WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited

Industrial Relations Commission (NSW)|2004-10-03|Before: Schmidt J

Industrial Relations Commission of New South Wales in Court Session

CITATION: WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited [2005] NSWIRComm 188

PROSECUTOR: WorkCover Authority of New South Wales (Inspector Kathleen Maltby)

FILE NUMBER(S): IRC 5427, 5429 and 5430 of 1999

Occupational Health and Safety - prosecutions under section 15 and 16 of the Occupational Health and Safety Act 1983 - question of penalty and costs - serious offences - totality and accumulation - separate penalties imposed - costs discounted to reflect failures in prosecution case - costs of summons to produce documents considered - prosecutor to bear costs of summons

CATCHWORDS: Practice and Procedure - notice of motion to set aside summons for production - documents sought in extraordinarily wide terms - production of documents required unnecessary - inadequate conduct money - agreement reached between the parties - costs of motion and unnecessary production of documents may not be justly borne by defendant

Crimes (Sentencing Procedure) Act 1999 Industrial Relations (General) Regulation 2001 LEGISLATION CITED: Occupational Health and Safety Act 1983

Abigroup Contractors Pty Ltd v WorkCover Authority of New South Wales (2004) 135 IR 317 Arhill Pty Ltd v General Terminal Co Pty Ltd (1990) 23 NSWLR 545 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 99 IR 29 DPP v Esso Australia Pty Limited (2001) 107 IR 285 O'Sullivan v Crown in Right of the State of New South Wales (Dept of Education and Training) (2003) 128 IR 158 Pearce v The Queen (1998) 194 CLR 610 Morrison v Powercoal Pty Ltd (No.3) [2005] NSWIRComm 61 CASES CITED: Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96 WorkCover Authority of New South Wales (Inspector Maltby) v Abigroup Contractors Pty Ltd (2003) 128 IR 204 WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited [2003] NSWIRComm 28 WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited [2003] NSWIRComm 370 WorkCover Authority (NSW) (Inspector Mansell) v Josef (2004) 137 IR 241 WorkCover Authority of NSW (Inspector Mansell) v Robert Josef [2003] NSWIRComm 421

HEARING DATES: 03/10/2004; 04/22/2005; 04/26/2005

PROSECUTOR: Mr MJ Joseph SC with Mr PM Skinner of counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES:

DEFENDANT: Mr JE Maconachie QC with Mr GM Watson SC SOLICITORS: Bartier Perry

1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v AGL GAS NETWORKS LIMITED Prosecution under section 16(1) of the Occupational Health and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v AGL GAS NETWORKS LIMITED Prosecution under section 15(1) of the Occupational Health and Safety Act 1983

WORKCOVER AUTHORITY OF NSW (INSPECTOR MALTBY) v AGL GAS NETWORKS LIMITED Prosecution under section 16(1) of the Occupational Health and Safety Act 1983

1 Judgment was given in these matters on 14 November 2003 (WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited [2003] NSWIRComm 370). Two of the charges were found proven and one dismissed. This judgment deals with the question of penalty and costs. 2 The hearing of this aspect of the case went forward on 10 March 2004 but was adjourned, because of appeal proceedings in related matters. Judgment was given by the Full Court in Abigroup Contractors Pty Ltd v WorkCover Authority of New South Wales (2004) 135 IR 317 ('the Abigroup appeal') and the parties then advanced written submissions, which were further heard on 26 April 2005. Judgment in another related appeal was given in WorkCover Authority (NSW) (Inspector Mansell) v Josef (2004) 137 IR 241. 3 The defendant called evidence from Mr Kenneth McCall, Health Safety and Environment Manager and Mr John Ferguson, Client Program Manager. 4 The case advanced by the prosecutor was that the maximum penalty for each offence was $500,000. This was because s51A of the Occupational Health and Safety Act 1983 ('the Act') was inserted into the legislation after the offences here in question. The section consequently has no application in this case. In written submissions the fact that there was one prior conviction of AGL Sydney Ltd, was argued to be relevant to the penalty to be imposed. 5 It was argued that the offences, here in question, involved gravity of a high level, given the possible, as well as actual consequences of the second gas explosion on 4 December 1995. (See Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 99 IR 29 at [94].) The emergency with which the defendant was here confronted was submitted to be quite foreseeable, as were the risks which would face those attending or in the vicinity of the gas explosion. The element of foreseeability was such that 'a higher nominal starting penalty is justified.' 6 The Court was urged to adopt a similar approach to that of Kavanagh J and Curtis AJ, who imposed penalties having regard to a figure 80% of the maximum available. (See WorkCover Authority of New South Wales (Inspector Maltby) v Abigroup Contractors Pty Ltd (2003) 128 IR 204 and WorkCover Authority of NSW (Inspector Mansell) v Robert Josef [2003] NSWIRComm 421.) It was also submitted to be relevant that the Full Court in the Abigroup appeal accepted that Kavanagh J was correct in her assessment. 7 The circumstances were argued to be such that both general and specific deterrence must be taken into account. The defendant's undertaking was one where proper planning for emergencies was crucial. Given that the defendant continued to operate as the major supplier of gas in Australia, there was a need for specific deterrence in this case. 8 As to the principle of parity, it was relevant that a penalty of $400,000 was imposed by Kavanagh J on Abigroup Contractors Pty Ltd. The elements of the respective charges in question were different, but her Honour's conclusions as to the objective seriousness of the offence were argued to be relevant to penalty in this case. 9 As to accumulation of sentences, reference was made to Pearce v The Queen (1998) 194 CLR 610. It was also submitted that consistently with the approach of the Full Court in the Abigroup appeal, an appropriate sentence for each offence must be fixed, before considerations of accumulation, concurrence and totality are considered. It was submitted that these offences did not constitute the one criminal episode or enterprise, they were distinct offences each with a prescribed maximum penalty. It was accepted that in the Abigroup appeal and in Morrison v Powercoal Pty Ltd (No.3) [2005] NSWIRComm 61 at [126], the Full Court reaffirmed the need for the application the principle of totality, to properly take account of the full effect of accumulation in related penalties. It was relevant that in Abigroup and Robert Josef, the final discount for totality was 25%. That discount was urged in this case. 10 It was finally submitted that: In conclusion under this head it is submitted that the applicable principles, as referred to above, compel a substantial degree of a accumulation of the penalties to be imposed for each individual offence, and that the objective seriousness of the offences, the need for substantial deterrence both general and particular, the appropriateness of denial of leniency because of the defendant's prior criminal record and its conduct of its defence, all call for a substantial total penalty to be imposed.

