Industrial Court of New South Wales CITATION: Inspector Mayo-Ramsay v Caines Pty Limited & Ors [2006] NSWIRComm 223 PROSECUTOR Inspector Rosalie Mayo-Ramsay FIRST DEFENDANT Caines Pty Limited (in liquidation) PARTIES: SECOND DEFENDANT Frank Heagney THIRD DEFENDANT Graham Hislop FILE NUMBER(S): IRC 764, 765, 766, 767, 770, 771 of 2005 CORAM: Boland J CATCHWORDS: Occupational health and safety - Prosecutions under s 15(1), 16(1) and 50(1) of Occupational Health and Safety Act 1983 - Oil seed extraction industry - Three employees received fatal burns from an explosion in seed crushing mill - Corporate defendant in liquidation - Ex parte proceedings - Personal defendants pleaded guilty - Comprehensive failures to ensure safety of employees and others - Corporate defendant found guilty - Significance of general deterrence - Penalties imposed on all defendants Crimes (Sentencing Procedure) Act 1999 Criminal Procedure Act 1986 LEGISLATION CITED: Dangerous Goods (General) Regulation 1999 (Repealed) Fines Act 1996 Industrial Relations Act 1996 Occupational Health and Safety Act 1983 Abigroup Contractors Pty Limited v WorkCover Authority of New South Wales (Inspector Maltby) (2004) 135 IR 317 Camilleri's Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Crown in Right of the State of New South Wales (Department of Education and Training) v Keenan (2001) 105 IR 181 Department of Mineral Resources of New South Wales (McKensey) v Kembla Coal and Coke Pty Limited (1999) 92 IR 8 Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 Ferguson v Nelmac Pty Limited (1999) 92 IR 188 Fletcher Constructions Australia Limited v WorkCover Authority (Inspector Fischer) (1999) 91 IR 66 Inspector Atkins v Network Production Personnel Pty Limited [2004] NSWIRComm 71 Inspector Elizabeth Benbow v Planada Holdings Pty Limited [2001] NSWIRComm 275 Inspector Jones v T Helsby & Sons Contracting Pty Ltd (No 2) [2004] NSWIRComm 57 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Lowe v The Queen (1984) 154 CLR 606 CASES CITED: Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 Markarian v R (2005) 215 ALR 213 McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd (2004) 137 IR 310 Mill v The Queen (1988) 166 CLR 59 Morrison v Powercoal Pty Ltd (2003) 130 IR 364 Pearce v The Queen (1998) 194 CLR 610 Postiglione v The Queen (1997) 189 CLR 295 State Rail Authority of New South Wales v Dawson (1990) 37 IR 110 Haynes v C I & D Manufacturing Pty Limited; Callaghan v CI & D Industries Pty Ltd (1995) 60 IR 149 WorkCover Authority (Inspector Yeung) v Wilson (t/as Wilson's Tree Service) (2005) 143 IR 187 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Anor (2000) 95 IR 383 WorkCover Authority of New South Wales (Inspector Mansell) v Chen (2004) 137 IR 33 WorkCover Authority of New South Wales (Inspector Mansell) v Robert Josef (2004) 137 IR 241 WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No. 2) (2000) 99 IR 163 WorkCover Authority of NSW (Inspector Glass) v ACI Operations Pty Limited [1994] NSWIRComm 11 WorkCover Authority of NSW (Inspector Maltby) v Josef & Sons Contracting Pty Limited (In Liquidation) [2005] NSWIRComm 425 HEARING DATES: 29/05/06 DATE OF JUDGMENT: 07/07/2006 PROSECUTOR Mr M Cahill of counsel Solicitor: Mr G Diggins WorkCover Authority FIRST DEFENDANT LEGAL REPRESENTATIVES: No appearance - proceeded Ex-parte SECOND DEFENDANT Solicitor: Mr L Ryan THIRD DEFENDANT Mr G Hislop in person JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Boland J Friday 7 July 2006 Matter No IRC 764 of 2005 INSPECTOR ROSALIE MAYO-RAMSAY v CAINES PTY LIMITED (in liquidation) Prosecution under s 16(1) of the Occupational Health and Safety Act 1983 Matter No IRC 765 of 2005 INSPECTOR ROSALIE MAYO-RAMSAY v CAINES PTY LIMITED (in liquidation) Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 Matter No IRC 766 of 2005 INSPECTOR ROSALIE MAYO-RAMSAY V FRANK HEAGNEY Prosecution under s 15(1) and s 50(1) of the Occupational Health and Safety Act 1983 Matter No IRC 767 of 2005 INSPECTOR ROSALIE MAYO-RAMSAY v FRANK HEAGNEY Prosecution under s 16(1) and s 50(1) of the Occupational Health and Safety Act 1983 Matter No IRC 770 of 2005 INSPECTOR ROSALIE MAYO-RAMSAY v GRAHAM HISLOP Prosecution under s 16(1) and s 50(1) of the Occupational Health and Safety Act 1983 Matter No IRC 771 of 2005 INSPECTOR ROSALIE MAYO-RAMSAY v GRAHAM HISLOP Prosecution under s 15(1) and s 50(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2006] NSWIRComm 223 1 Caines Pty Limited (in liquidation) ("the first defendant") operated an edible oil refinery and a seed oil extraction plant, or seed-crushing mill, at Lot 10 Gardiners Road, Rutherford in the State of New South Wales. The seed-crushing mill was used by the first defendant to extract seed oil from a range of seeds including cottonseed, sunflower seed, canola and soya bean. 2 Frank Heagney ("the second defendant") was the general manager and company secretary of the first defendant. Graham Hislop ("the third defendant") was the managing director of the first defendant. 3 At approximately 6:20 am on 6 December 1999 there was an explosion in the seed meal storage bin known as bin D. The explosion in bin D occurred as three employees of the first defendant (Robert Anderson, Ronald Brooker and Geoffrey Terry) were opening an inspection hatch located at the base of bin D. 4 As a consequence of the explosion in bin D, the three employees received fatal burn injuries. Ronald Jenkins, the New South Wales Fire Brigades Captain in charge of the Telarah Brigade, who was attending at the site, along with other officers from the Fire Brigades, received burn injuries to his face and hands. 5 Arising out of the events of 6 December 1999, the three defendants were prosecuted by Inspector Rosalie Mayo-Ramsay of the WorkCover Authority of New South Wales for breaches of the Occupational Health and Safety Act 1983. 6 The first defendant was prosecuted for breaches of s 15(1) and s 16(1) of the Act. Those sections provide as follows: 15 Employers to ensure health, safety and welfare of their employees (1) Every employer shall ensure the health, safety and welfare at work of all the employer's employees. 16 Employers and self-employed persons to ensure health and safety of persons other than employees at places of work (1) Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. 7 By virtue of the operation of section 50(1) of the Act, the second and third defendants were also each charged with breaches of s 15(1) and s 16(1). Section 50(1) provides: 50 Offences by corporations (1) Where a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, shall be deemed to have contravened the same provision unless he or she satisfies the court that: (a) (Repealed) (b) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (c) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation. 8 The s 16(1) charge against the first defendant was expressed in the terms of the relevant statutory provision. The alleged failures particularised in the application for order were that the first defendant: i. Failed to provide and/or maintain a plant which was safe and without risks to health in that the design and construction of the seed-crushing mill failed to take adequate account of the fire and explosion risks inherent in the processes conducted in and about the plant. ii. Failed to provide and/or maintain plant that was safe and without risks to health in that the seed crushing mill, including the seed silos, meats bins, the meal bins, and the augur/transportation system, was not fitted with adequate fixed fire suppression systems. iii. Failed to provide and/or maintain plant that was safe and without risk to health in that the defendant failed to provide any mechanism for monitoring the heat of seed meal, including spent bleaching earth, in the meal storage bins. iv. Failed to provide and/or maintain plant that was safe and without risks to health in that the defendant failed to maintain an air cannon, located on the western wall of the meal storage bin known as bin D so that air could not leak from that air cannon into bin D. v. Failed to make arrangements for ensuring safety and absence of risks to health in connection with the storage of seed meal and/or seed meal mixed with spent bleaching earth. vi. Failed to provide a system of work that was safe and without risks to health with respect to handling of seed meal once the seed meal was found to be heating whilst stored in the meal storage bins, including but not limited to bin D. vii. Failed to develop and/or implement any safe working procedures designed to deal with the fire and/or explosion risks associated with the processes conducted in and about the seed-crushing mill. viii. Failed to provide information about the chemical characteristics of substances associated with the Seed Crushing process and in particular, the capacity of seed meal, both with and without spent bleaching earth being added to the meal, to heat spontaneously, smoulder and to give off pyrolytic vapours and gases and/or the capacity of the seed meal to give off pyrolytic gases and vapours if subjected to heating and/or partial combustion. ix. Failed to ensure that any or any adequate information regarding the chemical characteristics, the storage and/or handling of spent bleaching earth was available for provision to the New South Wales Fire Brigades in the case of a fire or related emergency at the site. x. Failed to ensure that any or any adequate information regarding the chemical characteristics, the storage and/or handling of seed cake was available for provision to the New South Wales Fire Brigades in the case of a fire or some other related emergency at the site. xi. Failed to ensure that any or any adequate information regarding the chemical characteristics, the storage and/or handling of seed meal and/or seed meal mixed with spent bleaching earth was available for provision to the New South Wales Fire Brigades in the case of a fire or some other related emergency at the site. xii. Failed to provide or maintain an Emergency Plan with respect to heating and/or fire in the meal storage bins for use by its staff in co-operation with the New South Wales Fire Brigades in case of a fire or some other related emergency at the site. xiii. Failed to provide or maintain a manifest of chemicals and/or dangerous goods stored on the site, including but not limited to spent bleaching earth, seed meal and/or seed meal mixed with spent bleaching earth, for provision to the New South Wales Fire Brigades in the case of a fire or some other related emergency at the site. xiv. Failed to provide or maintain any work procedures with respect to fighting fires in and about the seed crushing mill, including but not limited to smoulders in spent bleaching earth, smoulders in seed meal, dust explosions and/or dust fires in and about the seed crushing mill. 9 The s 15(1) charge against the first defendant was expressed in the language of the relevant statutory provision. The alleged failures particularised in the application for order were that the first defendant: i. Failed to provide and/or maintain a plant which was safe and without risks to health in that the design and construction of the seed-crushing mill failed to take adequate account of the fire and explosion risks inherent in the processes conducted in and about the plant. ii. Failed to provide and/or maintain plant that was safe and without risks to health in that the seed crushing mill, including the seed silos, meats bins, the meal bins, and the augur/transportation system, was not fitted with adequate fixed fire suppression systems. iii. Failed to provide and/or maintain plant that was safe and without risk to health in that the defendant failed to provide any mechanism for monitoring the heat of seed meal, including spent bleaching earth, in the meal storage bins. iv. Failed to provide and/or maintain plant that was safe and without risks to health in that the defendant failed to maintain an air cannon, located on the western wall of the meal storage bin known as bin D so that air could not leak from that air can non into bin D. v. Failed to make arrangements for ensuring safety and absence of risks to health in connection with the storage of seed meal and/or seed meal mixed with spent bleaching earth. vi. Failed to provide a system of work that was safe and without risks to health with respect to handling of seed meal once the seed meal was found to be heating whilst stored in the meal storage bins, including but not limited to bin D. vii. Failed to develop and/or implement any safe working procedures designed to deal with the fire and/or explosion risks associated with the processes conducted in and about the seed-crushing mill. viii. Failed to provide such information as was necessary to ensure the health and safety at work of the persons it employed at the site in that the defendant did not supply its employees with information about the chemical characteristics of substances associated with the seed crushing process and in particular, the capacity of seed meal, both with and without spent bleaching earth being added to the meal, to heat spontaneously, smoulder and to give off pyrolytic vapours and gases and/or the capacity of the seed meal to give off pyrolytic gases and vapours if subjected to heating and/or partial combustion. ix. Failed to provide such instruction and training as was necessary to ensure the health and safety at work of the persons it employed at the site in that the defendant did not supply its employees with instruction and training about the chemical characteristics of substances associated with the seed crushing process and in particular, the capacity of seed meal, both with and without spent bleaching earth being added to the meal, to heat spontaneously, smoulder and to give off pyrolytic vapours and gases and/or the capacity of the seed meal to give off pyrolytic gases and vapours if subjected to heating and/or partial combustion. x. Failed to provide any or any adequate information with respect to the chemical characteristics, the storage and/or handling of spent bleaching earth. xi. Failed to provide any or any adequate information regarding the chemical characteristics, the storage and/or handling of seed cake. xii. Failed to provide any or any adequate information regarding the chemical characteristics, the storage and/or handling of seed meal and/or seed meal mixed with spent bleaching earth. xiii. Failed to provide or maintain an Emergency Plan with respect to heating and/or fire in the meal storage bins. xiv. Failed to provide or maintain a manifest of chemicals and/or dangerous goods stored on the site, including but not limited to spent bleaching earth, seed meal and/or seed meal mixed with spent bleaching earth. xv. Failed to provide or maintain any work procedures with respect to fighting fires in and about the seed meal, including but not limited to smoulders in spent bleaching earth, smoulders in seed meal, dust explosions and/or dust fires in and about the seed crushing mill. xvi. Failed to provide or maintain any personal protective equipment for its staff to use in the course of fighting a fire or whilst assisting fire officers. 