District Court New South Wales Medium Neutral Citation: SafeWork NSW v AGL Macquarie Pty Ltd [2023] NSWDC 133 Hearing dates: 3 April 2023 Date of orders: 2 May 2023 Decision date: 02 May 2023 Jurisdiction: Criminal Before: Strathdee DCJ Decision: (1) The defendant is convicted. (2) The appropriate fine for the offence is $600,000.00, and that will be reduced by 25% to reflect the plea of guilty. (3) Accordingly, I order the defendant to pay a fine of $450,000.00. (4) Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. (5) Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor's costs agreed in the sum of $40,617.86. 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 – appropriate discount for the utility of the plea – general deterrence – specific deterrence – remorse and contrition COSTS – prosecutor's costs Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW) Criminal Procedure Act 1986 (NSW) Fines Act 1996 (NSW) Work Health and Safety Act 2011 (NSW) Work Health and Safety Regulation 2017 (NSW) Cases Cited: Bulga Underground Operations v Nash (2016) 93 NSWLR 338 Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610 Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 Haynes v CI & D Manufacturing (No 2), Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 Kirk v Industrial Commission of New South Wales [2010] HCA 1 Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 Markarian v The Queen (2005) 228 CLR 357 Morrison v Powercoal Pty Ltd (No. 3) (2005) 147 IR 117 Muldrock v The Queen (2011) 244 CLR 120 Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 Orbit Drilling v The Queen (2012) 35 VR 399 R v Cage [2006] NSWCCA 304 R v MA [2004] NSWCCA 92 R v Miria [2009] NSWCCA 68 R v MMK [2006] NSWCCA 272 R v Thomson & Houlton (2000) 49 NSWLR 383 R v Youkhana [2004] NSWCCA 412 SafeWork NSW v Grandcity Constructions Pty Ltd [2018] NSWDC 398 SafeWork NSW v HCM Building Pty Ltd [2019] NSWDC 632 Veen v R (No. 2) (1988) 164 CLR 465 WorkCover Authority (NSW) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 WorkCover Authority (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 Category: Principal judgment Parties: SafeWork NSW (Prosecutor) AGL Macquarie Pty Ltd (Defendant) Representation: Counsel: Mr I Fraser (for the Prosecutor) Mr D Jordan SC and Mr R Ranken (for the Defendant) Solicitors: Department of Customer Service (for the Prosecutor) Ashurst Solicitors (for the Defendant) File Number(s): 2022/00354160 Publication restriction: Nil Judgment Background 1. SafeWork NSW ('the prosecutor') initiated proceedings pursuant to s230(1)(a) of the Work Health and Safety Act 2011 (NSW) ('the WHS Act') against AGL Macquarie Pty Limited ('the defendant'). 2. At all material times, the defendant operated Liddell Power Station situated on the New England Highway in Muswellbrook, New South Wales ('the power station'). 3. The defendant filed an affidavit of Leonard McLachlan dated 22 March 2023 which became exhibit 1. Mr McLachlan was not required for cross-examination. 4. The maximum penalty for the offence is $1,766,130.00. Liddell Power Station 1. It is an agreed fact that at all material times, the defendant was conducting a business or undertaking for the purposes of the WHS Act at the power station. 2. At all material times, Mr Graeme McNeill ('Mr McNeill') was employed by the defendant at the power station as an Assistant Plant Controller ('APC'). 3. The power station has four 500-megawatt steam generator units. Each generator unit has a turbine and three transformers, one of which is a generator transformer. Each generator transformer sits within a transformer tank and is immersed in oil which acts as insulation against the heat produced by the generator transformer. 4. Each generator transformer has three cooling systems which cools the oil in the transformer tanks. Two of the three cooling systems ('oil coolers') must be functional at any one time in order for the generator transformer to operate at full capacity. The Risk 1. It is an agreed fact that the introduction of air into a transformer tank is a serious and known hazard. 2. Any air pockets inside a transformer tank may produce an arc fault. An arc fault releases large amounts of energy which causes the temperature of the surrounding oil to increase significantly and results in a rapid build-up of pressure inside the tank. 3. An arc fault may ultimately result in the rupture of the transformer tank and the release and ignition of hot oil. System of Work 1. The defendant had in place a number of job sheets prescribing steps to be followed when undertaking certain operational tasks. 2. Job sheet U58 prescribed the procedure to be adopted when securing a generator unit following a shutdown. It stated that the task is to be performed by the APC. It also provided that a 'Read Before Operating' tag must be placed on the valves of the oil pumps to indicate that they have been closed. Job sheet U58 did not require that the oil be drained from the oil cooler. 3. Job sheet U37, titled 'Generator Transformer – Prepare for Standby or Coming into Service' was used to prepare generator transformers and oil coolers for return to service after they had been removed from service. Steps 15 and 16 of Part B of job sheet U37 required that personnel 'open or check open' the generator transformer oil pump inlet and outlet valves. 