District Court New South Wales Medium Neutral Citation: 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 Hearing dates: 10 December 2020; 15 March 2021 Date of orders: 30 April 2021 Decision date: 30 April 2021 Jurisdiction: Criminal Before: Strathdee DCJ Decision: (1) The defendants are convicted. (2) The appropriate fine for JPS is $400,000.00 and that will be reduced by 25% to reflect the early plea. (3) Accordingly, I order JPS pay a fine of $300,000.00. (4) The appropriate fine for SRS is $400,000.00 and that will be reduced by 25% to reflect the early plea. (5) Accordingly, I order SRS pay a fine of $300,000.00. (6) The appropriate fine for Mr Sidhu is $40,000.00 and that will be reduced by 25% to reflect the early plea. (7) Accordingly, I order Mr Sidhu pay a fine of $30,000.00. (8) Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fines imposed are to be paid to the prosecutor. (9) The defendants are to pay the prosecutor's costs agreed in the sum of $40,000.00. Catchwords: CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence – capacity to pay – totality of sentence - appropriate sentence - parity OTHER – failure to notify SafeWork of a notifiable incident – failure to consult, co-operate and co-ordinate activities with other persons who had a duty under s 19(1) of the Work Health and Safety Act 2011 (NSW) Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW) Fines Act 1996 (NSW) Work Health and Safety Act 2011 (NSW) Cases Cited: Bulga Underground Operations v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 Capral Aluminium Limited v WorkCover Authority of NSW [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 Jahandideh v R [2014] NSWCCA 178 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464 Markarian v The Queen (2005) 228 CLR 357 McColl v John Watson Building Services Pty Ltd & Anor (2004) 137 IR 310 Morrison v Powercoal Pty Limited & Anor (No.3) [2005] NSWIRComm 61 Nash v Silver City Drilling (NSW) (2017) 93 NSWLR 338 Orbit Drilling v The Queen (2012) 35 VR 399 R v Cage [2006] NSWCCA 304 R v MA [2004] NSWCCA92 R v Miria [2009] NSWCCA 68 R v MMK [2006] NSWCCA 272 R v Skondin [2015] QCA 138 SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 SafeWork NSW v HCM Building Pty Limited [2019] NSWDC 632 SafeWork NSW v McConnell Dowell Constructors (Aust) Pty Limited (No 2) [2020] NSWDC 668 SafeWork v Poletti Corporation [2019] NSWDC 491 Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 Veen v R (No. 2) (1988) 164 CLR 465 WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 WorkCover Authority of NSW v Sarjame Storage Pty Ltd [2015] NSWDC 151 Texts Cited: Kerrick Operating & Maintenance Manual Managing Risks of Hazardous Chemicals in the Workplace dated July 2014 Premium Tyre Gloss Safety Data Sheet Category: Sentence Parties: SafeWork NSW (Prosecutor) JPS Car Wash Management Pty Ltd, Sarjeet Sidhu, and SRS Star Management Pty Ltd (Defendants) Representation: Mr Boncardo, of counsel for the Prosecutor Mr G Walsh, solicitor for the Defendants Solicitors: Department of Customer Service (for the prosecutor) Mr G Walsh, Greg Walsh & Co (for the defendant) File Number(s): 2019/00230379001, 2019/00230426001 & 2019/00230453001 Publication restriction: Nil Judgment 1. On 19 October 2020, SRS Star Management Pty Ltd (ACN 141 927 120) ('SRS') and JPS Car Wash Management Pty Ltd (ACN 613 184 017) ('JPS') being a person conducting a business or undertaking, who had a health and safety duty under s 19(1) of the Work Health and Safety Act 2011 (NSW) ('the Act') each entered a plea of guilty to an offence contrary to s 32 of the Act and exposed Nikhil Nikhil ('Mr Nikhil') and Mr Lovepreet Singh ('Mr Singh') to a risk of death or serious injury. 2. On 19 October 2020, Sarjeet Sidhu ('Mr Sidhu') entered a plea of guilty to an offence under s 27(1) of the Act, in that in breach of his duty, he failed to exercise due diligence to ensure that the company (SRS) complied with its duty under s 19(1) of the Act, failed to comply with that duty, exposed workers, in particular Mr Nikhil and Mr Singh, to a risk of serious injury contrary to s 32 of the Act. 3. The maximum penalty for the s 32 offence for a corporate offender is $1,500,000 and for an individual is $300,000. BACKGROUND 1. The defendants' businesses or undertakings involved the operation of several car wash businesses, including a car wash located in the car parking area of the Ashfield Mall Shopping Centre located at 260A Liverpool Road, Ashfield NSW 2131 ('the Carwash') to which Star Car Wash (Sydney) Pty Ltd ('Star Sydney') is the lessee. At all material times, the Carwash was a principal place of business for SRS and JPS. 2. JPS was engaged by SRS to conduct the day to day operations of the Carwash including providing workers to perform work as car wash attendants. 3. Mr Sidhu was the sole director of SRS and was in active management of it. He had been working in the carwash industry for approximately 19 years. 4. Mr Jitender Singla ('Mr Singla') was the sole director of JPS, and had active managerial control of JPS. He described himself as the "onsite manager" for the carwash and had 8-10 years' experience in the car wash industry. He had been managing the carwash for approximately 4 years, first as a worker employed by SRS and then on behalf of JPS. The principal place of business for SRS and JPS was the Carwash. 5. On or about 1 September 2011, SRS and Star Sydney entered into a Licence Agreement with respect to the Carwash which effectively gave SRS the licence to operate under the Star Café Wash Brand as a franchisee for a licence fee. The agreement contained terms as set out at paragraph 5 of the Agreed Statement of Facts ('ASOF'). 6. In or about June 2016, Mr Sidhu on behalf of SRS subcontracted or otherwise engaged Mr Singla via JPS to conduct the day to day operations of the Carwash, including the provision of workers to perform work at the Carwash. The arrangement between SRS and JPS involved JPS retaining 80% of the turnover of the Carwash and SRS retaining the remaining 20%. In turn, SRS continued to pay the ongoing licence fee to Star Sydney. There is no written contract or documentation evidencing the arrangement between SRS and JPS. 7. As at 13 April 2018, the date of the incident, JPS employed, or otherwise engaged, the following workers: 1. Mr Nikhil, an 18-year-old casual car wash attendant who worked approximately 19 hours a week and who had been working at the Carwash since about February 2018; 2. Mr Singh, a 25-year-old casual car wash attendant who worked approximately 10 to 15 hours a week and had a supervisory role when Mr Singla was not on-site, performing roles such as serving customers and providing instructions to Mr Nikhil as to the work he was to perform. Mr Singh had worked at the Carwash longer than Mr Nikhil by approximately one year; and 3. Mr Gurinder Singh ('Gurinder Singh') who also worked at the Carwash on occasion but was not there on the day of the incident. 