I am dealing at this stage with the corporate defendant Customised Gas Australia Group Pty Limited (CGA). I shall come to the particulars of the charge in due course but first I detail the relevant facts. Usefully the parties have provided an agreed statement of facts and most of the relevant facts are obtained from that document.
CGA was a company conducting a business of repair and refurbishment of gas tankers at Curtis Road, Mulgrave. Mr Flynn was its sole director and performed an executive role in the day to day management of the business.
CGA employed Matthew Pearce as a general hand and at the time of the incident the subject of this charge he had been employed by CGA for about two years. His duties consisted of making deliveries, assisting workshop staff and cleaning. CGA employed Mr Hill as head mechanic he had been employed by the company for about eight years. Mr Hill and Mr Pearce both reported to Mr Flynn.
On 2 November 2012 Mr Flynn commenced the task of purging/venting a 48 kilolitre tanker-trailer of liquefied petroleum gas with nitrogen outside the workshop at the premises. It was being vented and purged to enable the inside to be cleaned. It was partially vented, the remainder of the job left for Mr Hill to complete the following week.
On 6 November 2012 Mr Pearce was assisting Mr Hill to complete the process. Mr Flynn was not present. He was away in Adelaide on business at that time. At that time, the tanker was parked inside the workshop at the premises. Sometime in the morning, nitrogen was introduced into and vented from the tanker inside the workshop. As part of the process Mr Hill instructed Mr Pearce to use a dual fuel operated forklift to assist in the removal of the inspection hatch from the tanker. After the hatch was removed, Mr Hill inserted hosing attached to an extraction fan into the hatch and turned the fan on. It was in suction mode. About 30 to 40 seconds later there was a loud bang and a large fireball erupted causing serious injuries to Mr Pearce and damage to the workshop.
WorkCover has not been able to establish the cause of the ignition. Testing has excluded the extraction fan, an extension lead and the gas analyser as sources of ignition. Tests verified that the battery spark ignition system, alternator, all electrical systems and the hot exhaust of the fork lift could cause ignition.
At the time of the incident Mr Pearce was wearing a fluoro nylon shirt, shorts, sun glasses, gloves, boots and socks. His pelvic area, eyes, hands and feet were the only areas not burnt. Prior to the incident some personal protective equipment including a long sleeved shirt and pants were available to Mr Pearce, however he was provided with no instruction as to when it was required to be worn. Mr Pearce was not considered part of the front line workshop staff and usually wore shorts and shirts to suit his tasks.
Mr Pearce sustained severe burns to 55% of his body surface. He has very limited physiological temperature regulation and requires air-conditioning to ensure he does not overheat. He underwent skin grafts to all four limbs, right flank, ears and debriding to his face and back. He returned to work on modified duties on 6 February 2013. He has been and will be unable to return to his pre-injury duties due to his body being unable to deal with heat.
In amplification of the circumstances at the time of and following the incident Mr Flynn explained that he was in Adelaide at business meetings at the time and, on hearing of the incident, he immediately arranged to fly back. At first opportunity he went to Concord Hospital where Mr Pearce was being treated. That was sometime after 9pm. He was unable to see Mr Pearce but spoke extensively to his relatives. He left the hospital at 1.30am the next morning. He spoke to his staff about the incident and arranged counselling. A few days after the incident Clear-View Psychology Services conducted a group debriefing. Ongoing individual counselling support was offered to all staff and taken up by several.
Following the incident, WorkCover conducted investigations. The defendant cooperated fully.
Prior to the incident Mr Flynn had prepared a safe-work method statement for the purging and venting of road tankers. The statement was in evidence. It is contained in an exhibit to an affidavit of Mr Flynn at tab JF3. Relevantly it deals with purging of tankers. In outstanding red lettering it includes "all work MUST be carried out in the designated de-gas area OUTSIDE". The document was held by Mr Flynn but its contents were not communicated to Mr Pearce or Mr Hill. It was however common practice to carry out this work in the outside de-gas area.
Before the incident CGA had a number of safety measures in place. I need not detail them here. They are set out in paragraph 13 of Mr Flynn's affidavit of 25 November 2014. In paragraph/14 he sets out safety measures in place for the purging/venting of tankers. Mr Hill and Mr Flynn were the two people who would primarily undertake and supervise that task. Mr Hill was well qualified to do so. He had completed numerous courses and obtained numerous certificates.
The existence of the Safe-Work statement and its contents as I have indicated were not communicated to Mr Pearce or Mr Hill nor to other employees of CGA.
In his affidavit of 25 November 2014 Mr Flynn accepts that he should have ensured that CGA trained and instructed both Mr Hill and Mr Pearce that the purging task must be completed outside. He also accepts that he should have ensured that the company trained Mr Pearce in the task of purging the tanker and made sure he understood he was required to wear appropriate protective clothing. The company did not provide any formal induction or training to Mr Pearce in relation to venting and purging a tanker in a safe manner. CGA did not provide Mr Pearce with any training or instruction as to appropriate clothing and safety gear to be worn whilst venting and purging a tanker or to ensure he was wearing appropriate personal protective equipment whilst carrying out the task.
