SafeWork NSW v Go Go Petroleum Pty Ltd

[2022] NSWDC 96

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v Go Go Petroleum Pty Ltd [2022] NSWDC 96

Hearing dates:

30 March 2022

Date of orders:

4 April 2022

Decision date:

04 April 2022

Jurisdiction:

Criminal

Before:

Russell SC DCJ

Decision:

(1)   Go Go Petroleum Pty Ltd is convicted.

(2)   The appropriate fine is $160,000 but that will be reduced by 25% to reflect the early plea of guilty.

(3)   Order Go Go Petroleum Pty Ltd to pay a fine of $120,000.

(4) Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

(5)   Order Go Go Petroleum Pty Ltd to pay the prosecutor’s costs agreed in the amount of $43,434.92.

Catchwords:

CRIMINAL LAW – prosecution – work health and safety – duty of persons undertaking business – risk of death or serious injury

SENTENCE – objective seriousness – mitigating factors – aggravating factors – plea of guilty – general deterrence – specific deterrence – capacity to pay - appropriate penalty

COSTS – prosecution costs

OTHER – defendant involved in constructing fuel and petrol stations - underground tank being pressure tested by unqualified worker – pressure ten times safe limit – tank exploded – failure to provide adequate information, instruction and training – failure to provide adequate on-site supervision – failure to engage specialist contractor to perform pressure testing on fuel systems

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22

Fines Act 1996 (NSW), ss 6, 122

Work Health and Safety Act 2011 (NSW), ss 3, 19, 32

Work Health and Safety Regulation2017 (NSW), Part 3.1

Cases Cited:

Baumer v R [1988] HCA 67; (1988) 166 CLR 51

Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338

BW v R [2011] NSWCCA 176

Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610

Mahdi Jahandideh v The Queen [2014] NSWCCA 178

Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120

Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96

R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566

R v Wilkinson (No. 5) [2009] NSWSC 432

Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266

Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465

Texts Cited:

Australian Standard AS 4037 1999 (Reconfirmed 2016) “Pressure Equipment – Examination and Testing”

Australian Standard AS 4897 2008 (Reconfirmed 2016) “The Design, Installation and Operation of Underground Petroleum Storage Systems”

Australian/New Zealand Standard AS/NZS 3788: 2006 “Pressure Equipment - In Service Inspection”

Department of Environment, Climate Change and Water NSW “Guidelines for Implementing the Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2008” (September 2009)

Technical Guide “Durapipe PLX Safe Pipework for Fuel” (January 2013) New Zealand Code of Practice for the “Design, Installation and Operation of Underground Petroleum Storage Systems”

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
Go Go Petroleum Pty Ltd (Defendant)

Representation:

Counsel:
A Mykkeltvedt (Prosecutor)
M Shume (Defendant)

Solicitors:
SafeWork NSW (Prosecutor)
Colin Biggers Paisley (Defendant)

File Number(s):

2020/00059264

Judgment

1. On 26 February 2018 Go Go Petroleum Pty Ltd (Go Go Petroleum) was constructing a service station in Wagga Wagga. One aspect of the construction was the installation of underground fuel tanks, which involved pressure testing the tanks. An unqualified and unsupervised worker pressure tested a tank by applying a pressure which was ten times the safe pressure limit. The tank exploded.

2. Go Go Petroleum has pleaded guilty to an offence that as a person who had a work health and safety duty pursuant to s 19 of the Work Health and Safety Act 2011 (NSW) (the Act) it failed to comply with that duty and thereby exposed Mr Hicks to a risk of death or serious injury contrary to s 32 of the Act.

3. The maximum penalty for the offence is a fine of $1,500,000.

The Risk

4. The risk described in par 12 of the Amended Summons is as follows:

“12.   The risk was the risk of workers, in particular Mr Hicks, suffering serious injury or death as the result of an explosion occurring when undertaking the task of pressure testing an underground fuel system at the site.”

Reasonably Practicable Measures

5. Paragraph 13 of the Amended Summons pleads particulars of the defendant’s failure to comply with the duty under s 19(1) of the Act as follows:

“13.   The defendant failed to ensure so far as is reasonably practicable the health and safety of workers, in particular Mr Hicks, in that it failed to take one or more of the following measures, each of which is alleged to have been reasonably practicable, to eliminate (or alternatively to minimise if not reasonably practicable to eliminate) the risk:

a.   Maintaining a system where the only pressure testing that was done on the fuel system, including the newly installed tanks, was done by a third party who was appropriately qualified, experienced, and licenced to test and issue certificates of compliance with the relevant standards;

b.   provide adequate information, instruction, and training, to workers, in particular Mr Hicks and Mr O’Shea, so that they understood they were not permitted to undertake the task;

c.   provide adequate on-site supervision by an experienced and competent person to prevent workers from undertaking the task;

d.   engage a specialist contractor to perform and complete the task.”