1. SRS and JPS sometimes interchangeably employed Mr Nikhil and Mr Singh. Mr Nikhil had previously also worked at another Star Car Wash franchise operated by SRS, and Mr Sidhu, at Taren Point ('the Taren Point Carwash') from 11 July 2017 to August 2017. Mr Nikhil understood that he was paid by Star Car Wash. Mr Singh understood that he was employed by SRS. The workers considered Mr Sidhu to be the 'main boss' or head of the Carwash and other franchise locations. At the time of the incident, Mr Singh and Mr Nikhil's wages were paid by Mr Singla from a bank account in the name of JPS. 2. Mr Singla was on site at the Carwash six days a week as the onsite manager in which he supervised workers and was also involved in car washing and detailing himself. Mr Sidhu provided Mr Singla with onsite training when Mr Singla was employed by SRS. Mr Singla, in turn, then gave some verbal training to workers of JPS regarding the Safety Data Sheet ('SDS') and chemical charts. If Mr Singla was not on site, Mr Sidhu would sometimes send a manager from a different Star Car Wash site. 3. Mr Sidhu would attend the Carwash about once a month to check on the site where he would see if everything was okay and would then leave. Mr Singh refers to Mr Singla as 'the manager' and stated that Mr Sidhu would attend the Carwash once or twice a week. Mr Singla would report to Mr Sidhu at the end of each day via phone and would call Mr Sidhu to attend the Carwash if an issue required his attention. 4. Mr Singla, Mr Nikhil and Mr Singh would often communicate with each other in Hindi or sometimes in their local Indian dialects, including Punjabi. SITE DESCRIPTION 1. The Carwash was located on the ground floor car park of Ashfield Shopping Mall and was accessed from inside the car park. The Carwash occupied the rear corner and a number of bays which were set up to wash and clean vehicles. In the middle of the car wash area was a small office/storeroom in which the front of the room was a dedicated office/reception area. The rear of the room was a staffroom/storeroom. 2. The storeroom was used to store car cleaning chemicals and products. The room also contained a fridge and a microwave, and the workers would store their lunch and other food and drink in the fridge. Other items such as sponges, rags and soap powder were stored along the internal partition wall. THE INCIDENT 1. On 13 April 2018, Mr Nikhil commenced work at approximately 12:00pm. Mr Singla and Mr Singh were at the Carwash. It was a quiet day and Mr Singla left the Carwash sometime between approximately 4:00pm–4:40pm. 2. At approximately 5:00pm, Mr Singh and Mr Nikhil had just finished cleaning the last car and were closing up. Mr Singh asked Mr Nikhil to make him a cup of tea, and the two workers went to the staffroom. Mr Singh checked to see if there was milk in the fridge. When he opened the fridge, a container of Tyre Shine, which the workers had put in the room after it had been used that day in the course of cleaning cars, fell over and a liquid spilled out of the container and covered an area of approximately one meter squared. Mr Singh told Mr Nikhil to get the vacuum to clean up the spill. 3. Mr Nikhil got the Kerrick Commercial Wet & Dry Vacuum cleaner ('the Vacuum') to clean up the spill. The Vacuum had been used two or three times that day, including to clean up water and a chemical called 'Rite Off' which was used to clean cars, and according to Mr Singh, the use of the Vacuum was commonplace for workers to use in cleaning up any spillages, whether chemical or not. 4. The Vacuum was positioned in the doorway of the storeroom. Mr Singh walked out of the storeroom to give a customer, Mark Gerber ('Mr Gerber') his car keys back. Mr Nikhil then commenced vacuuming approximately half of the spill when Mr Singh suggested that he change the nozzle on the Vacuum to a sponge nozzle. The Vacuum was restarted near the spill, with the new nozzle. 5. An explosion occurred and fire engulfed the room and caught onto Mr Nikhil's clothing. Mr Nikhil could not see anything. He stood up, fell, attempted to stand up again and hit the Vacuum before falling again. Mr Nikhil managed to crawl out of the storeroom. 6. Mr Singh pulled Mr Nikhil out of the storeroom. Mr Nikhil attempted to run to the water tap and began rolling on the floor to put the fire out. Mr Gerber assisted Mr Singh to extinguish the fire burning Mr Nikhil using rags from a nearby car wash trolley. 7. Mr Singh then removed Mr Nikhil's clothes and shoes as they were melting onto his skin. The sprinkler system inside the storeroom then activated. Mr Singh telephoned Mr Singla to inform him of the incident. 8. NSW Ambulance, the Security Manager on Duty for Ashfield Mall (Mr Ibrahim Alkhasibi), the Operations Manager (Danny Teekaram), the Centre Manager (Linda Lord) and the Marketing Manager (Houaida Susnig) were all notified and made their way to the incident area together. Cars and customers were ushered out from the car park. Fire & Rescue, Ambulance and Police attended the scene. Mr Nikhil was stabilised by Ambulance Officers before being rushed to RPA hospital. 9. Mr Nikhil sustained serious injuries, including partial/full thickness burns to 35% of his body, including his face, bilateral upper and lower limbs, back and buttocks. He was later transferred to the Concord Hospital burns unit. OBLIGATIONS AND GUIDANCE MATERIAL 1. Under the Globally Harmonized System of Classification and Labelling of Chemicals ('GHS'), the safety data sheet for hazardous chemicals is required to be updated regularly. Neither SRS nor JPS were in possession of an updated or renewed SDS for the Heavy Duty Industrial Degreaser, nor was a chemicals register in place at the Carwash. Workers were not provided with training on the use and storage of hazardous chemicals. 