10 In relation to the second defendant the charges and the particulars of the charges were, relevantly, a reflection of those laid against the first defendant. Similarly so in respect of the third defendant. 11 Despite service of the order made under s 246(1) of the Criminal Procedure Act 1986, as applied by s 168 of the Industrial Relations Act 1996, being properly effected on the first defendant at its registered office on 17 March 2005, there was no appearance by the first defendant at any stage of the proceedings. 12 The Court was advised by the prosecutor, based on a letter from D J Offermans of Knights Solvency Administration dated 11 August 2005, that the first defendant was in liquidation and "is without funds and will not be defending these proceedings." 13 Section 250 of the Criminal Procedure Act provides: 250 Procedure where accused person does not obey order to appear If the accused person does not appear on the day and at the time and place set by an order under Division 2 (or on a day to which a hearing has been adjourned), the court may, if satisfied that the order was served on the accused person: (a) proceed to hear and determine the matter in the absence of the accused person, or (b) if the court thinks the matter should not proceed on that day or without the accused person, adjourn the hearing to a specified time and place and make an order for the apprehension of the accused person under Division 2. 14 The Court proceeded to deal with the charges ex parte on the basis of not guilty pleas. 15 In relation to the second and third defendants, each entered pleas of guilty to the charges under s 15(1) and s 16(1). First defendant - the evidence 16 Mr M Cahill of counsel for the prosecutor tendered a statement of facts together with three lever arch folders of evidentiary material relevant to the prosecutor's case that included statements, extracts from transcript of the coronial proceedings, minutes of meetings, material safety data sheets, police and insurance company reports, autopsy reports, a 40-page report by Test Safe Australia following its investigation into the incident at Rutherford on 6 December 1999, photographs and plans. 17 The statement of facts, which was drawn up based on the material in the three folders, indicated that there were four bins known as bins A, B, C and D, located on the site adjacent to the seed crushing mill. These storage bins were used to store the seed used in the seed crushing mill and a by-product of the oil extraction process consisting of the ground remnants of the seed, known as "seed meal". As at 6 December 1999, bin D contained between about 40 and 45 metric tonnes of cottonseed meal. The cottonseed meal contained in bin D also included a quantity of "Tonsil Activated Clay". Tonsil Activated Clay is a diatomaceous earth used in the oil refining process in the first defendant's oil refinery. The Tonsil Activated Clay, also known as "spent bleaching earth", once used in the oil filtration process was saturated with seed oil. The cotton seed meal stored in bin D (including the Tonsil Activated Clay) if heated sufficiently, and/ or partially combusted, was liable to give off a mixture of volatile fumes and pyrolytic gases. 18 The evidence was that at about 11.00 pm on Sunday, 5 December 1999, Robert Jordan and Jason McKewen, employees of the first defendant, attended at the site. Robert Jordan was at the site to start up the seed crushing mill in preparation for the commencement of the day shift. Jason McKewen was at the site to start up the oil refinery. In addition, two other employees were present on site, Greg Hall who was doing maintenance on a scrubber pump, and Jason Brooker who was working in the refinery. 19 At about 2.00 am Robert Jordan noticed a strong, unpleasant odour in the vicinity of the storage bins. At approximately 2:45 am, when Robert Jordan walked down between bins B and D, he noticed heat coming from in between the two bins. When Robert Jordan put his hand onto the western side of bin D he noticed that it was very hot adjacent to the air cannon, an air operated device for dislodging meal from the interior walls of the bin. Mr Jordan rang Bob Anderson, the acting site supervisor, to obtain some advice. Mr Anderson told Mr Jordan "he did not know much about it, and he would go down to the NSW Fire Brigades". 20 Mr McKewen then got a Riken gas monitor, used for detecting gas leaks in the first defendant's hydrogenation plant, to check the odour near the storage bins. While Mr McKewen was operating the monitor and walking back down toward the storage bin area, the meter of the monitor went "off the dial". When Mr McKewen approached the storage bin area on a second occasion, the monitor went "off the dial" again. 21 At 3:32 am Ronald Jenkins, Captain of Telarah NSW Fire Brigades, received a call on his NSW Fire Brigades pager. Captain Jenkins was alerted to a "fire in drum" at the first defendant's Rutherford site. Captain Jenkins arrived at Telarah Fire Station at 3:39 am and proceeded to the site with Telarah's pumper and crew. 22 When the Telarah Brigade arrived at the site, Mr Jordan was waiting at the front gate. Mr Jordan said in his statement to Police made on 10 December 1999 and his statement to WorkCover on 17 February 2000 that he told members of the Telarah Brigade on their arrival at the site about the gas smell and that "the gas monitor had gone off the scale. Retained firefighter ("Rf") Walter Morris, the driver of the Telarah pumper, confirmed that a member of the first defendant's staff motioned him to stop as he was approaching the site and that the member of staff said words to the effect: "We've had a fire in a silo they had been using a gas monitor which was going off the dial". Rf Morriss then drove the Telarah pumper to the rear of the site and parked it behind the crushing mill. 23 The evidence showed that Captain Jenkins accompanied Mr Anderson to the storage bin area where he felt the side of bin D at head height and found it to be hot. Captain Jenkins reported that he asked one of the operators if the bin was hot on top, the operator said it was not. Captain Jenkins also reported that he then asked Mr Anderson if there was access into the bins from the top and Mr Anderson said that there was no access into the storage bins from the top. As there was a strong pungent odour around the storage bin area that irritated his eyes and throat, Captain Jenkins evacuated the seed-crushing mill and called for the assistance of the Hazmat Unit from Newcastle. 24 After Station Officer Evans (Hazmat) arrived at the site, there was discussion between Mr Anderson, Captain Jenkins and S/O Evans regarding the monitoring of gas and the removal of the cottonseed meal from the storage bin. 25 The statement of facts stated (references to evidence omitted): S/O Evans assigned Fire-fighter (Ff) Greg McCall of the Hazmat Unit to monitor the gas in and around the seed-crushing mill. In his statement Ff McCall stated that his task was to monitor the temperature of the "hopper" and the product being removed from inside the "hopper". For reasons that have not been satisfactorily explained, a period of 35 minutes elapsed from the time of the arrival of the Hazmat Unit at the site until Ff McCall obtained the TMX 412-gas monitor from the Hazmat truck to check for the presence of flammable gases. According to Ff McCall, the TMX 412 gas monitor did not detect the presence of any flammable gases and the oxygen level in the seed mill area was "sufficient". However, about 5 to 10 minutes after Ff McCall commenced using the TMX 412 gas monitor, the monitor went into low battery mode. Ff McCall did not replace the batteries. There is no evidence that any further checks for flammable gases were carried out prior to the subject explosion. After the subject incident, all efforts to recover the test data from the memory chip of the TMX 412 gas detector failed. Upon further examination the unit's data logger was found to have failed. 26 Following discussions between Mr Anderson, Captain Jenkins and S/O Evans, Mr Anderson sent Mr Jordan to the top of the bin area. Mr Jordan made the trip to the bins unaccompanied and unsupervised by any member of the New South Wales Fire Brigades. 27 Following further discussions between Mr Anderson, Captain Jenkins and S/O Evans, S/O Evans decided that the cottonseed meal should be removed from the bin and dumped onto a concrete pad outside the seed-crushing mill to cool down. The cottonseed meal was to be removed from the bin using the auguring system to deliver it into a truck in the "receival bay" and the truck would then be used to dump the meal on to the concrete pad for cooling. 28 Ff McCall and Mr Anderson continued to monitor the temperature of the meal coming out of the augur system into the truck, as well as the side of bin D, with Raytec heat monitors. When temperature monitoring was commenced, the temperature measured at the hottest point on the side of the bin was 280 degrees Celsius. The hottest point being immediately adjacent to the air cannon. When all the meal had been removed from the hot side of bin D the temperature adjacent to the air cannon was 70 degrees Celsius. Other temperature readings around bin D were as low as 35 degrees Celsius. 29 Mr McKewen drove the truck and Mr Jordan operated the auger system used to empty the meal from bin D. Neither Mr McKewen nor Mr Jordan were provided with any form of personal protective equipment. 30 One to one and a half truckloads of meal had been removed when the augur began to run dry. Employees of the first defendant then bashed on the side of the bin with a 35mm diameter iron bar to loosen the remaining meal. When this occurred, Mr Jordan noticed "a lot of pale blue smoke coming out of the doors that feed into the auger". 31 The statement of facts noted (references to evidence omitted): Mr Jordan was asked by Mr Anderson to go to the top of the bins on a second occasion that morning. The purpose of this second trip was to measure how much meal was left in bin D. Again, Mr Jordan made this trip to the top of the bins unaccompanied and unsupervised by any member of the New South Wales Fire Brigades. When Mr Jordan reached the top of the bins he noticed smoke coming out of the inspection hatch at the top of bin D. When Mr Jordan opened the lid on the inspection hatch to drop the measuring tape into the bin, Mr Jordan saw smoke being drawn back into the bin. Mr Jordan then waited a few minutes before putting his tape about 12 metres down into the bin to a point just above the augur. When Mr Jordan returned to the base of the bin area, he informed Bob Anderson that the bin was empty. Mr Jordan did not inform anyone of the smoke coming from the inspection port. Mr Jordan then returned to the operation control panel in the receival [loading] bay. 32 The statement of facts continued, stating that in accordance with instructions provided to him by Mr Anderson, Mr Jordan closed all the augur doors to the augur on the hot side of bin D except for one in which he had changed the air line around for it to remain open as it had a faulty solenoid. Mr Jordan then opened the two rear doors on the augur for the cool side of bin D. The purpose of this activity was to bring the meal away from the inspection hatch at the base of bin D. 33 Mr Anderson also instructed Mr Brooker and Mr Terry to take the inspection hatch cover plate off from the base of bin D. An employee then turned on the compressor so that Ron Brooker and Geoffrey Terry could use a pneumatic bolt gun to undo the bolts securing the inspection hatch cover from the base of bin D. The statement continued: Shortly after Mr Jordan started the augur to remove the meal from the cool side of bin D, Mr Anderson, Mr Brooker and Geoffrey Terry started to remove the inspection hatch cover from the base of bin D. As Mr Anderson, Mr Brooker and Mr Terry were removing the inspection hatch cover from the base of bin D, there was an explosion inside bin D. Mr Jordan was standing at the control panel in the receival [loading] bay when the explosion occurred. Mr Jordan saw a fireball come out of the augurs and engulf the entire loading bay area. Fire also emerged from the discharge chute above the truck in the loading bay. At the time of the explosion, Captain Jenkins was approaching the base of bin D. Captain Jenkins saw a fireball coming out of the base of bin D. Captain Jenkins, who had removed his gloves, pulled down the visor on his helmet to protect his face but suffered severe burns to his hands and other parts of his body. Mr Anderson, Mr Brooker and Mr Terry were at the base of bin D when the inspection hatch cover opened. As the inspection hatch opened, there was an influx of cold, oxygenated air into bin D. This influx of air was followed by an explosion inside bin D and a fireball that emanated from the hatch opening to engulf all three men. As a consequence, all three men suffered serious burns to more than 60% of their bodies and later died of their injuries. 