Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Phillip Estreich v TLC Plumbing & Bathrooms Pty Ltd [2011] NSWIRComm 121 Hearing dates: 5 August 2011 Decision date: 08 August 2011 Jurisdiction: Industrial Court of NSW Before: Kavanagh J Decision: 1 In Matter No IRC 122 of 2011, I find the corporate defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $80,000 with a moiety to WorkCover Authority of New South Wales. 3. In Matter No IRC 123 of 2011, I find the individual defendant guilty of the offence as charged. 4. The defendant is fined in the sum of $18,000 with a moiety to WorkCover Authority of New South Wales. 5. There shall be one order as to costs. The defendants are to pay costs of the prosecutor. There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - breaches of s 8(1) of the Occupational Health and Safety Act 2000 - corporation sub-contracted to perform plumbing services - explosion and fire cause injury and property damage - individual defendant had managerial responsibility on site over apprentices - system of work in place - failure to properly explain system - foreseeable element to offence - obligation to provide extra care and instruction to apprentices - general and specific deterrence an element of penalty - remorse and contrition demonstrated - maximum penalty differs - penalties Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW) Occupational Health and Safety Act 2000 (NSW) Cases Cited: Cahill v State of NSW (Department of Community Services (No 4) [2008] NSWIRComm 201 Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Inspector Morgenthal v Houghton [2010] NSWIRComm 192 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 R v Gallagher (1991) 23 NSWLR 220 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR 104 R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168 Tyler v Sydney Electricity (1993) 47 IR 1 Category: Principal judgment Parties: Inspector Phillip Estreich (Prosecutor) TLC Plumbing & Bathrooms Pty Ltd (First Defendant) Michael William Causer (Second Defendant) Representation: R Reitano of counsel (Prosecutor) G A Farmer of counsel (Defendants) WorkCover Authority of NSW (Prosecution) Tiernan Lawyers (Defendants) File Number(s): IRC 122 of 2011 IRC 123 of 2011 Judgment 1These prosecutions are brought by Inspector Phillip Estreich of the WorkCover Authority of New South Wales against TLC Plumbing & Bathrooms Pty Ltd ("the first defendant" or "TLC") under s 8(1) of the Occupational Health and Safety Act 2000 ("the Act") and Michael William Causer ("the second defendant") under s 8(1) by virtue of s 26(1) of the Act, by way of Applications for Order. 2It is alleged the first defendant, being an employer, in the course of its trade, business or other undertaking, on 30 March 2009 at Ocean Court, 83 - 85 Spring Street, Bondi Junction, in the State of New South Wales ("the premises"), contravened s 8(1) of the Act in that it failed to: by its acts or omissions as particularised below, to ensure the health, safety and welfare at work of all its employees and in particular, Todd Field and Troy Sarkis, contrary to section 8(1) of the Act. In particular: The particulars of the risk are that: a) The risk was the risk of employees being near an explosion and/or fire in the event that explosive gases were ignited; The particulars of the acts or omissions in failing to eliminate the risk are that: b) The defendant failed to ensure that there was an effective means of identifying the need to purge large volume gas installations so that employees were not exposed to the risk in the event that gas escaped into the plant room; c) The defendant failed to implement a safe work method in respect of working on pipes containing gases and, in particular the task of purging large volume gas installations so as to ensure that employees were not exposed to the risk posed by the escape of gases into the plant room; d) The defendant failed to ensure that there were no sources of ignition in or near the area where gases were escaping or were being purged from large volume gas installations so as to ensure that employees were not exposed to the risk if gases escaped; e) The defendant failed to undertake a risk assessment that properly identified the risk created by the escape of gases from large volume gas installations; f) The defendant failed to provide information to employees about the nature of gas purging, how correct purging would avoid the risk, the purging methods that were available to be used, how the volume of gas could be ascertained prior to the purge and the establishment of a purging area; g) The defendant failed to retain contractors to purge the gas lines prior to and after undertaking work on those gas lines; h) The defendant failed to carry out pressure testing in accordance with relevant Australian standards relating to gas installations. As a result of the defendant's failures and omissions employees and in particular, Todd Field and Troy Sarkis, were placed at risk of injury. 