2. At the time of the incident, in respect to the chemicals used at the Carwash, only the following existed: 1. A SDS for the Premium Tyre Gloss dated November 2016. 2. A Material SDS for Formula 940 Heavy Duty Industrial Degreaser dated March 2008. 1. There was no mandatory dangerous goods signage. There were no signs that gave adequate information and warning to employees and the public regarding hazardous goods or emergency information. Equipment which is not rated for use in a hazardous atmosphere must not be used in areas containing hazardous substances. No such hazardous areas were established at the site. 2. No safety shower or eye wash area was present at the Carwash. Kerrick Operating & Maintenance Manual 1. The Kerrick Operating & Maintenance Manual for the Vacuum cleaner specifies: 'Never use flammable liquids or operate machine in or near flammable liquids, vapours or combustible dusts.' Work Health and Safety Regulation 2017 1. Persons conducting a business or undertaking ('PCBU'), which SRS, Mr Sidhu and JPS all are, have a duty under Part 3.1 of the Work Health and Safety Regulation 2017 ('the Regulation') to: 1. Identify reasonably foreseeable hazards that could give rise to risks to health and safety; 2. Eliminate risks to health and safety so far as it is reasonably practicable to do so and, where it is not reasonably practicable to eliminate such risks to minimise risks so far as reasonably practicable by implementing control measures in accordance with the hierarchy of risk control under cl 36 of the Regulation; 3. Maintain implemented control measures so that they remain effective; and 4. Review and, if necessary, revise risk control measures. 1. Clause 344 of the Regulation provides that the PCBU must obtain a current version of the safety data sheet for hazardous chemicals. Further, the person must ensure that a current safety data sheet for hazardous chemicals is readily accessible to: 1. a worker who is involved in using, handling or storing the hazardous chemical and the workplace; and 2. an emergency service worker, or anyone else, who is likely to be exposed to the hazardous chemical at the workplace. 1. Clause 351(1) of the Regulation provides: 'A person conducting a business or undertaking must manage, in accordance with Part 3.1, risks to health and safety associated with using, handling, generating or storing a hazardous chemical at a workplace'. 2. Clause 351(2) of the Regulation provides: 'In managing risks the person must have regard to the following: a. The hazardous properties of the hazardous chemical, b. Any potentially hazardous chemical or physical reaction between the hazardous chemical and another substance or mixture, including a substance that may be generated by the reaction, c. The nature of the work to be carried out with the hazardous chemical, d. Any structure, plant or system of work: i. that is used in the use, handling, generation or storage of the hazardous chemical, or ii. That could interact with the chemical at the workplace.' Code of Practice – Managing Risks of Hazardous Chemicals in the Workplace 1. SafeWork Australia's Code of Practice titled Managing Risks of Hazardous Chemicals in the Workplace dated July 2014 ('the Chemicals Code') is an approved Code of Practice under s 274 of the Act. The Code was published and available to SRS and JPS prior to the incident. 2. Chapter 1 of the Chemicals Code details how a duty holder should manage risks associated with hazardous chemicals. 3. Section 2.3 of the Chemicals Code provides that workers that are likely to be exposed to the hazardous chemical must know how to find the SDS. It also states that if a container is not labelled or is incorrectly labelled, action must be taken to correctly label the container. 4. Chapter 4 of the Chemicals Code provides that ventilation is a means of maintaining a safe atmosphere by the introduction or recirculation of air and that maintaining a safe atmosphere in the storage and handling area of hazardous chemicals is an important control measure. Premium Tyre Gloss Safety Data Sheet 1. The Premium Tyre Gloss SDS contains the following notation in Section 2 – Hazards Identification: 'GHS SIGNAL word: DANGER… …Highly Flammable liquid and vapour' 1. Under "Prevention" it states: 'P202: Do not handle until all safety precautions have been read and understood. P271: Use only outdoor or in a well-ventilated area P281: Use personal protective equipment as required' 1. The SDS states at Section 5 – Fire Fighting Measures: 'This product is classified as flammable. There is a moderate risk of an explosion from this product if commercial quantities are involved in a fire…Fire decomposition products from this product may be toxic if inhaled.' 1. Under Section 6 – Accidental Release Measures of the SDS it states the following measures: 'Evacuate the spill area and deny entry to unnecessary and unprotected personnel…wear full protective clothing including eye/face protection… Suitable materials for protective clothing include rubber, PVC, Viton. The section provides further information on how to absorb a spill and clean up the chemical.' 'Any electrical equipment should be non-sparking. Any equipment capable of building an electrostatic charge should be electrically grounded.' 1. Further to the above, SafeWork Australia and other institutions have a number of publications relating to hazardous chemicals and solvents which were available to SRS and JPS prior to the incident: Code of Practice: Preparation of Safety Data Sheets for Hazardous Chemicals Code of Practice: Labelling of Workplace Hazardous Chemicals Australian Code for the Transport of Dangerous Goods by Road and Rail, 7th edition, approved by the Australian Transport Council AS 1940: The storage and handling of flammable and combustible liquids (where the corrosive substance or mixture is also a flammable liquid or has a dangerous goods Subsidiary Risk of Class 3) Authoritative websites, such as those of international work health and safety agencies like the US Occupational Safety and Health Administration, or the European Commission Joint Research Centre's Institute for Health and Consumer Protection 1. Prior to the incident, SafeWork Australia's Code of Practice titled Managing Risks of Hazardous Chemicals in the Workplace ('the Code') was published and available. 