34 In relation to the cause of the explosion the statement indicated (references to evidence omitted): The preponderance of the evidence suggests that the explosion was a backdraft event in the sense that opening the hatch allowed cool oxygen-rich air to enter the bin where it mixed with the explosive gases trapped within the bin in the presence of a source of ignition such as a remnant of the hot "charcoalised" meal. [50] However, the preponderance of the evidence also indicates that combustion of "vegetable" dusts in Bin D and in the communicating duct work formed part of the event. On this scenario, the presence of cottonseed meal dust was still significant as it constituted additional fuel for the combustion/ explosion process. 35 The statement observed that: · Cottonseed meal dust is identified in AS 2430.2—1986 as having a "strong" degree of hazard severity in terms of its ignition sensitivity and explosion severity. · The seed meal, or ground seed cake, stored in bin D was a class 4.2 spontaneously combustible dangerous good that belonged to packaging group II as defined in the Australian Dangerous Goods Code. · It was common knowledge throughout the oil seed industry that oil seed meal could heat spontaneously and combust. 36 The prosecutor's statement of facts indicated that the risk of heating and spontaneous combustion of seed meal were considered in two Policy Holder's Property Loss Control Reports dated 13 May 1997 and 7 December 1998, respectively, prepared by Mr Wallington, a Risk Analyst employed by Zurich International (Australia). Mr Heagney, the second defendant, conferred with Mr Wallington during a site visit on 18 November 1998 and Mr Heagney was on the distribution list set out in each of the subject reports. 37 The statement also noted that from 1 September 1999 it became a requirement of the Dangerous Goods (General) Regulation 1999 to license the storage of Class 4.2 spontaneously combustible materials to which "seed meal" belonged where the quantity "stored" exceeded 1,000 kilograms. At the time of the explosion the first defendant had not amended its Dangerous Goods Licence to include the seed meal stored on the site and the storage bins were not signposted to indicate that the bins contained Class 4.2 spontaneously combustible goods. Further, that: The defendant failed to provide or maintain a manifest of chemicals and/or dangerous goods stored on the site including but not limited to spent bleaching earth, seed meal and/ or seed meal mixed with spent bleaching earth. As at 6 December 1999, the employee of the defendant nominated as the contact person in respect of dangerous goods storage at the site was Richard Zambrowski, the maintenance manager. Mr Zambrowski was unaware that he was the nominated contact and had received no formal training regarding the storage of such goods. 38 In relation to the design of the first defendant's plant the statement indicated (references to evidence omitted): § The design of the product transportation system, the seed storage silos, the meats bin and the meal bins (including Bin D) at the site took little account of the risks associated with dust explosions. § The design did not include venting and/ or dust explosion hatches. § The design did not include any form of spark arrestors in the hammermill or any form of spark or fire detection system in the conveying line from the hammermill to the meal bins. Equipment within the mill at the site had a propensity to release metal fragments (known as "tramp metal") into meal (including cottonseed meal) as it was processed. § The presence of tramp metal in cottonseed meal as it passed through the hammer mill gave rise to the potential for the creation of sparks generated as the tramp metal was struck. Such sparks were a potential source of ignition of combustible dusts such as cottonseed meal dust. § The electrical fittings within the mill at the site were specified and installed on the basis that canola and sunflower milling activity was to take place (neither canola nor sunflower are identified as a combustion hazard in AS 2430.2—1986). Such fittings were not specified and installed as being appropriate for cottonseed milling activity. The electric motors within Bin D, for example, were not dust ignition proof. § The existence of horizontal flat surfaces on the interior of the walls of the receival section of the expeller building permitted the build-up of combustible cottonseed meal dust. § The fire fighting plant and equipment at the site was extremely limited. The fire fighting facilities available in the expeller plant, including the associated seed storage silos, the meats bin the meal bins (including Bin D) and the storage warehouse was limited to: (a) a 100 metre dead end main running to the end of the site; (b) 1 fixed reel hose located in the vicinity of the bins; and (c) some hand-held extinguishers. · The design did not include any form of fixed fire fighting system in or around the products bins. In particular, there were no sprinklers, deluge system or any other form of fixed fire protection in place within the crushing plant or in the seed/ meal transportation system. 39 On the issue of supervision, the statement noted from the evidence that: · During the course of the morning after the arrival of the Hazmat Unit, but prior to the explosion, Mr Jason Brooker, Mr Jason McKewen, Mr Richard Zambrowski, Mr Nigel Little, Mr Steven Hipwell and Mr Mark Price, at various times, all entered the seed crushing mill and the storage bin area unaccompanied and unsupervised by members of the New South Wales Fire Brigades. · These employees were also allowed to undertake activities in and about the seed crushing mill and the storage bin area independent of the New South Wales Fire Brigades. These activities included banging on the side of bin D with a metal bar or "stock" on a number of occasions whilst the bin was being emptied and also the activation of plant and equipment. · The banging on the side of Bin D with a metal bar acted to create or excite a cloud of combustible cottonseed meal dust within the bin in the presence of a potential ignition source being heating and/ or smouldering cottonseed meal and spent bleaching earth. The risk of creating a dust cloud inside the bin and the subsequent risk of explosion was recognised before 6 December 1999. · Further, on two occasions after the NSW Fire Brigades were on site, Mr Robert Jordan was sent unaccompanied to the top of the seed bins. 40 The statement contended that the seed meal storage bins were not fitted with permanent temperature monitors. This was despite the fact the first defendant was concerned about monitoring the temperature of the meal in the bins because the first defendant had carried out some preliminary tests involving the placement of temperature probes into the bins. But the probes were destroyed. It was further contended that prior to 6 December 1999 the first defendant only monitored the temperature of its seed meal as it was discharged into trucks for dispatching, or when the meal was moved to another bin. This process was not related to monitoring the temperature of the seed meal in the bins. 41 The evidence disclosed that the air cannon in bin D had not been in a serviceable condition for a period of a few months prior to 6 December 1999. During that time air had been escaping from the solenoid valve with the possible consequence that it was leaking into the interior of bin D in proximity to the area within bin D where the meal was heating. Mr Jordan said in his evidence before the Coroner that air was leaking into bin D. The leakage of air from the solenoid valve was not stopped - by means of operating an isolating valve - until approximately one hour prior to the explosion. As at 6 December 1999, the first defendant had no system of regular inspection and maintenance of the air cannon in bin D. 42 The statement of facts also dealt with the evidence relating to the first defendant's failure to provide information, instruction and training. In this respect it was stated (references to evidence omitted): § As at 6 December 1999, the defendant had no written work procedures or training on how to manage seed meal that had heated, and in particular, seed meal once it had started to smoulder. § There were no written work procedures prescribing the actions that should be taken by staff in the event of a fire in the seed crushing mill or the meal storage bins. The defendant's staff had also had no training on what to do in case of such an emergency arising. § The defendant did not supply its employees with information, instruction or training about the chemical characteristics of substances associated with the seed crushing process and in particular, the capacity of seed meal, both with and without spent bleaching earth being added to the meal, to heat spontaneously, smoulder and to give off pyrolytic vapours and gases and/ or the capacity of the seed meal to give off pyrolytic gases and vapours if subjected to heating and/ or partial combustion. § The defendant did not supply the members of the NSW Fire Brigades present at the site on 6 December 1999 with adequate information about the properties of cottonseed meal and its combustibility. The Fire Brigades were provided with a Material Safety Data Sheet relating to unused tonsil activated clay. § The defendant had not developed any Material Safety Data Sheets that included intermediate products such as spent bleaching earth and seedcake and/ or final products such as seed meal (either with or without the addition of spent bleaching earth). § As at 6 December 1999 the defendant had not provided its employees with any instruction or training in relation to fire fighting either generally or in relation to fires in silos. § As at 6 December 1999 the defendant had not provided its employees with any instruction or training in relation to the possibility of a dust explosion in a silo. § As at 6 December 1999 the defendant had not trained or instructed its employees not to bang the sides of bins (such as Bin D) so as to avoid the creation or excitation of clouds of combustible dust within such bins. The defendant had not put in place any written procedures proscribing, or warnings against, such a practice. § Prior to 6 December 1999 a practice had developed among the defendant's employees at the site of banging the sides of bins to attempt to determine if they were empty. The defendant had permitted such a practice (subject to an attempt to have employees use a rubber hammer rather than a metal bar to strike the bin out of concern that the use of the latter damaged the appearance of the bin). § As at 6 December 1999, the defendant had failed to provide training to its employees in relation to the use of personal protective equipment. 43 In relation to the last matter the evidence was also that the first defendant failed to provide or maintain any personal protective equipment (such as fire-retardant suits and breathing apparatus) for its staff to use in the course of fighting a fire at the site or while assisting Fire Brigade officers in fighting such a fire. 44 As to an emergency plan, the evidence referred to in the statement was that, as at 6 December 1999, the first defendant had not implemented any emergency/ evacuation/ disaster plan in relation to the Rutherford site. 45 The prosecutor's statement of facts identified the remedial steps taken by the first defendant following the incident (references to evidence omitted): a. the installation of a permanent, data-logging, heat monitoring system into the seed meal storage bins. Such technology was available prior to 6 December 1999 and could have been adopted at the site; b. the installation of explosion hatches to the roof of the seed meats and seed meal storage bins; c. the installation of ventilation stacks to the roof of the seed meats and seed meal storage complex; d. the installation of an extensive fixed fire-fighting system to the seed meats and seed meal storage complex including the installation of a deluge system. Such technology was available prior to 6 December 1999 and could have been adopted at the site; e. the installation of fixed points for the introduction of nitrogen or carbon monoxide to the seed meal storage bins so that inert gas can be introduced into the bins in the event of a heating or fire; f. the development of an emergency procedure guide and an evacuation procedure; g. the development of MSDS for seed meal; h. the amendment of its Dangerous Goods licence to include seed cake and seed meal, with the installation of appropriate signposting to the storage bins and at the entrance to the site; i. the installation of lining and barriers in the receiving and dispatching areas to reduce dust build-up; j. the cessation of the practice of disposing of spent bleaching clay by means of mixing it with cottonseed meal; k. the implementation of a work procedure for the handling of cottonseed meal; l. the purchase of 2 sets of full fire-fighting gear. 46 The statement of facts noted that a series of risk assessment reports in relation to the first defendant's premises and operations at the Rutherford site had been commissioned by the first defendant's insurer, Zurich Financial Services Australia Limited ("Zurich"), prior to the fire and explosion of 6 December 1999. These reports had been received by the first defendant and Mr Heagney prior to 6 December 1999. 