Background

6. The parties presented an Agreed Statement of Facts and this material is summarised below.

7. Go Go Petroleum conducted a business or undertaking involving construction activities including the building of service stations.

8. Go Go Petroleum was contracted as the principal contractor to construct a petrol service station at 1 Docker Street, Wagga Wagga NSW (the site). This included the installation of an underground fuel system that consisted of storage tanks and connecting pipework (the fuel system).

9. Mr Michael Badaoui was the sole Director of Go Go Petroleum. He had a hands-on role with Go Go Petroleum and was actively involved in the day-to-day management of the business.

10. At the start of the job, Mr Badaoui attended the site and set it up with Mr Eitan O’Shea. Once the job was set up Mr O’Shea handled the day-to-day operations. Mr Badaoui and Mr O’Shea had telephone contact on a regular basis to discuss progress and issues.

The Workers

11. Mr O’Shea was engaged by Go Go Petroleum as a contractor and worked as a site supervisor. He was responsible for the work at the site including the supervision of work at the site. Mr O’Shea was a licensed plumber.

12. Mr O’Shea had performed work similar to that being undertaken at the site on the day of the incident on one or two occasions previously. He was not present at the site on the day of the incident but had spoken to Mr Kevin Hicks about the work he was performing.

13. Mr Hicks was a licensed plumber and gas fitter engaged by Go Go Petroleum. Mr Hicks worked predominantly for Go Go Petroleum.

14. Mr Hicks commenced work six months prior to the incident.

15. Mr Hicks was not trained in undertaking the pressure testing of underground tanks and had no previous experience in performing this work. He undertook the work after speaking with Mr O’Shea. Mr Badaoui was not consulted or made aware that Mr Hicks was going to pressure test the fuel system including the underground tanks but was aware that on at least one previous occasion a worker of Go Go Petroleum had performed pressure testing.

Incident Site, Equipment and Plant

16. On 26 February 2018 the site consisted of a partially constructed petrol service station. An underground petroleum storage system had recently been installed, including a fibreglass tank known as the 91/E10 tank, with pipe connections attached to its manhole covers. The tank had not yet been completely buried underground so the manhole covers and pipework were exposed.

17. The 91/E10 tank was manufactured by Envirotank. The Installation Instructions for Petroleum Storage Tanks, Publication No. INST INS 02, Fibreglass Underground Storage Tanks by Envirotank March 2017 (the instructions) included the following warning:

“Do not exceed the recommended test pressure of 35 kPa.

Tank damage and physical injury may result”

18. The instructions stated:

“Gauges must have a maximum full-scale reading of approx. 80 kPa with 5 kPa increments.

Pressure-relief device must be appropriately sized and set to prevent the tank from being pressurized in excess of the maximum allowed test pressure of 35 kPa maximum.

DO NOT EXCEED 35 kPa WHEN PRESSURE TESTING ANY TANK”

19. There were two manhole covers positioned at ground level, one above the 91-tank (the tank) and the other above the E10 tank. Each manhole cover consisted of a circular metal plate. Each tank manhole cover, including a blue fibreglass shroud surrounding the manhole cover, weighed 83kg.

20. The end of the tank dome was stamped by the manufacturer stating that the maximum pressure for the tank was 35kPa.

21. The 91/E10 tank had an internal partitioning wall which separated the 30,000-litre tank and the 30,000-litre E10 tank. Connected to the tank at the manhole cover was permanent and temporary pipework, consisting of:

1. A permanent vent pipe. This pipe could be isolated via a vent isolation valve fitted along its length.

2. A temporary Durapipe pipe connection 1.5 metres long that attached a compressor to the fuel system via an air hose and flexible nylon tubing. The Durapipe passed through the shroud that surrounded the tank manhole cover.

3. A permanent tank fill pipe capped off at its fill (inlet) point with an overflow pipe fitted immediately beneath the fill point. The overflow pipe had an isolation valve fitted at its fill point.

22. Technical Guide “Durapipe PLX Safe Pipework for Fuel” January 2013 from shipmaking.com.au provides that:

1. “All pressure testing equipment should be subject to manufacturers calibration requirements before use.”

2. “All tank connections above ground or below ground should be disconnected or isolated.”

23. The tank was connected directly to the permanent and temporary pipework. Australian/New Zealand Standard AS/NZS 3788: 2006 “Pressure Equipment - In Service Inspection” states:

“Where practicable, the volume of the pressure equipment shall be minimized, e.g. by testing individual compartments or sections, adding seal blocks or isolating sections and the like.”