2. Chapter 1 of the Code details how a duty holder should manage risks associate with hazardous chemicals. 3. Section 2.3 of the Code provides that workers that are likely to be exposed to the hazardous chemical must know how to find the SDS. It also states that if a container is not labelled or is incorrectly labelled, action must be taken to correctly label the container. 4. Chapter 4 of the Code provides that maintaining a safe atmosphere in the storage and handling area of hazardous chemicals is an important control measure. It also provides that ventilation is a means of maintaining a safe atmosphere by the introduction or recirculation of air. SYSTEMS OF WORK BEFORE THE INCIDENT 1. There were approximately seven chemicals stored in the staff/storeroom at the Carwash. These included: 1. Terminator (being a soap used for cleaning cars); 2. The Premium Tyre Gloss/Tyre Shine Silicone (which was used on wheels); and 3. Formula 940 Heavy Duty Industrial Degreaser. 1. Some substances were not in the original containers that they were supplied in. The Tyre Shine was stored in was a plain white can with no hazard or warning labels attached on it and the words 'tyre shine' written on it with a marker. 2. Mr Nikhil had received no safety training on the use of the Tyre Shine product. He was not given any instruction or training on the use of Tyre Shine at the Carwash. 3. Mr Nikhil was unfamiliar with the term 'SDS' or 'safety data sheet'. Mr Singh stated that when a new employee started, Mr Singla would go through the paperwork. He recalled being given information from the internet referring to safety equipment and the details of chemicals however they were all in English. Mr Singh had not seen a copy of the SDS before the incident occurred but was provided a copy to read post incident. 4. No site induction of workers took place at the Carwash. SRS was given a copy of a document titled 'Employee Induction – Star Car Wash Operational Manual' that had been provided by Star Sydney. This was a generic document prepared by Star Sydney for use at any car wash under the brand name Star Car Wash. The document did not include details with respect to work health and safety. 5. Mr Singh recalled that they had placed stickers that said 'flammable' on some products but that workers did not receive any other training about the use of flammable liquids. 6. The system of work implemented by JPS was provided to it by SRS. JPS and Mr Singla would take direction from SRS and Mr Sidhu regarding work processes and training. Mr Sidhu provided verbal onsite training to Mr Singla. 7. Work health and safety was not discussed at team meetings, as no such meetings took place. No one person was allocated responsibility for developing, implementing and maintain work health and safety management systems and processes at the Carwash. It was unclear amongst staff who, if anyone, had such responsibility. 8. In terms of safety instructions, Mr Singh informed Mr Nikhil to be careful when washing cars, to wear gloves and to wear shoes. Mr Singh also informed Mr Nikhil if he got chemicals in his eyes to wash his eyes and to inform management if he felt any pain. 9. Mr Nikhil received no training or instruction on how to clean up chemical spills. The workers were not trained to use the vacuum in those circumstances. The workers did not receive any training on how to appropriately clean up a spill prior to the incident. It was not communicated to workers that the silicone Tyre Shine could catch fire or explode. Mr Singla stated that the workers were supposed to use terry nappy towels to clean chemical spills, however, no SWMS or written procedure was in place at the Carwash or any procedure with respect to the cleaning of chemical spills. 10. After the incident Mr Singh and Mr Singla were interviewed by SafeWork Inspector, Ryan Tinker. His records of interview are contained in the defendant's court book. The interviews addressed many matters in relation to the use and labelling of various products once decanted, and also the use of the vacuum. Both Mr Singh and Mr Singla stated that workers were instructed in the use of the Vacuum, that the Vacuum was in proper working order, and that the Vacuum had never been used in respect of chemical spills. SYSTEMS OF WORK FOLLOWING THE INCIDENT 1. An Improvement Notice and Prohibition Notice was issued requiring the introduction and maintaining of a hazardous chemical register in accordance with Regulation 346. A copy of the SDS was obtained together with other updated SDS's for other hazardous chemicals from different suppliers. These documents were integrated into a new hazardous chemical register. 2. Post incident, training took place at the Carwash to train staff how to identify all products used at the site including identifying dangerous, flammable and non-dangerous goods. Training was also provided on the GHS symbols on the containers containing chemicals. Documents titled 'Hazardous Substance' and 'Toolbox Talk' were also created. 3. Fire extinguishers were installed at the Carwash. A representative from Star Sydney attended the site on June 2018 to a conduct a site safety audit. 4. Mr Barry Bone, an accredited dangerous goods consultant, inspected the Carwash following the incident and recommended: 1. Safety signage be installed; and 2. Copies of current SDS for all hazardous chemicals used at the Carwash be kept on premises. 1. The pleaded measures admitted by SRS and JPS to be reasonably practicable steps which it ought to have implemented, but failed to do so, in breach of their duties under s 19(1) of the Act. Similarly, the measures admitted by Mr Sandhu to be reasonably practicable steps which he ought to have taken, but failed to do so, in breach of his duty under s 27(1) of the Act. SENTENCING 1. The penalty to be imposed must be one which will give overall effect to the policy of the Act, in particular, 'ensuring the safety, health and welfare of workers and others on workplace premises': s 3 of the Act. 2. I have had regard to the objectives set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('the Sentencing Act') for the purpose of sentencing. The purposes for which a Court may impose a sentence on an offender are as follows: 1. to ensure that the offender is adequately punished for the offence; 2. to prevent crime by deterring the offender and other persons from committing similar offences; 3. to protect the community from the offender; 4. to promote the rehabilitation of the offender; 5. to make the offender accountable for his or her actions; and 6. to recognise the harm done to the victim of the crime and the community. 