4. It is an agreed fact that the oil coolers are only drained in limited circumstances, including where specific maintenance is to be performed to them. Accordingly, there was no requirement that any of the oil coolers be drained of oil prior to their return to service. 5. In Service Approved Procedure ('ISAP') 132 dated 11 September 2012, titled 'Generator transformer – oil cooler return to service unit generator oil cooler' set out the applicable procedure where a drained oil cooler was to be returned to service. Relevantly, ISAP 132 noted a risk of air becoming trapped in an out of service oil cooler which would trigger a series of events culminating in a transformer trip. ISAP 132 was created by the previous owner of the power station. Accordingly, at the time of the incident, it was considered redundant for the defendant's operational purposes and was only used by maintenance personnel. The Incident 1. The whole of steam generator unit 3 was taken out of service on 25 October 2020. 2. In accordance with job sheet U58, the valves on each oil cooler were closed. 3. Also, in accordance with job sheet U58, several 'Screen Read Before Operating' ('SRBO') tags were placed on the screens of the unit's digital control system. One tag was placed on the faceplate that controlled all three oil coolers and one tag was placed on the individual faceplates for oil coolers A, B and C. The description on each SRBO tag was 'Oil inlet and outlet valves closed'. 4. Job sheet U37 provided that upon return to service, personnel were required to 'open or check open' the valves for the generator transformer oil pump as well as the inlet and outlet valves for oil coolers A, B and C. 5. On 12 November 2020, unit 3 was started up. The inlet and outlet valves for oil coolers A and C were opened and the SRBO tags removed. However, the inlet and outlet valves for oil cooler B remained closed and the SRBO tag remained in place because the water box drain on oil cooler B required maintenance work. The maintenance task was initially recorded by a Preparation and Restoration Instruction ('PRI') on 9 November 2020. The PRI was issued and then immediately suspended on 12 November 2020. 6. It is an agreed fact that, unbeknown to the defendant at the time, oil cooler B had developed an oil leak. It is believed that the leak occurred over the course of several weeks because it had not been detected during routine inspections. As at the date of the incident, oil cooler B had been partially or fully drained of oil due to the leak. Given that the oil inlet and outlet valves were closed (and had been since 25 October 2020), the void created by the leak was full of air. 7. On 17 December 2020, the maintenance work on the water box drain was finished and the PRI signed off as completed. At that time, the SRBO tag was incorrectly removed and the oil valves remained closed. 8. Mr McNeill was on duty as the APC on 17 December 2020. At the morning shift meeting that day, an oil leak discovered in unit 3 was discussed. After samples had been taken from each oil cooler, it was determined that oil cooler C was leaking and needed to be removed from service. In order to remove oil cooler C from service and to maintain a full load, a replacement needed to be brought into service. It was determined that oil cooler B should return to service to replace oil cooler C. 9. It was believed that oil cooler B was on standby and primed to return to service, although this was not checked. 10. Mr McNeill commenced the procedure for bringing oil cooler B to service in accordance with job sheet U37. He had performed this task before. He checked the temperature, ensured that the water box was drained and opened the oil outlet valve 'moderately' before opening the oil inlet valve. He radioed the control room to start the oil pump. He checked that he could feel a flow in the pipes and, believing that he could, started to return to the control room. 11. On his way back to the control room, an operator called Mr McNeill to advise that he could not see any indication that the flow had started. At that point, Mr McNeill returned to the oil cooler to check that it had. After further discussions over the radio with the control room and suspecting that there may have been a blockage, Mr McNeill went to shut off the water. When he went to do this, he heard a cracking noise. 12. Mr McNeill sprinted to get away and made it halfway up the staircase before the transformer exploded. 13. Mr McNeill said later on that he expected that the oil circuits would have been open and did not know when they had been closed. 14. It is an agreed fact that the leak in oil cooler B may have gone unnoticed because only small amounts of oil were leaking and any spillage onto the ground may have been washed away by rain. Injuries 1. Mr McNeill sustained second degree burns to 19% of his body, including on his buttocks, legs, ears and back. He was treated as a hospital inpatient for two weeks, including a debridement and skin graft on his buttocks. Mr McNeill also required follow up blood tests after traces of PCBs were found in the oil. 2. The injuries sustained by Mr McNeill reduced his flexibility and restricted him from being exposed to sunlight for lengthy periods. Guidance Material 1. The following guidance material was available to the defendant at the time of the incident: * NSW Code of Practice How to manage work health and safety risks (August 2019) outlining different control measures to address risks and hazards. * NSW Code of Practice Managing the risks of plant in the workplace (August 2019) containing further guidance. * The manufacturer's instructions for the transformer, which included multiple warnings about ensuring that there is no air in the transformer oil and that if mixed with air, 'results in an explosive mixture'. Prohibition Notices 1. SafeWork issued two prohibition notices to the defendant following the incident. 