24. While Go Go Petroleum’s system for pressure testing the fuel system was generally to engage a contractor who was licensed, experienced and skilled in performing this type of work, its workers had themselves engaged in pressure testing on at least one prior occasion.

25. Prior to 27 February 2018, Go Go Petroleum did engage Leighton O'Brien Field Services Pty Ltd (Leighton O'Brien) as a licensed contractor to carry out the pressure testing at the site. Exactly how the testing came about is unclear. Mr O’Shea says it was Mr Hicks who wanted to do it and Mr Hicks says that he was directed by Mr O’Shea to do it. Mr O’Shea was not on site and was fielding phone calls and messages from Mr Hicks.

26. Mr Hicks hired a West Air compressor asset number 151567 with a design pressure of 1000kPa and a pressure limiting switch to limit operating pressure to 800kPa (the compressor) from Kennards Hire. The hire was organised by Mr Hicks using the Go Go Petroleum credit card to pay for the hire. Mr Hicks used the compressor to pressure test for any leaks prior to Leighton O'Brien attending and testing.

27. An air hose was connected to the compressor via a quick connect connection.

28. At its other end, the air hose outlet was connected to flexible nylon pressure tube 1300mm long. A 400kPa pressure gauge and control point isolation valve were located at the connection point between the air hose and the nylon pressure tube. The flexible nylon pressure tube outlet was connected to the Durapipe.

29. There were no engineering control measures installed in the test equipment to prevent the tank exceeding the manufacturer’s recommended maximum test pressure.

30. Australian Standard AS 4037 1999 (Reconfirmed 2016) “Pressure Equipment – Examination and Testing” states in Section 19 that where supply pressure is greater than 35kPa, a suitable pressure-reducing device be used along with the use of a pressure gauge, relief safety value and release cock on the low-pressure side of the device.

31. Without engineering controls, the pressure could only be regulated manually by a worker monitoring the test pressure on a gauge. The effectiveness of this control is dependent on:

1. The worker knowing and following the manufacturer’s instructions in relation to the maximum testing pressure.

2. The precision of the gauge used.

32. There were no pressure regulation and pressure relief safety valves installed on the fuel system as it was being pressure-tested for leaks to prevent the manufacturer’s recommended test pressure for the tank being exceeded.

The Task

33. An underground petrol storage system (UPSS) can only be made available to the public once it has been fully commissioned. Before full commissioning of the system, the UPSS needs to be tested for integrity of the system (integrity test). Testing needs to be performed in accordance with the written directions of a duly qualified person, and in accordance with the manufacturer’s written instructions. Once the system has satisfied the integrity test, the person performing the integrity test will issue a certificate to the person responsible for the UPSS.

34. The integrity test has to be performed by a third party who can certify the work. It is not permissible for a company to certify its own work.

35. Mr Hicks was not a duly qualified person and was unable to provide a certificate confirming the integrity of the system. He was not testing the system in accordance with the written directions of a duly qualified person. He was pre-testing the system before a duly qualified person attended the site. Mr Hicks had not seen anyone who worked for Go Go Petroleum pre-test for pressure leaks of the UPSS.

The Incident

36. On 26 February 2018 Mr Hicks set up isolation caps and valves in order to test the fuel system as instructed by Mr O’Shea.

37. Mr O’Shea was not present at the site. Mr Hicks telephoned his supervisor, Mr O’Shea, and explained that he was not able to get the existing small compressor available at the site to the pressure that Mr Hicks believed was required to test the fuel system. Mr Hicks was instructed by Mr O’Shea to test the fuel system to a pressure of 350kPa.

38. Mr O’Shea gave verbal approval for Mr Hicks to hire a bigger compressor to complete the task, using the Go Go Petroleum credit card to pay for the hire.

39. Prior to undertaking the task Mr Hicks did not isolate the tank from the connecting pipework. He was unaware of the requirement to do so.

40. Mr Hicks used a 0 to 400kPa gauge on the test equipment rather than the more precise 80kPa gauge recommended in the instructions for the tank. The 0 to 400kPa gauge is less sensitive to changes in pressure than the 80kPa gauge, making it difficult to monitor the tank test pressure to ensure it does not exceed 35kPa.

41. Mr Hicks connected the compressor to a vent line fitting on the tank and operated the compressor to a pressure of 350kPa.

42. Without the separate components of the fuel system being isolated, both the pipework and the tank were pressurised simultaneously to the 350kPa applied by Mr Hicks.

43. Consequently, the pressure in the tank well exceeded the 35kPa recommended in the instructions (and stamped on the tank), causing the tank to explode.