11 The case for AGL was that the prosecution's submissions proceeded on a fundamentally incorrect premise. Reliance was placed upon penalties imposed in Robert Josef and Abigroup. Those defendants were convicted in relation to matters of which AGL had been acquitted, most notably in relation to responsibility for the actual consequences of the two explosions on 4 December 1995. WorkCover was called upon to withdraw the submissions so made. It did not do so. 12 The two charges of which AGL had been convicted, brought under s15 and s16, were submitted to involve identical particulars and to have been based upon identical evidence. It was also argued that a comparison of what AGL and the Abigroup and the Josef parties had been convicted of, showed that the acts of AGL stood at the lower end of criminality. 13 It was also relevant to penalty that AGL had been convicted of charges involving risk of injury, not having caused actual injury. There was no finding that it had caused either explosion on 4 December. It was submitted that the key findings in the 2003 judgment, which were accepted as being serious and which must result in a penalty were: (a) that AGL had a responsibility to provide information on the location of its gas pipes and valves and that if this was not readily available, to supply it promptly at a site where it was needed;

(b) that the means employed to communicate information, especially by radio and telephone contact, were manifestly inadequate - demonstrated by the events at Kogarah;

(c) that it was no excuse that the circumstances which occurred at Kogarah constituted an emergency; rather it was incumbent upon AGL to have a system in place in the event of emergency;

(d) that as a result of failing to provide accurate information relating to the location of gas pipes and valves, gas was able to continue to burn and as a result AGL employees and other persons present on the site were exposed to risks of injury.

14 It was submitted that also to be taken into account in fixing penalty was that the breaches had come about from events which were unintentional, from AGL's point of view and had come about because of the criminal intervention of the Abigroup and Josef parties. AGL accepted that this was no excuse, but argued that this distinguished their criminality from its own. Here, there was no evidence of callous indifference to worker's rights, or because short cuts on safety were taken in order to save costs. 15 The evidence showed that AGL went to significant lengths and expense to ensure safety and that it was a matter of primary importance to AGL. Account would also be taken of steps implemented after the Kogarah gas explosion, to ensure that an event of this kind could not occur again. 16 The evidence of the confusion and chaos at Kogarah after the first explosion was also submitted to go to reduce AGL's criminality. AGL accepted that it should not have allowed Mr Bigrigg to attend the scene without maps, but account would be taken of the evidence that Mr Bigrigg was an experienced team leader, who knew where the maps were kept and candidly admitted making a mistake in failing to take them with him. It was not AGL's desire to criticise him, however. It was accepted that he had discharged his duties with bravery and distinction and it was accepted that AGL should have had a system in place, which ensured that he would not have left without the maps. 17 Account would also be taken that AGL's efforts were hampered at the site by the conduct of Josef & Sons, whose workers misled Mr Bigrigg. 18 It was further submitted that to punish AGL separately for the two offences would be to punish it twice for the same offence. The circumstances were submitted to be similar to those before the High Court in Pearce. Consideration

19 In Pearce it was held at [40]: To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts. 20 The question is whether there is in this statute, a contrary legislative intent. The answer to that question must be a positive one, given the Full Court's decisions in Abigroup and Powercoal, which are binding. 21 This means that separate penalties for the two offences must be imposed and questions of accumulation and totality then considered. I will return to these questions later. 22 Consistently with the provisions of the Crimes (Sentencing Procedure) Act 1999, the starting point for a determination of the appropriate penalty for these offences is their nature and seriousness. The two charges were relevantly identical. The s15 charge provided: Matter Number IRC 5429 of 1999

Did fail to ensure the health, safety and welfare at work of all its employees and in particular, Charles Bigrigg, Liugino Galasso, Damian Paul Lindsay, Roy Alvero, Gary Charlewood, Les Emerson and Nuno de Sousa contrary to section 15(1) of the Occupational Health & Safety Act, 1983 in that it failed to:

(i) maintain availability of sufficient information to enable persons to identify where the gas supply lines were situated in Kogarah CBD; (ii) provide and maintain adequate and up to date records of the location of: (a) gas supply lines; (b) main supply lines; (c) gas valves; (iii) provide or maintain a system for the efficient isolation of gas flows; (iv) install valves which when operated efficiently isolated gas flows.

On or prior to 10 November 1995 the Defendant was requested to cut off the gas supply to Shops 3 and 7 Railway Parade, on the eastern side of the KSU.

On or about 10 November 1995 pursuant to a request, John Princi an employee of the Defendant, attended the KSU and inspected Shops 3 and 7 Railway Parade, Kogarah.

Shops 3, 5, 7 and 9 Railway Parade, Kogarah (the Building ) was to be demolished as part of the KSU.

On or about 10 November 1995 John Princi disconnected the gas supply by cutting and capping the charged gas supply line, leading to Shop 7 Railway Parade, Kogarah.

The gas supply line was capped but remained charged.

