DPP v Esso Australia Pty Ltd

[2003] VSC 367

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

CRIMINAL DIVISION

No. 1484 of 2000

IN THE MATTER of s.85B Sentencing Act 1991 Compensation Applications

DIRECTOR OF PUBLIC PROSECUTIONS

v

ESSO AUSTRALIA PTY LTD

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JUDGE:	Cummins J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 September 2003
DATE OF JUDGMENT:	30 September 2003
CASE MAY BE CITED AS:	DPP v Esso Australia Pty Ltd
MEDIUM NEUTRAL CITATION:	[2003] VSC 367

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Crimes compensation – Applications by victims pursuant to s.85B Sentencing Act 1991 – Psychiatric injury – Depressive disorder – Adjustment disorder – Grief, pain and suffering – Victims children of employee victim – Marital separation of parents of victims direct result of offences and compensable – Applications consequent upon convictions for offences under ss.21 and 22 Occupational Health and Safety Act 1985 – Considerations applicable – Orders for compensation made.

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APPEARANCES:	Counsel	Solicitors
For the Director of Public Prosecutions	Office of Public Prosecutions
For the Applicants	Mr D. Hore-Lacy SC with Mr D. Bracken	Maurice Blackburn Cashman
For the Respondent Esso Australia Pty Ltd	Mr D.E. Curtain QC With Mr S. O'Meara	Middletons

HIS HONOUR:

1. On 28 June 2001, after a four month trial, Esso Australia Pty Ltd was found guilty by a jury on eleven counts of breaches of s.21 and s. 22 Occupational Health and Safety Act 1985. By reason of s.47(3) of that Act, each of those convictions was of an indictable offence. The convictions essentially were of failures to provide and maintain, so far as was practicable, a safe workplace and safe systems of work at Esso Australia's major gas processing facility at Longford, Victoria. On 25 September 1998, as a consequence of Esso's failure, a catastrophic rupture in plant had occurred. Explosions and fires ensued, two employees tragically were killed, eight others were seriously injured and numerous persons were caused significant trauma, pain and suffering. On 30 July 2001, I imposed fines totalling $2,000,000 upon Esso Australia for the eleven offences.

1. The circumstances of the eleven offences under the Occupational Health and Safety Act 1985 and of which Esso Australia Pty Ltd has been convicted are set out in the sentence I imposed on 30 July 2001. They are a matter of public record and I shall not here repeat them.

1. Numerous persons have made application in this court for compensation for injury suffered as a result of the offences of which Esso Australia was convicted.  On 19 December 2001 I ordered the payment by Esso Australia Pty Ltd of compensation to numerous victims of the rupture and explosions at Longford on 25 September 1998.  On 23 June 2003 I made further orders of compensation to further victims.

1. Today before me are two further claims for compensation, on behalf of the children of Mr James Ward, control room operator on the day of the rupture and explosions and of Mrs Elizabeth Ward.  The children are Haydn James Ward, now 16 years and 9 months of age, and Katlyn Elizabeth Ward, now 15 years and 2 months of age.  Both are students at secondary schools in Sale.  Both now reside with their mother in Sale.  Haydn suffers from mild chronic adjustment disorder with depressed mood and Katlyn suffers from a major depressive disorder, in circumstances in which it is wholly understandable that they have sustained those conditions.  I shall come to those circumstances shortly.  I also find that those conditions are a direct result of the offences committed by Esso Australia.  I shall come also to the circumstances of that direct result shortly.

1. The pivotal section in claims for compensation for pain and suffering under the Sentencing Act 1991 is s.85B. That section founds the court's power to order the offender to pay compensation to a person who has suffered injury as a direct result of the offence. Injury is defined by s.85A(1) as follows:

"'Injury' means

(a)actual physical bodily harm;  or

(b)mental illness or disorder or an exacerbation of a mental illness or disorder, whether or not flowing from nervous shock;  or

(c)pregnancy;  or

(d)grief, distress or trauma or other significant adverse effect;  or

(e)any combination of matters referred to in paragraphs (a), (b), (c) and (d) arising from an offence –

but does not include injury arising from loss of or damage to property;

'medical expenses' includes dental, optometry, physiotherapy, psychology treatment, hospital and ambulance expenses."

1. A number of authorities have passed upon like legislation.  Each authority must be considered in the light of legislation the court was there considering.  Compensation is not punishment and proceeds according to common law criteria:  McDonald[1] and In Re Poore.[2]  Further, it has long been held that very complex cases ought not be heard consequent upon a criminal sentence but should be heard in the civil list:  Landholt[3] and Braham.[4]

   [1](1979) 1 N.S.W.L.R. 451.

   [2](1973) 6 S.A.S.R. 308.

   [3](1992) 63 A.Crim.R. 200.

   [4](1977) V.R. 104.