44. The Durapipe outlet was severed during the incident and the metal tank turret, which weighed 83kg, blew off and landed 82 metres away on a public street. Debris from the explosion was found hundreds of metres away from the site. Vehicles parked nearby were damaged as a result of the explosion.

Injuries

45. Mr Hicks sustained a graze to his forehead and was driven to Wagga Rural Referral Hospital by Mr Barry Clark, but was not examined at that time.

46. As a result of the incident, Mr Hicks suffered from a stiff neck a few days later and attended Canterbury Hospital.

Systems of Work Before the Incident

47. Prior to the incident, Go Go Petroleum had conducted initial testing of parts of the fuel system itself.

48. Go Go Petroleum did not have a documented or formal safe system of work in place for the testing.

49. Go Go Petroleum did not have a risk assessment or Safe Work Method Statement (SWMS) for testing.

50. Prior to undertaking the testing Mr Hicks had several verbal discussions with Mr O’Shea. Mr Hicks had not previously undertaken the task or observed the task being undertaken by another worker. Mr Hicks was not supervised while undertaking the task.

51. Go Go Petroleum had guidance material for the tank at the site, being the instructions relating to the tank, from the tank’s manufacturer. These instructions were not displayed on or near the tank or test equipment. The instructions were not followed at the site.

52. Go Go Petroleum did not have a system in place to verify that its workers had been provided with the instructions, understood those instructions, or understood how the instructions related to the task.

53. Workers were not instructed to maintain a safe distance from the plant while carrying out the task in accordance with Australian/New Zealand Standard AS/NZS 3788: 2006 “Pressure Equipment - In Service Inspection”. This Standard states that the following procedures shall be observed:

“For ‘on site’ testing of site erected equipment complete isolation of the equipment by evacuation of the surrounding area.”

54. This Standard states that testing staff must be at least 7 metres away from the pressure control point for the pressure equipment being tested. The control points on the testing equipment were only 3 metres away from the tank and 1.3 metres away from the Durapipe.

Duties and Guidance Materials

Work Health and Safety legislation

55. Go Go Petroleum had a duty under s 19(1) of the Act to ensure, so far as reasonably practicable, the health and safety of workers engaged by it, including Mr Hicks, while they were at work in the business or undertaking.

56. Go Go Petroleum had a duty under Part 3.1 of the Work Health and Safety Regulation 2017 (NSW) (the Regulation) to:

1. Identify reasonably foreseeable hazards that could give rise to risks of health and safety.

2. Eliminate the risk to health and safety so far as reasonably practicable, and if not reasonably practicable to do so, minimise the risk so far as reasonably practicable by implementing control measures in accordance with the hierarchy of risk control under cl 36 of the Regulation.

3. Maintain the implemented control measure so that it remains effective.

4. Review and, if necessary, revise all risk control measures.

57. Go Go Petroleum was required to comply with its duties under the Act by complying with Australian Standard AS 4897 2008 (reconfirmed in 2016) “The Design, Installation and Operation of Underground Petroleum Storage Systems”.

58. This Standard was developed with the primary aim of providing requirements and recommendations for the underground storage of petroleum products. This Standard intends to promote the safe, environmentally sound, and efficient underground storage of petroleum products.

59. This Standard provides:

“Section 8.5.1 General

The UPS system shall be tested for integrity of the system by means of an equipment integrity test (EIT) after the completion of all site works.

NOTE: There may also be requirements for testing of the UPS system through an EIT during the life of the UPS system.

Equipment integrity tests (EIT’s) shall comply with all of the following:

(a)   The test shall be capable of detecting a leak of 0.38 L per hour, with a probably of detection of at least 0.95 and a probability of false detection of 0.05 or less.

(b)   The EIT shall be conducted by a competent and experienced person who shall provide certification in compliance with Clause 6.4.2.

(c)   The EIT shall be a nationally approved and certified method of EIT that meets, as a minimum, the requirements or certification standards of the USEPA.”

60. “Guidelines for Implementing the Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2008” published by the Department of Environment, Climate Change and Water NSW September 2009 provides:

“Equipment Integrity Test

An equipment integrity test (EIT) must be performed on all new, repaired and (significantly) modified UPSS after installation is compete and other planning consent requirements have been met, before the full commissioning of the system. The person performing the test must provide the person responsible for a UPSS with a certificate stating that the system has passed the test, as well as the results of the test. These documents must be kept for seven years after decommissioning, in accordance with clause 26 of the UPSS Regulation.

Minimum requirements for equipment integrity testing

An EIT should be conducted by a duly qualified person in accordance with the manufacturer’s written instructions specific to the UPSS”

61. The Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2008 was repealed from 1 September 2014 and replaced with the Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2014. Clause 26 still requires documents to be kept for 7 years.