On 4 December 1995 the integrity of the charged gas supply line was broken when the line became detached at an elbow joint adjacent to the Family Amusement Zone (FAZ), located at 13 Railway Parade, Kogarah.

The detachment of the gas line from the elbow joint allowed gas which was under pressure to escape.

At approximately 2.00 pm on 4 December 1995 the Defendant was advised of a gas leak at Railway Parade, Kogarah and thereafter despatched a crew.

At approximately 2.00 p.m. on 4 December 1995 there was a gas explosion in the vicinity of FAZ.

At approximately 2.00 p.m. on 4 December 1995 the Defendant was notified of the gas explosion.

Shortly after the first explosion on 4 December 1995 AGL employees attended Railway Parade, Kogarah.

At approximately 4.00 p.m. on 4 December 1995 a second gas explosion occurred in the vicinity of FAZ.

The valves which could be operated so as to isolate the gas flow to the area were not located expeditiously.

After valves were located the gas flow was not isolated by the operation of the valves prior to 4.00 pm.

The Defendant's employees had to dig exploratory holes before locating the gas supply line that could be crimped to prevent the flow of gas into the atmosphere.

At approximately 4.15 pm the gas flow to the area was stopped.

The gas flow was stopped by crimping the gas supply line on the eastern side of Railway Parade, cutting the line and capping the end.

The gas explosion was of sufficient extent and severity that persons were injured thereby. 23 At [175] of the 2003 judgment, I observed that: The prosecution made no suggestion that the fact that the defendant's response to the advice of the gas leak at Kogarah, was not able to prevent the explosion at 2pm on 4 December 1995, gave rise to any offence under the Act. It was also anxious to praise the heroic response of the defendant's employees, to the emergency with which they were confronted.

24 While at [176] of the 2003 judgment, I concluded that the offence charged had been made out, at [177] I concluded: While two of the particulars of the charge suggested that it was the defendant's delay in stopping the flow of gas to the area which caused the second explosion, I am satisfied that this was not made out on the evidence. There was no evidence from which it could be determined whether it was gas which had escaped after the defendant had been notified of the gas leak, or had reached the scene, rather than gas which had escaped beforehand, which was involved in this explosion. Indeed, given the evidence of a first explosion and that thereafter, escaping gas was burning throughout the afternoon, it seems likely that it was not gas which was escaping after the first explosion, which led to the second explosion. It is, however, impossible to come to any concluded views on this. 25 At [193] I held: I am well satisfied, on the evidence, that while not each of the particulars of this charge were established on the evidence, the charge was made out. The defendant's system did not ensure the efficient isolation of gas flow when the need arose on 4 December. Both Mr Galasso and Mr Bigrigg decided very early on in their endeavours to deal with this situation, that locating the valves was necessary. The difficulty and delay in finding the valves necessitated other difficult and dangerous work to be pursed in digging a variety of holes in the roadway, in the vicinity of burning gas, in order to locate the service line. Had the maps been on site from the outset, or the necessary information provided promptly in the absence of the maps, much of this work would have been unnecessary. As it transpired, both the crimping of the service line and the valves being turned off occurred simultaneously, about two hours after AGL was first alerted to the problem and one and a half hours after the first of its employees arrived at Kogarah.