3It is alleged the second defendant, being a director of a corporation, on 30 March 2009 at Ocean Court, 83 - 85 Spring Street, Bondi Junction, in the State of New South Wales ("the premises"), contravened s 8(1) by virtue of s 26(1) of the Act in that it failed to: by its acts or omissions as particularised below, to ensure the health, safety and welfare at work of all its employees and in particular, Todd Field and Troy Sarkis, contrary to Section 8(1) of the Act. In particular: The particulars of the charge are as follows. a) At all material times the defendant was a director of the corporation. The particulars of the risk are that: b) The risk was the risk of employees being near an explosion and/or fire in the event that explosive gases were ignited; The particulars of the acts or omissions in failing to eliminate the risk are that: c) The corporation failed to ensure that there was an effective means of identifying the need to purge large volume gas installations so that employees were not exposed to the risk in the event that gas escaped into the plant room; d) The corporation failed to implement a safe work method in respect of working on pipes containing gases and, in particular the task of purging large volume gas installations so as to ensure that employees were not exposed to the risk posed by the escape of gases into the plant room; e) The corporation failed to ensure that there were no sources of ignition in or near the area where gases were escaping or were being purged from large volume gas installations so as to ensure that employees were not exposed to the risk if gases escaped; f) The corporation failed to undertake a risk assessment that properly identified the risk created by the escape of gases from large volume gas installations; g) The corporation failed to provide information to employees about the nature of gas purging, how correct purging would avoid the risk, the purging methods that were available to be used, how the volume of gas could be ascertained prior to the purge and the establishment of a purging area; h) The corporation failed to retain contractors to purge the gas lines prior to and after undertaking work on those gas lines; i) The corporation failed to carry out pressure testing in accordance with relevant Australian standards relating to gas installations. As a result of the corporation's failures and omissions employees and in particular, Todd Field and Troy Sarkis, were placed at risk of injury. 4Each defendant pleads guilty to the charges. 5Mr R Reitano, of counsel, appeared for the prosecution and Mr G Farmer, of counsel, appeared for the defendants. The prosecution relied upon an Agreed Statement of Facts with annexures which included: Factual Inspection Report of Inspector Phil Estreich dated 25 September 2009 ; TestSafe Report dated 10 August 2009; seventy-eight (78) colour photographs taken by Inspector John Whatman dated 31 March 2009 ; forty-four (44) colour photographs taken by Inspector Phil Estreich dated 2 April 2009; extracted pages of Australian Standard AS5601-2004 Gas Installations; prior convictions certificates for TLC Plumbing & Bathrooms Pty Ltd and Michael William Causer. 6The defendants relied upon an affidavit of Michael Causer, sole director of TLC, sworn 12 July 2011 . A number of relevant documents were attached to the affidavit including documents in relation to the pre-existing safe work method, the investigation of the incident and the upgrading of the system of work immediately after the incident. The corporate defendant also relied upon the affidavits of: Kelly Armstrong, Property Manager at McKenzie Hall, sworn 29 June 2011; Mel Crook, Managing Director of Mel Crook & Associates Pty Ltd, sworn 15 July 2011; Mousa Mashat, Engineering and Operations Manager at Broadway Shopping Centre for Mirvac Asset Management, sworn 30 June 2011. 7It was agreed that evidence in one prosecution be evidence in the other except as to the relevance of that evidence to the differing particulars relied upon in the Applications for Order. 8There was one Agreed Statement of Facts for both prosecutions which relevantly reads: 3. At all material times TLC conducted its business at premises located at 146 Bellingara Road, Miranda in that State of New South Wales. 4. At all material times Michael William Causer ("Mr Causer"), date of birth 9 August 1971, of 146 Bellingara Road, Miranda in the State of New South Wales was a director of the corporation and was responsible for supervision of TLC employees. Mr Causer is a licensed plumber, which permits him to undertake work as a drainer, gasfitter, LPG fitter, plumber and roof plumber and has been working in the plumbing industry since commencing his apprenticeship in 1988. 