47 The statement continued (references to evidence omitted): On 6 May 1997 Mr Bob Wallington, a risk analyst employed by Zurich International (Australia), carried out a site inspection at the defendant site at Rutherford. Wallington then prepared the Policyholder's Property Loss Report 13 May 1997. This report contained a number of recommendations relevant to the subject risk. These recommendations were described as being critical risk improvements necessary before Zurich would rate the defendant as a "Good" risk. These recommendations included: (a) Installation of a 100mm diameter main (minimum), ideally in a ring configuration around the main buildings, together with other mains fire fighting upgrades. (b) Urgent review of handheld extinguisher and hose-reel coverage inside the buildings, including foam-making attachments for the hose-reels. (c) Implementation of formal hazard controls (Hot Work controls, fire/ safety self-inspections, electrical safety checks and a preventative maintenance program). (d) Review and upgrade safety training for employees and safety inductions for new staff. (e) Introduce training in fire and emergency procedures training, install audible emergency alarm/ siren. (f) Provide an upgraded emergency site plan for Fire Brigade use and invite regular Fire Brigade inspections. (g) Review of dust control in the new expeller building and make provision for cleaning down services. (h) Implement daily monitoring of temperatures in seed silos and meal bins. (i) Recommendations for housekeeping to reduce the risk of dust fires and explosions, particularly in the "receival bay". 48 On 18 November 1998 a representative of Zurich inspected the site at Rutherford. A report was subsequently prepared reviewing the recommendations made in May 1997 referred to in the foregoing paragraph That report noted the following: (a) Although fire extinguishers had been installed in the new crushing plant area, no hose reels or foam equipment had been installed. The newly constructed meal storage shed had no fire protection equipment. (b) No fire/emergency alarm had been installed, nor were training in emergency or evacuation procedures in place. (c) There had been no action taken in relation to the preparation of fire prevention manuals. (d) No action had been taken in relation to the preparation of an emergency site plan and the organisation of Fire Brigade inspections. (e) Means had not been implemented for the monitoring of temperatures in the seed silos and meal bins. 49 A Policyholder Loss Control Report dated 11 December 1998 prepared by Zurich in relation to the Rutherford site recommended that the first defendant improve housekeeping to prevent the build-up of oily dust in the receival area of the expeller building. The report stated: Although general housekeeping around the site is satisfactory, we are concerned about conditions in the receival section of the expeller building, where oily dust is accumulating on internal building members, despite blow down procedures, and spillage in the conveyor boot has thickly covered most surfaces including electricals. There is no easy solution to this problem now the building has been erected (metal cladding should have been installed on the inside of the frame to eliminate horizontal flat surfaces), but any ignition source such as a cigarette or hot tramp metal from a delivery truck may result in a major fire in this area. 50 The statement of facts noted that: Engineering, Safety and Project Personnel Pty Ltd [ESP] prepared a report for the defendant dated 21 October 1999 which reiterated certain of the recommendations outlined above. Little if any effective action had been taken to implement ESP's recommendations prior to the subject incident. 51 Approximately 12 months prior to 6 December 1999, a dust explosion occurred in a section of the site known as the number 1 bag house. 52 The first defendant established an occupational health and safety committee at the site in February 1999. The evidence in relation to the operation of this committee was that: · At all material times Heagney was the defendant's management representative on the OHS committee. Prior to 26 March 1999, Heagney was the chairperson of the OHS committee. · At a meeting of the OHS committee on 23 February 1999, it was agreed that evacuation and disaster plans were to be obtained and circulated to staff. At that meeting it was further agreed that the committee "look at" the monitoring of the temperature of seed meal and the possibility of using nitrogen for cooling purposes. · At a meeting of the committee on 26 March 1999, it was agreed that fire training for staff would be organised in coming months. · At a meeting of the committee on 12 May 1999, it was agreed that emergency evacuation plans were to be distributed to all staff as soon as possible. · At a meeting of the committee on 20 May 1999, it was agreed that daily checks of seed meal temperature were to be undertaken. Readings were then taken when the seed meal was emptied, for delivery, from the Bins. · At a meeting of the OHS committee on 19 August 1999, it was agreed that a site register for access by the Fire Brigade was to be kept at the site office. This register was to outline the chemicals stored at the site, the emergency plan and the evacuation plan. · A further meeting of the OHS committee was held on 9 September 1999. · As at 6 December 1999, the members of the OHS committee had not received training to assist in the exercise of their functions. · As at 6 December 1999 the Zurich Policyholder Loss Control Reports had not been provided to (nor had the recommendations contained therein had been communicated to) the members of the OHS committee, apart from Mr Heagney who received the reports in the circumstances described above. Evidence - second defendant 53 The second defendant, Mr Heagney, was represented by his solicitor, Mr L Ryan. Mr Cahill for the prosecutor tendered a statement of facts to which no objection was taken by the second defendant. The statement was in similar terms to the statement of facts relating to the prosecution of the first defendant except that, in addition, it was stated: The Role of the Defendant in Occupational Health and Safety at Caines. 118 The defendant, in his capacity as general manager of Caines, was directly involved in the approval processes relating to the design, approval and construction of the expeller plant. 119 The defendant, in his capacity as general manager of Caines, was directly involved in the company's dealings with the Environment Protection Authority ("EPA") including dealings with the EPA relating to the licensing of the design, construction and operation of the expeller plant. 120 The defendant, in his capacity as general manager of Caines was directly involved in the management of the company's dangerous goods licence applications and management of the company's compliance with the relevant legislative requirements. 121 In his role as general manager of Caines, the defendant was directly involved in matters concerning identification and management of the risks associated with the operation of the expeller plant. For example, the defendant was a party to the risk analyses conducted by Bob Wallington on behalf of Zurich and was named on the distribution list for the circulation of the Loss Control reports generated on behalf of Zurich. The defendant was the management nominee and thereby the personal representative of the company's principal (Mr Graeme Hislop), on the company's OH&S committee. 122 The defendant's signature is to be found on a wide range of documents relating to the matters referred to paragraphs 118 to 121 above, including: a. Various correspondence and Development Application forms with Maitland City Council concerning the construction of the expeller plant b. Various correspondence with the EPA concerning the licensing and operation of the expeller c. A Facsimile/ memorandum dated 3 November 1998 from Mr Kapitanof (an employee of Caines) to the defendant entitled "RE OHS IMPLEMENTATION & PROPOSED EQUIPMENT PURCHASE REQUIREMENT"; d. The 2 Property Loss Control Reports prepared by Mr Wallington (on which the defendant is named as both a participant in Mr Wallington's site inspections and as the addressee for the company with respect to both reports); and e. The minutes of meetings of the Rutherford site OH&S Committee (on which the defendant is named as the management's nominee). 54 It was also stated that the second defendant was in attendance at all of the meetings of the OHS committee referred to in the statement relating to the first defendant. 55 In addition to the statement of facts, plans of the Rutherford plant were tendered together with a plan of the Expeller Building. The prosecutor also tendered a bundle of documents that included photographs, insurance company reports, minutes of meetings of the first defendant's occupational health and safety committee, Australian Standards relating to hazardous materials, Material Data Safety Sheets and the TestSafe Report referred to in relation to the prosecution of the first defendant. 56 For the second defendant, his affidavit was tendered and read. Mr Heagney was required for cross-examination. Mr Heagney commenced with the first defendant as a junior clerk in 1963 after gaining his Leaving Certificate. Mr Heagney said that in about 1978 Graham Hislop, the third defendant, acquired the controlling interest in the first defendant and he assumed the role as Managing Director. Shortly after this Mr Heagney was appointed General Manager of the business although his role was defined primarily as a financial controller. 57 Mr Heagney said in his affidavit that whilst he held the position as General Manager of the first respondent Mr Graham Hislop actually took personal responsibility for all operations carried out at the Rutherford refinery. Mr Heagney said he was responsible for financial matters and took little interest in the actual activities that took place at the Rutherford plant with the exception of ensuring due payment of wages, taxation, superannuation and other employee entitlements. Mr Heagney acknowledged he was a member of the Occupational Health and Safety Committee. 58 The second defendant deposed that at the time of the explosion on 6 December 1999 there was, in effect, dual management of the first defendant with Mr Hislop being primarily responsible for operational matters whilst Mr Heagney was primarily responsible for financial matters. They worked as a team although Mr Heagney said he was at all times answerable to Mr Hislop. Mr Heagney accepted that he should have taken a more pro-active role in relation to matters involving the health, safety and welfare of all of the employees within the Company and he sincerely regretted that he was remiss in that regard. 59 In relation to the statement of facts Mr Heagney stated: I have this day read the Statement of Facts prepared by the Solicitor acting on behalf of WorkCover. Whilst I agree substantially with the Statement of Facts there are a number of matters in respect of which I would like to make comment and they are:- a. In relation to paragraph 118 I state that the applications which were submitted to various authorities were signed by myself because Mr Graham Hislop was not present at the time when the documents had to be signed and submitted. I wish to make it quite clear that I had no input into the design or construction of the premises at Rutherford and that this was the actual product of Mr Hislop and his technical advisors. b. As to paragraph 119 I do concede that I attended a number of meetings with the E.P.A., however, on each occasion when I attended these meetings I clearly attended as a support for Mr Hislop who was actually responsible for the operational compliance with the various conditions on the license. c. As to paragraph 120 I do state that as at the date of the explosion there had been no material distributed by the relevant authority to advise that cotton seed meal had been added to the dangerous goods list. When I was interviewed by Inspector Mayo-Ramsay she actually conceded this fact. d. As to paragraph 121 I do state that my only dealings with Mr Wallington occurred when I was required to deputise for Mr Hislop who was in Sydney on those occasions when Mr Wallington attended the plant. Unfortunately I was not possessed of sufficient technical skills to be of any constructive assistance to Mr Wallington. Putting it in layman's language "I was out of my depth". e. As to the post-incident remedial steps which were implemented and which have been referred to in paragraph 95 I do state that these remedial steps were undertaken whilst I still occupied the position as General Manager of the Company and before the Company had been placed into liquidation. 