26 At [194] - [195], I found the s16 charge proven, for similar reasons to those reached in relation to the s15 charge. 27 The penalty imposed must be approached with these conclusions in mind. It follows that the prosecutor's submission that the gravity of these offences was at a high level, because of the actual consequences of the second gas explosion, must be rejected. Whether the second explosion would have been avoided, had the gas been turned off earlier than it was, simply cannot be known on the evidence. 28 That does not mean that the offences here in question were not serious, or that the risks which so obviously flow from gas escaping under pressure from a breached gas pipe, may be ignored when penalty is here imposed. Whether the second explosion would have been prevented, if the gas had been earlier turned off, was not established. Nevertheless, the risk of explosion and fire, if gas flowing under pressure to a breached pipe is not cut off promptly, are entirely obvious and may not be ignored, when the risk to safety here in question, is considered in fixing penalty. 29 I am satisfied that the risks to safety here in question were foreseeable, a matter relevant to an assessment of culpability. The risks included the risk of death and serious injury. The offences were thus plainly serious, a matter which must be reflected in the penalty imposed. 30 These conclusions flow from the evidence which showed that as a part of its undertaking, the defendant was obliged to send its employees to deal with a most dangerous emergency situation at Kogarah, where its employees and others were exposed to grave risk of injury, because gas was there escaping under pressure from a broken gas pipe. There had been an explosion and the gas was burning, despite ongoing efforts by firefighters to dowse the flames. While the defendant was not responsible for the pipe being breached, the evidenced showed that such emergency work was a part of the defendant's undertaking. It had trained its employees in such work and had equipped them to perform such work. As was entirely foreseeable in circumstances such as this, other emergency services, such as police and fire, also had to send their employees to work in the vicinity, located in a shopping centre, where members of the public were present when the pipe was breached and before they were removed by emergency personnel. Given the failures identified on the evidence, the offences here in question were of a most serious kind. 31 The evidence showed that what the defendant failed to do on 4 December 1995, was to arm its employees with necessary and available information, so that the leaking gas could be quickly and safely turned off. That failure meant that its employees had to undertake difficult and dangerous work, while a fire fuelled by escaping gas burnt. Much of the work undertaken would have been entirely unnecessary, if the flow of gas had been stopped by use of the available valves. Non-employees were involved in dealing with that situation. The evidence did show a situation of confusion and chaos at Kogarah. The defendant's employees were obliged to perform their work in that environment. So were others. That was entirely predictable, given the nature of the defendants' undertaking. The defendant's failures resulted in its employees and others being unnecessarily exposed to risk of injury, because the defendant failed to promptly stop the gas escaping under pressure. 32 The failure to provide the relevant maps or information to those working on site, when it was needed that day, even when it was realised that Mr Bigrigg had departed Alexandria without those maps, exacerbated the seriousness of the offence. The service crew which first arrived on the scene carried no maps. Mr Bigrigg departed Alexandria at about 2pm, after the first explosion. He arrived on site where other of the defendant's employees were already working, realising that he had left the maps behind. They were despatched, but the information which would have enabled the gas to be turned off, which was always to hand in Alexandria, was not conveyed before Mr Bigrigg arrived, or even afterwards to Mr Bigrigg, in a manner which safety required. This led to the conclusion at [193] of the 2003 judgment, earlier set out. 33 It follows, as I have noted, that these must be regarded as serious offences, gravely putting at risk the safety of AGL's employees and others, which must be reflected in the penalty imposed. In fixing penalty, I am also satisfied that regard must be paid to both specific and general deterrence, an approach which the defendant accepted, although it was argued that it was important to differentiate between different levels of blameworthiness, in a situation such as this, otherwise there would be no incentive on the part of those who are sought to be influenced by penalties, to do anything. There must be proportionality in sentencing. 34 It is convenient at this point to note that I reject the submission that the defendant's conduct of its defence of the charges called for a substantial penalty to be imposed. This is because the defendant was acquitted of one charge and because I was also unable to conclude, on the evidence, that all of the particulars of the other charges had been made out, including importantly, that the second explosion resulted from the defendant's delay in turning off the gas. 35 There was in issue the question of whether remorse and contrition might be mitigating factors in this case. The prosecutor relied upon the observations of Cummins J in DPP v Esso Australia Pty Limited (2001) 107 IR 285 at [48]: Normally in sentencing, a failure to accept responsibility sounds in the matter of specific deterrence. This is not so here, because Esso has demonstrated by its subsequent operational reforms that it has acted responsibly to remedy past deficiency. But its lack of acceptance of responsibility has a relevance in my not accepting that Esso's expression of remorse is practical and operational. Esso's failure still to accept responsibility for these tragic events is a serious deficiency. 36 In Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96, the Full Court recently observed at [59] to [60]: 59 We agree with the view expressed in Esso that contrition and remorse are best evidenced by an acceptance of responsibility. In that sense, Mr Hayes was not in a position to accept responsibility on behalf of the respondent for the offences. He left the company in 2002. As he said: A. I can only express a regret for the incident that occurred and my involvement up to the end of that with the company, but my understanding is that the company does have deep regret about that incident, but I think that's as much as I can say.

Q. And I take from the answer that you have given me that you are not in a position to express contrition in relation to those particulars or failings on behalf of the defendant company?