5. At all material times TLC undertook the business or undertaking of commercial maintenance of plumbing and gas fitting. TLC was registered with ASIC on 27 June 2003. TLC was an employer. TLC Plumbing employed Blake Giovenco, David Edwards, Troy Sarkis and Todd Field. 6. Mr Field was a 24 year old, fourth year plumbing apprentice employed by TLC. Mr Field had completed the NSW OHS construction induction training. Mr Field had done some gas fitting work on small residential buildings, but not on larger residential complexes. 7. Mr Sarkis was a 20 year old, first year plumbing apprentice employed by TLC. Mr Sarkis had completed the NSW OHS construction induction training. Mr Sarkis had learned the basics of plumbing, but had not yet been taught gas fittings in his studies. 8. "Ocean Court" at 83-85 Spring Street, Bondi Junction is part of the larger Eastgate Gardens complex which includes a second residential tower known as 'Harbour Court' and associated residential facilities, such as a pool and tennis courts. At the time of the incident, Ocean Court had approximately 300 tenants. The complex runs from 71-91 Spring Street, bordered by Ebley Street to the south and Newland Street to the west. The complex is located on top of the Eastgate Shopping Centre. 9. The plant room at the premises was located on the 29 th floor and was approximately 12.5 metres long by 1.9 metres wide and 2.5 metres high. It was constructed of concrete and brick. It only had one door. The plant room contained the final section of the main gas supply line for the building complex. As the gas line entered the room it was 100 mm in diameter, and was reduced down to 45 mm prior to the service metre. The plant room also housed nine hot water systems, switchboards and electronic panels. The Incident 10. On 20 March 2009 TLC was called to the premises in relation to the smell of gas in the plant room. A small gas leak was identified and a temporary repair was made with a power wrap bandage as the fittings required to make a permanent repair had to be ordered. 11. On 30 March 2009 Mr Causer prepared a safe work method statement on his laptop. It was Mr Causer's plan to be present throughout the whole of the job. Mr Causer then arranged for another plumber, Blake, to read the statement. Blake did this and told Mr Causer that "it was fine". Mr Causer then arranged for David Edwards, Troy Sarkis and Todd Field to read the statement individually. After it had been read, Mr Causer asked Troy if he understood it. He replied that he was "fine with it". Mr Causer then e-mailed the safe work method statement to Gordon McMillan, the manager of the Towers. 12. Mr Field understood that the process for the repair as requiring the path valve to be turned off on the footpath, then for the gas to be 'bled' from the piping and then to cut out the damaged section and replace it with a new section of piping. 13. Mr Causer, Mr Field and Mr Sarkis took their gear to the plant room. Access was gained to the plant room by use of an electronic pass key. The three men only had one key between them. Once in the plant room, they plugged chargers for the cordless tools into the plant room power points. The fittings and tools were laid out near the leaking pipe and then checked. Mr Sarkis was then sent back to the vehicle to get some pipe and cutters which were needed for the job. 14. When Troy Sarkis left the plant room, Mr Causer talked Todd through the procedure as outlined in the safe work method statement. There was discussion about the time that it might take for the remaining gas to run out. Mr Causer stated: "We could drop the temperature in the systems by opening the pressure temperature relief valves for the hot water systems." 15. At 12.06 pm and 12.22 pm Mr Causer telephoned Troy Sarkis to find out what was taking him so long. Mr Causer then went down to the vehicle to assist Troy Sarkis. Mr Causer then told Troy Sarkis to carry the gear up to the plant room and that he, Mr Causer, would cut the gas off from the path valve. Mr Causer told Troy Sarkis to "come back down to get me when you drop the gear off to Todd". Mr Causer then walked to the path valve. He turned the valve off using the gas key. 16. At 12.35 pm Mr Causer telephoned Todd Field on his mobile phone and believes he told him about Troy going up with the equipment or that he was going to turn the path valve off. At 12.37 pm Mr Causer again called Todd Field on his mobile and told him that the valve was turned off. Mr Causer did not say to Todd Field and he/it was "sweet to go". At 12.39 pm Mr Causer telephoned Troy Sarkis' mobile telephone and said "Where are you? Come down and get me". Mr Causer then received a telephone call from Todd Field. Mr Causer could hardly hear what Todd Field was saying. There was a loud noise in the background. The noise was deafening. Todd was yelling over the phone. Todd said: "Mick, Mick, I broke it. What do I do?" The telephone connection dropped out and Mr Causer immediately heard an explosion. 