1. There are a number of incidents of s.85B compensation proceedings. First, the proceedings are under the Sentencing Act 1991, a criminal statute. The proceedings are heard in the Criminal Division by the sentencing Judge. Second, a condition precedent to the institution of s.85B proceedings is the recording of a criminal conviction. Third, the respondent to an application under s.85B is a party by reason of his, her or its character of being an offender. Fourth, the applicant has to be a victim of a crime. Fifth, there is an intimate connection between the antecedent criminal trial and the application. The documents the application proceeds upon are criminal trial documents, including committal depositions before the trial and victim impact statements after conviction: s.85F(2). Sixth, unlike ordinary civil process where the impecuniosity of the defendant is irrelevant, in s.85B applications the court may take into account the financial circumstances of the offender and the nature of the burden that the payment ordered will impose: s.85H(1). Seventh, by s.85H, the rehabilitation of the offender, always an important matter in sentencing, should not be deflected or defeated by a compensation order. Eighth, by s.85C(1)(b)(iii) a section 85B application may be made on the victim's behalf by the Director of Public Prosecutions. Ninth, s.85L preserves the applicant's right to recover civil damages separate and apart from, or in addition to, s.85B proceedings. And finally and importantly, pursuant to s.85B compensation can be awarded not only for injury constituted by "actual physical bodily harm" (s.85A(1)(a)) but also (amongst other heads) by "grief, distress, trauma, or other significant adverse effect". Compensation can also be awarded for hospital, medical psychological and other expenses.

1. These two applications were filed in the Court on 23 May 2003.  Under the Sentencing Act 1991, an application for compensation must be made within 12 months after the offender is convicted of the offence (s.85C(1)(a)) unless the Court on application extends the time for the making of the application (s.85D). These applications were thus made almost a year out of time. At the hearing of the applications earlier this month I ruled that the ordinary time for the making of these applications be extended so as to permit the applications to be made. Esso Australia properly did not oppose that course. The reason I extended the time was that the injury suffered by the two applicants developed over time – indeed over the 5 years to today – and was not immediately apparent. Also the injury derived in part from events which occurred more than a year after the convictions, events which themselves were a direct result of the offences. Prominent amongst those events is the failure, in April 2002, of the marriage of the parents of the applicants, after 19 years of marriage which had been a happy fulfilling and loving marriage but which was destroyed by the offences committed by the respondent and their sequelae. For reasons I shall come to, I am affirmatively satisfied that the failure of that previously happy, viable marriage was a direct result of the offences. Both applicants suffer grievously from that sad effect and continue to suffer.

1. The two applicants are the only children of Mr James Ward and Mrs Elizabeth Ward.  At the time of the explosions and rupture at Longford, the Ward family lived at Glenmaggie. They were a family to be proud of – responsible, hard-working, supportive and loving.  Mr Ward was a plant room controller at Esso's plant at Longford.  Mrs Ward was a primary school teacher and deputy principal in Sale.  Haydn, who was born on 8 December 1986, was 11 years 9 months of age.  Katlyn, who was born on 13 June 1985, was 10 years and 2 months of age.  Thus Haydn was 1½ years older than Katlyn.  As I have said, Haydn now is 16 years and 9 months of age and Katlyn is 15 years and 2 months of age.  Haydn is in Year 10, and Katlyn is in Year 9, at colleges in Sale.

1. In Haydn's application, I have had regard to the body of material supporting it. That material is first, his victim impact statement, in the form of a statutory declaration made 16 April 2003;  an affidavit by his father, Mr James Ward, who being an adult has formally initiated these proceedings on behalf of his children, and sworn 22 May 2003;  a psychiatric report of Dr Michael Epstein of 15 July 2003;  and a psychological report of Mr John Hodgson of 15 March 2003.  A medical report of Dr Peter Stevens, general practitioner, of the Heyfield Medical Centre of 22 March 2003 is not relevant to the proceedings concerning Haydn.  I also have had regard to the initial victim impact statement of Mr James Ward declared on 18 June 2001 and the psychological reports of Mr John Hodgson, psychologist, dated 8 June 2001 concerning Mr James Ward and of 8 July 2001 concerning Mrs Elizabeth Ward, essentially as background to what the children then and later went through, because as I have said much of the suffering of the children occurred later.

1. In Katlyn's application, I have had regard to the body of material supporting it.  That material is first, her victim impact statement, in the form of a statutory declaration made 16 April 2003;  an affidavit by her father, Mr James Ward, sworn 22 May 2003;  psychiatric reports of Dr Michael Epstein of 15 July 2003 and of 5 August 2003;  a psychological report of Mr John Hodgson of 15 March 2003;  a report of Dr Peter Stevens, general practitioner, of the Heyfield Medical Centre of 22 March 2003;  and a report of Ms Mary McNally, student counsellor, of 26 March 2003.  For the reasons I stated in relation to Haydn, I also have had regard as background material to the victim impact statement of Katlyn's father, declared on 18 June 2001 and the psychological reports of Mr John Hodgson, psychologist concerning her father and mother and which I specified earlier.