60 Mr Heagney further deposed: On careful reflection I do now appreciate that by 1999 the size and the nature of the Caines enterprise had outgrown my capacity to perform properly the role as a General Manager as well as accepting responsibility for all financial affairs of the Company. All of my available working time was utilised attending to matters which related to financial control and accountability. With the benefit of hindsight I do now appreciate that I should have been more pro-active in relation to occupational health and safety matters especially in relation to the relatively large factory operations which were conducted in the crushing plant at Rutherford. It was remiss of me to leave these matters in the hands of the various departmental managers. I believe that the tragic events which occurred on 6 December, 1999 were the culmination of failures by myself, Mr Hislop and also the NSW Fire Brigade officers. The contributory role played by myself, Mr Hislop and the Fire Brigade officers was canvassed in detail by the Deputy State Coroner and I do believe that this honourable Court should have the benefit of considering the comments made by the Deputy State Coroner when she handed down her findings. In the hope that the comments and findings will be of assistance to this honourable Court annexed hereto and marked with the letter "A" is photocopy of the findings of the Deputy State Coroner dated 26 February, 2003. I do feel obliged to make one point in relation to the events of 6 December, 1999 and that is the fact that I hold a genuine belief that the employees of Caines did have a full appreciation of the safety requirements at the time. The employees actually retreated from the vicinity of the danger area after it became obvious to them that there was a heating problem with the storage bin. The employees were responsible for contacting the local Fire Brigade which in turn arranged the attendance of the Hazmat. Thereafter the employees relied upon officers of the NSW Fire Brigade to control the situation. I believe that the actual steps taken by the employees on this evening does indicate that they were safety conscious in the performance of their duties. As to the responsibility of the NSW Fire Brigade I again refer to some of the comments made by the Deputy State Coroner. I do respectfully refer to her comments which relate to the Fire Fighters response to the "call out" on page 10 when referring to conduct of Officer Evans the Coroner stated "As incident controller no tasks should have been undertaken by anyone without the express permission and knowledge of Officer Evans". On page 11 the Coroner said "The use of Caines staff without protective clothing was not acceptable given that the Fire Fighters felt it necessary to be suited up". 61 Mr Heagney said that the explosion and death of the three employee had a "profound impact upon myself and my own family as we continue to live in a relatively close-knit community where I have contact from time to time with the members of the families of the three deceased employees." He said that he attended three funerals and also visited members of the deceased's families. This, he said, was a very emotional experience for himself and the family members. Mr Heagney arranged for payment of all funeral expenses from company assets and ensured payment of weekly wages to each family right through to the time when the families received compensation from their civil actions. 62 As to subjective matters, Mr Heagney deposed: I am a married man with three adult children and four grandchildren. I have been married for some 37 years and state that I have no criminal convictions. I have been actively involved in sporting affairs within the Maitland community and have served as a Director in a number of sporting organisations including the Maitland Golf Club Limited. … Caines Pty Limited was placed into liquidation on 14 April, 2005. Thereafter the business was acquired by Atlantic Pacific Foods Pty Limited and I was appointed the financial controller of that Company. My last day of service with the Company was on 24 December, 2005 and I am presently on long service leave. At the expiration of my long service leave entitlement I will cease working with the Company and will be dependant upon my superannuation entitlements to support myself and my wife. I have never been a Director of the Caines Group of companies and furthermore I have never derived any pecuniary benefit from the activities of the companies apart from the payment of my wages as an employee. Prior to the explosion on 6 December, 1999 I enjoyed relatively good health and had no plans to retire at a set age as I enjoyed work and believed that I making a reasonable contribution towards the success of the business enterprise. Since the explosion and the death of the three employees I have found it increasingly more difficult to cope with the day to day responsibilities associated with my employment and this has been a significant factor in my decision to terminate employment effectively from December, 2005. 63 Mr Heagney provided a number of references as to his good character. 64 In relation to the second defendant's means, the following exchanges took place on the record: HIS HONOUR: One thing I want to raise with you was the capacity to pay. I see the prosecutor has said in his submission that the defendant has not provided any financial records going to the capacity to pay the fine that might be imposed. What do you say about that? RYAN: Would you give me a couple of seconds to get some instructions on that. HIS HONOUR: Yes. Before you respond so that you don't misunderstand what I am getting at here. The evidence, of course, is in. If you want leave to open that issue up, you would have to seek it. CAHILL: If your Honour grants such leave, the prosecution's position would be that if additional material was submitted in the form of documents, I will take no objection to that course as long as it is limited to financial materials. If it were necessarily, could be dealt by way of short written submissions if necessary. HIS HONOUR: I appreciate that. CAHILL: I am mindful that Mr Ryan comes from the country and of his client's limited resources. HIS HONOUR: Go ahead. RYAN: My understanding, firstly is that Mr Heagney is a joinder (sic). This is a very brief summary of the financial position. I understand this is an accurate summary. He is joint owner of the residence which is before you, having a value $360,000 with a mortgage liability of $50,000 on that property. He retired but is still receiving weekly salary as a consequence of the fact that he is on long service leave, a weekly salary whilst he is receiving only long service leave and the weekly salary is $1,100 net. There is no income from his wife. She does not hold employment. At the expiration of the period which will expire in December this year, he will then proceed to receive the benefits of his superannuation entitlements. Currently, discussions are being held with financial planners as to appropriate way to do that which I think has substantially changed by decisions of the treasurer in recent weeks but the anticipation is that he and his wife should be able to receive, between the 2 of them at that point, an income which will be in the vicinity of $48,000 a year. Other than that, there is a personal motor vehicle which is a 2003 Toyota Camry. No other assets as I understand it. HIS HONOUR: You say that's the defendant's entire means? RYAN: That's what I understand, yes. Sorry. He doesn't owe the car. It is a company vehicle. I withdraw that. HIS HONOUR: What is that-- upon the exploration (sic - expiration) of his long service leave. RYAN: Or he may be given the opportunity to purchase it for its written down value which is a decision he will make at that time. HIS HONOUR: Is there anything more? RYAN: Nothing more. CAHILL: I don't wish to be heard in respect of those matters. The prosecution accepts it is a matter for your Honour to take those matters into account. HIS HONOUR: You don't need any time to make any further submissions in that respect? CAHILL: No, thank you. If your Honour's satisfied, I see no reason to take any point with respect to the submissions being made from the Bar table. HIS HONOUR: I don't either. CAHILL: Thank you. Evidence - third defendant 65 Despite being informed by the Court of the advisability of obtaining legal representation, Mr Hislop appeared in person. Apparently, he did not have sufficient funds to engage a lawyer and was unable to obtain legal aid or pro bono assistance. 66 The prosecutor tendered a statement of facts together with a bundle of documents, similar to that tendered in relation to the second defendant. The statement was in essentially the same terms as that relating to the prosecution of the first defendant. Mr Hislop agreed with the statement except he wished to clarify two matters. First, he was concerned that the statement, "It was common knowledge throughout the oil seed industry that oil seed meal could heat spontaneously and combust" might convey the impression that combustion might occur as a random event without any prior warning or for any reason. Secondly, Mr Hislop noted in relation to the proposition, "It was also commonly known in the seed oil industry that if seed meal was subjected to heat and/ or partial combustion, the seed meal could give off combustible, or pyrolytic, gases and vapours" that, "It is common knowledge that any organic matter will do that [give off gases or vapours] whether it be timber, saw dust, seed." 67 As I understood Mr Cahill, the prosecutor was not attempting to convey any different impression than that which was clarified by Mr Hislop. 68 Mr Hislop tendered no evidence of his own except when asked about his capacity to pay any fine he stated from the bar table that he had no such capacity; that he did not "have a cent." Subsequently, Mr Hislop gave evidence on oath regarding his financial means. In cross-examination, Mr Hislop was taken through the history of the collapse of the first defendant and his financial relationship with that company. His evidence was he was left with nothing and was living with a friend who paid him $100 per week for "doing chores" and that was his only source of income. Liability of first defendant 69 The first defendant is charged under both s 15(1) and s 16(1) of the Act. A defendant will be found to have contravened s 15(1) of the OHS Act if it is proven beyond reasonable doubt that the defendant, at the time of the alleged offence, was an employer; if there was a failure to ensure health, safety and welfare; and, if the failure was in respect of the defendant's employees at work. 70 A causal nexus must also be established between the defendant's acts or omissions and the resulting detriment to the employees' health, safety and welfare. The detriment need not be physical injury or death; it is only necessary to prove to the requisite standard that the employees were placed in a situation of risk by the defendant's acts or omissions in failing to ensure safety, etc: State Rail Authority of New South Wales v Dawson (1990) 37 IR 110 at 120-121; Haynes v C I & D Manufacturing Pty Limited; Callaghan v CI & D Industries Pty Ltd (1995) 60 IR 149 at 157; Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 449. In other words, the employer may have contravened s 15(1) if, by some act or omission, the employer has created a situation of potential danger to the health, safety and welfare of the employer's employees at work. 71 A similar position exists in respect of s 16(1) of the OHS Act. A defendant will be found to have contravened s 16(1) if it is proven beyond reasonable doubt that the defendant, at the time of the alleged offence, was an employer; if there was a failure to ensure that persons not in the employer's employment were not exposed to risks to their health or safety; and, if the risks arose from the conduct of the employer's undertaking while the persons were at the employer's place of work. A causal nexus must be established between the employer's failure to ensure health or safety and the exposure to risk. 72 Taking firstly, the s 15(1) charge; the first defendant was an employer as at 6 December 1999 and employed the deceased employees Messrs Anderson, Ronald Brooker and Terry as well as Messrs Jordan, Jason Brooker, McKewen, Zambrowski, Little, Hipwell and Price. So much is established by records of interview with Mr Hislop and those employees who survived the explosion. It is also beyond doubt that the deceased persons were at work on 6 December 1999, that being the first defendant's Rutherford plant. 