17. At 12.41 pm, Mr Causer dialled 000 on his mobile telephone. 18. At about 11.30 am Mr Sarkis went to the plant room. Mr Field had been there for about 10 minutes when Mr Sarkis arrived. Mr Field was standing next to a pipe holding a shifter. Mr Sarkis put down the tools he was holding to the left of the gas main in the plant room. 19. Mr Sarkis entered the room and he heard and smelled gas coming out of the test nipple. After about a minute or so that gas started coming out in greater quantities. Mr Sarkis heard a hissing noise about twice as loud as an air compressor. 20. Mr Field realised there was a fair amount of pressure coming out of the bleed valve and rang Mr Causer to make sure the path valve was fully shut off. Mr Sarkis gave Mr Field his mobile phone so that Mr Field could ring Mr Causer. Mr Sarkis and Mr Field walked around the corner from the plant room, about eight metres away from the gas pipe, and Mr Field rang Mr Causer. Mr Causer confirmed the path valve was off and told Mr Field to turn the valve the other way. Mr Causer denies that he was told by Mr Field to turn the valve the other way. Mr Field said to Mr Causer "Are you sure it is off?" and Mr Causer replied "It is off all the way". 21. Mr Field went back to the plant room to check on the valve because it was making a lot of noise. As he went back into the plant room the screw vibrated out of the pipe so that there was full gas pressure coming out and there was no way he could get the screw back in. Mr Field was still on the phone to Mr Causer when he advised Mr Causer that the screw had come out. Mr Causer told Mr Field to go in and turn off the hot water heaters. Mr Causer told Mr Field to turn off the hot water heaters and then the phone dropped out. 22. Either just before or just after Mr Field had hung up the phone, the gas ignited and a fire ensued. There was a large explosion, which caused the fire to go out. 23. Mr Field called out for, and looked for, Mr Sarkis. He could not hear or see Mr Sarkis because of the dust and smoke. Mr Field ran down the fire stairs to evacuate the building. 24. Mr Sarkis saw Mr Field turn back toward the leaking pipe and then the explosion happened. Mr Sarkis was blown about 10 metres across the room and ended up in a pile of rubble, about 1.5 metres from the edge of the fire stair landing. He called for help and looked for Mr Field. He ran down the fire stairs but he could not see because his eyes were blurred. He was bleeding and skin was hanging off him. He could taste gas. He got to ground level, saw Mr Causer and told him he thought that Mr Field was dead as a result of the explosion. Mr Causer assured him that Mr Field was alright and had already reached ground level. 25. Mr Sarkis and Mr Field were then placed under fire hoses until the ambulance arrived. 26. Levels 28 to 30 of the premises were significantly damaged, including damage to residential apartments and common areas. There were collapsed internal concrete besser block walls, collapsed gyprock ceilings and walls, exposed electrical cabling, smashed or blown out glass windows and doors, and imploded front doors of apartments. Other levels of the building also suffered damage, including front doors being damaged or dislodged from the hinges and frame, and damage to internal gyprock walls. Injuries 27. Mr Sarkis suffered lacerations to his head, requiring eight staples, a large bump on his head, burns to his face, including his eyelids, burns to his hands, arms and leg. Large areas of third degree burns on his right arm were grafted from donor sites on his body, including from his left thigh and behind his left ear. Mr Sarkis has lost feeling in his right index, middle finger and thumb. Mr Sarkis was in hospital for approximately three weeks following the incident. 28. Mr Field suffered burns to approximately 60% of his body, including arms, legs, chest, face and back. Mr Field was in hospital for approximately one month following the incident, and has sustained permanent scarring and mental suffering. 29. Both Mr Sarkis and Mr Field have returned to pre-injury duties with TLC. Work systems before the incident 30. Mr Causer had developed a safe work method statement that was discussed amongst the employees prior to them commencing work on the date of the incident. The safe work method statement did not identify the need to undertake purging or pressure testing before work commenced on the gas line. 31. Information was readily available prior to the incident in Australian Standard 5601-2004 - Gas installations, which clearly outlines the requirements for the controlled release of flammable gases to ensure that purge areas are defined and clear of ignition sources. The requirements of the Australian Standard were not referred to or incorporated into the safe work method statement. 