60 Given the evidence we have, there is no statement we can point to that evidences a full and practical acceptance of responsibility for the workplace circumstances relating to the incident. We accept, however, that the respondent has at all times expressed immense regret for the circumstances leading to the death of Mr Carroll and the injuries to Mr Dickson. 37 In this case, on the evidence led by the defendant, I am of the view that despite what was revealed in these proceedings, as to the defendant's approach to its safety obligations under the Act, there was still no complete appreciation of the nature of its failures in this case. I will return to this below, in the context of deterrence. 38 I turn then to the evidence led by the defendant at the sentencing hearing. I accept that this evidence established that this was not a defendant which simply ignored its obligations under the Act. It had, in the past, paid attention to its obligations and continued to do so after 1995. For instance, the Dial Before You Dig programme had been in operation before 1995. This programme had been improved after the accident. It also had specific emergency response procedures in place, which have been constantly improved since then, including in response to the terrorist attacks in America in 2001. It had a training system in operation and had a programme for obtaining the necessary safety equipment for use in the field, especially when dealing with gas leaks and explosions. 39 The defendant had also been proactive in introducing various safety innovations, including the establishment of the Sydney One Call system, which permits members of the public to obtain access to information about the location of various utilities in an area, including those of the defendant. In 1995 it introduced the Life Guard Programme, which is the subject of ongoing development, designed to inculcate safety in the minds of all of its employees. A system of safety audits is also conducted. In recent years a reduction in workplace injuries has been achieved. As a result, the defendant has won various safety awards. 40 Given the nature of its undertaking, I also accept that the defendant's record was an excellent one. These are matters proper to be taken into account in determining penalty. 41 This evidence does not, however, detract from the conclusion which I have reached as to the nature and seriousness of these offences. The evidence which the defendant led, also put the failures here in question into a context which may not be ignored, when sentence is considered. The need for a system of valves which enable places such as shopping centres to be isolated from the gas supply system in cases of gas pipe breach, was identified by the defendant in 1993, after a ruptured pipe in Leichhardt had resulted in a fire at a shopping centre. 42 Indeed, even earlier, in the 1970s and 1980s, when the natural gas system was established by the defendant, an extensive system of sector valves was created. It was even then thought that a system of isolation valves for shopping centres should be introduced, as a safety measure. 43 The introduction of that system was a major project, spanning years and costing millions of dollars. By 1995, when these offences occurred, the isolation valve system was functioning in Kogarah. It had been mapped and the maps were readily available from where they were centrally held. 44 Consideration had also been given by the defendant to hard copies of such shopping centre valve maps being carried in the defendant's service vehicles in valve books, so that service crews would always have access to them in the field. A decision had been made as early as 1993, that rather than provide those maps to service crews as they became available, they would not be provided until all the mapping had been completed. This did not occur until 1997, notwithstanding what had occurred in 1995 at Kogarah. 45 The evidence was that in 1995 the defendant gave consideration to what had occurred at Kogarah, but that did not involve its Occupational Health and Safety department directly. Mr McCall, the defendant's Health and Safety Manager, was not involved in the review conducted. His view at the time was that the defendant's employees were not at risk or were unsafe. He had not read the 2003 judgment in which the charges here being considered for sentencing were found to have been made out. The review conducted by the defendant in 1995, in which Mr Ferguson was involved, did not lead to the defendant's approach to the provision of valve maps to service crews being altered. They were not provided to service crews until 1997. 46 This evidence revealed the context and consequences of the offences here proven. The defendant did not, at the relevant time, identify, or rectify, its failure to ensure safety in December 1995. The decision taken before these events, not to ensure that available valve maps were carried by service crews, was an obvious error. While I accept that this was not a matter of deliberate risk taking, I am also entirely satisfied that the obvious risk to safety which arose from this decision is not a question of hindsight. Indeed, it was a step considered, but not implemented, prior to 1995. Nor did the defendant's breach of its statutory obligations in 1995, lead it to review that decision. It follows that it must be concluded that readily available steps, which would have helped rectify the risks to safety which these events had revealed, were not taken, when they could have been, despite what had occurred and the investigation which the defendant then conducted. 47 Valve books were not provided to crew vehicles until 1997. While not in evidence, Mr Ferguson described them as a folder containing the maps relevant to the area. They are not static documents. As new maps are created, they are added to the books, or replace older maps. It follows that in 1995 there was nothing, other than a management decision to take a different course, which prevented the defendant from then ensuring that the service crews carried the valve maps then available, including that for Kogarah. 48 Had the crew which first arrived at the site had that information with them, the gas flowing to the breached pipe would undoubtedly have been earlier stopped than it was, without the necessity for the dangerous work which that crew had to perform in the absence of that information. Because Mr Bigrigg failed to bring the maps to the site and because the defendant failed to ensure that the necessary information on the maps was otherwise conveyed promptly to those working to find the leaking gas pipe, that work had to be undertaken, in circumstances of considerable risk to safety. As Mr Ferguson made clear in his evidence, the valve books which service crews now carry, is their first point of reference, because the maps in the book contain all of the details which the crews require when responding to a gas leak in a shopping centre. Indeed, in even more recent times, the defendant has introduced a system of laptop access to those maps. 49 This evidence put beyond doubt that the risks here in question, were not only foreseeable, but foreseen, yet the defendant still failed to ensure that they were properly dealt with, through means readily available to it. This evidence precludes acceptance of the submission that these offences involved oversight or error in a safe system, which should result in the conclusion that these offences are "at the very lower order of matters that come before this Court." I am also satisfied that these matters are relevant to the question of specific deterrence, as an element of the penalty here to be imposed, given the defendant's continued pursuit of this undertaking. As earlier noted, I have also taken general deterrence into account in fixing penalty in this case. 50 The defendant also argued that account should be taken of the fact that the prosecutor had not informed the defendant at the time that other service providers, here interstate or overseas, adopted a different approach. The defendant had itself taken steps to identify world's best practice, in relation to the operation of its system. I cannot accept these submissions, given the obligations imposed by the Act and the nature of the offence here proven. 51 In one sense, it might be said that the Act has, since its inception, required those to whom it applies to lead, rather than to follow, in terms of safety matters. It requires that safety be ensured. Here, the evidence demonstrated that the defendant fell short of the obligation. How others in New South Wales and elsewhere, might meet or fail to meet, the obligation imposed upon them, assuming that there is, in fact such an obligation in other places, is not relevant, it seems to me, to the sentence which must here be imposed. Although, I do accept that the offences would have been more serious had evidence been led to show that the defendant had failed to provide maps of its system when other service providers, in fact, did so. There was not such evidence here. 52 I accept the submission that, as a matter of parity, in determining penalty, regard must be had to the penalties imposed in Abigroup and Josef & Sons. 53 I accept the submission that "there is a world of difference between both the objective and subjective circumstances of both cases. And that as a matter of sentencing policy must in our submission be reflected in the response from the Commission so that principles of proportionality and response by the Commission are observed." 54 I have concluded that the criminality involved in these offences is of a significantly lower level than that of those offences. On the evidence, it was not this defendant's acts and omissions which caused the fires and explosions which occurred on 4 December, when the gas pipe was breached during work being undertaken by Abigroup and the Josefs. These offences occurred when the defendant sent its employees to deal with the consequences of the gas leaking from the breached pipe, as it was obliged to do, in the conduct of its undertaking. These offences are concerned with the defendant's failures in what it then undertook. The deliberate disregard of safety which featured in the Abigroup and Josef matters, are absent in this case. 55 The records of the various defendants was also considerably different, another relevant matter. 56 Having considered all of the matters I have mentioned, I have concluded that the appropriate penalty for each offence is 55% of the maximum available, $275,000. It is next necessary to consider questions of totality and accumulation. 57 The particulars on which the two charges were based were identical. I came to the same conclusions in relation to each of them. The defendant must not be punished twice for the same failures, bearing in mind, however, that the legislature has seen fit to create two separate offences under ss15 and 16, in respect of employees and non-employees. (See the Abigroup appeal, as applied in Coal Operations Australia Ltd (No 2).) 58 I have had regard to the conclusions on penalty reached in the Abigroup appeal and Josef, as the principle of parity requires. I am satisfied, as I have said, that the criminality of this defendant is of a lower order than that of these other two defendants, although I am also satisfied that the offences were of a most serious kind. I accept that account must also be taken of the evidence led as to this defendant's general approach to questions of safety, as well as steps taken after the events of 4 December. 59 In that light and following the approach outlined in Pearce, I have concluded that the total penalty which should be imposed is $325,000, apportioned equally between the two charges. Costs 60 The parties were agreed that the usual order should be made in favour of the prosecutor, as to the costs of the s49(4) proceedings, where the defendant failed in the application made. (See WorkCover Authority of New South Wales (Inspector Maltby) v AGL Gas Networks Limited [2003] NSWIRComm 28.) They were disagreed as to the costs orders otherwise to be made. 61 As to the sentencing hearing, I am also satisfied that the usual order should be made in favour of the prosecutor, other than in relation to the adjournment of the hearing in 2004. This adjournment flowed from the prosecutor's desire to make submissions on the outcome of the appeals in the Abigroup and Josef proceedings. I am satisfied that the proper order in the circumstances, is that the prosecutor bear the defendant's costs thrown away as the result of the adjournment, as agreed or assessed by the Court. 62 I am satisfied that the proper order in relation to the hearing of the three charges, is that there be a discount to reflect that the prosecutor failed to make out the offence charged in relation to 11 November 1995. Some of the particulars of that charge were repeated in the 4 December charges and they were also not made out. The prosecutor argued that a proper discount was 25%. The defendant argued that the proper order was that each party should bear its own costs, having in mind that the major part of the proceedings were concerned with the dislocation of the gas pipe which took up most of the proceedings. The defendant was acquitted of responsibility for this. The second aspect, delay in sealing the gas pipe, in respect of which the convictions were secured took up only modest time and effort. This must be reflected in the costs order made. 63 I am satisfied that a proper application of the principles discussed in O'Sullivan v Crown in Right of the State of New South Wales (Dept of Education and Training) (2003) 128 IR 158 at [196] to [199], is that the defendant be ordered to pay 45% of the prosecutor's costs of this aspect of the proceedings. True it is that two offences were found proven in relation to 4 December, but they rested on identical facts. Some of the particulars of those offences were not made out. The reality is that more than half of the proceedings were concerned with matters upon which the prosecution failed. This must be reflected in the costs order. 64 Finally, consideration must be given to the costs of the summons for production issued by the prosecutor in April 2005, shortly prior to the resumption of the sentencing hearing and the defendant's motion seeking that the summons be set aside. The parties finally reached an agreement as to the production in question, namely that the documents produced by the defendant in attempting to satisfy paragraphs 1 to 7, would suffice; and documents relating to paragraphs 8 to 10 were produced in the expectation of the defendant receiving reasonable recompense from WorkCover. 65 The summons was issued in response to the defendant's filing of the statements of Messrs McCall and Ferguson on 11 April 2005. It sought production of the following: 1. All documents in respect of the installation of isolation valves in and around the Kogarah Shopping Centre dated 1 January 1992 to 4 December 1995.