62. The New Zealand Code of Practice for the “Design, Installation and Operation of Underground Petroleum Storage Systems” at 14.4.1, states:

“Care shall be taken to ensure that the tank is isolated and vented during the pipework test to avoid excessive pressure being applied to the tank.”

Action Taken Following the Incident

63. SafeWork NSW issued an Improvement Notice 7-323300, requiring a review of existing procedures and related training. Go Go Petroleum complied with the Improvement Notice.

64. On 16 and 17 April 2018, Leighton O’Brien attended the site and performed the task of pressure testing the fuel system.

Evidence for the Defendant

65. Mr Michael Badaoui swore an affidavit on behalf of Go Go Petroleum on 25 March 2022 (DX 1). Mr Badaoui is the sole director of Go Go Petroleum.

The Company

66. Go Go Petroleum has been operating since 2007 predominantly in NSW and Victoria. The company is involved in the refurbishment of fuel and petrol stations

67. Go Go Petroleum engages experienced, licensed and competent tradesmen and trades assistants to undertake the refurbishment works.

68. The works can take place at various locations in regional NSW. Usually a supervisor and two to three other workers are engaged for a project however this varies depending on the works being undertaken.

Mr Badaoui

69. Mr Badaoui has 30 years experience in the fuel industry and has been undertaking refurbishment works for many years.

70. Mr Badaoui is a commercial builder, underground fuel tank and line installer and business owner.

71. Mr Badaoui’s role at Go Go Petroleum involves the assessment, quoting and estimating of new projects. When a new project commences, Mr Badaoui attends the site with the supervisor to undertake a risk assessment and ensure a safety process is in place.

The Site

72. On the day of the incident refurbishment works were being undertaken at the petrol service station at 81 Docker Street, Wagga Wagga in New South Wales.

73. The refurbishment works at the site included the installation of an underground fuel system consisting of storage tanks, connecting pipework and arranging for the testing and finalising of the underground fuel system.

74. Work at the site commenced in December 2017.

Contractors and Workers Engaged at the Site

75. Go Go Petroleum engaged Mr Kevin Hicks, a licensed plumber, gasfitter and drainer, to undertake the fuel pipe installation works. Mr Hicks has over 30 years experience as a licensed plumber and gasfitter.

76. Mr Hicks commenced working at Go Go Petroleum in mid-2017. He worked on a number of fuel renovation sites prior to commencing at Wagga Wagga in December 2017.

77. Go Go Petroleum engaged Mr O’Shea, a qualified plumber, to supervise the works at the site. Mr O’Shea has over 25 years experience in construction projects. Due to the experience and competence of Mr O’Shea he was the senior company representative on the project and had responsibility for safety on site. He had been working for Go Go Petroleum for 18 months at the time of the incident.

78. Both Mr O’Shea and Mr Hicks had worked together prior to working for Go Go Petroleum. Mr O’Shea had assisted Mr Hicks in obtaining employment with Go Go Petroleum.

79. Mr Hicks had worked on two other jobs for Go Go Petroleum prior to the Wagga Wagga project. This was the first project where Mr Hicks was involved in installing and setting up the pipes and tanks. Mr Hicks worked under the supervision and instruction of Mr O'’Shea.

80. The works involved the removal of concrete driveways at the service station prior to removing and replacing the underground fuel storage tanks. Go Go Petroleum engaged an expert contractor to safely de-gas and remove the old tanks in accordance with the contractor’s safety procedures.

81. Go Go Petroleum engaged contractors to deliver and install new fuel storage tanks. This task was undertaken accordance with the contractor’s safety procedures.

82. Prior to the underground fuel system being covered, the fuel system required pressure testing by an expert pressure testing business to ensure the fuel system was safe to operate. Go Go Petroleum engaged Leighton O'Brien to undertake this task.

The Incident

83. A number of tanks and pipework had previously been installed at the site. No workplace incidents had occurred at the site in the months prior to the incident.

84. On 27 February 2018 Mr Hicks conducted pressure testing of the fuel system that he had installed. Leighton O'Brien had been engaged to conduct the pressure testing on a later date.

85. Prior to the incident Go Go Petroleum had not conducted its own pressure testing of the fuel system at this site.

86. However it was an agreed fact that Mr O’Shea had conducted pressure testing at other sites on one or two previous occasions (PX 1, Tab 2, par 11). In a Record of Interview conducted on 14 August 2018 (PX 2, Q 127) Mr Badaoui said that he was informed by Mr O’Shea by telephone that Mr Hicks was going to “pressure test the lines”. That answer did not make clear to Mr Badaoui what was to be the extent of the testing.