2. On 18 December 2020, prohibition notice 35991 was issued requiring the cessation of changing in-service generator transformer oil coolers until a review of the procedures had been conducted and the appropriate persons had been retrained. The prosecutor confirmed on 19 May 2021 that prohibition notice 35991 had been complied with. 3. On 18 December 2020, prohibition notice 35992 was issued prohibiting any work being undertaken on the structurally compromised unit 3 until a safe methodology had been developed. The prosecutor confirmed on 22 December 2020 that prohibition notice 35992 had been complied with. Systems of work following the incident 1. The defendant has made the following changes to its systems of work following the incident: 1. The in-service changeover of transformer oil coolers that are not in standby status is prohibited. If no standby oil cooler is available, the entire generator transformer is to be taken out of service. 2. Job sheet U39 titled 'Place Standby/Out of Service Oil Cooler in-service OR Place Out of Service Oil Cooler In Service OR Isolate an In Service Oil Cooler' was created. Job sheet U39 provides a written process for oil cooler changeovers. It requires express permission of the production manager before priming an oil cooler for service. 3. Job sheet U58 has been modified to ensure that oil cooler valves are not closed when units are removed from and returned to service. Where valves have been closed due to an oil leak, the valve can only be reopened once the required maintenance has been performed and the generator transformer must be out of service. 4. The title of job sheet U37 has been changed to: 'Generator Transformer – Prepare for Coming into Service'. Job sheet U37 has also been amended to include a requirement that the oil cooler inlet and outlet valves be open and primed and that job sheet U39 is completed. 5. Finally, job sheet U37 has been amended to remove Part A which included steps to open the valves of the oil cooler when preparing a generator transformer for standby. Failures of the Defendant 1. The failures of the defendant to comply with its duty under s 19(1) of the WHS Act are set out in full at [8] of the Summons. They may be summarised as follows: 1. Developing and implementing a safe method of work for the changeover of oil coolers on a live transformer which included: 1. Prohibiting changing over oil coolers that are not in standby status. 2. Verification that an oil cooler is primed and in standby status before it is returned to service on a live transformer 3. Requiring that oil inlet and outlet valves on a cooler not be opened on an in-service transformer. 1. Providing a physical means of preventing oil valves on an oil cooler being opened while a transformer is in service. 2. Providing relevant information and training to workers regarding: 1. A safe system of work for the changeover of oil coolers on a live transformer as outlined above. 2. The hazards relating to air being introduced into the transformer tank and the potential for this to cause an electrical arc and an explosion. 1. Most helpfully, it is agreed by the parties that an accurate crystallization of what occurred is that the system that was in place did not: 1. adequately provide for the possibility that procedures may not have been followed, resulting in the oil inlet and outlet valves not being open; and 2. adequately provide for the possibility that an oil cooler may become fully or partially drained of oil due to an undetected oil leak whilst out of service. 1. It was agreed between the parties that the above two circumstances gave rise to the risk. It seems clear that there needed to be steps taken to ensure that valves were open as required, and for proper checks to be made to ensure that the oil cooler was primed and in standby status before it was put into service. The Defendant's Duty 1. The defendant had a duty pursuant to s 19(1) of the WHS Act to 'ensure' the health and safety of its workers, so far as reasonably practicable. The duty requires the identification of risks in the workplace, so far as is reasonably practicable. The duty requires the identification of risks in the workplace and the adoption of measures to eliminate or minimise them, so far as is reasonably practicable (see Kirk v Industrial Commission of New South Wales [2010] HCA 1 at [34]). The duty is positive, nondelegable and requires duty holders to search for, detect and eliminate, so far as is reasonably practicable, risks to safety. Sentencing 1. The penalty to be imposed must be one which will give overall effect to the policy of the WHS Act, in particular, ensuring the safety, health and welfare of workers and others on workplace premises. I have had regard to the principle contained within the WHS Act that workers should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work: s 3 of the WHS Act. 2. The