All documents in respect of a 'plan to have hard copies of valve books carried in vehicles driven by service crews', as referred to in paragraph 5 of a statement of John Leslie Ferguson annexed as "A", for the period 1 January 1992 to 4 December 1995.

All documents relating to the placement of hard copies of valve books in vehicles driven by service crews, for the period from 1 January 1992 to date.

All documents relating to the implementation of a uniform system of valve maintenance in the period 1 January 1992 to date.

All maps showing the location of service lines in the Kogarah Shopping Centre area.

All documents relating to procedures for the checking that valves if turned off, would isolate the gas supply for the period 1 January 1992 to date.

Distribution list of all mains/plans and/or maps in relation to the Kogarah Shopping Centre.

All incident management strategies for gas leaks for the period 1 January 1992 to date.

All documents relating to any auditing of Occupational Health & Safety programmes operated by the defendant by internal or external consultants from the(sic) 1 January 1992 to date, as referred to in paragraph 18 of the statement of Mr Kenneth Hugh McCall, annexed and marked "B", other than those specified in the said paragraph 18.

All documents relating to the internal review of and reports about the audits as referred to in paragraph 19 of Mr Kenneth Hugh McCall's statement excluding that document specified in the said paragraph 19.

66 Relevantly, the defendant's motion complained that while it was conceded that paragraphs 7, 8, 9 and 10 of the summons might be relevant to the evidence which the defendant proposed to call, the summons should nevertheless be set aside as oppressive, given that it sought production of a substantial volume of documents ranging over 13 years, up to three years before the offences proven in these proceedings and nine years afterwards. Most of the documents sought could not be relevant to the issues remaining to be determined in the sentencing proceedings, guilt already having been established on the evidence led. Production of the documents in the available time frame was onerous, particularly as both Mr Ferguson and Mr McCall were on leave. It would also be costly and the conduct money tendered was entirely inadequate.

67 The matter was listed on Friday, 22 April, being the last working day prior to the date of the sentencing hearing. The defendant produced a considerable volume of documents. It took issue, however with the remainder of the summons, submitting that to that point, it had spent over 100 hours in collecting documents and over $2,000 in having them copied.

68 The inadequacy of the $30 conduct money provided by WorkCover with the summons when served was patent. It was submitted that, if pressed, costs in compliance with the remainder of the summons would be in the order of some $12,000. The defendant sought orders to the effect of the inadequacy of the conduct money and an order that WorkCover bear the defendant's reasonable costs of compliance with the summons. The prosecutor, nevertheless, pressed the summons. 69 The matter was stood down in the list to allow counsel to have discussions in attempt to resolve the matter. Upon resumption, a measure of agreement had been reached in relation to paragraphs 8, 9 and 10, of the summons to the effect that WorkCover would recompense the defendant for its reasonable costs already incurred in compliance with the summons. No further documents were pressed under these paragraphs.

70 There was still, however, a dispute as to the balance of the summons, namely paragraphs 1 to 7. This was surprising, given the width of the documents sought to be produced and the terms in which the summons was cast. There was a further short adjournment, prior to my hearing the motion. This discussion produced the agreement earlier referred to.