87. Why the pre-testing was done is unclear. No matter how it came about there was a lack of supervision by Mr O’Shea in either directing the work or permitting the work to be done.

88. Mr O’Shea did not follow the existing Company Safety Management System by requiring Mr Hicks to complete a SWMS for the work.

Injuries

89. Mr Hicks sustained a graze to his forehead and was driven to Wagga Rural Referral Hospital but did not receive any treatment. Mr Hicks later attended a hospital near his home in Sydney where he reported a stiff neck for a number of days but required no treatment.

90. Mr Hicks continues to work for Go Go Petroleum and has not reported any continuing medical concerns.

Systems of Work Prior to the Incident

91. A SWMS had been prepared and implemented for the excavation and installation of the tanks at the site.

92. Pursuant to the contract to refurbish the petrol station a Work Health and Safety Management Plan (WHSMP) was prepared for the site.

93. The WHSMP was prepared in conjunction with the site supervisor Mr O’Shea.

94. A site-specific risk assessment was undertaken for the site and a blank SWMS document was provided for personnel to complete at the relevant stage, given the conditions at the site at that time.

95. The WHSMP also required consultation and communication with all workers at the site. A pre-start meeting would occur at the site to discuss the jobs for the day and any risks or safety concerns. The purpose of this was to identify any risks and put in controls to deal with the risks.

96. All workers attending the site were inducted into the WHSMP and the requirements for safety at the site.

97. It was the practice of Go Go Petroleum to engage a certifying business to provide a certificate that the fuel system had been pressure-tested. Leighton O'Brien had been contacted prior to 27 February 2018 to attend the site.

98. It was generally not the practice of Go Go Petroleum to undertake pressure testing of the fuel system. The pressure testing was always left to the expert who would provide the appropriate Certificate of Compliance.

99. Go Go Petroleum held no documented or formal safe system of work for the pressure testing of the fuel system as this task was not usually undertaken by Go Go Petroleum. Go Go Petroleum did not hold a SWMS for tasks that were not required to be done in the refurbishment at the site.

100. The instruction manual for the tanks was on site and available. Mr Badaoui asked Mr O’Shea and Mr Hicks to make themselves conversant with the instruction manual.

101. Mr Badaoui made both Mr O’Shea and Mr Hicks aware of the maximum pressure of the tank (35kPa) by pointing out the stamped information on the tank to both of them.

Steps Taken Following the Incident

102. The investigation conducted by Go Go Petroleum determined that a more robust Safety Management System could be implemented to improve safety.

103. To assist in this process, Go Go Petroleum engaged a Work Health and Safety consultant to draft and prepare a new Safety Management System. The new Safety Management System has now been implemented.

104. The new Safety Management System requires a pre-work risk assessment to identify the hazards and risks of the project. If any risks can be eliminated, that step is taken. If any risks cannot be eliminated, reasonably practicable controls are developed, in consultation with workers, to manage those risks.

105. The new Safety Management System includes the drafting of site-based SWMSs. All workers on site are inducted into the SWMSs and attest to their understanding of the requirements of the SWMSs.

106. If any further task is identified that is not covered by a SWMS, then a new SWMS is prepared for that particular task. These steps are undertaken in consultation with the workers on the site.

107. The investigation also determined that consultation and communication at the site could be enhanced. At the commencement of each day, a toolbox talk is conducted.

108. The toolbox talk covers any work safety issues that emerged from the previous day and any safety lessons that could be learnt. The tasks for the day and any safety issues arising from those tasks are discussed. Each person has ample opportunity to raise any concerns about work safety. Everyone is reminded that if the job is not safe they are to stop the job, talk to their supervisor, reassess the safety risks, review the SWMS and only proceed when it is safe to do so.

Safe Work History

109. Go Go Petroleum has no previous work health and safety convictions.

Cooperation

110. Go Go Petroleum has cooperated with SafeWork NSW during its investigation of this incident in an appropriate and proper manner.

Contrition

111. Go Go Petroleum entered a plea of guilty on 18 October 2021, immediately after the Amended Summons and Agreed Statement of Facts were filed.

112. Go Go Petroleum is sorry that despite its best efforts the incident occurred. Go Go Petroleum accepts responsibility for its failings as set out in the Amended Summons.

113. Go Go Petroleum wishes to express remorse for these failures and breach of the safety laws. Go Go Petroleum particularly regrets the impact that the incident had upon Mr Hicks.