32. TLC did not undertake any risk assessment that identified the need to purge explosive gases consistent with the relevant Australian Standards so as to avoid the risk of explosion and fire, and ensure that during the purging process there was no possible source of ignition of those gases. 33. On 10 August 2009, David Pearson and Daniel Massey of TestSafe Fire and Explosion and Personal Protective Equipment Branch prepared a report into the incident. The report in particular set out the following: A review of statements by the injured persons and their supervisor, and the physical evidence collected from the scene, strongly suggest that a natural gas leak occurred after an employee removed a test nipple from the gas manifold in the plant room. Although the natural gas supply to the building has been isolated, the residual pressurised gas remaining inside the pipe leading up to the plant room had not been safely vented . Once the test nipple was removed, gas jetted at high velocity into the plant room. Ignition is most likely to have occurred at the combustion chambers or the ignitions systems located within the gas fire water heaters . After the explosion a jet fire occurred as residual gas was released from the manifold test point, causing limited fire damage to the region surrounding the level 29 plant room door. Work systems after the incident 34. Following the incident a gas specialist was engaged to undertake repair works on behalf of the insurer as a result of the damage to the premises. The owners' corporation of the premises also asked the gas specialist to review and rectify any issues relating to gas installations and systems at the premises. 35. TLC now engages contractors to purge gas lines prior to and after any work is undertaken by TLC employees. 36. Following the incident TLC amended their safe work method statements to include the identification of the possible hazard or risk of explosion. 37. Following the incident TLC introduced pressure testing consistent with the relevant standards. 38. Following the incident WorkCover published a Safety Alert on the potentially catastrophic results of the uncontrolled release of gas within a building. The Safety Alert was published in WorkCover E-News and on the WorkCover internet site. The Safety Alert was also distributed to stakeholders including CCH, trade unions, the Department of Housing, Department of Commerce, RTA, Sydney Water, industry association including the Caravan and Camping Association and the Australian Liquefied Petroleum Gas Association, and the Directors of Education for Building and Construction/Primary Industries responsible for plumbing and gas fitting in the Western Sydney TAFE campuses. Co-operation 39. The defendants have co-operated with WorkCover during the course of the investigation and prosecution. Costs & Moiety 40. The defendants agree to pay the prosecutor's costs as agreed or assessed. The defendant agrees that the prosecution should have a moiety of any fine that is imposed. Prior Offences 41. The defendants have no prior convictions under the Act or associated legislation Relevant Principles 9In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case ss 8(1) and 26(1) of the Occupational Health and Safety Act 2000 along with ss 21A, 22, 23 and 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 10Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 11Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 ACrimR 104 correctly, given the consideration in Markarian , recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. Proper regard is to be had to express legislative provisions and to the relevant statutory regime ( Markarian at [27]). The object of the Act is to protect employees from risk to safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the workplace. 12In Inspector Morgenthal v Houghton [2010] NSWIRComm 192, the Court observed at [9]: In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act ...are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: '[i]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion." 13Of relevance particularly is the effect of s 21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing and states, inter alia : . . . (2) Aggravating factors . . . (d) the offender has a record of previous convictions, ... (g) the injury, emotional harm, loss or damage caused by the offence was substantial, . . . (3) Mitigating factors . . . (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, ... (k) a plea of guilty by the offender (as provided by section 22) (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23) . . . Consideration 14In a consideration as to penalty, the Court first assesses the objective seriousness of the offence as charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474): In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ... And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ... 