71 This sequence of events gives rise to the question of the proper costs order now to be made in relation to the motion. 72 The use of words such as 'relating to' and 'in respect of' in a summons such as this, must always be approached with care by the drafter of the summons, given the requirement that a summons must identify documents to be produced with some particularity; such a summons may not be a substitute for discovery and may not require the recipient to assess the relevance of documents to issues lying between the parties to the litigation. A summons may properly require the production of documents that relate to a particular fact or subject matter in issue in the proceedings, provided that production is reasonably necessary and the scope of the documents does not impose an oppressive obligation on the recipient: Arhill Pty Ltd v General Terminal Co Pty Ltd (1990) 23 NSWLR 545.

73 I raised these concerns with Mr Skinner of counsel appearing for the prosecutor, before agreement was reached by the parties, making by way of illustration, particular reference to paragraph 5 of the summons, which required the production of "all maps showing the location of service lines in the Kogarah Shopping Centre area". This was because, amongst other things, such maps were already in evidence, having been tendered at trial by the prosecutor. 74 It is apparent that sense finally prevailed and agreement was reached on the entirety of the summons, without the necessity that it be determined by the Court.

75 I am, nevertheless, satisfied that the interests of justice requires that the costs of this summons and motion, as agreed or assessed, be awarded to the defendant. While the parties eventually reached agreement, it was nonetheless, the prosecutor's summons, cast in extraordinarily wide terms with the provision of inadequate conduct money, that provoked the defendant's motion.

76 In respect of a search involving many, many documents sought in extraordinarily wide terms and spanning a period of over a decade, conduct money of $30 was tendered by the prosecutor. Even under the regulations fixed for conduct money to be paid to WorkCover under the Supreme Court Rules when a summons is served upon it, $40 must immediately be tendered if more than two weeks notice is given and $60, if less. The Industrial Relations (General) Regulation 2001 also provides that: 20 Expenses of persons summonsed (1) This clause applies to any summons (however described) for the purposes of the Act that is issued at the request of a party and requires a person to do either or both of the following: (a) attend and give evidence, (b) attend and produce documents or other things. (2) Any such person is not required to comply with the summons unless an amount sufficient to meet the reasonable expenses of the person in complying with the summons is paid or tendered to the person at the time of service of the summons or not later than a reasonable time before the day on which the person is required to comply with the summons.

77 At the very least, the prosecutor should have given an assurance that reasonable costs would be paid, when the summons was served. 78 This situation well illustrates the kind of difficulties discussed by Rogers J in Arhill at 555-7: The advent of more sophisticated word processing apparatus, electronic transmissions and photocopying machines has meant that the amount of documentary material that may be relevant, applying the orthodox tests, to the resolution of the dispute, has multiplied in geometric progression. As lawyers, in proper discharge of their duty to their clients, attempt to leave no stone unturned in search of evidentiary material which may be supportive of their clients' case, discovery and inspection have become not only extremely arduous, but a prohibitively expensive interlocutory step. Judges have frequently complained that the volumes of documents that are handed up at the commencement of a case, yield very little at the end of the argument. The number of documents that may be referred to in the course of the case, constitute but a fraction of the material which had been amassed. A great deal of the material, in turn, had been quarried in the course of discovery and inspection of documents held by other parties, and by strangers to the litigation. It seems to me, that, new measures of control have to be introduced to supplement the relatively relaxed gateway which has traditionally been imposed in determining whether, or not, a subpoena is oppressive, or whether discovery should be ordered, inspection afforded, or interrogatories administered. At a time when there is much anxiety about the cost of litigation, the length of cases, delay in the courts and other problems stemming from the Rolls Royce treatment afforded to individual disputes, is it not time to draw the line at what is necessary for disposing fairly of the proceedings?

Admittedly, in Science Research Council v Nassé [1980] AC 1028, the House of Lords, and in Dolling-Baker v Merrett [1990] 1 WLR 1205, the Court of Appeal, were concerned with applications for production and inspection of documents under the English rules of court. Nonetheless, it seems to me, that there is utility in considering the approach made by the two tribunals in those cases. In Science Research Council v Nassé , the House of Lords held that relevance alone, though a necessary ingredient, did not provide an automatic test for ordering discovery. According to their Lordships, the ultimate test was, whether discovery was necessary for disposing fairly of the proceedings. I need to point out at once that, by the Rules of the Supreme Court (UK), O 24, r 13, it is specifically provided that no order for production of documents for inspection, or to a court, shall be made "unless the court is of the opinion that the order is necessary, either for disposing fairly of the cause or matter, or for saving costs". That, it seems to me, should be the criteria whereby courts should approach applications in relation to setting aside subpoenas, discovery and inspection. There should only ever be the one true guide. Obviously, if a document is not relevant, it cannot be necessary for disposing of the cause. Obviously, if the document does not open up a new line of inquiry, it cannot be necessary. But merely because it is relevant, or opens up a new line of inquiry, does not make it necessary.

Obviously, it is at times difficult to determine ahead of a trial what is "necessary" to "disposing fairly" of a cause. All lawyers have known of cases where the odd document, which might have seemed of tangential importance, made all the difference. On the other hand, more often than not, hundreds of documents will be searched for and produced that will be of absolutely no use. The question has been discussed by Judge Newman of the Second Circuit Court of Appeals in "Rethinking Fairness: Perspectives on the Litigation Process", 94 Yale LJ 1643 esp at 1652ff (1985).

Decisions on claims of oppression, relevantly for present purposes, fall into two categories. The first involves claims that the subpoena seeks discovery against a third party. The second category of claims is that the terms of the subpoena are so wide and indeterminate as to be oppressive. The rationale for the first category once again highlights the incongruity present in this case where the relationship between the defendants and the "third party" appears so close. This is a point made by Clarke J in Southern Pacific Hotel (at 712, 720). Jordan CJ explained in Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 573 that:

"... A stranger to the cause ought not to be required to go to the trouble and perhaps to expense in ransacking his records and endeavouring to form a judgment as to whether any of his papers throw light on a dispute which is to be litigated upon issues of which he is presumably ignorant."