Consideration

114. I have had regard to the objects in s 3 of the Act and the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW).

Objective Seriousness of the Offence

115. The proportionality principle requires that a sentence should neither exceed nor be less than the gravity of the crime having regard to the objective circumstances: Veen v The Queen (No. 2) [1988] HCA 14; (1988) 164 CLR 465 at 472, 485-6, 490-1 and 496. At common law, the term “objective circumstances” was used to describe the circumstances of the crime. The gravity of the offence was assessed by reference to its objective seriousness: R v McNaughton [2006] NSWCCA 242; (2006) 66 NSWLR 566 at [15].

116. The task requires the court to consider where in the range of conduct covered by the offence the conduct of the offender falls: Baumer v R [1988] HCA 67; (1988) 166 CLR 51 at 57. This assessment will generally indicate the appropriate range of sentences available which will reflect the objective seriousness of the offence committed and set the limits within which a sentence proportional to the criminality of the offender will lie: BW v R [2011] NSWCCA 176 at [70].

117. In Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27] the High Court said:

“The objective seriousness of an offence is to be assessed without reference to matters personal to a particular offender or class of offenders. It is to be determined wholly by reference to the nature of the offending.”

118. The sentencing judge should take into account not only the conduct which actually constitutes the crime, but also such of the surrounding circumstances as are directly related to that crime and are properly regarded as circumstances of aggravation or mitigation: R v Wilkinson(No. 5) [2009] NSWSC 432 at [61].

119. The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor relative to the gravity of the offence: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 at [82]. The question of foreseeability of the risk is to be determined objectively.

120. The court must identify all the factors that are relevant to the sentence, discuss their significance and then make a value judgment as to what is the appropriate sentence given all the factors of the case: Muldrock. This approach to sentencing, known as the “instinctive synthesis” approach, involves the making of a global judgment without any attempt to state precisely how any given factor has influenced the judgment.

121. The Court of Criminal Appeal has examined the sentencing process with regard to the Act in the matter of Nash v Silver City Drilling (NSW) Pty Limited; Attorney General for NSW v Silver City Drilling (NSW) Pty Limited [2017] NSWCCA 96. Justice Basten at [34], under the heading “Assessment of Risk” said:

“The sentencing judge commenced his consideration with the proposition that ‘greater culpability attaches to the failure to guard against an event the occurrence of which is probable rather than an event the occurrence of which is extremely unlikely’. However the truth of that proposition depends upon other considerations including (a) the potential consequences of the risk, which may be mild or catastrophic, (b) the availability of steps to lessen, minimise or remove the risk, and (c) whether such steps are complex and burdensome or only mildly inconvenient. Relative culpability depends on assessment of all those factors.”

122. Further at [42] his Honour continued:

“The culpability of the Respondent is not necessarily to be determined by the remoteness of the risk occurring, nor by a step‑by‑step assessment of the various elements. Culpability will turn upon an overall evaluation of various factors, which may pull in different directions. Culpability in this case is reasonably high because, even if the [event] which occurred might not be expected to occur often, the seriousness of the foreseeable resultant harm is extreme and the steps to be taken to avoid it, which were not even assessed, were straightforward and involved only minor inconvenience and little, if any, costs.”

123. At [53] his Honour dealt with the proper approach to considering the objective seriousness of offences under the Act, saying:

“It is important to note that the risk to be assessed is not the risk of the consequence, to the extent that a worker is in fact injured, but is the risk arising from the failure to take reasonably practicable steps to avoid the injury occurring. To discount the seriousness of the risk by reference to the unlikelihood of injury resulting is apt to lead to error. The conduct in question is the failure to respond to a risk of injury, conduct which will be more serious, the more serious the potential injuries, whether or not they are likely to materialize. The objective seriousness of the conduct will also be affected by the ease with which mitigating steps could have been taken.”

124. My findings about the defendant’s level of culpability are based upon the following:

1. The risk was entirely foreseeable. The defendant should have been aware of the risk by reason of the Guidance material.

2. The likelihood of the risk occurring was extremely high since the tank was over pressurised by a factor of 10.

3. The potential consequences of the risk were death or serious injury. It was a miracle that no worker was killed or injured.

4. Simple steps were available to eliminate or minimise the risk.

5. There was no burden or inconvenience of implementing those steps. A qualified and experienced contractor was already engaged. The cost of this would have been built into the price charged by Go Go Petroleum to construct the service station.

6. The maximum penalty for the offence is a fine of $1,500,000 which reflects the legislature’s view of the seriousness of the offence.

125. Both counsel submitted that the objective seriousness is in the mid range. That is also my view. I find that the level of culpability of Go Go Petroleum is in the mid range.

Deterrence

126. The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Limited v Nash [2016] NSWCCA 37; (2016) 93 NSWLR 338 at [180].

127. The penalty must reflect the need for specific deterrence. Go Go Petroleum is still conducting a business, although on a smaller scale. Its operations involve the construction of service stations, including installing and commissioning underground tanks.