1. As background to the two applications today before me, I also have re-read a body of historical material.  That material is the statement and evidence of Mr James Ward before the Longford Royal Commission and given in February 1999 (p. 2991-3288) and his evidence before the jury in this Court and given in April 2001 (T.2333-2447).  I repeat what I said in sentencing Esso Australia on 30 July 2001 (paragraph 44):

"One (of) the first witnesses called in the trial Mr Jim Ward, (was) the control room operator.  I was most impressed by the integrity of Mr Ward.  He was not asked one question in cross-examination before the jury.  How unfortunate it was that, on Esso's instructions, its solicitors submitted to the Royal Commission:

'Mr Ward was in possession of the necessary information to initiate appropriate action to address the loss of lean oil circulation … Mr Ward's failure in this respect was due to reasons peculiar to himself.'

(Submissions on behalf of Esso Australia by its solicitors to the Longford Royal Commission, 26 April 1999, p. 83, paragraph 269).  The truth is there was only one entity responsible for lack of knowledge on that day:  Esso.  It, and it alone, should have properly trained the operators and supervisors not only in production, which it did, but also in safety.  It, and it alone, failed to do so.  Mr Ward and the employees did not fail.  Esso failed."

It is obvious, and it was always obvious, that Mr James Ward did not contribute in any way to the rupture, explosions and inferno that occurred at Esso Australia's Longford plant on 25 September 1998.  On the contrary, at all times he acted properly, responsibly, and indeed bravely. 

1. The relevance of those necessary observations is twofold.  First, it is Mr Ward who is the father of the two applicants before me.  He has been to hell and some but not all of the way back because of the events of 25 September 1998.  Second, his odyssey has directly impacted upon his two children, upon his wife, upon their marriage and upon the Ward family.  I turn to the impact upon the two applicants.

1. First, the family situation at the time of the rupture and explosions.  The family was a loving, close-knit family.  As children often do, Haydn in 1997 had had some difficulties at school.  The psychologist Mr John Hodgson described the response of the parents to those difficulties as follows (Report, 8 July 2001, p. 3):

"In my opinion the knowledgeable, sensitive and loving approach taken by both Elizabeth Ward and her husband Jim at the time was the major factor in turning Hayden's educational opportunities around.  Both Elizabeth and Jim Ward were very open to try different strategies to assist their son.  They worked in a loving and cooperative way together to support Hayden and worked very effectively with other resources such as the staff at St Michael's Primary School, Heyfield.  In my opinion it was their outstanding efforts and determination to assist Hayden that has meant that the issue has not presented itself again as a problem and even further to that Hayden now is a very happy and motivated student in his secondary schooling."

Of Mrs Ward, the psychologist observed (p. 9):

"My report above indicates very clearly that there were no significant pre-disposing factors reported by Elizabeth Ward prior to the Longford explosion.  Her own physical and psychological health and that of her family, as well as her functioning in all aspects of life, was of a high level."

The psychologist concluded that at 8 July 2001 as a result of the rupture and explosions and their sequelae, Mrs Ward suffered from adjustment disorder with mixed anxiety and depressed mood.  The psychologist concluded, as to Mr Ward, at 8 June 2001 that he suffered, as a result of the rupture and explosions and their sequelae, from posttraumatic stress disorder and from major depression.  The psychologist observed (p. 10):

"Jim Ward reported no serious pre-disposing factors.  His physical and mental health prior to the trauma was excellent."

The psychologist, as at mid 2001, commented most favourably upon the efforts both Mr  and Mrs Ward were making to deal with what had happened.  Mr Ward's world had been turned upside down.  That directly affected Mrs Ward, and directly affected both the children who today are applicants before me.  But the scarifying and corrosive effects of the rupture and explosions and their sequelae were too strong.  Over time Mr Ward changed.  From a warm and loving and supportive husband and father he turned into a withdrawn, disturbed, troubled man.  Things became more and more difficult domestically.  It is not appropriate to detail the full matter here.  It is on the Court record.  It is contained in Mr Ward's affidavit of 22 May 2003, the victim impact statement of both Haydn and Katlyn, and in the psychiatric and psychological reports concerning both Haydn and Katlyn and which I have previously specified.  In the end, in April 2002, after 19 years of happy and supportive marriage, the parents separated.  Experience shows that most, but not all, separations are multi-factorial in cause. [5]   In my view, this separation was not multi-factorial.  There was a single initiating cause – the rupture and explosions at Longford on 25 September 1998 and their direct sequelae.  Having considered all the factual data I have specified, I am affirmatively satisfied that the failure of the marriage was a direct result of the offences committed by the respondent and their direct sequelae.  The family doctor, Dr Peter Stevens of the Heyfield Medical Centre, in a report dated 22 March 2003 concerning an examination on 14 January 2003 of Katlyn in which Dr Stevens diagnosed depression, stated that "it is quite possible" that the Longford explosions and their sequelae "were a contributing factor" in the subsequent parental difficulties. Understandably, the respondent relies upon that opinion both as to what it says and its limitation.  Dr Stevens had the longitudinal benefit of being the family doctor.  (Mr Hodgson also had longitudinal knowledge of the family).  However I have had the benefit of a wide body of comprehensive and detailed expert and lay material in reaching the affirmative conclusion I reach.