The "most harassing duty" of which the authorities speak, in this case, falls upon a person well able to make the necessary judgment, the solicitor for the defendants.

It is the second category of objections that is of concern. The subpoena may be so wide that the search for documents may involve the recipient in an expenditure of time and effort quite disproportionate to any benefit that the administration of justice may derive from it. It may be argued that the provisions of Pt 37, r 9, permitting the award of costs for the expense incurred in answering a subpoena, has substantially overcome this head of objection.

With respect to the Prothonotary, in my view, the subpoenas in the present case, even applying the test of relevance, are far too wide. The definition of documents leads to the result that a multiplicity of copies of the same document may need to be produced. Why are all copies, including drafts, necessary? Documents relating to the computer business of MLC in Australia which have nothing to do with any element of the dispute are encompassed by the subpoena. The same comments apply to par (b)(v) of the schedule. Clause (c) as it trawls may snag a variety of documents of no value in the resolution of the dispute.

In my view the subpoenas are too wide and should be set aside. That having been said, the issues between the parties have received much definition by the exchange of witness statements. I would now expect the parties to work out what is really required in the nature of documents, in order to allow a fair hearing of the dispute.

79 The difficulties discussed may be more acute in criminal proceedings, particularly when a summons such as this one, is issued at the stage which these proceedings had reached. The expenditure in time and effort which production of the documents sought involved, were entirely disproportionate to the benefit which the administration of justice received from their production. 80 This was partly accepted by the prosecution in the accommodation reached before the sentencing hearing. It was confirmed by the use - or lack of use - made of the documents at the resumed hearing. 81 At issue at this point in these proceedings, was the sentence to be imposed upon the defendant for the offences it committed in 1995. The sentence must primarily reflect the nature and quality of the offence. That had already been established on the evidence. Considerations of deterrence will arise, as will the subjective matters which the defendant seeks to advance. Undoubtedly, the prosecution is entitled to test such evidence, in this case, having been given notice of that evidence, prior to the hearing, by the filing of the two witnesses' affidavits. What was then sought by way of summons for the production of documents, went far beyond anything which justice might have required or will accommodate. This was put beyond doubt, by what happened at the sentence hearing. The agreed production led to the tender of no document at the hearing. While the two witnesses called by the defendant were cross examined, the cross examination was short and seemingly on a basis largely unrelated to the myriad of documents sought in the summons, or even the many documents, in fact, produced. 82 That the production of those documents was, in reality, unnecessary can readily be demonstrated by reflecting upon the evidence which led me to conclude that the charges here in question were made out. It has been established on that evidence that the defendant had the relevant maps of its gas pipes available in 1995, but failed to ensure that they were available to its employees at Kogarah when they were needed to deal with the emergency which had arisen and that it otherwise failed to promptly communicate the information which those maps contained, to its employees, by other available means. The employees were consequently hampered in their efforts to stop the gas flowing to the breached pipes, putting them and others at risk of injury, contrary to the obligations imposed by the legislation. 83 In that context, the oppressive nature of the summons is abundantly apparent. By paragraph 5, it required the defendant to produce, for example, 'all maps' in relation to the Kogarah Shopping Centre. The obligation was unlimited as to date. The maps in existence at the relevant time were already in evidence. The production sought was thus entirely unnecessary - as the cross examination of the defendant's witness at the resumed hearing only confirmed. The same conclusion must be reached in relation to paragraph 7, which deals with distribution lists of "mains/plans and/or maps". 84 The summons required in paragraph 1 production of 'all documents in respect of installation of isolation valves between 1992 and 4 December 1995.' The evidence had already established the existence in 1995 of four valves at Kogarah, which could have been used to isolate the flow of gas to the pipes, including that which had been breached and that maps maintained by the defendant showed their location. It follows that these documents were also irrelevant to the issues which arose at sentencing, as were the documents sought in paragraph 4, relating to a uniform system of valve maintenance between 1992 to date; and those sought in paragraph 6, relating to procedures for checking that valves, if turned off, would isolate the gas supply. 85 The summons sought in paragraph 8, 'all incident management strategies for gas leaks for the period January 1992, to date'. Given the period in question the documents sought were plainly too wide, as were those sought in paragraphs 9 and 10. 86 The evidence had already established that the defendant produced a book containing maps of all isolation valves installed at shopping centres. This book did not exist at the time of the offence. It followed that the documents sought in paragraphs 2 and 3, might have been of conceivable relevance to the issues now in question. No such documents were, however, tendered. 87 I am well satisfied that the costs of the motion and the unnecessary production of documents which flowed from the summons may not justly be required to be borne by the defendant. Orders

88 For all of the reasons given, I make the following orders: 1. The defendant is convicted of the offences charged in Matter Numbers IRC 5429 and 5430 of 1999.

The defendant is to pay a penalty of $162,500 for each offence in Matter Numbers IRC 5429 and 5430 of 1999, with a moiety to the prosecutor.

The defendant is to pay the prosecutor's costs as agreed or assessed by the Court of: (a) The s49 (4) proceedings,

(b) The sentencing hearing, apart from the costs thrown away by the adjournment of the 2004 hearing; and

The prosecutor is to pay the defendant's costs as agreed or assessed by the Court of:

(a) Costs thrown away by the adjournment of the 2004 sentencing hearing; and

(b) The motion and documents produced in relation to the prosecutor's 2005 summons.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

At a glance

Court

Decision date

Before

Source

Judgment (83 paragraphs)

Parties

Cases Cited (13)

Cited By (1)