To ensure the safety of its workers it was reasonably practicable for CGA to:
1. have completed the entire task of purging and venting outside in the designated de-gas area.
2. have required Mr Pearce to wear appropriate clothing.
3. have provided training and induction in relation to the safe process of purging including undertaking the task outside and the use of appropriate clothing.
Mr Flynn failed to exercise due diligence to ensure that CGA's employees and in particular Mr Pearce and Mr Hill were instructed and trained as to the existence and contents of the safe work method document and were mandated to purge and vent a tanker outside and wear appropriate clothing.
Since the incident CGA updated its Safe Work Method Statement and introduced new procedures for purging/venting gas tankers which includes a designated area outside the workshop as a de-gassing area. CGA has implemented a gas detection station with gas equipment, paperwork and safe work methods. Gas detection and ventilation equipment were updated to use in hazardous environments. New gas detectors were purchased and the manufacturer has attended the premises to train workers in its operation. CGA has instructed a work health, safety company to commence implementation of work, health, safety package and training program.
Mr Flynn's affidavit of 25 November 2014 sets out more details of safety upgrades implemented since the incident. It is not necessary to detail it all here. I note however there is now a designated hazardous area for purging and occupational, health and safety organisation has implemented a safety package and has an ongoing role visiting monthly. Statements and signs have been updated. Equipment has been added.
Neither the company nor Mr Flynn have any prior convictions. CGA is a family company. It has nine employees including Mr Flynn's wife. He regards the employees as part of his family. Mr Flynn states that CGA trades on a tight budget. The profit and loss statement and balance sheet for the 2013 financial year and the draft profit and loss statement for the following year appear to bear that out. Mr Flynn's income from the company is about $60,000 per annum gross. It appears to be by way of salary. I am not sure what, if any, amounts he received by way of dividend or director's fees. Mr Flynn has about $2,000 deposited in the bank. CGA has assets and there is equity in the company. I do not know what Mr Flynn's assets and liability situation is.
CGA is a responsible corporate citizen it is community minded. It contributes significantly to the local community. It is on the call register for the New South Wales and Victorian Fire Services. It provided equipment and drivers to assist in the Victorian bushfires in 2012.
In his affidavit Mr Flynn has expressed contrition. This is an area where often actions speak louder than words. Having said that Mr Flynn's and CGA's actions speak well of their contrition. It is exemplified in Mr Flynn's immediate response to the news of the incident, the engagement of counselling services, Mr Flynn's attempts to contact Mr Pearce, combined with his respecting Mr Pearce's wishes not to see anyone and the comprehensive review of the safety systems and implementation of new systems with ongoing overview by experts in the field.
The maximum penalty that maybe imposed for this offence in the case of the company is $1.5 million, however that of course should only be considered in the most extreme of cases.
I have been provided with a few comparable or comparative cases in terms of the consideration of appropriate penalty. They cannot be binding. They can be guides only. In all cases the fine imposed was $120,000 or close to that. That was after a 25% discount for an early plea in each case. In each case the maximum penalty available to be imposed was $550,000.
The particulars alleged against the company are contained in the amended summons and are as follows:
"It was reasonably practicable for the defendant to ensure the health and safety of its workers, in particular Matthew Pearce, by taking one or more of the following steps:
(a) complete the task of purging and venting the tanker outside the workshop; and
(b) provide training and instruction to its employees to conduct the entire process of venting and purging a tanker outside in a designated de-gas area, and to provide and require employees undertaking that task to wear appropriate clothing and safety gear.
[2]
SENTENCING
In sentencing I must bear in mind many matters. I must bear in mind the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act. I need not itemise these here. I must also bear in mind relevant, aggravating and mitigating factors as specified in s 21A. I must also bear in mind the objective of the Work Health and Safety Act in seeking to secure the safety of persons in workplace premises.
I start with the objective seriousness of this offence. It was serious. It was so because the risk of fire and explosion was readily foreseeable. Further the potential consequences of fire and explosion including catastrophic injury and even death were readily foreseeable. Further there were simple means available to avoid the risk. All these matters are readily apparent from CGA's own safe work method statement. Further those means were known to Mr Flynn but not communicated to Mr Pearce or Mr Hill. Nor was Mr Pearce instructed as to appropriate clothing to wear. Further the safe work method statement was not displayed anywhere on the work premises.
It was submitted correctly that Mr Hill was more experienced than CGA in this work. He had always performed the task outside at CGA and Mr Flynn expected he would continue to do so. He had considerable experience before coming to CGA. CGA and Mr Flynn, it was submitted, had no reason to suspect that Mr Hill would perform the work inside. This submission does not get over the problem that the safe work method statement was documented but not displayed nor even shown to Mr Hill. Had it been he could not have missed the red obvious compulsory direction in it. It also does not get over the problem that Mr Pearce with his more limited training and experience was not given any training or information about it. Had these matters been done it is almost certain that the task of purging would not have been done indoors.
