving explosions caused by flammable vapours being ignited by sparks or sources of heat sadly are common in this court. Many prosecutions arise from incidents which have resulted in workers suffering serious burns which have long term effects. See: SafeWork NSW v Plasser Australia Pty Ltd [2021] NSWDC 441; SafeWork NSW v JPS Car Wash Management Pty Ltd; SafeWork NSW v SRS Star Management Pty Ltd; SafeWork NSW v Sarjeet Sidhu [2021] NSWDC 148; SafeWork NSW v MMP Industrial Pty Ltd [2019] NSWDC 854; SafeWork NSW v CRS NSW Pty Ltd; SafeWork NSW v Jay McGeachie Jenkins [2017] NSWDC 312; SafeWork NSW v JA Investment Group Pty Ltd [2021] NSWDC 569.

Deterrence

1. In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act.
2. General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J).
3. When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68.
4. The Court of Criminal Appeal in Bulga Underground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37 ("Bulga") at [177]-[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a Court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]-[75] which said: "[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. … [75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable."
5. General deterrence must be a significant feature of the sentence imposed upon the defendant. It can be appropriately used to direct the industry's attention to the consequences of inattention and the need for greater concentration on the potential risks of death or serious injury associated with working in the water proofing industry, and the building industry generally.

Victim Impact Statement

1. The Victim Impact Statement provided by Mr Conway paints a picture that is heartbreaking and dismal. The injuries that he suffered were significant. I can take judicial notice of the suffering that people with severe burns go through as a part of their treatment. It is agonising, and something that Mr Conway suffered for a lengthy period of time.
2. Subsequently, after his discharge from hospital, his life has not improved. He suffers daily. He barely sleeps, and when he does, he suffers nightmares. He struggles to get out of bed in the morning.
3. Prior to the incident, he was a very active and happy person. That has all been destroyed. He enjoyed good health and fitness prior to the incident, and now cannot even go to the gym and is putting on weight.
4. He is incredibly sensitive to sunlight and heat. He has lost so many of the activities that he used to enjoy, for fear of not finding shade or being too hot when camping for example.
5. He is devastated by how he looks and cannot bear that people stare at him or cover their eyes when observing his disfigurement. His damaged skin is extremely dry, requiring moisturiser regularly, which does not completely alleviate his discomfort. He is no longer able to sweat which causes him to overheat and feel dreadful. As a consequence, he has to drink a lot of water to address his fluid loss that emanates from other parts of his body.
6. He has lost a lot of the function in his left hand, and attempting to use it causes pain and exhaustion. His suffering is immense, such that I could not fully comprehend what he is going through. Physical pain, embarrassment due to scarring and depression must make every day exhausting and incredibly difficult.
7. I thank Mr Conway for preparing his statements, which must in themselves have been an incredibly difficult task. I hope that as each day passes, his suffering diminishes, and that he sees some hope on the horizon.

Aggravating Factors

1. The injury, emotional harm, loss or damage caused by the offence was substantial: s 21A(2)(g) of the Sentencing Act. The defendant's offending conduct exposed persons to a grave risk of death, which is conceded by the defendant: s 21A(2)(ib) of the Sentencing Act. It seems to me that it was rather a matter of good fortune as opposed to good management that Mr Conway and Mr Lloyd survived the incident.
2. In order for this aggravating factor to be established, I must be satisfied beyond reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26] (Hidden J, McColl JA and Levine J agreeing). I am so satisfied.

Mitigating Factors

1. In Haynes v CI & D Manufacturing Pty Limited (No 2); Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 at 456-457 the Full Bench held the following: "We think that having regard to the specific nature of the legislation, the past record upon which the both the prosecution and the defendants should rely must be intimately bound to the nature of the offences which the Court is considering, namely industrial safety, health and welfare. We add one comment on the question of the previous record, and that is that the Court should attempt to ensure the accuracy of the record and have objective regard to it in relation to the industrial enterprise and the extent of its operations. We consider that the extent of the operations of the defendant enterprises is to be taken into consideration when coming to conclusions having regard to the past record. Human experience indicates that the larger the number of industrial transactions a company is involved in the larger the number of industrial accidents which occur as a matter of statistical expectation. The safety record of very large company with some prior convictions may, on analysis, be better than that of a small company with fewer such convictions. However, we again emphasise that in the context of the OHS Act the record is only one of the factors to be taken into account in assessing penalty and the essential inquiry must remain the circumstances of the breach in question."
2. The defendant has not been subject to any prior convictions under work health and safety law: s 21A(3)(e) of the Sentencing Act.
3. I accept the defendant is unlikely to reoffend: s 21A(3)(g) of the Sentencing Act.
4. I accept that the defendant has good prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act.
5. I accept that the defendant has demonstrated its remorse by providing evidence that it has accepted responsibility for the offence and has acknowledged the injury, loss and damage caused by the offence: s 21A(3)(i) of the Sentencing Act. The remorse of Mr Ibrahim is expressed at par 40 of his affidavit, which I accept as genuine and an acceptance of the defendant's failures.
6. Having regard to the reference provided on the defendant's behalf from LEAD Builder Pty Ltd, I accept that the defendant is of good character: s 21A(f) of the Sentencing Act