73 It was alleged in the application for order that the first defendant failed in 16 respects to ensure the health and safety of the aforementioned employees. The Court finds that the charge has been made out. As the prosecutor submitted, the design of the first defendant's plant, including the product transportation system, the seed storage silo, the meat bin and the meal bins took little account of risks associated with dust explosion and/or fires that might occur in association with the transportation and/or storage of seed meal. For example: (a) the design did not include venting and/or dust explosion hatches; (b) the design did not include any form of spark arresters in the hammer mill, or any form of spark or fire detection system in the conveying line from the hammer mill to the meal bins; (c) the electrical fittings within the mill at the site were specified and installed on the basis that canola and sunflower milling activity was to take place, but the electrical fittings as specified and installed were not appropriate for cotton-seed milling activity – dust associated with the processing of cotton-seed being highly combustible (see AS 2430.2-1986); (d) the existence of horizontal flat surfaces on the interior of the walls of the "receival section" of the expeller building permitted the build-up of combustible dust, in particular cotton-seed meal dust – leading to an increased risk of dust explosions and/or fires; (e) the fire fighting plant and equipment at the site was extremely limited and did not include any form of fixed fire fighting system in and/or around the meal bins; and (f) The design of the meal bins did not make provision for monitoring the temperature of seed meal whilst stored in the bins. 74 Further as the prosecutor submitted: (1) The Defendant had no written work procedures and provided no training to its employees with respect to the management of seed meal that had heated whilst stored in meal bins. In particular, the Defendant had no procedures of any kind with respect to the management of seed meal once it had started to smoulder or partially combust inside a meal bin. (2) The Defendant provided no written work procedures or any training regarding the actions to be taken by staff members in the event of a fire in the seed crushing mill, the product transportation system and/or the meal storage bins. (3) The Defendant provided no training on what to do in the case of an emergency arising. (4) The Defendant did not supply its employees with adequate information, instruction or training about the chemical characteristics of the substances associated with the seed crushing process. In particular, the Defendant did not provide its employees with information, instruction or training about the capacity of seed meal, both with and without spent bleaching earth being added to the meal, to heat spontaneously, smoulder and/or its capacity when heated to give off pyrolytic vapours and gases. (5) The Defendant did not have in place any systems, documents or plans designed to supply members of the NSW Fire Brigades with adequate information about the properties of cotton-seed meal, spent bleaching earth and other products stored on its site – including their capacity to spontaneously combust, smoulder and give off pyrolytic vapours and gases when subjected to heat. (6) The Defendant did not provide its employees with any instruction or training in relation to fire fighting, either generally or in relation to fires in the meal bins. (7) The Defendant did not provide its employees with any instruction or training in relation to the possibility of a dust explosion in the expeller plant, the product transportation system, the silos or meal bins. (8) As at 6 December, 1999 a practice had developed amongst the Defendant's employees at the site of banging the sides of meal bins to attempt to determine if the meal bins were empty. The banging of the sides of meal bins gave rise to a risk of the creation or excitation of clouds of combustible dusts within the meal bins. (9) The Defendant failed to put in place sufficiently rigorous housekeeping rules and practices, such that there were present in and about the product transportation system, particularly the elevator boot, and in other parts of the plant, particularly the receival bay, significant build up of combustible dust. The presence of the build up of dust in and about various parts of the plant increased the risk of dust explosions and/or the communication of fire through the expeller plant and its associated buildings, silos and meal bins. (10) The Defendant also failed to provide its employees with any training with respect to the use of personal protective equipment, in particular, personal protective equipment to be utilised in the event of a fire or dust explosion. Similarly, the Defendant did not provide or maintain any personal protective equipment, such as fire retardant suits and breathing apparatus, for its employees to use in the course of fighting a fire at the site or while assisting Fire Brigade officers in fighting such a fire. 75 As to the causal connection between the first defendant's failures and the risk of an explosion associated with the build up of partially combusted pyrolytic gases and seed dust, it is beyond doubt the connection existed. Messrs Anderson, Brooker and Terry did not know how to deal with the overheating in the cottonseed meal that was taking place inside bin D. It is apparent they had no idea that by removing the hatch from the bottom of the bin cool, oxygen-rich air would be allowed to enter bin D, where it would mix with explosive gases trapped within the bin in the presence in the source of ignition, such as a remnant of the hot "charcoalised"/"carbonised" meal and that the resulting explosion would be exacerbated by the combustion of "seed dusts" in the connecting duct work. 76 This lack of understanding and knowledge may be directly attributed to the first defendant's failure to have in place: · A documented safety policy; · A documented occupational health and safety program; · Any written work procedures with respect to the handling of meal that had started to heat within the storage bins; · Any written emergency procedures with respect to fires or heating within the meal bin complex; · Any training in emergency procedures with respect to fires or heating within the meal bin complex. 77 In addition, the first defendant failed to provide its employees with any training with respect to the use of personal protective equipment, in particular, personal protective equipment to be utilised in the event of a fire or dust explosion. Similarly, the defendant did not provide or maintain any personal protective equipment, such as fire retardant suits and breathing apparatus, for its employees to use in the course of fighting a fire at the site or while assisting Fire Brigade officers in fighting such a fire. 78 In respect of the s 16(1) charge, I am satisfied beyond reasonable doubt that it, too, has been made out against the first defendant. It is only necessary to add to what I have found in relation to the s 15(1) charge that the evidence established there were persons not employed by the first defendant, namely, members of the New South Wales Fire Brigades and, in particular, Captain Jenkins, who were exposed to a risk of injury in the course of their employment whilst present on the first defendant's site at Rutherford. The first defendant did not have in place any systems, documents or plans designed to supply members of the NSW Fire Brigades with adequate information about the properties of cottonseed meal, spent bleaching earth and other products stored on its site – including their capacity to spontaneously combust, smoulder and give off pyrolytic vapours and gases when subjected to heat. 79 I find the offences under s 15(1) and 16(1) of the Act proven. Sentencing 80 In relation to sentencing of the three defendants, there are those matters set out particularly in ss 21A and 22 of the Crimes (Sentencing Procedure) Act 1999 that must be considered as well as those matters that have been developed peculiar to this jurisdiction and those matters derived from the general criminal law. All of the matters the Court is required to consider in these proceedings will fall under one of the following nine subject matters: (1) The maximum penalty for the offence: Careful attention should be given to the maximum penalties because, firstly, the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick: See Markarian v R (2005) 215 ALR 213 at [31]. See also Camilleri's Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 at 698; Capral Aluminium Ltd v WorkCover Authority of NSW (2000) 49 NSWLR 610 at [45]. (2) An analysis of the offending conduct with a view to determining the nature and quality of the offence: See Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 475; Fletcher Constructions Australia Limited v WorkCover Authority (Inspector Fischer) (1999) 91 IR 66 at 79. This would involve an assessment of the seriousness of the breach. Although the damage or injury caused by the breach does not, of itself, dictate the seriousness of the offence or the penalty, a breach where there was every prospect of serious consequences may be assessed on a different basis to a breach unlikely to have such consequences. In such a case, the occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk: See Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17] - [18]. See also Capral Aluminium at [94] and [95]; WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited and Anor (2000) 95 IR 383 at 428; and Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [32]. (3) An identification of the risk and the degree of foreseeability of the risk. This is a significant factor to be taken into account when assessing the level of culpability of the defendant: See Capral Aluminium Limited at [81], confirming the approach taken by Walton J, Vice President, in Department of Mineral Resources of New South Wales (McKensey) v Kembla Coal and Coke Pty Limited (1999) 92 IR 8 at 27. (4) Whether there were simple and straightforward remedial steps that were available, which could have avoided the accident. The existence of simple and straightforward remedial steps which could have been taken by the defendant to avoid the risk to safety are relevant to assessing the seriousness of the offence: See Department of Mineral Resources of NSW (McKensey) v Kembla Coal & Coke Pty Limited (1999) 92 IR 8 at 27; WorkCover Authority of NSW (Inspector Glass) v ACI Operations Pty Limited [1994] NSWIRComm 11; Inspector Elizabeth Benbow v Planada Holdings Pty Limited [2001] NSWIRComm 275. (5) The need for general and specific deterrence: See Capral Aluminium at [71] to [80]; Inspector Jones v T Helsby & Sons Contracting Pty Ltd (No 2) [2004] NSWIRComm 57; WorkCover Authority of NSW (Inspector Maltby) v Josef & Sons Contracting Pty Limited (In Liquidation) [2005] NSWIRComm 425; Inspector Atkins v Network Production Personnel Pty Limited [2004] NSWIRComm 71. (6) Subjective considerations including such matters as a plea of guilty entered by the defendant; remorse; contrition; whether there are prior offences; cooperation with the investigating authority; measures taken by the defendant to prevent a re-occurrence of the breach; assistance provided to any worker injured as a consequence of the breach; whether it is unlikely the offender will re-offend; and, the offender's prospects for rehabilitation. See Lawrenson Diecasting at 475; ss 21A and 22 of the Crimes (Sentencing Procedure) Act. (7) The involvement of other parties and whether the principle of parity or consistency in sentencing have any application: Lowe v The Queen (1984) 154 CLR 606 at 610-611 per Mason J and at 617-618 per Brennan J; Postiglione v The Queen (1997) 189 CLR 295 at 301-302 per Dawson and Gaudron JJ; 309 per McHugh J, 325 per Gummow J, 338-340 per Kirby J. (8) Capacity to pay any fine: Fines Act 1996; McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd (2004) 137 IR 310 at [22]-[40]; WorkCover Authority of New South Wales (Inspector Mansell) v Chen (2004) 137 IR 33 at [51]; and WorkCover Authority ( Inspector Yeung) v Wilson (t/as Wilson's Tree Service) (2005) 143 IR 187 at [108]; Inspector Jones v T Helsby & Sons Contracting Pty Ltd (No 2) [2004] NSWIRComm 57; WorkCover Authority of NSW (Inspector Maltby) v Josef & Sons Contracting Pty Limited (In Liquidation) [2005] NSWIRComm 425. (9) The principle of totality: Pearce v The Queen (1998) 194 CLR 610; Mill v The Queen (1988) 166 CLR 59; Crown in Right of the State of NSW (Dept of Education and Training) v Keenan (2001) 105 IR 181 at [36]-[38]; Abigroup Contractors Pty Limited v WorkCover Authority of New South Wales (Inspector Maltby) (2004) 135 IR 317; and, WorkCover Authority of New South Wales (Inspector Mansell) v Robert Josef (2004) 137 IR 241. Maximum penalty 81 None of the defendants have any previous convictions. Accordingly, the maximum penalty in this case in respect of the first defendant is $550,000 for each offence: Section 12 of the Occupational Health and Safety Act; s 17 of the Crimes (Sentencing Procedure) Act. In respect of the second and third defendants, the maximum penalties are $55,000 for each offence. The offending conduct 82 In respect of the first defendant the critical considerations in assessing the seriousness of the offence are, in my opinion, as follows: (1) In designing and constructing the plant at Rutherford the first defendant failed to take adequate account of the fire and explosion risks inherent in the processes conducted in and about the plant. (2) The defendant knew that cottonseed meal could spontaneously combust at high temperatures and give off a mixture of volatile fumes and pyrolytic gases. (3) The defendant was on specific notice of the risks and of the "shortcomings" with respect to the steps that it had taken to deal with those risks in the course of the construction and subsequent operation of the expeller plant. The Loss Control Reports provided by Zurich Financial Services Australia Ltd prior to the fire and explosion in meal bin D at the expeller plant on the morning of 6 December, 1999 contained specific observations and recommendations with respect to hazard control/risk management at the subject site. In particular the reports noted failings with respect to: (a) the provision of adequate fire protection, both with respect to inadequacy of water supply and the absence of fixed fire protection services such as deluge or automatic sprinkler systems; (b) failure to provide adequate fire fighting equipment in the form of extinguishers and appropriate hose-reel equipment; (c) a failure to provide formal hazard controls, including but not limited to hot work permit system, fire self inspection programs, preventative maintenance programs etc.; (d) fire and safety training, evacuation procedures and fire alarms; (e) formal work procedures, in particular work procedures relating to fire prevention and fire control; (f) Fire Brigade inspections, site emergency plan and a process hazard review; (g) meal temperature monitoring; and (h) housekeeping – in particular, dust control. (4) Despite the specific observations made in each of the Loss Control Reports, the first defendant's response was completely inadequate in addressing the subject risks and implementing the recommendations made to them by the authors of the Loss Prevention Reports. In particular, the first defendant did not inform any of the employee representatives of the Occupational Health & Safety Committee of the existence of the Zurich Reports and/or any of the recommendations made by the Loss Protection experts who carried out the subject analyses. (5) The first defendant did not have in place any written emergency procedures with respect to fires or heating within the meal bin complex. (6) The first defendant did not