[5]See generally Examiner Newspapers Pty Ltd v Geeves (Supreme Court of Tasmania, unreported, 1975 no. 74, Crawford J.), Cameron v Nottingham Insurance Co. Ltd (1958) S.A.S.R. 174, Hird v Gibson (1974) Qd.R. 14 and Powderly v Gibson (Supreme Court of New South Wales, unreported, Cantor J., 25 June 1979).

1. Haydn was in Sale with his mother and sister on 25 September 1998.  They learnt of the explosion, saw emergency vehicles rushing to Longford, learnt that the explosion was where Mr Ward worked, learnt he was missing and only at 6.00 pm learnt that Mr Ward was alive and in hospital.  His father returned to work in December 1998.  His father was often depressed, anxious and angry.  Then his father went to work in Melbourne Mondays to Fridays because he could not daily face the reminders at Longford.  Things steadily deteriorated.  His father changed.  The change was because of the posttraumatic stress disorder and the major depression suffered by the father because of the offences.  The parents separated. His father found a relationship with a woman in Melbourne.  The happy family, which surrounded Haydn with support and love, was no more.  Haydn now suffers from "a mild chronic adjustment disorder with depressed mood" in the words of the psychiatrist Dr Epstein (p. 8).  Haydn suffers from "adjustment disorder with mixed anxiety and depressed mood" in the words of the psychologist Mr Hodgson (p. 12).  In human terms, he has lost his family and despite his mother's loyal and loving support he is grieving for that loss.  Psychologically, Haydn's prognosis is quite good and he would benefit from counselling.  In the words of the psychologist, which I endorse, Haydn is "a fine young man".  (p. 12).

1. Katlyn, in her own individual way, has suffered the same odyssey as her elder brother.  It has hit Katlyn particularly hard.  She continues to have medication.  She suffers from "a major depressive disorder" in the words of the psychiatrist Dr Epstein (p. 8).  She suffers from "adjustment disorder with mixed anxiety and depressed mood" in the words of the psychologist Mr Hodgson (p. 4).  She remains anxious and depressed.  Her condition will continue, even with psychological and other counselling, for a considerable period of time.  In human terms, she has lost her family and despite her mother's loyal and loving support is grieving from that loss.  Ms Katlyn Ward is a fine young woman.

1. Although Haydn and Katlyn are different individuals, they both have suffered as a direct result of the offences and I consider it is proper to treat them equally in the matter of monetary compensation. 

1. Unlike the children of Mr Peter Wilson, plant superintendent and of Mr John Lowery, maintenance supervisor, both of whom died at Longford on 25 September 1998, Haydn and Katlyn still have their father.  It is inappropriate to compare in detail the quantum of compensation awarded to other children.  In the case of the Wilson children – loving children who lost their beloved father – they each were full adults at the time of the explosions, being 27, 25 and 22 years respectively and only the youngest living at home.  In the case of the Lowery children, again at the time of their sad loss they each were full adults being 28, 26 and 25 years, the elder two having children of their own, and living away from home, the youngest interstate.  In the case of Janelle Miller, an impressive young woman who wrote a moving poem to her father after his separation from her mother after the explosions, I was unable to find that that separation was a result of the Longford explosions.  Each case is different and must be judged according to its particular facts.  What must be consistent are the principles of law which I stated at the outset.

1. Bearing in mind those principles of law, and on the evidence before me, I conclude that each applicant Haydn and Katlyn Ward has suffered injury as a direct result of the offences committed by the respondent on 25 September 1998 and of which the respondent was convicted on 28 June 2001.  The injury is the psychological injury each has suffered increasingly over five years and their grief, distress and trauma.  That includes the effect upon each of them of the separation of their parents.  I consider the proper order of compensation for their injuries is:

(a)       in the case of Haydn:  $100,000;  and

(b)      in the case of Katlyn:  $100,000.

1. I order the respondent to pay those amounts.

1. Further I order that the respondent pay the applicants' costs of these proceedings.