15In considering the objective seriousness of each offence in context, it is necessary to state the relationship between the two defendants, each of which faces a separate charge brought under different provisions of the Act. 16It is also necessary to give a little historical background to the work being done which is the subject of the asserted breaches of the Act. For some years TLC, the first defendant, had been engaged by the operators of Eastgate Shopping Centre to carry out plumbing works. This was the first job undertaken by the defendants at the Eastgate Gardens part of the complex. In preparation, on 30 March 2009, Mr Causer, the sole director and an employee of TLC, completed a safe work method statement for the task. He opines he did this in conjunction with the operators of the complex. He had been notified on 30 March 2009 of a gas leak detected in the plant room of the complex. Importantly, the plant room was located on level 28 of the complex. The leak was "power bandaged" as a temporary measure. Mr Causer and the complex manager agreed that it was necessary to shut down the supply of gas to allow for the replacement of the damaged piece of pipe. 17Mr Causer then attended with three apprentices on 31 March 2009. He went through, with those apprentices, his safe work method statement which involved: a visit to the area where the work was undertaken; turning off the supply of gas to the centre; then purging the gas remaining in the lines; testing whether pressure remained in the pipes; cutting that pipe and replacing it when satisfied that the remaining gas had been removed from the pipe. 18It is agreed that Mr Causer went through his safe work method statement with the apprentices. However, at the point where the purging of the gas out of the pipe was to be performed, the safe work method statement stated this was a task for Mr Causer himself. 19The incident occurred because Mr Field, an apprentice working on level 28, was notified the gas at the valve located at the street was turned off. Mr Field then commenced to undo the "nipple" located in the gas pipe (it is also known as a "Pete's Point"). The plan was to insert into that device another tool to test for any pressure of the gas in the pipe. Mr Field had not been properly trained as to the appropriate procedure under the Australian Standard for testing whether pressure is remaining in the pipe, nor in the procedure for purging any remaining gas. The Australian Standard outlines the process for purging at 2.4 and also outlines a further process for testing. 20Mr Field, having been told the gas was turned off in a telephone conversation with Mr Causer on the ground, loosened the valve in the pipe without testing whether gas remained in the pipe. There was pressure in the pipe as the gas had not been purged, and the pipe had not been tested to indicate whether there was gas pressure remaining. Mr Field called out, "Mick, I have broken it." The pressure of escaping gas from the value caused the valve to vibrate and blow out of the pipe. This caused even more gas to escape. As there were hot water heaters with burners in the room, the escaping gas ignited and a significant explosion occurred. Mr Field and another apprentice suffered injury. 21The work method statement defined the procedure to be complied with in the following manner: "Turn off gas part valve and bleed out gas through HWS and testing point." Mr Causer was clearly mistaken in his belief that Mr Field understood that a gas line had to be purged after the gas was turned off and before work commenced on the pipe. There was clearly a failure by Mr Causer to ensure that employees, notwithstanding the instruction in the work method statement, understood fully the task at hand and their responsibilities within that task. 22TLC and Mr Causer both acknowledge their responsibility for this explosion. 23The principle of foreseeability is a factor in determining the objective seriousness of an offence. This was considered and affirmed in the Full Bench decision of Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610. On the issue of foreseeability, the Full Bench in Capral stated at [82]: The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209-210) in these terms: ... reliance on 'hindsight' must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 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. 24The prosecutor submits there was a foreseeable element to this offence given that there was a known risk and that there were a series of simple steps that could have been taken to avoid the breach. Although two employees suffered injury, and Mr Field serious injury, the defendants are fortunate that, given the drastic effects of both the fire and the explosion, the risk of more serious injury or death did not materialise. The gravity of the risk makes the offence more serious. As was held by Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 (at 5): The gravity of the damage or injury actually resulting from breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from breach and its foreseeability are clearly relevant . . . This was, in the circumstance where the risk was a known risk, a foreseeable breach. 