Court is to be guided by the provisions of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act') which include: 1. Section 3A which sets out the purpose of sentencing; 2. Section 21A which sets out the aggravating, mitigating and other factors in sentencing; 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 Ltd [2019] NSWDC 632 at [109] in this way: 'The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock v The Queen [2011] HCA 39; [2011] 244 CLR 120. This approach to sentencing, known as the "instinctive synthesis" approach, involves the making of a global judgement without any attempt to state precisely how any given factor has influenced the judgement.' Objective Seriousness of the Offence 1. The primary consideration requires a determination of the objective seriousness of the offence. The High Court made this clear in Muldrock v The Queen (2011) 244 CLR 120 at [27]: '…The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of offending.' 1. Subjective factors play a subsidiary role: Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464, 474–5. 2. The duty of the defendant requires that it ensure the health and safety of workers as far as reasonably practicable. This duty is not delegable, and the duty requires the identification of risks in the workplace and an assessment of measures to address such risks. 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] (Maxwell P, Bongiorno JA and Kyrou AJA); Veen v R (No. 2) (1988) 164 CLR 465. 4. The objective degree of foreseeability is a matter for the Court to have regard to when considering the gravity of the offence: Capral Aluminium Ltd v WorkCover Authority (NSW) (2000) 49 NSWLR 610 ('Capral Aluminium') at [81]. 5. An offence will be serious where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible: Morrison v Powercoal Pty Ltd (No. 3) (2005) 147 IR 117. 6. 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 [31]. 7. The Court of Criminal Appeal examined the sentencing process with regard to the WHS Act in the matter of Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96 ('Nash v Silver City'). Justice Basten at [34], under the heading 'Assessment of Risk' said: 'The sentencing judge commenced his consideration with the proposition that '[g]reater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely.' However, the truth of that proposition depends upon other considerations, including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends upon an assessment of all those factors.' 1. His Honour further observed at [42]: 'The culpability of the respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step-by-step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the pressure event of the force which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and a little, if any, cost. That assessment will involve both objective considerations and a consideration of what the respondent's responsible officers knew or ought to have known.' 1. I accept that s 3A of the Sentencing 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. 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 following matters are relevant to determining the culpability of the defendant: 1. The risk of a fire or explosion caused by an electrical arc as a result of air being introduced into the transformer tank was a risk known or should have been known by the defendant. 2. Inservice Approved Procedures (ISAPs) were used at Liddell (see Sentencing Bundle tabs 10 and 15) and set out the procedure for the return to service of an oil cooler to service an in-service generator transformer. This procedure identified the risk of trapped air and addressed this by providing for the bleeding of air from the oil cooler. 3. The manufacturer's instructions contained a number of references to the need to bleed or release air from the system. 4. I accept that there was the clear potential for serious injury or death from the manifestation of the risk. Whilst only one worker was injured, there was the potential for multiple injuries to have occurred in multiple workers who were in the vicinity at the time. 5. The risk of an explosion within the transformer could only be considered to be one of the most significant hazards at Liddell, and as such the management of that risk required regular review. 6. Following the incident the defendant reviewed its systems and made significant changes to address the risks which are detailed in the PSTB at tabs 16, 17 and 18. 7. The defendant also undertook instruction and training of workers, which has included reference to the specific hazards relating to the incident. Better education of workers on the relevant risks may have increased the potential for the incident to have been avoided even without the appropriate procedures being in place. 8. The steps referred to above were both available and reasonably practicable prior to the incident. 9. The defendant acknowledges that the consequence of the incident, involving injuries to Mr McNeill, manifest the degree of seriousness of the risk. 10. The defendant also acknowledges that it had control over the primary causal factors of the risk. 11. There was no deliberate conduct on behalf of the defendant to avoid or ignore its obligations under the WHS Act. I accept that to the contrary, the defendant had an established safety management system, which included documented Job Sheets intended to manage, relevantly, the risk of a fire or explosion caused by an electrical arc because of air being introduced into the transformer tank. 12. If Job Sheet U37 had been followed, the oil inlet and outlet valves of all three oil coolers would have been opened. If that had occurred, any oil that was leaking from cooler B would have been replenished from the conservator such that no air would have entered the system. 