have in place any training in emergency procedures with respect to fires or heating within the meal bin complex. (7) Because of inadequate training, information and instruction the deceased employees did not know how to deal with the overheating in the cottonseed meal that was taking place inside bin D. (8) The first defendant did not provide its employees with any training with respect to the use of personal protective equipment, in particular, personal protective equipment to be utilised in the event of a fire or dust explosion. Similarly, the defendant did not provide or maintain any personal protective equipment, such as fire retardant suits and breathing apparatus, for its employees to use in the course of fighting a fire at the site or while assisting Fire Brigade officers in fighting such a fire. (9) The first defendant did not have in place any systems, documents or plans designed to supply members of the NSW Fire Brigades with adequate information about the properties of cottonseed meal, spent bleaching earth and other products stored on its site – including their capacity to spontaneously combust, smoulder and give off pyrolytic vapours and gases when subjected to heat. (10) At the time of the subject incident, oil seed meal was a class 4.2 spontaneously combustible good that belonged to packaging group III, as defined in the Australian Dangerous Goods Code. The same classification applied to the spent bleaching earth. As and from 1 September 1999 the Defendant was required, pursuant to the Dangerous Goods (General) Regulation 1999 (NSW), to license the storage of Class 4.2 Spontaneously Combustible Goods belonging to packaging group III, to which the seed meal belonged, where the quantity "stored" exceeded 1,000 kilograms. There was between 40 and 45 metric tonnes of seed meal in bin D on the morning of the incident. (11) As at the date of the subject incident, the first defendant had not sought to amend its dangerous goods licence for the site to include the storage of in excess of 1000 kilograms of class 4.2 Packing Group III - Spontaneously Combustible Goods; nor were the meal bins [including bin D] signposted to indicate that the bins could contain Class 4.2 Packing Group III Spontaneously Combustible Goods. (12) The first defendant's contact person nominated on the relevant Application for a Dangerous Goods Licence, Mr Richard Zambrowski, was unaware he had been nominated as the dangerous goods contact officer and Mr Zambrowski maintained that he had not received any information, training or instruction with respect to the storage of dangerous goods on the site and/or his functions as the nominated contact person. 83 I conclude that the nature and quality of the offending conduct by the first defendant was so serious that it should attract penalties at the high end of the scale. The first defendant failed comprehensively to protect employees from the risk of the explosion. As the prosecutor submitted the size of the ensuing explosion, the damage caused to the plant, the death of the first defendant's three employees and the serious injuries sustained by Captain Jenkins serve as a manifest illustration of the nature and extent of the risks left unaddressed by the first defendant and, therefore, the aggravated nature of the subject offences. 84 The second defendant, Mr Heagney, was the first defendant's general manager. It is apparent from the evidence that Mr Heagney was not a hands-on manager in the sense he was located at the Rutherford plant and carried out a managerial role in respect of the plant on a day-to-day basis. Mr Heagney was located at a different site in Steam Street, Maitland. It is also apparent that Mr Heagney's principal role was in respect of financial matters including payment of wages, taxation, superannuation and other employee entitlements. The second defendant said he took little interest in the actual activities at the Rutherford plant. Mr Heagney said Mr Hislop was primarily responsible for operational matters. The Coroner stated that Mr Heagney was general manager "more in name than in substance". 85 Mr Cahill submitted that in his capacity as the first defendant's general manager, Mr Heagney played a central role in the company's dealings with the Maitland City Council with respect the company's application to build the Expeller Plant, together with the associated seed silos, cotton meats bin and seed meal bins. It was observed that Mr Heagney's signature appears on the Development Application form and associated correspondence, including correspondence that sets out in some detail the purpose and function of the Expeller Plant. Similarly, it was noted Mr Heagney dealt with the EPA over the licensing of the design, construction and operation of the Expeller Plant. 86 Mr Heagney stated in his evidence that he signed the applications that were submitted to various authorities because Mr Hislop was not present at the time when the documents had to be signed and submitted. The second defendant said he had no input into the design or construction of the premises at Rutherford and that this was the actual product of Mr Hislop and his technical advisors. 87 Mr Heagney conceded that he attended a number of meetings with the EPA, however, on each occasion when he attended these meetings he attended as a support for Mr Hislop who he asserted was actually responsible for the operational compliance with the various conditions on the license. 88 I accept that it was Mr Hislop who had the more direct responsibility for operational aspects of the Rutherford plant but that does not absolve Mr Heagney from all responsibility. Mr Heagney himself conceded that: [B]y 1999 the size and the nature of the Caines enterprise had outgrown my capacity to perform properly the role as a General Manager as well as accepting responsibility for all financial affairs of the Company. All of my available working time was utilised attending to matters which related to financial control and accountability. With the benefit of hindsight I do now appreciate that I should have been more pro-active in relation to occupational health and safety matters especially in relation to the relatively large factory operations which were conducted in the crushing plant at Rutherford. It was remiss of me to leave these matters in the hands of the various departmental managers. 89 There are three further damaging considerations in relation to Mr Heagney. First, he was involved in various applications for dangerous goods licensing. Again, Mr Heagney's name appears on application forms. For example, in 1993 and 1995 Mr Heagney was nominated as the company's dangerous goods contact person. Significantly, Mr Heagney signed off on an application form on 2 June 1999 that nominated Richard Zambrowski as the company's dangerous goods emergency contact. Mr Richard Zambrowski denied any knowledge of the fact that he had been nominated for that position and stated that he had not received any relevant training or instruction. 90 Secondly, Mr Heagney was directly involved with the site visits by Zurich's risk assessors and the distribution of the reports prepared by those assessors following their various site visits. Mr Heagney had at least one personal meeting with Mr Wallington, the author of the Property Loss Control Reports and the Property Underwriting Risk Reports dated 13 May 1997 and 18 November 1998. Mr Heagney's name also appears on the distribution list for each of the subject reports. 91 Mr Heagney stated in respect of his dealings with Mr Wallington: [M]y only dealings with Mr Wallington occurred when I was required to deputise for Mr Hislop who was in Sydney on those occasions when Mr Wallington attended the plant. Unfortunately I was not possessed of sufficient technical skills to be of any constructive assistance to Mr Wallington. Putting it in layman's language "I was out of my depth". 92 However, as the prosecutor submitted, and with which I agree: The Property Loss Reports are written in plain English and the recommendations are generally expressed in simple, rather than technical terms. It is submitted that, having regard to the simple, direct language used in these reports, it is inconceivable that Mr Heagney, the company secretary and general manger of the company, could have failed to appreciate the views expressed in the subject reports regarding the existence of fire risks in and about the Expeller Plant. It is equally inconceivable that he failed to appreciate the clear and unambiguous recommendations with respect to both plant improvements and the need for improved safety management systems, including proper training of staff, at the site. 93 Thirdly, Mr Heagney was the management representative - Mr Hislop's nominee - on the site's occupational health and safety committee. As the prosecutor submitted, the minutes of the committee's deliberations during 1999 indicate that fire risks in the expeller plant - including the risk of a fire in the meal - and the need for safety training, fire training, emergency evacuation plans and emergency response plans were all under consideration at various meetings of the committee during 1999 leading up to the incident on 6 December 1999. Mr Heagney was present at each of the subject meetings but effectively nothing was done about the risks. Moreover, Mr Heagney did not bring the Zurich Loss Control Reports or any concerns expressed in those Reports to the attention of the Committee. 94 Mr Heagney was, in my opinion, in a position to decisively influence the first defendant in relation to occupational health and safety matters. It would have been apparent to him from the Zurich reports that significant risks existed in respect of health and safety at the Rutherford plant. He was the management representative on the site's occupational health and safety committee yet he effectively did nothing about the obvious unsafe state of the plant. 95 I accept that Mr Heagney may not have fully comprehended the enormity of the risks to health and safety at the Rutherford plant and he was probably of the view that occupational health and safety was an operational matter that fell within Mr Hislop's area of responsibility. But Mr Heagney had a managerial responsibility for occupational health and safety at the plant and he was aware of risks to health and safety. His failure to take appropriate action regarding the risks was an abrogation of his responsibilities. 96 The third defendant, Mr Hislop, was the managing director of the first defendant and he and his wife were the sole directors. At the time of the incident, Mr Hislop and his wife were the sole shareholders in the ultimate holding company, Caines Holdings Pty Ltd (now de-registered). 97 All of the failures of the first defendant to ensure the health and safety of employees and non-employees also lie at the feet of Mr Hislop. It was common ground that Mr Hislop was directly involved in the design and construction of the plant. The evidence also indicates that Mr Hislop attended at various meetings with both representatives of the Maitland City Council and the EPA during the development approval, construction and licensing phases referred to above. Foreseeability 98 It is apparent from the evidence relating to Mr Hislop that he was aware that cottonseed meal had the potential to spontaneously combust if it reached a certain temperature but that he had never experienced that happening. It may have been the case that because Mr Hislop had no expectation that spontaneous combustion would occur (because he had never experienced that happening) that the first defendant failed in so many respects to take steps to ensure the safety of its employees from the risk of an explosion associated with the build up of partially combusted pyrolytic gases and seed dust. 99 The fact that Mr Hislop was personally aware of the risk of spontaneous combustion; that oil seed meal and spent bleaching earth were class 4.2 spontaneously combustible goods that belonged to packaging group III as defined in the Australian Dangerous Goods Code; that through Zurich's Property Loss Control Reports the first defendant was on notice of the risks in the plant; and, the fact that it was well known in the seed oil extraction industry that cottonseed meal, including the spent bleaching earth, could give off a mixture of volatile fumes and pyrolytic gases when heated, all lead to the conclusion that the risk of an explosion was reasonably foreseeable on the part of all of the defendants. 100 Further, as the prosecutor submitted, even allowing for the fact that the incident represented the first occasion on which substantial overheating and subsequent "charcoalisation" of meal occurred at the Rutherford site, the subject risks were not only readily identifiable, but obvious. As it was stated in Ferguson v Nelmac Pty Limited (1999) 92 IR 188 at 209-210: [T]he very terms of Section 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger, or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to "ensure…. health, safety and welfare at work" and the decided cases which make plain the nature of the obligation." Availability of remedial steps 101 There were a number of relatively inexpensive and basic steps that the first defendant could have undertaken to ameliorate the risks. These are identified in the prosecutor's statement of facts and are referred to at [45] of this judgment. I note that Mr Heagney was involved in implementing these steps before the first defendant went into liquidation. General deterrence 102 In Inspector Jones v T Helsby & Sons Contracting Pty Ltd (No 2) the Court stated: 15 It is apparent from some of the information filed by the prosecutor that the defendant claimed it had a level of debt that, according to the Administrator, prevented the defendant from defending the prosecution. It might be thought that the imposition of a penalty on the defendant would, in the circumstances, be futile. Two things may be said about that. Firstly, no proof of debt was in evidence. Secondly, one of the principal purposes of punishment is to deter future breaches by others. General deterrence is an important consideration in this matter given the very high danger of persons being affected by carbon monoxide emissions from concrete cutting machines where they are used in enclosed areas. 