1. The penalties imposed must give effect to the intention of the Act, in particular, protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work: s 3 of the Act. 2. The court is to be guided by the provisions of the 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; and 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. 1. 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. 2. The approach to sentencing has been identified by Russell SC DCJ in SafeWork NSW v HCM Building Pty Limited [2019] NSWDC 632 at [109] in this way: '109. 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.' 1. The objective degree of foreseeability is a matter for the Court to have regard to when considering the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of NSW (2000) 49 NSWLR 610 at [89] ('Capral Aluminium'). OBJECTIVE SERIOUSNESS OF THE OFFENCE 1. The primary factor to be assessed is the objective seriousness of the offence. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (1999) 90 IR 464, 474–5. 2. 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 at [714]. 3. 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 v The Queen (2012) 35 VR 399 at [62]; Veen v R (No. 2) (1988) 164 CLR 465. 4. 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 Limited & Anor (No.3) [2005] NSWIRComm 61. 5. I accept that s 3A of the Act is generally regarded as a codification of the common law principles of sentencing: R v MA [2004] NSWCCA 92. The purposes of punishment in the section are constrained by the sentencing principles that exist under the common law such as the principles of proportionality and totality: R v MMK [2006] NSWCCA 272. 6. The defendants submit that an offender should not be liable for the unforseen and remote harm, because this breaks the moral nexus between moral outcome and responsibility. That is, offenders should be liable for harm for which they actually foresaw from an objective perspective was foreseeable from their actions: R v Skondin [2015] QCA 138. On the basis that in the interview with Inspector Tinkler, Mr Singla said that the wet and dry vacuum cleaner had never been used to vacuum chemical spills, the risk that it would be used as such was not foreseeable. 7. The facts support that a container of Tyre Shine was spilt when Mr Singh went to the fridge to see if there was any milk, and that the spillage covered an area of approximately one meter squared. At T38 Mr Sidhu concedes that the container that the Tyre Shine had been decanted into was not labelled. It is an agreed fact that Mr Singh told Mr Nikhil to use the wet and dry vacuum cleaner to clean up the spill, and then suggested that he change the nozzle to a foam nozzle. When the Vacuum was restarted, the explosion occurred and fire engulfed the storeroom. 8. The defendants submit that the offending could not have been, nor in fact was foreseen. They submit that they did not contemplate that an employee such as Mr Nikhil would use the wet and dry vacuum cleaner for such a purpose as it had never been done before. Thus it is submitted, that Mr Singh and Mr Sidhu had a state of mind that meant that they did not believe, on reasonable grounds, that either of the employees would use the wet dry vacuum cleaner to clean up a chemical spill. 9. Further, the defendants submit that the task of decanting hazardous chemicals had been carried out over a number of years without previous incidents. 10. Clearly the defendants failed to appreciate that if an employee such as Mr Nikhil or Mr Singh used the vacuum to clean up chemical spills, there was a serious risk of harm occurring to those employees. 11. The defendants contend that Mr Nikhil was instructed to use cloth nappies to clean up any chemical spill, and that he did not act in accordance with that direction. They further contend that if he had done so, the incident would not have occurred and he would not have been injured. 12. The clear intent of the oral evidence given before me was that the defendants are trying to place the blame or responsibility for the incident on to Mr Nikhil. Mr Singla's evidence was that he agreed with Mr Chimes, T74.42–47, view that Mr Nikhil was responsible for the accident: T18.37–39; T40.29–49. He also agreed that no amount of training could have prevented the accident: T64.1–5 and T64.11–16. 13. I view this attempt by the defendants to foist blame on to Mr Nikhil as a means to try and diminish the objective gravity of their offending as disingenuous at the least, and is not supported by an examination of the evidence. This attempt must be rejected for the following reasons: 1. The requirement of s 19 requires that a PCBU take a proactive approach to safety issues. The issue is not whether the PCBU envisaged a particular risk but whether it should have: SafeWork NSW v McConnell Dowell Constructors (Aust) Pty Limited (No 2) [2020] NSWDC 668 at [34] ('McConnell Dowell'). 2. A PCBU must have regard not simply for the ideal worker but one who is careless, inattentive or inadvertent. PCBU's must take into account that it is inevitable that there will be human error ranging from inattention to foolish or deliberate disregard of established safety systems: SafeWork v Poletti Corporation [2019] NSWDC 491 at [88]. 3. Where a foreseeable risk of injury arising from a worker's negligence in carrying out their duties or the possibility of disobedience to those duties exists, this must be taken into account and guarded against to the maximum extent possible: McConnell Dowell at [35]. 4. There is no evidence that Mr Nikhil disobeyed any direction given to him. The Statements of Facts are pellucid at [41]: he and the other workers had received no training or instruction as to how to clean up chemical spills. 5. The safety systems at the Carwash prior to the incident were wholly deficient, in that Mr Singla and Mr Sidhu did not discuss anything about the storage and use of chemicals and responsibility for training staff about such matters prior to the incident: T48.1–4. 