13. If the return to service flow chart had been properly followed, the steps on Job Sheet U58 would have been reversed, including removal of the RBO tag on oil pumps, which would have required the opening of the oil inlet and outlet valves of all three oil coolers. 14. If the RBO tag for oil cooler B had been correctly reversed and removed, as required, the oil inlet and outlet valves of oil cooler B would have been opened. 15. Critically, the slow leak of oil from oil cooler B was not detected, in circumstances where this involved small amounts of oil being leaked over several weeks, possibly washed away by rain. This provided a reasonable explanation for why the leak was not detected, notwithstanding the usual inspections. 16. The undetected slow leak of oil from oil cooler B is of particular importance in the sequence of events – because it was this loss that allowed for air in the system that results in the relevant risk, of fire or explosion caused by an electrical arc. 17. The incident occurred as a result of a combination of this series of unfortunate circumstances. The combination of those events culminated in a mistaken expectation that the oil inlet and outlet valves for cooler B were in an open state and cooler B was primed (sufficiently full of oil). 18. If cooler B had been primed (sufficiently full of oil), as was mistakenly expected, this would have removed the relevant risk to safety, by avoiding the introduction of air into the transfer tank, thereby preventing the consequent risk of fire or explosion caused by the electrical arc. 1. I accept that the defendant was aware of the relevant risk associated with the introduction of air into the oil cooler, and it was for the following reasons: 1. Procedures had been designed and implemented to avoid the introduction of air into those systems; 2. Regular maintenance was undertaken to test for leaks; and 3. The standard operations required that all oil coolers (including on standby) were primed (sufficiently full of oil) with oil inlet and outlet valves open. 1. In this sense, the relevant risk associated with air inside the system was, generally foreseeable. 2. However, the pertinent question is to what extent it was foreseeable that the relevant risk existed as at the time of the incident on 17 December 2020. In light of the prior sequence of events, it was not readily foreseeable — as at the time of the incident — that air had been introduced into the system, thereby presenting the relevant associated risk of fire or explosion caused by electrical arc. 3. In particular, it was the undetected slow leak of oil from oil cooler B that allowed air to enter the system, and the failure to detect that oil leak occurred in circumstances where it is possible that the leak involved very small amounts of oil, over several weeks, that may have been washed away by rain. 1. I accept that it is the risk that I am assessing the seriousness of, and not the manifestation of it. At [53] in Nash v Silver City, Basten JA dealt with the proper approach to considering the objective seriousness of offences under the Act, saying: 'It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of the injury occurring is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialise. The objective seriousness of the conduct will also be affected by the ease with which mitigation steps could have been taken.' 1. 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 (NSW) v Sarjame Storage Pty Ltd [2015] NSWDC 151 at [37] (Kearns DCJ). 2. The objective seriousness of an offence under s 32 of the WHS Act is considered in the context of the gradation of offences contained in ss 31–32 of the WHS Act: Nash v Silver City at [54]–[56]. 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: Ibid [34]; * The availability of steps to eliminate or minimise the risk: Ibid [34]; * Whether those steps are complex, burdensome or mildly inconvenient. If mitigating steps could easily have been taken, the offending will be more serious: Ibid [34] and [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. As a consequence of the matters set out above, I am of the view that this is an objectively serious offence. The seriousness of the foreseeable harm to a worker was extreme, and the steps available to avoid the risk were straight forward and inexpensive. Deterrence 1. In fixing a penalty in relation to these offences, an important objective feature is the need for specific and general deterrence. This is enshrined in s 3A(b) of the Sentencing Act. 2. General deterrence is a significant factor when safety obligations are breached. The fundamental duty of the Court to ensure a level of penalty for a breach will compel attention to work health and safety issues so that persons are not exposed to risks to their health and safety at the workplace: Fisher v Samaras Industries Pty Ltd (1996) 82 IR 384 at 388 (Hungerford J). 3. When examining matters of deterrence, both specific and general deterrence apply: R v Miria [2009] NSWCCA 68. 