103 I take a similar view here. There was almost a complete failure on the part of the first defendant to protect its employees from the risk of the explosion. The risk of spontaneous combustion of cottonseed meal is a known fact. There needs to be adequate measures in place to ensure combustion does not occur or if it does that employees and other persons are not exposed to any risk to their health and safety. There is also a need to encourage other employers, particularly those involved in extracting oil from seed, to ensure they have adequate safety measures in place where there is any risk of combustion. One means - and an important one in this jurisdiction - of achieving that objective is to impose a penalty that will draw attention to the risk and the consequences of disregarding it. 104 In respect of the second and third defendants and general deterrence I make the same observations as those in respect of the first defendant. Specific deterrence 105 As for specific deterrence, given the first defendant is in liquidation and, according to the prosecutor, awaiting deregistration, there would appear to be no proper basis for including in any penalty an element for specific deterrence. 106 The second defendant is on leave pending his ultimate retirement and I see little point in providing for specific deterrence. As to the third defendant, whilst he is not presently engaged in any enterprise, there remains the possibility that he will re-enter commercial life. I have provided for a small element in the penalty for specific deterrence. Subjective factors 107 The defendants are entitled to have taken into account as mitigating factors that they have no previous convictions and that steps were taken to avoid a re-occurrence of the offences. 108 As to co-operation with the WorkCover Authority in the course of its investigations, the prosecutor noted that the first defendant did not produce the various PolicyHolder's Property Loss Reports that pre-dated the subject incident and/or any of the related correspondence with Zurich or its insurance broker. The PolicyHolder's Loss Reports and related correspondence came to light as a consequence of cross-examination at the Inquest/Inquiry of the author of a risk analysis report that was prepared for Zurich in the aftermath of the subject. The prosecutor expressed some reservations about the extent of the first defendant's co-operation. Nevertheless, the prosecutor noted that Mr Hislop made himself available during the course of the investigation of the subject incident and that both Mr Hislop and Mr Heagney attended to be interviewed. 109 The second and third defendants are also entitled to have taken into account their early pleas of guilty to reflect the utilitarian value of their pleas. Further, I am satisfied as to their contrition. 110 The second defendant has provided character references and I am satisfied he is a person of good character. 111 I have had regard to all of the mitigating factors in fixing the respective penalties. Involvement of others 112 Mr Hislop and Mr Heagney have been charged in relation to what occurred on 6 December 1999 but it does not seem to me that questions of parity or consistency in sentencing arise in relation to those two offenders vis a vis the first defendant because the charges against them were, in a sense, derivative in that their culpability arises only because they were concerned in the management of the first defendant. 113 In respect of the second and third defendants, I note what was stated by Wright J, President in WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No. 2) (2000) 99 IR 163 at [38]: Although the relevant consideration is not whether, or to what extent, there is a level of contribution as between the corporate and individual defendants for the particular breach of safety which arose under the Act, it is nevertheless necessary when dealing with the precise gravity of the offence committed, or deemed to have been committed by the personal defendant, to accept the possibility or, in many cases where the individual is not simply the alter ego of the corporation, the likelihood that the level of gravity of the offence attributable to the personal defendant may be less than that which has been found to have been committed by the corporate defendant - that is, in these proceedings the first defendant. 114 In relation to Mr Hislop, he was the guiding mind of the first defendant. In terms of the objective seriousness of the offences his culpability was the equal of the first defendant. In considering the respective contributions of Mr Hislop and Mr Heagney to the creation of the relevant risk it is apparent that Mr Hislop was not only the guiding mind of the first defendant but he had the technical expertise and experience that would make him more aware of the risk and its causes. Moreover, Mr Heagney reported to Mr Hislop. 115 In my opinion, in terms of any penalty to be imposed on Mr Hislop it should reflect a greater degree of culpability than that of Mr Heagney. 116 I note that the New South Wales Fire Brigades has also been charged with two offences arising out of what occurred on 6 December 1999 alleging, respectively: · a contravention of section 15(1) of the 1983 Act with respect to a failure to ensure the health and safety of its officers whilst in the course of their employment at the site on that morning prior and including the subject explosion; and · a contravention of section 16(1) of the 1983 Act with respect to failing to ensure the health and safety of various Caines' employees once the senior New South Wales Fire Brigades' officer, from time to time, assumed control of the site - both with respect to general supervision of the site and with respect to the use of Caines' employees to assist in the auguring out of the meal from bin D. 117 Questions of parity or consistency do not arise because no relevant findings have been made in respect of the Fire Brigades. Moreover, I do not consider it permissible or appropriate to make any findings regarding the respective contributions of the Fire Brigades and the first defendant to the creation of the risk. I do note, however, that the first defendant owned and occupied the site and that it failed, comprehensively, to ensure the safety of its own employees and employees of the Fire Brigades. Capacity to pay fine 118 Section 6 of the Fines Act 1996 provides that: In the exercise by a Court of a discretion to fix the amount of any fine, the Court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the Court for consideration, and (b) such other matters as, in the opinion to the Court, are relevant to the fixing of that amount. 119 In McColl v John Watson Building Services Pty Limited and Dowdon Contracting Pty Limited at [24] the Full Bench stated: A Defendant who wishes to rely on the provisions of Section 6 to temper the amount of any monetary penalty bears the onus, of putting such evidence in support as is appropriate before the Court and bears the onus on the basis of the balance of probabilities, of satisfying the Court as to the truth of such evidence and its relevance to the fixing of penalties. 120 In relation to the first defendant, there is no evidence before the Court to warrant the Court exercising the discretion conferred by s 6 of the Fines Act in favour of the defendant. I was informed that the defendant was in liquidation and was without funds but this was merely conveyed to the Court on the basis of a letter to the prosecutor from the administrator. I have no other information before me as to the first defendant's means. 121 As to the second defendant, Mr Heagney, it would appear that his financial resources are as follows: · He is joint owner of a residence, having a value $360,000 with a mortgage liability of $50,000 on that property. · He retired but is still receiving a weekly salary as a consequence of the fact that he is on long service leave. The salary is $1,100 net. · He will be entitled to an income stream from superannuation of $48,000 per annum. 122 I am prepared to accept that Mr Heagney is a person of limited financial means. 123 I have come to the same conclusion regarding Mr Hislop. However, in respect of both of the personal defendants, the penalty fixed must ultimately reflect the objective seriousness of the offence and must not be inconsistent with the criminality of the offence: Inspector Yeung v Donald Edward Wilson Trading as Wilson's Tree Service at [110]. Totality 124 The defendants were charged under both s 15(1) and s 16(1) of the Act. There are common elements to be considered and it is, therefore, necessary to consider the principle of totality. 125 The correct approach to the application of this principle is to be found in the decision of the Full Bench in Crown in Right of the State of New South Wales (Department of Education and Training) v Keenan (2001) 105 IR 181, which considered the High Court's ruling in Pearce v The Queen. The Full Bench held that: [23] The effect of Pearce is that, in sentencing a defendant for more than one offence, the Court is required to fix an appropriate sentence for each offence and then consider questions of cumulation, concurrence and totality. It is only after determining an appropriate sentence for each offence that the Court should consider whether the sum of the separate sentences properly reflected the totality of the criminality involved. … [29] In an appropriate case, however, it may still be appropriate to impose a single penalty for multiple offences under the Act, but only as the result of the operation of the principle of totality after separate penalties have been assessed for each offence. However, we consider that the preferable course is that separate penalties should be imposed after the principle of totality is applied. … [51] In view of our conclusion that the two offences contained very substantial common elements, it could not be considered that the deduction made by her Honour was appropriate and sufficient. In a case such as this, the totality principle must be applied to ensure that the defendant is not punished more than once for the common elements of the offences and that the resultant penalty is appropriate to the overall criminality of the offences for which the defendant is being sentenced. 126 In determining penalty I have had regard to all of the relevant factors and circumstances. In relation to the first defendant, I consider the appropriate penalties are as follows: (1) In Matter No. IRC 764 of 2005, a fine of $380,000; and (2) In Matter No. IRC 765 of 2005, a fine of $420,000. 127 Having regard to the common elements of the two offences by applying the totality principle and overall criminality, I consider the total should be reduced to $400,000. Accordingly, the fines to be imposed in relation to each offence are: (1) In Matter No. IRC 764 of 2005, a fine of $190,000; and (2) In Matter No. IRC 765 of 2005, a fine of $210,000. 128 In relation to the second defendant, Mr Heagney, I consider the appropriate penalties are as follows: (1) In Matter No. IRC 766 of 2005, a fine of $24,000; and (2) In Matter No. IRC 767 of 2005, a fine of $21,000. 129 Having regard to the common elements of the two offences by applying the totality principle and overall criminality, I consider the total should be reduced to $22,000. Accordingly, the fines to be imposed in relation to each offence committed by the second defendant are: (1) In Matter No. IRC 766 of 2005, a fine of $12,000; and (2) In Matter No. IRC 767 of 2005, a fine of $10,000. 130 In relation to the third defendant, Mr Hislop, I consider the appropriate penalties are as follows: (1) In Matter No. IRC 770 of 2005, a fine of $25,000; and (2) In Matter No. IRC 771 of 2005, a fine of $28,000. 131 Having regard to the common elements of the two offences by applying the totality principle and overall criminality, I consider the total should be reduced to $27,000. Accordingly, the fines to be imposed in relation to each offence committed by the third defendant are: (1) In Matter No. IRC 770 of 2005, a fine of $12,000; and (2) In Matter No. IRC 771 of 2005, a fine of $15,000. Orders 132 The Court makes the following orders: (1) In Matter No. IRC 764 of 2005, the defendant, Caines Pty Limited (in liquidation) is convicted and fined an amount of $190,000 with a moiety thereof to the prosecutor; (2) In Matter No. IRC 765 of 2005, the defendant, Caines Pty Limited (in liquidation) is convicted and fined an amount of $210,000 with a moiety thereof to the prosecutor; (3) In Matter No. IRC 766 of 2005, the defendant, Frank Heagney is convicted and fined an amount of $12,000 with a moiety thereof to the prosecutor; (4) In Matter No. IRC 767 of 2005, the defendant, Frank Heagney, is convicted and fined an amount of $10,000 with a moiety thereof to the prosecutor; (5) In Matter No. IRC 770 of 2005, the defendant, Graham Hislop, is convicted and fined an amount of $12,000 with a moiety thereof to the prosecutor; (6) In Matter No. IRC 771 of 2005, the defendant, Graham Hislop, is convicted and fined an amount of $15,000 with a moiety thereof to the prosecutor; (7) The defendants shall pay the prosecutor's costs of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to any of the parties to approach the Court for final orders as to costs. 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