6. There were no Toolbox Talks or induction T48.27–34, and the only step taken by the defendants in relation to the risks posed by hazardous chemicals was to have the SDS on the wall T13.14-28 or under the counter in the office. Nor did Mr Singla read the SDS for Tyre Shine, the Vacuum or the operating manual. 7. Star Car Wash did not know prior to the incident that the Tyre Shine could ignite if vacuumed, make any risk assessment to the use of the Vacuum in and about hazardous materials, gave no consideration to the storage and use of hazardous chemicals, conduct any safety audits or require the installation of a fire extinguisher. 8. Both Mr Singh and Mr Singla gave evidence before me. They were very impressive witnesses. It seemed to me that they would say anything to try and escape any responsibility for the incident. I do not accept that the wet/dry Vacuum had never been used to clean up spills. I do not accept that they never thought that an employee may have chosen to use the Vacuum in that manner. I do not accept that they did not know that the Tyre Shine was flammable. I do not accept that there had never been a chemical spill at the Carwash, or any of the other carwashes they were associated with. 9. I find that the risk was not just foreseeable but was obvious, glaringly so despite the defendant's attempt to plead complete ignorance of the possibility. It defies imagination that the defendants could not foresee that the Vacuum could have been used to clean up a spill, and that such use with flammable liquids could result in an explosion or fire. 10. Mr Singh, Mr Singla, JPS and SRS had a flagrant disregard for the safety of employees. They plead absolute ignorance about all matters pertaining to safety in the workplace. The only single thing that they did in discharge of their respective duties was to place the SDS Sheets either on the wall or under the counter in the office. It is completely unacceptable. 11. Mr Singh's duty under s 27 of the Act to exercise due diligence to ensure that SRS complied with its obligations under s 19 of the Act was completely ignored. I find that he did nothing to check that the systems in place would provide a safe workplace. He completely ignored his obligations under the Act. 12. It is staggering that the defendants were able to successfully run businesses, purchase property and enter into loans for investment properties if they were seized with the level of ignorance about all workplace safety matters. I am of the view that a large amount of their evidence was fabricated and they deliberately attempted to blame the young vulnerable victim for the incident that occurred. 1. Nonetheless, the defendants concede by their pleas, that there were reasonable steps that were readily available and could have been easily implemented if the defendants had exercised due diligence to protect the subject workers. 2. The Court is obliged to make an assessment of where on the scale of criminality the offence lies referable to the maximum penalty prescribed by the legislature: R v Cage [2006] NSWCCA 304 at [17] – [18], Latham J. 3. The pleaded measures admitted by the defendants to be reasonably practicable steps which it ought to have implemented, but failed to do so, in breach of their duties under s 19(1) of the Act would have virtually eliminated, and at least significantly minimized the risk. 4. Where there was an obvious or foreseeable risk to safety against which appropriate measures were not taken, in circumstances where such measures were available and feasible, it will be a serious offence: WorkCover Authority of NSW v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37], Kearns DCJ. 5. The objective seriousness of an offence under s 32 of the Act is considered in the context of the graduation of offences contained in ss 31–32 of the Act: Nash v Silver City Drilling (NSW) (2017) 93 NSWLR 338 at [54]–[56] ('Nash'). The matters relevant to objective seriousness for a s 32 offence include: * The potential consequences of the risk. Consequences may range from mild to catastrophic. Offending will be more serious where the potential injuries are severe, regardless of whether they are likely to materialize: Nash (supra) [53]; * The availability of steps to eliminate or minimise the risk; * Whether those steps are complex, burdensome or mildly inconvenient if mitigating steps could easily have been taken, the offending will be more serious: Nash (supra) [53]; * Whether the risk was known or ought reasonably have been known to or identified by the offender; * Whether the risk was an obvious or clear one; and * The vulnerability of the workers exposed to the risk: SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 at [55] (Russell SC DCJ). 1. In this instance a number of hazardous materials were being used and kept in a room that was used both as a storeroom and a kitchen/staffroom. Some of the substances used came in large containers and were decanted into smaller ones for use in cleaning the cars. Some of the smaller containers were not labelled. Mr Nikhil was given no training as to the use of Tyre Shine, nor was there any SDS for it. There was no chemical register and the workers were not provided with any training on the use and storage of hazardous chemicals. No training was given to workers about cleaning up chemical spills and workers were not told that Tyre Shine could ignite or explode. 2. The potential consequences of the risks were significant. They included death or serious injury. The serious injuries sustained and suffered by Mr Nikhil are indicative of the severity of the risks. 3. The use of hazardous chemicals exposed workers to a risk of coming into contact with them or otherwise being exposed to fire and fumes if electrical equipment was used in the vicinity of hazardous chemicals. The risks could have been readily eliminated or minimised by a number of inexpensive measures as detailed in the summons. These measures were simple and straightforward. The measures introduced by SRS and JPS following the incident demonstrate the relatively easy means by which the risks could have been appropriately attenuated and also the absence of the appropriate safety systems prior to the offence. 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 Limited (1996) 82 IR 384 at 388. 