Parity

1. The Prosecutor submits that the culpability of the defendant should be assessed as being equal to or marginally less than that of Carbon, as the defendant had control of the works, and had they performed appropriate checks and a risk assessment, the risk to the workers could have been minimised. Moreover, it was the defendant that actually cleaned out the laundry and told Mr Conway and Mr Lloyd to go into the area to complete the waterproofing.
2. The defendant submits that there is a parity consideration as between it and Carbon, which I sentenced in August 2023: SafeWork NSW v Carbon BMC Pty Ltd [2023] NSWDC 349.
3. The defendant draws my attention to Jimmy v The Queen (2010) 77 NSWLR 540; [2010] NSWCCA 60 at [139] Campbell J said: "An essential characteristic of the parity principle is that it permits comparison of two individual sentences and alteration of one sentence as a direct result of the comparison with the other sentence."
4. I accept that in applying the parity principle, I should first determine the appropriate sentence having regard to the objective criminality and the other relevant factors and then consider whether the sentence needs further adjustment because of the parity principle: Director of Public Prosecutions (Cth) v Gregory (2011) 34 VR 1; [2011] VSCA 145. I further accept that I should not use a co-offender's sentence as a starting point and then increase or decrease the sentence by reference to other factors and I have not done so.
5. The defendant asserts that it is less culpable than Carbon for the following reasons: 1. It engaged Carbon as an expert in the waterproofing work because it had no relevant experience or knowledge. 2. As a licensed water proofer, Carbon was trained and knowledgeable about the risks involved in waterproofing, and particularly the need for the risk controls particularised in the AS at particulars (a) and (b). 3. In relation to particulars (c) and (d) in the AS, as the employer of the workers, Carbon was principally responsible for establishing the methods of work and providing supervision to ensure that the work was performed safely. 4. It was the directors of Carbon who instructed the workers to commence the work inside the laundry. 5. The extent of the duty breaches by Carbon as particularised in the judgement referred to above. 6. Bearing all of these issues in mind, I am of the view that the culpability of the defendant and Carbon were not equal. The defendant engaged Carbon on the basis that they were an expert in waterproofing work, on the basis that the defendant had no such knowledge or experience. 7. Carbon instructed the relevant workers to commence the work in an internal area.

Capacity to Pay

1. Section 6 of the Fines Act 1996 (NSW) provides as follows: 6 Consideration of an accused's means to pay In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) Such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) Such other matters as, in the opinion of the court, are relevant to the fixing of that amount.
2. The onus is on the offender to satisfy the court on the balance of probabilities as to the truth of such evidence and its relevance to the fixing of penalty: McColl v John Watson Building Services Pty Ltd (2004) 137 IR 310; [2004] NSWIRComm 353 at [24].
3. The offender's capacity to pay is relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16] (Rothman J, Hoeben CJ at CL agreeing).
4. In Inspector Beacham v J & L Marble Pty Ltd [2009] NSWIRComm 100, Staff J said at [57]-[58]: "The principles to be applied in respect of an application under s 6 of the Fines Act were discussed by Walton J, Vice-President in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 are as follows: '[83] The financial means of the defendant was a matter that was submitted in mitigation of penalty. In this regard I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50): "It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 94 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201." [84] This approach was subsequently adopted in Manpac Industries where the Full Bench of this Court stated (at pars 81-82): "... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76)." However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209 - 210, Wright J, President observed: "... 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 the Court not imposing a heavy penalty …" When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence ... [85] I would reiterate what the Court stated in WorkCover Authority (NSW) (Inspector Ankucic) v Lyndhurst Trading Co Pty Ltd (2000) 95 IR 462 at 476: "Where the means of the defendant to pay any fine is raised, the proper course will be to assess the appropriate amount of the fine having regard to the gravity of the offence charged and then reduce the fine to take into account the defendant's means and impecuniosity: see R v Rahme (1989) 43 A Crim R 81 at 86."'"

Costs

1. The issuing of costs against a defendant in both criminal and civil proceedings is not punitive, but rather compensatory to the prosecution: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543 (Mason CJ).
2. The court is entitled to take into account the fact that the defendant will be liable to pay the prosecutor's costs when considering any monetary penalty to be imposed on the defendants, particularly in circumstances where there is evidence of a limited capacity to pay a fine, and I have done so. Costs payable to the prosecutor are the "normal" rule as the prosecutor has been successful, although there can be exceptions: see for example, Bulga.
3. The court can also have regard to the defendant's own costs that it will have to bear as a consequence of a breach of the WHS Act, and I have done so: Environmental Protection Authority v Barnes [2006] NSWCCA 246 at [78].

Penalty

1. I make the following orders: 1. The defendant is convicted. 2. The appropriate fine for the offence is $400,000 and that will be reduced by 25% to reflect the plea of guilty, leaving a fine of $300,000. 3. In exercising my discretion under s 6 of the Fines Act 1996 (NSW), that fine will be reduced by one third. 4. Accordingly, I order the defendant to pay a fine of $200,000. 5. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. 6. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor's costs, as agreed or assessed.

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