I need to consider general and specific deterrence. I do not think that specific deterrence is a matter that looms for consideration in this case. This is because of the conduct and behaviour of Mr Flynn and the company since the event. Processes have been put in place to ensure that the event cannot happen again. I need, however, to consider general deterrence. To succumb completely to the subjective factors in this case, powerful though many are, risks failing to give due weight to general deterrence. Flammable volatile materials are inherently dangerous. They require very special care and attention to detail in their handling. Failure to apply that care and attention can result in a fireball as in this case and in high powered explosive forces. The consequences can be devastating. Those handling these materials must understand that. They must also understand that failure to apply proper safety standards is likely to result in a substantial penalty. General deterrence needs to be considered in this case for these reasons.
I have mentioned that I need to take into account aggravating and mitigating factors under s 21A. I have enumerated or recited in the course of outlining the facts of this case, facts that include matters that would be considered to be aggravating and mitigating factors and all of them I bear in mind.
After preparing these reasons and determining on a penalty, I have read a victim impact statement of Mr Pearce, I do not take it into account in determining penalty. I am, however, conscious of its contents considering the nature of the injuries he suffered. Its contents as to his ongoing problems are not surprising. To the extent that he thinks that leaving work may have been a selfish step on his part I think he is being unduly harsh on himself. I acknowledge the ongoing physical and emotional difficulties and problems he has on a daily basis and the fact that they are likely to continue.
Were it not for the subjective factors in this case I would impose a fine of a higher amount than I intend to do in this case. I still need to set an amount that is a high amount that reflects the seriousness of this offence and has some impact as a general deterrent.
I propose a fine in the sum of $200,000. It should be reduced by 25% for an early plea. If my mathematics is correct that will reflect a resultant sum of $150,000.
The defendant, CGA, is convicted. I impose a fine of $150,000. I order a moiety of that fine to be paid to the prosecutor. I order the defendant to pay the prosecutor's costs as agreed or assessed.
I proceed to the case involving Mr Flynn. Mr Flynn is charged that being a person who had a health and safety duty under s 27 of the Work, Health and Safety Act to exercise due diligence to ensure that CGA complied with its duty under s 19(1) failed with his duty and that failure exposed Mr Pearce to risk of death or serious injury contrary to s 32. Mr Flynn has pleaded guilty.
Relevant facts in relation to the charge against Mr Flynn have been included in the facts that I have recited in the charge against CGA and they need not be repeated here.
In the case against Mr Flynn, particulars of the charge are included in the amended summons and they are as follows:
"The defendant failed to exercise due diligence to ensure the company complied with its duty or obligation because he failed to take reasonable steps to:
(a) ensure CGA's workers, including Mr Pearce and Mr Hill, were aware of the existence and, or contents of its safe work method statement for the "Purging/Venting LPG Road Tankers for Internal Inspection"
(b) ensure that CGA's workers, including Mr Pearce and Mr Hill, were aware that purging and venting of a tanker should only be conducted outside the workshop and ought only be conducted wearing appropriate clothing and safety gear."
The observations I have made in sentencing CGA are applicable here. The critical failure is the failure to ensure that Mr Hill and Mr Pearce were aware of the contents of the safe work method statement. CGA is Mr Flynn's family company. It has been punished. In punishing it, Mr Flynn has effectively been punished. This is not a case of a substantial company with multiple directors and multiple shareholders. It is not a case of such a company being fined and then a director of that company being sentenced. In that situation the fine on the company may not affect the director financially at all. Here the fine imposed on the company is one that very much impacts on Mr Flynn personally. Whilst to fine him is not punishing him twice over in a legal sense as his offence is different it is punishing him twice over in a practical sense. This must be a discretionary matter that can be taken into account and I do.
I reject the submission seeking to have s 10 of the Crimes (Sentencing Procedure) Act applied. Clearly the section is available in an appropriate case. I do not think this is an appropriate case. The comments I have made in the CGA matter about the seriousness of the offence including its foreseeability, its foreseeable consequences, its preventability and the need for general deterrence apply here. It may have been the case that Mr Flynn did not expect that Mr Hill with all his experience would vent inside but this was an operation requiring a high degree of vigilance and Mr Flynn's expectation would have been better founded if he had brought the safe work method statement to the attention of Mr Hill and Mr Pearce. In the circumstances, the circumstances in which the offence was committed are not extenuating, nor is the offence trivial. In my view nothing in Thorneloe v Filipowski (2001) 52 NSW LR 60 really supports the defendant's submission.
I should not pass up this point without acknowledging Mr Flynn's character and antecedents. They are beyond question. To some extent I have covered them in the reasons I have just given in the CGA matter. They are supported also by numerous references covering a period of about 20 years.
Mr Flynn will be substantially affected by the fine imposed on CGA and I think it is appropriate in his case to apply a small fine. I think $10,000 is appropriate. It should be reduced by 25% for the early plea. The resultant fine will be $7,500.
Mr Flynn is convicted. I impose a fine of $7,500. I order a moiety of the fine to be paid to the prosecutor. Mr Flynn is to pay the prosecutor's costs as agreed or assessed.
[3]
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Decision last updated: 10 November 2015