4. The Court of Criminal Appeal in Bulga Underground Operations v Nash (2016) 93 NSWLR 338 at [177]–[180] reaffirmed the principle that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process, unless there are exceptional circumstances which would allow a Court to depart from this rule, citing with approval the decision of the Full Bench of the Industrial Court of NSW in Capral Aluminium at [74]–[75] which said: '[74] … It follows that both aspects of deterrence [specific and general] are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43]), we would expect such cases to be very rare and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. … [75] … Even where an offender demonstrates good character or a commitment to rehabilitation, the court may be obliged to have regard to the need for general deterrence: see R v Thompson (1975) 11 SASR 217 at 222. This is particularly so where the offence in question is prevalent in society and represents a serious threat to the community. The need for general deterrence in relation to serious offences under the Act is undeniable.' 1. General deterrence must be a significant feature of the sentence imposed upon the defendant. It can be appropriately used to direct the industry's attention to the consequences of inattention and the need for greater concentration on the potential risks of death or serious injury associated with working in power stations, and in workplaces where generators, oil and heat are used. 2. 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 WHS 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. 3. 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. 4. The systems of work in place prior to the incident were clearly deficient and the defendant has acknowledged that and accepted full responsibility. I note that the Liddell premises commenced their final shut down some days ago, so deterrence as regards that site is not relevant. 5. I accept that the prospects of rehabilitation of the defendant are very good. However, having regard to the attitude of the defendant to the safety of its workers, I am confident that the workers left at Liddell may be offered employment with AGL elsewhere, and as such a measure of specific deterrence is required. Victim Impact Statement 1. Mr McNeill provided a Victim Impact Statement which became exhibit B, which I have read as difficult as it was to read as it described in detail the suffering, physical and emotional, that Mr McNeill has been through in the aftermath of the accident. 2. Mr McNeill participated in the sentence hearing via AVL and provided a Victim Impact Statement dated 27 March 2023 which became exhibit B. He is an extraordinary man, who showed such generosity of spirit, that I have very rarely witnessed. The effect of that statement cannot be underestimated and as such I will quote the whole statement: 'The impacts of this have been quite extensive in terms of both the physical and mental injuries. The level of pain experienced during the first few weeks is impossible to forget. The ongoing physio and counselling have also been challenging. To a lesser extent these therapies are continuing. The effects on personal relationships have been significant, and not something I considered likely. I suppose the stresses are far reaching, and something of this scale does change you as a person. Which requires a period of adjustment? The support I have received has allowed me to progress nicely on this front. I am currently back at work full time and very much enjoying the role I have been given. All my colleagues have been very supportive, as have my managers and direct reports. Returning to work was a huge turning point for my mental health, and I owe a debt of gratitude to the AGL return to work co-ordinator, my leader & managers for making this happen so seamlessly. It was explained to me by my counsellor, that regardless of the level of your innocence, i.e., in terms of the cause of an incident, the victim will inevitably carry a burden of guilt for the damages. Given the enormity of this incident this was a massive burden until I was informed of the route cause. I am extremely grateful to my managers for providing this information very quickly. Although this burden was reduced dramatically on knowing the route cause, it does not eliminate it completely because you continually think, if only I picked up on this. Further to the above, I have recently been given the opportunity to share my experience and critical learnings to all staff at Liddell. Hopefully providing some valuable insights that might help people if they encounter a similar circumstance. This has given me the feeling of something positive coming from the incident, which has been very helpful.' 1. Despite the suffering that Mr McNeill has been through, and continues to date, he has been very heavily involved in training workers at Liddell, in particular, in matters of safety. 2. Mr McLachlan's affidavit, which became exhibit 1, is also impressive. There is no doubt in my mind that the contents of that affidavit are true and it demonstrates acceptance of the breach and its consequences and the significant steps the defendant has taken subsequent to the incident. 