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District Court 4 December 2014

WorkCover Authority of New South Wales v Customised Gas Australia Group Pty Ltd and Flynn

[2014] NSWDC 361

Public order & justice offences
TRAILER INSIDE WORKSHOP SERIOUS INJURY GAS AREA OPERATION WITH REGULATORY AUTHORITY NO PRIOR CONVICTIONS GOOD CORPORATE CHARACTER OF DEFENDANT

Citation: WorkCover Authority of New South Wales v Customised Gas Australia Group Pty Ltd and Flynn [2014] NSWDC 361
Court: District Court of New South Wales
Date: 4 December 2014
Judge: Kearns DCJ

Background

Customised Gas Australia Group Pty Ltd (CGA) operated a business repairing and refurbishing gas tankers at Mulgrave. Its sole director, Mr Flynn, managed the company day-to-day. In early November 2012, a task was underway to purge and vent a large liquefied petroleum gas tanker-trailer using nitrogen, in preparation for internal cleaning.

Mr Flynn had begun the task outside the workshop on 2 November 2012 but left it incomplete when he departed for Adelaide on business. On 6 November 2012, the head mechanic and a general hand continued the work, but did so inside the workshop. When an extraction fan was inserted into the tanker's inspection hatch, a fireball erupted, causing catastrophic burns to the general hand across 55 per cent of his body. He was not wearing appropriate protective clothing at the time, having received no instruction to do so.

WorkCover NSW prosecuted both the company and its director. CGA was charged under section 19(1) of the Work Health and Safety Act 2011 (WHS Act) for failing to ensure the health and safety of its employees. Mr Flynn was separately charged under section 27 for failing to exercise due diligence to ensure CGA complied with that duty. Both defendants entered early guilty pleas.

  • Whether CGA breached its primary duty under section 19(1) of the WHS Act to ensure, so far as reasonably practicable, the health and safety of its workers.
  • Whether Mr Flynn, as director, breached his duty under section 27 to exercise due diligence to ensure the company met that obligation.
  • What weight should be given to mitigating factors including early guilty pleas, cooperation, contrition, remedial steps, and the financial impact of fining the company on the director personally.
  • Whether a non-conviction order under section 10 of the Crimes (Sentencing Procedure) Act 1999 was appropriate for Mr Flynn.

Decision

The court accepted the agreed facts and findings that CGA failed in three material respects: it did not ensure the purging and venting task was completed in the designated outdoor de-gas area; it did not require or ensure the injured worker wore appropriate protective clothing; and it failed to train or induct him in the safe work method statement that CGA's director had himself prepared. That statement, in prominent red lettering, specified that all such work must be carried out outside. Neither the injured worker nor the experienced head mechanic had ever been shown it.

Kearns DCJ treated the offending as serious. The risk of ignition during gas purging work was foreseeable, the consequences of ignition were foreseeable, and the failures were entirely preventable. The court noted that a safe work method statement existed and specific safety measures were in place, but the existence of these documents counted for little when their contents were never communicated to the workers performing the task.

On the question of penalty, the court weighed significant mitigating factors: early guilty pleas (attracting a 25 per cent discount), full cooperation with WorkCover, no prior convictions, genuine contrition, extensive post-incident safety upgrades, and CGA's standing as a community-minded family company. Against those factors, the court balanced the seriousness of the offence, the severity of the injury, and the need for general deterrence in an industry where such hazards are well known.

The court rejected the submission that Mr Flynn should receive a non-conviction order under section 10 of the Crimes (Sentencing Procedure) Act. It held the offence was neither trivial nor committed in extenuating circumstances, and that general deterrence required a conviction. However, the court recognised as a matter of sentencing discretion that the fine imposed on CGA would fall directly and practically on Mr Flynn, given the company's modest finances and his singular role within it. This was not a case of a large corporation with passive shareholders. Accordingly, a reduced fine of $7,500 (after the 25 per cent early-plea discount applied to a starting point of $10,000) was imposed on Mr Flynn personally.

Orders Made

  • CGA convicted and fined (quantum for the corporate defendant addressed in the earlier, omitted portion of the judgment).
  • Mr Flynn convicted and fined $7,500 (reduced from $10,000 by 25 per cent for early guilty plea).
  • A moiety (half) of Mr Flynn's fine ordered to be paid to the prosecutor.
  • Mr Flynn ordered to pay the prosecutor's costs as agreed or assessed.

Key Takeaways

  • A safe work method statement that is prepared but never communicated to workers provides no meaningful protection and does not discharge a company's duty under section 19(1) of the WHS Act. The court treated the failure to train and induct workers in the document's contents as a central element of the offending.

  • Under section 27 of the WHS Act, a sole director who exercises day-to-day control of a business carries a personal duty of due diligence. The director's absence from the workplace at the time of the incident did not relieve him of responsibility for the systemic failures in training and supervision.

  • Where a company and its sole director are both sentenced, the financial impact of the corporate fine on the individual director is a legitimate discretionary consideration in fixing the director's personal penalty. The District Court held this was not double punishment in a legal sense, but was so in a practical sense, and adjusted the director's fine accordingly.

  • General deterrence carries significant weight in WHS sentencing, particularly where risks are foreseeable, consequences are severe, and the preventive measures required were straightforward. The court refused a non-conviction order for the director on this basis.

  • Post-incident remediation, cooperation with regulators, contrition, and an absence of prior convictions are all relevant mitigating factors, but they do not reduce a serious WHS offence to one that is trivial or extenuating enough to avoid conviction.

Legislation and Cases Referenced

Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(1), 27, 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 10

Cases:
- Thorneloe v Filipowski (2000) 52 NSWLR 60