Mitigating Factors

128. Go Go Petroleum has no record of previous convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999.

129. Go Go Petroleum is otherwise of good character: s 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. The steps which it took after the incident demonstrate this. Go Go Petroleum has been in business for approximately ten years.

130. Go Go Petroleum is unlikely to re-offend: s 21A(3)(g) Crimes (Sentencing Procedure) Act 1999.

131. Go Go Petroleum has good prospects of rehabilitation: s 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. It has taken positive steps to guard against the risk of an incident such as this ever happening again. It has brought its documentation and its procedures into line with those which, on all the evidence, should have been in place before this accident occurred.

132. Go Go Petroleum has shown remorse for the offence: s 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. It has provided evidence that it has accepted responsibility for its actions and has acknowledged that the injury to Mr Hicks was caused by its actions.

133. Go Go Petroleum entered a plea of guilty: s 21A(3)(k) Crimes (Sentencing Procedure) Act 1999. The court must take into account the fact that the offender has pleaded guilty, when the offender pleaded guilty, and the circumstances in which the offender indicated an intention to plead guilty: s 22(1) Crimes (Sentencing Procedure) Act 1999. It is appropriate to give Go Go Petroleum a 25% discount for an early plea.

128. Go Go Petroleum gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. It cooperated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to Pay a Fine

135. I am required to have regard to s 6 of the Fines Act 1996 (NSW) before imposing a fine. Where an offender seeks to have a fine reduced on the basis of a limited capacity to pay, it bears the evidentiary onus of convincing the court that it should exercise its discretion to limit the amount of the fine. The offender’s capacity to pay is relevant but not decisive: Mahdi Jahandideh v The Queen [2014] NSWCCA 178 at [16]. A substantial fine may still be warranted as a result of the seriousness of the offence and the need for general deterrence.

136. In Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266 at [79] the Court of Criminal Appeal said:

“First, and more generally, questions of specific deterrence should take into account the size and scope of the operations of the defendant; a fine which may be crippling to a small business may have virtually no impact on the financial operations of a large corporation. The maximum penalty for the offence is undoubtedly set having regard to such a factor. Secondly, the Court is required to have regard to ‘the means’ of the defendant, pursuant to s 6 of the Fines Act 1996.”

137. Mr Badaoui’s affidavit (DX 1) dealt with the financial position of Go Go Petroleum. Counsel for the defendant made it plain that there was no submission about a reduced capacity to pay. He submitted that Go Go Petroleum was a small company which was conducting much less work now than at the time of the incident. I accept that submission and I will take into account the size of the defendant company when fixing a penalty.

138. Go Go Petroleum was required to replace the tank damaged in the incident. Additional labour, costs, delays and impact upon other site works led to an over run on the project in the amount of approximately $450,000 to $500,000.

139. Go Go Petroleum has been significantly impacted by the losses and has since been attempting to pay off its debts.

140. In 2019 Go Go Petroleum received payment for some small jobs. The money from these jobs was used to pay some of the outstanding debt of the company. When Go Go Petroleum was unable to secure new work, because Mr Badaoui could not raise any money to keep the company operating, Mr Badaoui decided to stop seeking new work and undertake small consulting jobs which involved his personal labour. The payments from the consulting work were paid to Go Go Petroleum and used to pay Mr Badaoui’s wages and pay off Go Go Petroleum’s debts.

141. Go Go Petroleum made a loss in 2019 and has not made a profit since.

142. In 2020 and 2021, COVID-19 had a detrimental impact upon the consultancy work that Mr Badaoui was undertaking.

143. Mr Badaoui suffered a Covid infection in February 2022 and was again diagnosed with Covid on 22 March 2022. COVID-19 has had a significant impact on Mr Badaoui’s health and he has been unable to travel. Mr Badaoui is still located in regional Victoria.

144. Go Go Petroleum is no longer undertaking any work similar to the refurbishment job in Wagga Wagga in February 2018.

Costs

145. The parties have agreed to an order that the defendant is to pay the prosecutor’s costs in the amount of $43,434.92.

Penalty

146. My orders are:

1. Go Go Petroleum Pty Ltd is convicted.

2. The appropriate fine is $160,000 but that will be reduced by 25% to reflect the early plea of guilty.

3. Order Go Go Petroleum Pty Ltd to pay a fine of $120,000.

4. Order pursuant to Section 122(2) of the Fines Act 1996 (NSW) that 50% of the fine is to be paid to the prosecutor.

5. Order Go Go Petroleum Pty Ltd to pay the prosecutor’s costs agreed in the amount of $43,434.92.

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Decision last updated: 04 April 2022