3. Further, at [46] of the defendant's written submissions, the following is stated: '[46] A particularly helpful aspect of AGLM's remedial measures has been the facilitation of the safety talks conducted by Mr McNeill, as described in [159]–[162] of Mr McLachlan's affidavit. The personal insights shared in these talks by Mr McNeill has provided a powerful message to all staff about the importance of individual safety and the safety of others. The positive impact of these talks on workers, and indeed for Mr McNeill himself, is also apparent from Mr McNeill's Victim Impact Statement.' 1. It was a privilege that I had to hear Mr McNeill speak, and to hear how such a terrible incident has had a very beneficial impact to all workers still at Liddell, which is very much due to Mr McNeill himself for giving to others the special knowledge that he has, which must hit home to all those that were his co-workers. Aggravating Factors 1. For an aggravating factor to be established, I must be satisfied beyond a reasonable doubt that the harm was greater or more deleterious than may ordinarily be expected for the offence in question: R v Youkhana [2004] NSWCCA 412 at [26] (Hidden J, McColl JA and Levine J agreeing). It is not necessary that an injury occurred for the offence to be established, the creation of a risk is sufficient. Mr McNeill's significant injuries are an aggravating factor. The injury and emotional harm caused by the offence was substantial: s 21A(2)(g) of the Sentencing Act. Mitigating Factors 1. The defendant has been carrying out its business since acquiring it in 2012 and has no previous convictions: s 21A(3)(e) of the Sentencing Act. The business has expanded significantly to date. In Haynes v CI & D Manufacturing (No 2), Callaghan v CI & D Industries Pty Limited (No 2) (1995) 60 IR 455 at 456-457 the Full Bench Held the following: 'We think that having regard to the specific nature of the legislation, the past record upon which the both the prosecution and the defendants should rely must be intimately bound to the nature of the offences which the Court is considering, namely industrial safety, health and welfare. We add one comment on the question of the previous record, and that is that the Court should attempt to ensure the accuracy of the record and have objective regard to it in relation to the industrial enterprise and the extent of its operations. We consider that the extent of the operations of the defendant enterprises is to be taken into consideration when coming to conclusions having regard to the past record. Human experience indicates that the larger the number of industrial transactions a company is involved in the larger the number of industrial accidents which occur as a matter of statistical expectation. The safety record of a very large company with some prior convictions may, on analysis, be better than that of a small company with fewer such convictions. However, we again emphasise that in the context of the OHS Act the record is only one of the factors to be taken into account in assessing penalty and the essential inquiry must remain the circumstances of the breach in question.' 1. I have taken into account the size of the defendant and the company's industrial record of no prior convictions: s 21A(3)(e) of the Sentencing Act. 2. I accept that the defendant's achievements and participation in the energy distribution industry and the support they provided to Mr McNeill demonstrates that it is of good character: s 21A (3)(f) of the Sentencing Act. 3. I accept that the defendant has very good prospects of rehabilitation: s 21A(3)(h) of the Sentencing Act. 4. The defendant co-operated with SafeWork during the investigations: s 21A(3)(m) of the Sentencing Act. 5. Mr McLachlan's affidavit (exhibit 1) demonstrates the acceptance of responsibility for the defendant's failures and has demonstrated remorse and contrition: s 21A(3)(i) of the Sentencing Act. I further note that the defendant has gone to great lengths to re-employ Mr McNeill and support him after the accident. 6. The imminent closure of the Liddell power station is a further consideration that could weigh against the need for specific deterrence, however, the message to the whole of the defendant and its operations on different sites in the future need to be very aware of their obligations under the WHS Act. 7. The defendant entered a plea of guilty very early, which of itself demonstrates remorse, and the prosecutor submits it is open to me to find that the defendant is entitled to the maximum discount on that basis. Thus, I will allow the deduction of 25% for the utilitarian value of the pleas in accordance with the principles set out in R v Thomson & Houlton (2000) 49 NSWLR 383: s 21A(3)(k) of the Sentencing Act. 8. Having taken all of those matters into consideration, the appropriate fine for the defendant is $600,000.00. The defendant is entitled to a discount of 25% for the utility of the early plea. Penalty 1. I make the following orders: 1. The defendant is convicted. 2. The appropriate fine for the offence is $600,000.00, and that will be reduced by 25% to reflect the plea of guilty. 3. Accordingly, I order the defendant to pay a fine of $450,000.00. 4. Pursuant to s 122(2) of the Fines Act 1996 (NSW), 50% of the fine imposed is to be paid to the prosecutor. 5. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the defendant is to pay the prosecutor's costs agreed in the sum of $40,617.86. ********** 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: 02 May 2023