25I am persuaded from the evidence that TLC did not undertake any proper risk assessment identifying the need to first purge explosive gases from the pipe (in accordance with the relevant Australian Standard) so as to avoid the risk of explosion and fire. It therefore failed to ensure that, in the performance of the process, there was no possible source of ignition of the gas. Clearly, the nipple was taken out of the pipe before the remaining gas was removed from the pipe. The gas then escaped with velocity causing the explosion, and the consequential fire occurred because the pilot light had not gone out on the water heaters. 26Mr Field suffered burns to approximately 60 percent of his body. He was in hospital for approximately one month. There is evidence Mr Sarkis suffered lacerations to his head, burns to his face (including on the lips) and burns to his hand, arm and leg. He had three bigger burns on his right arm, which were aggravated, and burns on his left thigh and behind his left ear. He has lost the feeling in his right index finger, middle fingers and thumb. Both Mr Field and Mr Sarkis, however, returned to pre-injury duties although both have now moved on. 27There is further evidence, aside from the injuries suffered by the apprentices, of damage to the building caused by both the explosion and by the rubble that hit the ground, and damage from the force of the explosion to a balcony opposite the shopping centre. There was, therefore, considerable property damage as well as physical injury. 28The potential risk became a reality with all its consequences. The gravity of this foreseeable risk to safety was most serious. 29Further, it is necessary to note that, while an employer who supports the apprenticeship system is to be commended, there must be extra care taken when training up our youth to ensure not only their safety but to rigorously impress upon them the importance of safe working procedures. 30The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral at [71] - [77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: ... both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example , Page v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39 at [40]-[43] ) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. 31Both the corporation, TLC, and Mr Causer continue to operate in the construction area performing work requiring a licensed plumber. Mr Causer said after the incident he was directed by the head contractor to return to the site. There shall be an element of specific deterrence in penalty with an acknowledgement there was, before the incident, an awareness of the necessity for safe working procedures, which awareness is now rigorously implemented. 32Here the real fault was that two good apprentices volunteered to perform a task about which they had received no training and without the clear instruction not to so do. I have no doubt Mr Causer knew of the appropriate way to purge the pipes of gas, but he did not ensure the safe work method was followed. Clearly there was no real understanding by the apprentices, perhaps because of their lack of experience, as to how the pipe was to be purged. 33Once more the construction industry, and particularly the plumbers working therein, must be reminded of the necessity to rigorously ensure safe working procedures are followed and that special care must be taken when an employer is dealing with apprentices working under their control. There shall be an element of general deterrence. 34However, this is not a circumstance where there was no consideration of safe working procedures. Rather, the prosecutor acknowledged Mr Causer had his laptop computer on site, which held a soft copy of the safe work method statement, and instructed the four apprentices as to how the task was to be performed. He failed to make clear, however, that he was the one to perform the dangerous purging procedure. 35It is also necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A(1) of the Crimes (Sentencing Procedure) Act 1999 relevant to the defendants. As was said in R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168: [56] ... it is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c) Ultimately, all of the above factors must be considered as part of "a complex of inter-related considerations" ( R v Gallagher (1991) 23 NSWLR 220 (at 228)). 