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 v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [177]–[180] reaffirmed the principle that both aspects of deterrence are matters which should be normally 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 Limited v WorkCover Authority of NSW [2000] NSWIRComm 71; (2000) 49 NSWLR 610 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.' 1. General deterrence must be a significant feature of the sentence imposed upon the defendant. The failure by a company to recognise the dangers and risks that arise to persons working using flammable liquids that are decanted and placed into other containers which are not properly labelled is very concerning. 2. Workers being subjected to a risk of serious injury or death as a result of the use of hazardous chemicals are not unique to the circumstances of these defendants. The imposition of a component directed towards general deterrence, it is hoped, will highlight the need to other corporations and individuals of the need for proper planning and development of procedures to eliminate, or at the very least severely minimise the presentation of such a risk. 3. Similarly, general deterrence 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 associated with working with hazardous chemicals and machinery such as vacuums in industrial context. 4. In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve the safety of its worksites following a breach of a duty are relevant, as is the propensity for the defendant to reoffend. 5. The requirement to comply with the expectation of the community, that both large and small employers will comply with safety requirements, means that employers must take the obligations imposed by the Act very seriously. However, whilst general deterrence is a matter that I must consider in the sentencing process, it is not a factor to dominate the exercise of sentencing discretion to the exclusion of all other factors. 6. I find that the defendant's actions and words since the incident do not give me any great comfort that the offending will not recur. To this end, specific deterrence is very relevant to these defendants. The fact that the defendants are trying to place the blame on Mr Nikhil demonstrates a complete lack of insight into their offending, and heightens the need for specific deterrence. 7. The defendants called Mr Allen Chimes who was the Operations Manager for Star Car Wash and worked in the head office. He knew of JPS and SRS and also knew Mr Sidhu and Mr Singla and had observed them both in their car washes on a number of occasions. Mr Chimes also provided a 'Testimonial' dated 27 November 2020. 8. At paragraph 4 of that document he states as follows: 'The accident at Ashfield which I became aware of at approximately 5:30pm on the evening of 13/04/18, and the attendance on the Ashfield site together with Kerry Williams from SafeWork NSW on the morning of 14/04/18, was due to a terrible mistake by Nikhil in mopping up the spilled Tyre Shine using a vacuum cleaner, instead of rags available. No amount of training onsite could have prevented this explosion which even the wash chemical supplier to the Star Group could have predicted or anticipated.' 1. He was then cross-examined about this Testimonial at T85.6–T86.12: 'Q. You say that the accident at Ashfield amongst other things was due to a terrible mistake by Nikhil in mopping up the spilled Tyre Shine using a vacuum cleaner instead of rags available? A. That's correct. Q. Well whose fault was it? A. It was probably a fault of a mistake and possibly a lack of training. Q. Whose mistake, Nikhil's mistake? A. Well you know the person who told him to use the vacuum. Q. So Mr Singh, Lovepreet Singh's mistake was it? A. Well it wasn't a mistake, it was an error, well I would say, I said here it was a mistake by Nikhil. Q. And you stand by that, it was a mistake by Nikhil? A. Yes, he vacuumed it up, it was probably a mistake from the worker who told him to clean it up as well as Nikhil if they understood that they shouldn't have been using a vacuum cleaner. Q. So is it your position that the persons responsible for this incident are Mr Nikhil and Mr Lovepreet Singh? A. It was a mistake. Q. I am asking you what your position is as to who is responsible for the incident and I am trying to understand whether you say that Mr Nikhil and Mr Singh were the sole people responsible for this incident? A. I concede that further training could have been given – HER HONOUR: That is not the question you were asked, ask the question again please Mr Boncardo. BONCARDO Q. Is it your position that the sole people responsible for this incident are Mr Nikhil and Mr Lovepreet Singh? A. Yes. HER HONOUR Q. Is that Star's position as well seeing you have written it on the Star letterhead? A. Well subsequent to the – prior to the incident I would say that— Q. That's not what I asked you I asked you when you said "yes", that you think it was the victim's fault and the other gentleman is that also the Star's position seeing that you have written that testimonial on their letterhead? A. Your Honour I am not saying that it was their fault. Q. What are you saying? A. I am saying it was an accident, a mistake. Q. Made by them? A. Made by them.' 1. Similarly, the defendants remain in the carwash industry. Both JPS and SRS continue to conduct the Carwash. Mr Sidhu is the sole director of a number of businesses involved in operating a number of carwash style businesses, including Star Café Wash Taren Point Pty Ltd and Thornleigh Carwash Café Pty Limited. 2. It is clear to me that not only do these defendants have no real acceptance of their failures with regards to their Work Health and Safety obligations, as they blame Mr Nikhil for the incident, the same view is repeated by the representative from head office of Star Car Wash. 3. The Star Car Wash group employs about 500 people in NSW (T82), and a message must be sent to these defendants, and any others that engage in these activities, that their disregard for the safety of employees will not be tolerated. AGGRAVATING FACTORS 1. The injuries sustained by Mr Nikhil were significant: s 21A(2)(g) of the Sentencing Act. He was in Concord Hospital for more than 3 months and then in rehabilitation in Westmead for another 2-3 months. His injuries continue to afflict him. 2. The prosecution tendered two Victim Impact Statements from Mr Nikhil and they became Exhibit 1. Mr Nikhil remains with problems with his left index finger and his general strength. He continues to receive assistance from doctors, surgeons, social workers and an occupational therapist. He remains unemployed as at 30 November 2020. 