36In Cahill v State of NSW (Department of Community Services) (No 4) [2008] NSWIRComm 201, Boland J (President of the Industrial Court of New South Wales) said at [62]: A simple expression of contrition or remorse by a representative of a corporate offender, no matter how senior the representative, is not enough to enable the Court to find that the offender is remorseful: As Cummins J said in DPP v Esso Australia Pty Ltd [2001] VSC 263; (2001) 124 A Crim R 200, "personal expressions of remorse need to be translated into reality". See also see Regina v Heip Tan Nguyen [2004] NSWCCA 438 per Bell J (Hidden and James JJ agreeing) at [21]. There must be evidence that the offender has accepted responsibility for its actions and also that the offender has acknowledged any injury, loss or damage caused by its actions or that it has made reparation for such injury, loss or damage (or both). Section 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 provides " remorse " may be taken into account as a mitigating fact if, and only if: . . . (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both) (emphasis added) . . . 37Both TLC and Mr Causer rely upon evidence in the form of references going to character. The Court acknowledges that Mr Causer was known for his positive attention to ensuring safe working procedures were in place for all his jobs. 38I accept the defendants have demonstrated contrition and remorse for their act in exposing these two persons to the risk to safety. They met their obligation through the concern and care shown to the injured employees, their attendance at hospital and providing suitable employment for the employees when they were ready to return to work. 39Apprentices usually qualify and move on. However, it is noted, Mr Sarkis did not complete his apprenticeship. 40Both defendants entered early guilty pleas to the offences as charged and will each be given a 25 percent discount for the utilitarian value of a plea ( R v Thomson; R v Houlton ). It is agreed both defendants co-operated with the investigation of the incident. 41The maximum penalty for a corporation for a first offence, in this case TLC (the first defendant), is $550,000. The maximum penalty an individual for a first offence, in this case Mr Causer (the second defendant), is $55,000. 42TLC employs four persons. It was first registered on 22 June 2003. Mr Causer is the owner of all shares in the company. He is the sole director of the company. Mr Causer has been engaged in plumbing for 23 years. He has been a licensed plumber for 18 years. 43Since the incident, Mr Causer has hired an additional licensed plumber and an office manager. He has introduced dramatic changes to upgrade what has been acknowledged as pre-existing safe work procedures. There has been the purchase of a portable printer to enable the safe work method statements to be not only read to employees/contractors, but specifically handed to them on instruction sheets. Each employee on site is now given a telephone for direct communication. 44Mr Causer avoids the task of purging pipes and he hires specific experts in the field to ensure no such incident occurs again. His general occupational health and safety procedures have been reviewed and are now rigorously adhered to. 45Mr Causer places some evidence before the Court as to the financial position of TLC and, as well, his own personal financial circumstance. His corporation has a significant turnover of some $500,000 a year on average. He draws a wage from the business in the sum of approximately $531 a week. He has very limited savings. It is not quite clear what the assets of the corporation are, but Mr Causer suggests he has an interest in property which is mortgaged. 46I take into account the financial status of both the company and Mr Causer but I reiterate what has been said in the authorities. The basic consideration in assessing penalty for breaches of the Occupational Health and Safety Act 2000 must reflect the objective seriousness of the offence. 47This was a basic breach of safety procedures. I find the first defendant, TLC Plumbing and Bathrooms Pty Limited, guilty of a breach of s 8(1) of the Act. The defendant shall pay a penalty in the sum of $80,000 with a moiety to the WorkCover Authority of New South Wales. 48I find the second defendant, Michael William Causer, guilty of a breach of s 8(1) by virtue of s 26(1) of the Act . The defendant shall pay a penalty in the sum of $18,000 with a moiety to the WorkCover Authority of New South Wales. 49There shall be one order for costs to the prosecutor as agreed or assessed. Orders 50The Court makes the following orders: 1. In Matter No IRC 122 of 2011, I find the corporate defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $80,000 with a moiety to WorkCover Authority of New South Wales. 3. In Matter No IRC 123 of 2011, I find the individual defendant guilty of the offence as charged. 4. The defendant is fined in the sum of $18,000 with a moiety to WorkCover Authority of New South Wales. 5. There shall be one order as to costs. The defendants are to pay costs of the prosecutor. There has been no agreement between the parties as to the quantification of the costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 September 2011