3. Mr Nikhil was a vulnerable worker. He was only 18 years old, inexperienced in the use of hazardous chemicals and machinery and had little to none English language skills. MITIGATING FACTORS 1. The defendants have no record of previous convictions: s 21A(3)(e) of the Sentencing Act. 2. Section 21A(3)(i) of the Sentencing Act provides that 'remorse' may be taken into account as a mitigating fact if 'the offender has provided evidence that he or she has accepted responsibility for his or her actions, and the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both).' I accept that the defendants have expressed remorse and contrition: s 21A(3)(i). 3. The defendants did go to significant lengths to assist Mr Nikhil after the accident, personally and financially. They visited him whilst he was in Concord Hospital most days, and gave him food. They assisted in arranging for his brother to travel to Australia to assist in his recovery and they loaned him money to assist with his studies. I accept that these matters have a mitigating effect. 4. As previously stated, I am somewhat sceptical of the defendants' prospects of rehabilitation. It is evident that the defendants realistically did very little, or at least very little that was relevant and appropriate, before the incident to protect a worker from an obvious risk. They lack any real insight into their offending, and in turn wish to blame Mr Nikhil. I afford the defendant limited leniency under s 21A(3)(h). 5. The defendants have provided character references, the contents of which I have taken into account when assessing the relevant penalty. 6. The defendants entered pleas of guilty reasonably early, and thus I will allow the deduction of 25% for the utilitarian value of the pleas: s 22 of the Sentencing Act. CAPACITY TO PAY 1. The defendants' have raised the issue of their ability to pay any fine due to their financial circumstances, and therefore makes an application under s 6 of the Fines Act 1996 (NSW). The defendants seek leniency by way of a reduction of the fine to be imposed on the basis of their limited ability to pay. 2. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 the Court of Criminal Appeal held as follows: 'First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant: a fine which may be crippling to a small business may have virtually no impact on the operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to 'the means' of the defendant, pursuant to s 6 of the Fines Act 1996.' 1. Nonetheless, the onus is on the defendant to satisfy the court on the balance of probabilities as to the truth of such evidence and its relevance to the fixing of a penalty: McColl v John Watson Building Services Pty Ltd & Anor (2004) 137 IR 310 at 224. The offender's capacity to pay in relevant but not decisive: Jahandideh v R [2014] NSWCCA 178 at [16] (Rothman J). 2. It is for the defendant to place detailed financial information that fully discloses the company's financial circumstances to the Court so as a proper assessment can be made of its capacity to pay. However, notwithstanding the capacity of a defendant to pay a fine, the penalty to be imposed must be reflective of the objective seriousness of the offence. 3. Tax Returns and bank statements for Mr Singla and Mr Sidhu were provided in the Defendants Court Book and in Exhibit 2. 4. The defendants also gave evidence with regard to their financial circumstances. Mr Sidhu gave evidence about his own financial position and that of SRS at T22–35. From that evidence it is clear that Mr Sidhu has interests in a number of properties, some of which are vacant whilst he completes renovations. He also indicated that SRS had not filed a Tax return or paid any tax since about 2016. Mr Singla gave evidence with regards to his financial circumstances at T52–56 and T60–63. 5. The three witnesses called by the defendants were not impressive witnesses. I formed the view that they all were intent on blaming Mr Nikhil for their failures. I also formed the view that they would say anything if they thought it would lessen their culpabilities. 6. I do not accept that the defendants do not have the capacity to pay a fine. The evidence put before me does not support that proposition. Mr Singla and Mr Sidhu have assets and businesses that appear on paper to be viable. 7. I accept that payment of a fine might be difficult for the defendants and have been mindful of that in coming to my determination. However, the objective seriousness of the offences are such that it must be reflected in the penalty, and significant fines must be imposed to send a message to employers that they must take their obligations to protect their workers from a risk of injury very seriously. To reduce the fine would not provide the appropriate level of specific and general deterrence that is expected given the serious nature of this offending. 8. The appropriate fine for JPS is $400,000.00. The defendant is entitled to a discount of 25% for the early plea. 9. The appropriate fine for SRS is $400,000.00. The defendant is entitled to a discount of 25% for the early plea. 10. The appropriate fine for Mr Sidhu is $40,000.00. The defendant is entitled to a discount of 25% for the early plea. PENALTY 1. I make the following orders: 1. The defendants are convicted. 2. The appropriate fine for JPS is $400,000.00 and that will be reduced by 25% to reflect the early plea. 3. Accordingly, I order JPS pay a fine of $300,000.00. 4. The appropriate fine for SRS is $400,000.00 and that will be reduced by 25% to reflect the early plea. 5. Accordingly, I order SRS pay a fine of $300,000.00. 6. The appropriate fine for Mr Sidhu is $40,000.00 and that will be reduced by 25% to reflect the early plea. 7. Accordingly, I order Mr Sidhu pay a fine of $30,000.00. 8. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fines imposed are to be paid to the prosecutor. 9. The defendants are to pay the prosecutors' costs agreed in the sum of $40,000.00. *** 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. Decision last updated: 30 April 2021